EPSO-G results determined by growing energy demand and lower rates of services for system users


29-11-2018
  • Infografikas 2018 III.jpg

VILNIUS. In implementation of works of synchronization and integration of gas market, the state-owned group of energy transmission and exchange companies EPSO-G earned income of 182.3 million euros in the first nine months of the year 2018, i.e. 10.9 percent more, if compared to 164.4 million euros in the same period last year. The demand of energy transmission services and the increased volumes of balancing services had the biggest impact on such results.

At the same time, the net profit of the group EPSO-G decreased from 19.6 to 11.0 million euros. This was mainly affected by significantly lower transmission rates of electricity and gas applied from the beginning of the year – 7.1 and 35.5 percent respectively.

“The demand for electricity and transmission services exceeded the speed of growth  of domestic economy. Bigger amount of gas transported to the neighbouring countries offset somewhat lower demand for transportation services of natural gas in the sectors of fertilizers and energy. Moreover, the demand for balancing services has increased a lot. Therefore, we earned more income, although we have been applying smaller transmission rates of electricity and gas for the users, as well as smaller tariffs for biofuel trade.

Besides, we have advanced in the works of strategic synchronization, integration of gas and biofuel markets and their development more than ever. The especially active and coordinated cooperation with the Polish, Latvian and Estonian partners resulted in invitation for us to become a part of the European energy system, and we know, how we are going to do this – through Poland until 2025. Now we are paying big attention for renovation of the national electricity transmission infrastructure and its preparation for smooth and reliable work with continental Europe.

The preparatory works of construction of the gas-pipe together with Poland are continued, and we are implanting smart decisions of gas-pipe diagnostics that will allow us to save expenditure and to ensure bigger safety of the gas-pipe. The exchange of natural gas is gaining bigger and bigger regional weight, whereas the trade platform in biofuel created by us is already used in four countries,” – Mr. Rolandas Zukas. Managing Director of the group EPSO-G. has commented on the main performance aspects of the company in three quarters of the year.

The demand for energy transmission services was growing

7 661 million kilowatt-hours (kWh) of electricity were transmitted to the residents and business entities of the country through high-voltage networks in nine months of the year. This is 4.1 percent more that in the same period in 2017. According to the data of the Lithuanian Department of Statistics of the first rating points, the gross domestic product (GDP) was growing by 3.4 percent in this January-September, if compared to the period of nine months a year ago.

The volume of transmission services provided in Lithuania in the course of the first nine months in the sector of natural gas decreased by 11.5 percent in the third quarter of the year. However, the amount of transported gas to the neighbouring countries increased by 12.1 percent.

15 215 GWh of natural gas were transported to gas distribution or directly connected user systems of the Lithuanian users in the first nine months of the year. This amount comparesl to 17 190 GWh in the same period last year. This was mainly determined by reduced demand for natural gas in Lithuania in summer and usage in the sector of fertilizers and energy.

20 379 GWh were transported to Kaliningrad District of the Russian Federation within the accounting period (in September 2017 – 18 083 GWh). 2 155 GWh were transmitted to the Republic of Latvia through Kiemėnai DAS (gas accounting station) (in September 2017 – 2 021 GWh).

The volume of natural gas exchange GET Baltic of three quarters of the year 2018 made 982 GWh. After having become the regional trade platform in gas de facto, the trade volumes in the GET Baltic exchange increased almost by three times if compared to the same period in.

The centralized heat-supply companies, independent heat producers and industrial companies acquired 325.4 thousand tons of biofuel in the exchange of energy resources “Baltpool” in nine months of the year 2018. This is higher by 5.0 percent if compared to the same period in 2017.

Income and expenditure

The consolidated income of the group EPSO-G in nine months of the year 2018 increased by 10.9 percent up to 182.3 million euros, if compared to the same period last year. The increased amount of electricity and natural gas to the system users in the country and in the neighbouring countries and the balancing services had the biggest impact on such results.

As the factual transmission price was reduced by 7.1 percent, income from electricity transmission decreased by 3.3 percent down to 48.6 million euros and made 26.7 percent of total income of the group. The decreased in the transmission price was partly compensated by bigger amount of transmitted energy.

The income from sale of electricity balancing (regulation) services increased by 42.2 percent up to 19.2 million euros. This was mainly determined by the increased demand for balancing energy and need to ensure capacity of distributor of electric connections with Sweden ad Poland (i.e. sold amount of electricity on exchange).

The income from transportation services of natural gas in the first three quarters of the year 2018 made 31.6 million euros or 17.3 percent of total income of the group EPSO-G. The income from this area was 22.2 percent smaller compared to the last year because of gas transportation rate lower by 36.5 percent applicable from the beginning of this year. The impact of more favourable prices for system users was amortized by bigger amount of provided services to the neighbouring countries.

The expenditure of the group’s performance increased by 29.7 million euros in the first nine months of the year 2018 – up to 167.8 million euros. The increase in the expenditure was determined by increased prices of systemic services and energy resources. These costs made 56.6 percent of total expenditure in the first nine months of the year. Other performance expenditure remained on the level of the year 2017.

Performance result

The net profit of the EPSO-G companies in the first nine months of the year 2018 was 11.0 million euros, i.e. smaller by 44.0 percent than in the same period last year, when 19.6 million euros of net profit were gained. This was mainly determined by significantly smaller transmission rates of gas and electricity applied from the beginning of the year for system users.

The group’s earnings before interest, taxes, depreciation and amortization (EBITDA) in the first nine months of the year 2018 reached 44.1 million euros. If compared to the same period last year, EBITDA decreased by 23.0 percent. EBITDA margin in three quarters of the year 2018 reached 24.2 percent (it was 34.9 percent in three quarters of the year 2017).

Management

In order to ensure trust in the strategic projects under implementation, big attention was paid to the performance transparency and accountability, and thus the management quality of EPSO-G received the top evaluation A+. This was manifested by the latest management practice index of the State-owned companies (SOC). It is calculated by the Agency of Monitoring and Programmes (SIPA).

The purpose of SOC good management index is to assess and measure the implementation of good management practices by SOC. This covers recommendations of the Organization for Economic Cooperation and Development (OECD recommendations, Property guidelines, Transparency guidelines and Selection guidelines), as well as other documents regulating SOC activities.

The SIPA good management index is the tool that assesses SOC management quality in the widest scope. The index consists of three principal evaluation dimensions: transparency, collegial bodies and strategic planning and implementation.

Last updated: 29-11-2018