EPSO-G earned EUR 183.3 million in revenue in the first nine months of 2019


20-11-2019
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VILNIUS.  The state-owned group of energy transmission and exchange companies EPSO-G earned EUR 183.3 million in revenue in the first nine months of 2019. Compared to the same period last year, consolidated group revenue was stable – it increased by 0.6 percent from EUR 182.3 million last year.

Rolandas Žukas, CEO of EPSO-G, commented on the performance results of the three quarters of the year:

“Systemic electricity transmission services and the record-high gas transportation to Latvia had the biggest impact on EPSO-G revenue in the first three quarters of the year. In an environment of extremely favourable gas prices, an increase by one-tenth in gas consumption in Lithuania also contributed to the amortization of lower income at the beginning of the year due to warmer weather.

Consumer-friendly prices have been formed not only in the gas market but also in the biofuel market – with the price of biofuel falling by one third on the “Baltpool” exchange, the heating season that has already begun promises to translate to the most favourable for district heating residents over the  the last several years.

Trading on the GET Baltic gas exchange was also twice as active as last year. We are in the final stage of the preparatory work starting next year and intend to enter the Finnish market and the increase in our sales by a quarter is expected. 

At the same time, we carried out important work on the first phase of synchronization with the European energy transmission networks and continued our cooperation with the Polish transmission system operator in preparation for the “Harmony Link” submarine cable laying. We have secured the highest possible EU support, and have launched two new, most powerful transformers at Vilnius substation to provide reliable power to residents and business in the Vilnius region. An extremely powerful controlled shunt reactor has been transferred from the Transformer Substation of the Ignalina Nuclear Power Plant to Elektrėnai, which will no longer participate in the control of cross-system power flows with the Belarusian system.

For the project of gas interconnection between Lithuania and Poland implementation, a contract has already been signed for the purchase of pipes for construction. The tender for the contract work is still ongoing as having received the conclusion of the Public Procurement Office we have decided to reassess the final tenders for contract works. We focus on implementation of this project important not only for Lithuania on time, i.e. by the end of 2021”.

Service demand and quality

During the three quarters of this year, 7,575 million kilowatt-hours (kWh) of electricity were supplied for the consumer and business needs by the networks of high-voltage transmission, i.e. 1.1 percent less compared to the same period last year. 6,882 GWh of electricity, i.e. 0.3 percent less, were transmitted to the customers of the distribution network operator (AB “Energijos Skirstymo Operatorius”). Other customers directly connected to the transmission network were supplied with 693 GWh of electricity or 8.4 percent less.

During this period 16,727 GWh of natural gas were transported to Lithuanian consumers, i.e. 9.9 percent more compared to 15,215 GWh in the same period last year. This was mainly due to stable demand and consumption in the fertilizer sector.

During the reporting period, 18,304 GWh of natural gas were transported to the Kaliningrad region of the Russian Federation (Q3 2018 – 20,379 GWh). 4,192 GWh of natural gas were transmitted to the Republic of Latvia via the Kiemėnai DAS system (Q2 2018 – 2,155 GWh).

After the completion of warranty repair works in 2018, the asynchronous connections, which open up the possibility of importing cheaper electricity from the Nordic countries, were extremely reliable. Over the nine months in 2019, interconnection “NordBalt” with Sweden has reached 100% market access. (97 percent in 9 months of 2018). The “LitPol Link” interconnection with Poland also functioned almost fully (97% market access).

In the first three quarters of 2019, the trading volume of GET Baltic natural gas exchange amounted to 2,063 GWh. Compared to the same period in 2018, it has almost doubled. Amendments to Lithuanian legislation had the biggest impact on the increased trade volumes. On 1 January 2007, regulated energy producers in Lithuania became free participants in the natural gas market and active participants in the natural gas exchange.

In 2019, centralised heat-supply companies, independent heat producers and industrial companies purchased 368,000 toe of biofuel through the “Baltpool” energy exchange.  It is 13.1 percent more compared to the same period in 2018. 

Revenue and costs

During the first nine months of 2019, the EPSO-G group’s revenue from the electricity transmission increased by 5.1 percent up to EUR 51.1 million compared to the same period last year. This amounted to 27.9 percent of the total revenue of the Group. Revenue growth was driven by 6 percent higher average actual cost of power transmission.

Revenue from natural gas transportation services in nine months of 2019 amounted to EUR 33.5 million or 18.3 percent of the total revenue of the EPSO-G group. The largest growth in revenue was driven by the increased volume of services rendered in Lithuania. In addition, the number of transmissions to Latvia has almost doubled.

Due to the 16 percent higher system service tariff set by the National Commission for Energy Control and Prices since the 1st of January 2019, revenue from system electricity services increased by 14.8 percent up to EUR 52.0 million. Revenue from balancing electricity sales increased by 5.0 percent up to EUR 20.2 million.

The Group’s operating costs during the nine months of 2019 amounted to EUR 174 million. Excluding increased energy costs, decreased depreciation costs, and impairment and write-down, total operating costs decreased by EUR 2.3 million compared to the same period in 2018.

Purchase of energy resources and related services accounted for the largest part of operating costs, i.e. EUR 109.7 million (purchase costs of electricity and related services amounted to EUR 101.5 million, purchase costs of natural gas amounted to EUR 8.2 million) or 63.1 percent of the total cost.

Operating result

The Group's earnings before tax, interest, depreciation and amortization (EBITDA) during the nine months of 2019 amounted to EUR 32.6 million. EBITDA was 26.2 percent less compared to the same period.

During this period, EPSO-G companies’ net profit was EUR 6.3 million, i.e. 42.1 percent lower compared to the same period last year with EUR 11.0 million net profit. It was mainly influenced by the balance of revenues and costs of electricity system services, i.e. the costs of regulated system power transmission services were EUR 3.4 million higher than the revenue.

 

Last updated: 20-11-2019