VILNIUS. After efficiently adapting to changed operating environment due to the COVID-19 pandemic and utilising favourable trends in the gas sector, the state-owned energy transmission and exchange group EPSO-G earned EUR 196.9 million in revenue during the first nine months of 2020. Tis represents a 7.4 percent rise from EUR 183.3 million in the same period a year ago.
During this period, the net profit of EPSO-G Group amounted to EUR 30.3 million compared with EUR 6.3 million during the same period in 2019. In the third quarter of this year, EPSO-G scaled down its financial liability to the state-owned enterprise Ignitis Group for stocks of its subsidiary Litgrid by EUR 8 million to EUR 148.6 million.
“Notwithstanding the changed conditions of activities due to the coronavirus pandemic, during the first three quarters of 2020, all of EPSO-G Group companies were profitable and continued the implementation of projects, concerning the strategic electricity and gas transmission system integration into the European market.
The greatest impact on the positive dynamics of the results was created by the significant growth gas transmission services to the direction of Latvia due to the favourable prices of gas, the gas demand in the country’s energy sector, the change in prices of regulated services and lower operating costs. These factors offset the decline in revenue due to the warmer weather at the beginning of the year and slightly decreased volume of energy transmission services due to the country's economy development trend.
Positive impact on the results was also achieved by more than a doubled turnover in the GET Baltic Gas Exchange and the consistent growth in the trade in biofuels, organised by Baltpool. It is encouraging to note that the Baltpool exchange data allows forecasting that the current season of central heating will be the cheapest in more than a decade.
At the same time, companies of EPSO-G Group have continued to implement synchronisation with European power transmission grid projects and the construction of the gas pipeline with Poland.
Currently, the third one of the 14 government-approved projects is in the final stages, while the European Union has provided maximum funding for the construction of the sea link with Poland and installation of synchronous compensators. At the beginning of September, the most complex GIPL construction works under the largest rivers of the country were completed and part of the constructed section of the pipelline was connected to the gas transmission system making us confifent that 60 percent of the entire pipeline construction works will be completed by the end of the year,” EPSO-G CEO Rolandas Zukas commented on the performance results for the first three quarters of the year.
Services
In the first three quarters of 2020, 7.4 terawatts (TWh) of power – 3.1 percent less year-on-year – were transferred by the high voltage transmission networks for the needs of the country’s population and businesses due to warmer than usual temperatures at the start of the year and the slowed-down economy development due to the COVID-19 impact.
In the first nine months of 2020, almost 26 TWh of natural gas were transported via the Lithuanian gas transmission system (excluding transit services). This was 17.6 percent more compared with the same period last year. During the nine-month period, the volume of transported gas from Lithuanian gas transmission system to Latvia, Estonia, and Finland was two times higher than last year during the same period – 7.8 TWh. The increase largerly comes due to favourable gas prices in the international market and the operations of Balticconnector gas pipeline linking Finland and Estonia that was launched at the start of the this year.
In this period, 17.7 TWh of gas were transferred for the needs of Lithuania. This was 5.7 percent more comared with the same perios a year agodue to very favourable gas price that prompted the usage of gas for electricity generation.
In the first nine months of 2020, the volume of GET Baltic Natural Gas Exchange trade accounted for 4.7 TWh in Lithuania, Latvia, Estonia, and Finland. In comparison with the same period in 2019, the volume of trade increased more than 2.2 times or 1.6 times more than during the whole year of 2019. The greatest impact on the increased volume of trade was made by operation in Finish market launched at the beginning of the year.
In 2020, heat supply companies, independent heat producers and industrial companies operating on Baltpool Energy Resources Exchange traded 385 thousand tons of biomass. This amount is 4.6 percent higher compared with the same period in 2019.
Revenue and costs
During the three quarters of 2020, the revenue from the transmission of energy increased by 18.6 percent up to EUR 60.6 million. The increase in revenue was mostly affected by the higher actual average price of energy transmission services. Revenue from system services rose 20.8 percent year-on-year up to EUR 62.8 million. Revenue from trading in disbalancing and balancing services was 28.7 percent lower and made EUR 14.4 million. The revenue from electricity transmission and related services amounted to EUR 149.1 million and made 75.7 percent of total income of EPSO-G group.
In the first nine months of 2020, EPSO-G group earned EUR 38.2 million in revenue from natural gas transportation. This amounted to 19.4 percent of the consolidated revenue of EPSO-G group. The revenue from natural gas transmission service remained at the same level as during the same period last year. Though from the start of the year, the tariff of the transferred gas was lower by 16 percent, the increased volume of transferred gas to the direction of Latvia and greater gas demand in Lithuania, especially in the sector of electricity generation, helped to retain a stable level of revenue earned from gas transmission activities.
During the nine months of 2020, the operating costs of the Group amounted to EUR 166.8 million, EUR 7.2 million less year-on-year. The biggest part of the operating costs stemmed from the purchaseof energy resources and related services.
Operating result
Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) of EPSO-G group amounted to EUR 55.8 million in the nine months of 2020, a rise of 68.4 percent year-on year.
The EBITDA margin rose to 28.3 percent from 17.8 percent in the same period a year ago.