Energijos Skirstymo Operatorius AB - Interim information

ESO 9 months 2016 results: revenue up by 2.3% up to EUR 478.8 million, net profit up by 11.1% up to EUR 72.4 million

Energijos Skirstymo Operatorius AB, identification code 304151376, registered
office placed at Aguonu str. 24, Vilnius, Republic of Lithuania. The total
number of registered ordinary shares issued by company is 894 630 333; ISIN
code LT0000130023. 

Electricity and gas distribution company Energijos Skirstymo Operatorius, AB
(hereinafter – ESO or the Company), which is a part of the largest Lithuania’s
energy group Lietuvos Energija, UAB (hereinafter – Lietuvos Energija), during
the third quarter of this year reached the best to date financial results.
After merging of LESTO AB (hereinafter – LESTO) and joint stock company
Lietuvos Dujos (hereinafter – Lietuvos Dujos) into ESO in the beginning of this
year, operating expenses declined by 13% or almost EUR 11 million. 

During January-September 2016 the net profit of ESO amounted to EUR 72.4
million – 11.1% more than during the same period of 2015 when LESTO and
Lietuvos Dujos consolidated net profit amounted to EUR 65.2 million. Net profit
increased due to increased revenue and reduced operating costs. 

ESO revenue during nine months of 2016 amounted to EUR 478.778 million – 2.3%
up compared to January-September in 2015, when it amounted to EUR 468 million.
Revenue increased due to higher electricity and natural gas distribution
volumes. 

ESO operating expenses during three quarters of 2016 amounted EUR 71.6 million
- 12.9% less compared to the same period of 2015, when it amounted EUR 82.2
million. 

During nine months of 2016 year ESO allocated 6.6 billion kWh of electricity
and 4.82 billion kWh of natural gas - respectively 5.06% and 5% more than
during nine months of 2015. 

"In the third quarter of this year we have achieved even more impressive
results. The main reason, which led to even better financial indicators –
increased positive effect of merged two companies synergy. ESO operational
efficiency improvement is our strategic goal and it is an ongoing process. We
share the return from efficiency with our customers by offering to them
reliable, convenient and high quality services. Furthermore, reduction of our
operating costs is our direct contribution to lower service prices for our
customers,"- says Chairman of the Board and CEO Dalia Andrulionienė. 

According to the head of the company, search of untapped potential of
operational efficiency continues: “To that end our universal electricity and
gas operative teams were put in action this autumn, and as soon as the
beginning of the next year we will launch a Lean-principles based Operational
Excellence Programme”. 

During nine months of 2016 ESO investments in the electricity and gas
distribution networks amounted to EUR 89.594 million – 10.5% more than during
January-September in 2015. Major part of the investment – almost EUR 47.7
million – was assigned to the modernization of electricity distribution
network. 

During January-September of 2016 ESO EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) amounted to EUR 122.9 million – 9.2% more
compared to the same period of 2015. EBITDA margin increased by 1.62% points
and amounted 26.68%. 

During nine months of 2016, electricity, natural gas purchase and related
services costs made up EUR 284.3 million and, compared with the same period of
2015, increased by 4%. This was mainly influenced by increased electricity
transport volumes, increased transmission cost and higher natural gas
distribution volumes. 

Significant impact on the electricity distribution network operation during
nine months of 2016 had more frequent natural disasters, which resulted in very
changeable weather, compared to the same period last year. The majority of
natural phenomena that led to power outages in the network happened during
June. 

During nine months of 2016 with the influence of natural disasters (“force
majeure”) the system average interruption duration index (SAIDI) per customer
amounted to 144.34 minutes. This is 64.19 minutes more compared to the same
period in 2015, when it amounted 80.15 minutes. 

The system average interruption frequency index (SAIFI) with the influence of
natural disasters per customer reached from 0.96 – 0.15 times more compared to
2015 January-September, when it was 0.81 times. 

ESO shares are quoted on the Nasdaq Vilnius. The state-owned energy company
Lietuvos Energija owns 94.98% ESO shares, remaining shares are traded on the
stock exchange. 


         Representative for Public Relations Martynas Burba, tel. (8~5) 2514516.

Attachments:

Presentation ESO 2016 3Q financial results.pdf

ESO_2016_Q3_ENG.pdf