VILNIUS. The Ministry of Energy, the sole shareholder of the management company EPSO-G, has approved the company's audited consolidated financial report for full year 2017, took note of the annual report and has endorsed the profit distribution during the annual shareholder's meeting held on 27 April, Friday.
The audited EPSO-G operating results do not materially differ from the previously published preliminary data – due to changes in the principles of accounting of the non-current tangible assets of the subsidiary “Amber Grid” the operating result of EPSO-G group in 2017 was a net loss of 2,8 million euros. It was 0,8 million euro lower compared to the previously reported preliminary result (a net loss of 3,6 million euros).
The group‘s operating result was mainly influenced by the valuation of the non-current assets of the subsidiary “Amber Grid”. It has been carried out taking into account the uniform accounting principles applicable in EPSO-G group and by ensuring that, as required by the International Financial Reporting Standards, the accounting of the non-current assets of the group would be carried out at a fair value and would correspond as far as possible to the regulatory accounting.
Besides a one- off impact of the revaluation of the assets of “Amber Grid” in the accounting, the normalized audited EPSO-G operating result of 2017 was a net profit of 26,6 million euros. A normalized Return on Equity (ROE) was 11,3 %, i.e. 2,5 % percentage points higher compared to the purport of the Government of the Republic of Lithuania of 8,8 %.
The audited revenue of EPSO-G in 2017 amounted to 224,8 million euros, compared to 234,5 million euros in 2016. The revenue of EPSO-G in 2017 was mainly influenced by the reduced average tariffs for the electricity and gas transmission services for the system users – 2,75 % and 7,8 % respectively.
Following the increasing demand for energy transmission services and the effective operation of the group, from 1 January 2018 the services of EPSO-G group are continued to be provided cheaper to Lithuanian users – the average electricity transmission price from the beginning of the year decreased by 7.9% (to 0,619 cents per kilowatt-hour), and the average natural gas transmission price decreased by 36,5 % (to 1,13 euros per megawatt hour). From 11 December 2017 the trading cost of biofuels for the participants of the energy exchange has also decreased by 12,9 % to 0,61 euros per ton of oil equivalent. For this reason, the Lithuanian users of energy transmission and exchange systems will spend approximately 15 million euros less in 2018.
The costs of EPSO-G group amounted to 225,4 million euros in full year 2017. Compared to 2016, they have been reflected as 18,9 % higher in the accounting due to the revaluation of the non-current tangible assets of “Amber Grid” of 35,5 million euros. Besides the one-off impact of the revaluation of the assets, the consolidated EPSO-G operational costs remained at the same level compared to the same period a year ago.
Will pay dividends and scale down the debt burden
As the decision of the Government of the Republic of Lithuania provides, EPSO-G will directly make contributions of 682 thousand euros of dividends to the State Budget (508 thousand euros have been paid for the year 2016). EPSO-G will set allocate a major share of the annual retained earnings, consisting of the dividends to be paid by the subsidiaries (27,2 million euros), for the reduction of the financial liability to the state-owned company “Lietuvos energija” for the shares of the subsidiary “Litgrid”.
In 2017 EPSO-G reduced these financial liabilities significantly faster than set in the debt payment schedule – 35,4 million euros (to 170 million euros). Looking ahead to the works of integration of the important synchronization and regional energy markets, a balanced structure of the capital in EPSO-G is of especially great importance.