State-owned group of electricity transmission and exchange enterprises EPSO-G earned EUR 61.26 million in revenue in the first three months of the year, which is 2.1 per cent more than over the same period last year, when the revenue amounted to EUR 59.98 million. The Group’s consolidated operating earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 25.7 million. Year-over-year increase of EBITDA was 0.9 per cent.
According to Rolandas Zukas, CEO of EPSO-G, the financial results were most affected by the fact that the volume of transmitted energy, which has further increased due to economic growth of the country, outweighed the reduction of prices of gas transmission services this year. Active efforts to reduce the level of the Group's financial obligations and debt service costs also had a positive effect on the results of the first quarter.
“The first five-year strategy helped us to define the priority lines of action to achieve the main objective – to create a safe, sustainable and transparent energy market, which would improve the competitiveness of the national economy, while at the same time focusing on operational efficiency and financial stability.
We are pleased to have registered the lowest historical wholesale price of electricity on the market in the first quarter of 2017 due to the links with Sweden and Poland. Together with the Swedish partners we have found a solution which will ensure smooth and secure operation of the link in the future. It will not cost anything extra for the Lithuanian consumers.
An important step was made towards the common natural gas market of the Baltic countries. It has been agreed that on 1 July, together with the introduction of the indirect capacity allocation model, gas trading sites will be established in Latvia and Estonia, while GET Baltic, which has won the tender, will become the regional trading platform. After introducing this model, the suppliers of three Baltic countries will directly compete on the exchange, which will have positive effects for gas consumers in the future.
We observe positive signs of regional development in the Baltpool biofuel exchange, which is part of the Group. Clearly, the benefits of an open and competitive market are being discovered by the sellers of biofuel in the neighbouring countries as well as the buyers,” Mr. Zukas commented on the performance at the beginning of the year.
Income and expenses
The income of EPSO-G Group in the first quarter was EUR 61.3 million. It was a 2.1 per cent increase from the same period in 2016.
The income from transmission of electricity in the first quarter saw a year-over-year increase by 1.5 per cent to EUR 18.3 million and accounted for 29.8 per cent of total income of the Group. This growth was predominantly the result of a 3.1 per cent increase in the volume of transmitted electricity. The income from transmission of gas over this period was 4.9 per cent lower and stood at EUR 17.6 million. It accounted for 28.7 per cent of total income of the Group. The main reason behind the lower income from gas transmission was the reduction of the natural gas transmission service rate due to good performance in the previous years.
Consolidated expenses of the Group remained almost unchanged in the first three months of 2017. They stood at EUR 45.9 million compared to EUR 45.63 million in the same period last year. The majority of expenses of the Group went for the purchase of energy resources and related services.
Performance
All enterprises directly controlled by EPSO-G Group (Litgrid, Amber Grid and Baltpool) were profitable in the first quarter of the year.
Group's EBIDTA for the first three months of 2017 was EUR 25.7 million. Year-over-year increase of Group's EBITDA was 0.9 per cent. EBITDA margin was 42.0 per cent (42.5 per cent in 2016).
Consolidated net profit of EPSO-G in the first quarter of 2017 amounted to EUR 12.0 million, i.e. 10.5 per cent higher than in the same period last year, when the Group earned EUR 10.9 million in net profit.
Reducing the burden of debt
Due to good performance, on 31 May 2017, EPSO-G will transfer EUR 31.14 million from the profit earned last year to the state-owned enterprise Lietuvos Energija, which is required to allocate these funds to the budget of Lithuania according to the agreement between the Ministry of Energy and the Ministry of Finance.
"We have essentially fulfilled our obligations for the shaares of gas transmission eneterprise Amber Grid. Now we will allocate our profit to pay up the shares of our subsidiary Litgrid significantly sooner than planned according to the payment schedule this year. In the run-up to important synchronization and integration to regional energy markets, a balanced capital structure is very important to us," said the head of EPSO-G.
On 31 March 2017, the value of assets of the EPSO-G Group of enterprises was EUR 1,078.3 million.