VILNIUS. The sole shareholder of the EPSO-G group – the Ministry of Energy – approved the audited annual and consolidated financial statement of the company for 2019, read the annual report and approved the distribution of the profits in the regular annual meeting on 30 April.
- Despite the effect of unusually warmer weather on the demand of energy transmission services, the revenue increased, the cost of activity was lower.
- Targeted investments in energy transmission and trading infrastructure have benefited consumers with highly favourable energy prices in the market.
- The target of the return on equity set by the Government of the Republic of Lithuania for the EPSO-G group of companies was exceeded by 0.3 % point.
- EPSO-G will directly contribute EUR 773 thousand to the budget for dividends.
The shareholder also read the evaluations of the performance for 2019 of the holding company and the collegial managing bodies of all the companies of the group, i.e. boards, nomination and remuneration, and audit committees, prepared by the EPSO-G Nomination and Remuneration Committee, as well as the most important directions of work identified by the Committee aimed at further improvement of the performance of the collegial bodies in 2020.
The audited performance results of EPSO-G did not materialy differ from the previously reported preliminary data: despite a significant deviation of the air temperature from the standard climate norm, the EPSO-G group’s consolidated revenue increased by 2.1 percent year-on-year up to EUR 251 million. The impact of unusually warmer weather on the demand for energy transmission services, and thus on the EPSO-G revenues, was amortised by the increased volume of natural gas transportation services provided in Lithuania and, due to highly favourable gas prices, record gas transit to Latvia's direction.
“This clearly shows the benefits of timely investments for market participants in Lithuania and the entire region, as due to the well developed energy transmission and trading infrastructure and regional integration consumers could utilize highly favourable prices in the electricity, gas and biofuels markets,” said Chief Executive Officer of EPSO-G Rolandas Zukas.
EPSO-G group’s revenue from electricity transmission increased by 4.2 percent year-on-year up to EUR 69.3 million and accounted for 27.6 percent of the total group’s revenue. The revenue growth was determined by 6 percent increase in the regulated average actual electricity transmission tariff.
The revenue from natural gas transportation services during 2019 increased by EUR 1.9 million up to EUR 45.5 million and accounted for 18.1 percent of the total revenue of the EPSO-G group. The revenue growth was mainly determined by 5.4 percent increase in the volume of natural gas transmitted in Lithuania. In addition, gas transmission to Latvia's direction more than doubled.
With a strong focus on efficiency, the EPSO-G group’s operating costs in 2019 amounted to EUR 235.2 million. Excluding the increased costs for energy resources, lower depreciation costs and impairment and write-off costs, the total cost level decreased by EUR 4.0 million compared to 2018.
The EPSO-G group’s audited net profit was EUR 11.4 million. Due to the changed regulatory environment, the consolidated net loss of the group in 2018 amounted to EUR 47.7 million due to the revaluation costs of long-term tangible assets of subsidiaries.
In 2019, the EPSO-G group exceeded the 5.7 percent return on equity target set by the Government of the Republic of Lithuania for the EPSO-G group of companies for the period of 2019–2021.
The shareholder also decided that pursuant to the Resolution of the Government of the Republic of Lithuania, the shareholder decided that EPSO-G would pay a direct dividend of EUR 773 thousand (EUR 750 thousand) to the State budget ensuring the group’s sustainable financial condition in the preparation of important energy markets in the region and at the same time fulfilling the financial obligations to the state capital company “Ignitis Group” for the stakeholding in “Litgrid” subsidiary.
With a strong focus on the good governance, transparency of the performance and accountability, EPSO-G, the group of energy transmission and exchange companies, has been recognised as a leader in the transparency category “A+”, and the quality of management has received rating “A”
The highest possible rating “A+” was also assigned for the work of collegial bodies, the process of selection of their members, competence and involvement, and strategic planning. The overall assessment was affected by the high level of the EPSO-G liabilities due to financial debt to“Ignitis Groupe”.
This was shown by the governance indicator for the state-owned enterprises (SOEs) of 2018-2019, calculated by the Monitoring and Programme Agency of the Governance Coordination Centre (GCC)