VILNIUS. The state-owned EPSO-G energy transmission and exchange group earned EUR 132 million in revenue during the first six months of 2020, having rapidly and effectively adapted to the changed operating conditions due to the Coronavirus pandemic. This represents an increase of 6.7 percent compared to EUR 124.1 million in the same period last year.
The net profit of the EPSO-G Group during this period was EUR 19.6 million, compared to EUR 6.3 million in the same period in 2019.
“Having made necessary decisions in a timely manner, EPSO-G Group companies quickly and effectively adapted to the significantly changed operating conditions due to the introduction of the quarantine against the COVID-19 virus. Therefore, the Group’s financial results of the first half-year were not significantly affected by the emergency situation announced in mid-March in Lithuania – all the companies in the EPSO-G Group worked profitably and continued to integrate strategic electricity and gas transmission systems with Europe.
The positive results of the Group were mostly influenced by the changes in prices of regulated services, lower operating costs, and a sharp increase in gas consumption in the domestic energy sector and transit towards Latvia in the second quarter. The GET Baltic gas exchange activities on the Finnish market and the profitable work of the contract company Tetas also exceeded expectations.
We plan that the cooperation of e-commerce exchange Baltpool with the largest Swedish association of biofuel producers and consumers as well as the start of work on the Finnish market in autumn will further contribute to the positive results of the Group.
In implementing strategic projects of importance for the country in the first half of this year, together with the Baltic and Polish system operators, an application was submitted to the European Union to finance the second phase of synchronisation, an agreement was reached with Polish colleagues on the division of work in the construction of the most complex maritime connection of the project, Harmony Link.
On very favourable terms, we have signed up to EUR 65 million loan agreement with the European Investment Bank for financing the GIPL: gas interconnection between Poland and Lithuania. The construction works of the gas pipeline important for the entire region’s gas market is in full swing – the most complex works of the pipeline under the country’s largest rivers are being completed, the first 100 kilometres of the route will soon be built and how to use the regional potential of the interconnection that will be operated by the end of next year is becoming more effective.
We continue close monitoring of the COVID-19 virus situation and we are going to adjust our actions accordingly if necessary,” commented Rolandas Zukas, CEO of EPSO-G.
Demand and quality of services
During the first six months of 2020, 4,932 million kilowatt-hours (kWh) of electricity were transferred to the needs of the country’s population and business via high-voltage transmission networks, i.e. 4.2 pct. less compared to the same period last year. This was broadly in line with the general trend of the economic development of the country: according to preliminary data of the Department of Statistics, the gross domestic product of Lithuania decreased by 5.1 pct in the first half of this year.
During the first six months of 2020, 12,556 GWh of natural gas was transported to Lithuanian consumers. The consumption of natural gas remained almost unchanged compared to the same period in 2019, when 12,551 GWh was transported. This was due to a significant increase in gas consumption in the country’s energy sector and transit towards Latvia in the second quarter of the year, which offset the decrease in demand for gas transportation services during the first three months of this year.
In the first half of 2020, the volume of trade on the GET Baltic Natural Gas Exchange increased to 3,854 GWh and increased more than twice compared to the same period in 2019. This was largely influenced by the activities in Finland started since the beginning of the year.
In 2020, district heating supply companies, independent heat producers and industrial companies purchased 226 thousand toe of biofuel on the Baltpool Energy Resources Exchange, which is 19.4 pct. less than in the same period in 2019. This was mainly due to the stock of biofuels accumulated and unused during the previous heating season as well as continuosly low prices of biofuel.
The electricity transmission network and interconnections operated reliably – in the first half of 2020, due to disruptions in the high-voltage grid under the responsibility of the operator, 3.09 MWh of electricity was not supplied to consumers. The availability of the gas transmission network to system users was 100 percent.
The performance of asynchronous connections met or was better than the 95 pct. target – the market availability of NordBalt connection with Sweden was 95 percent. The LitPol Link connection with Poland was almost intact – access to the market amounted to 98 percent.
Revenue and costs
In the first half of 2020, the revenue of the consolidated EPSO-G Group increased from EUR 124.1 million to EUR 132.4 million, i.e. 6.7 percent rise, compared to the same period in 2019.
Revenue from electricity transmission increased by 17.7 pct. to EUR 40.9 million in comparison to the same period last year and accounted for 30.9 percent of the Group’s total revenue. The decrease in the volume of electricity transferred was offset by a 23.0 percent higher average actual electricity transmission price.
Revenue from natural gas transportation services during the first half of 2020 amounted to EUR 21.0 million, i.e. 6.4 percent lower compared to the same period last year, mainly due to a 16 percent lower transmission service tariff and lower demand for gas transmission due to exceptionally warm weather at the beginning of the year.
The Group’s operating costs amounted to EUR 112.6 million in the first six months of 2020. Compared to the same period in 2019, they were EUR 2.8 million lower.
In 2020, for six months EPSO-G Group’s operating profit before tax, interest, depreciation and amortisation (EBITDA) amounted to EUR 37.0 million. Compared to the same period, EBITDA increased by 54.3 percent.
The EBITDA margin over this period was 27.9 percent., compared to 19.3 percent in the same period last year.