VILNIUS. In purposeful and timely implementation of strategical projects of synchronization and integration of gas markets, the state-owned group of energy transmission and exchange companies EPSO-G earned income of 124.1 million euros in the first six months of year 2019, i.e. 4.4 percent rise year-on-year, if compared to 118.9 million euros in the same period last year.
“The demand for electricity and gas transmission services that had increased significantly in the second quarter of the year after warmer beginning of the year and increased demand for systemic services affected income of the group of companies EPSO-G in the first half-year of 2019 the most. The financial outcome was mostly determined by the balance between income and expenditure of systemic services in electricity and the price-forming principles of natural gas transmission services changed in the beginning of the year for the new regulatory period of five years.
At the same time, we implemented the important works of synchronization and integration of gas market into the European energy transmission networks in the first six months of the year, without deviating from the set goals and schedule.
Today we have a valid contract stating that once we complete the homework specified in the ENTSO-E catalogue of measures, we will operate under the same frequency as European energy network in 2025. We have safeguarded maximal financing of the European Union for the projects of reinforcement and renewal of the Lithuanian electricity transmission network scheduled for the first stage of the works.
The law was passed that granted the status of national importance to the synchronization-related infrastructure projects. The plan of particular actions and tools was submitted for public consulations. It will serve as a basis for implementation of the synchronization project.
Positive trends were also seen in the gas sector – the amount of gas that has been transported for the Lithuanian needs this year was up, whereas the amount of gas transported to the Baltic states has more than doubled. This shows evident benefit of purposeful investments to the gas transmission infrastructure not only for the Lithuanian participants, but also for the participants of entire region. When the construction of interconnection with Poland (GIPL) that will start this autumn is completed in due time, the benefit brought by regional gas market to residents and domestic economy will continue to grow.
Favourable perspective is being formed not only in gas market, but also in biofuel market. If compared to the same period last year, the trade in the exchange “Baltpool” has increased by more than 50 percent year-on-year, whereas the price of biofuel has decreased by one third. The current tendency creates reasonable expectations to see lower market price of biofuel reflected in the users’ bills in the upcoming heating season already.
After the regulated energy producers had become free participants of gas market, the trade in the GET Baltic gas exchange in the first six months was more active by two and a half times than last year. We continue to work actively in order to welcome Finnish market participants into the exchange. It will definitely grant a new impulse for further development of regional gas market,” – Mr. Rolandas Zukas, Managing Director of the group EPSO-G, has commented on the performance results of the first half-year.
Demand for services and quality
5.2 TWh of electricity were transmitted to the residents and business entities of the country through high-voltage networks in the first half-year of the year. It is the same amount as in the same period last year. 4.7 Gwh of electricity were transmitted to the users of operator of distribution networks, i.e. 0.2 percent less. 466 GWh of electricity were transmitted to other users connected directly to the transmission network, i.e. 1.7 percent more.
12.6 TWh gas were transmitted for the Lithuanian needs in the first six months of year 2019. It is 1.4 percent more than in the same period last year, when 12.4 TWh were transported. The growth was mainly determined by stable demand in the sector of fertilizers and growing usage of households.
1.2 TWh of natural gas were transported in the direction of Latvia and Estonia. This amount is almost twice bigger (by 46 percent) than in the first half-year of 2018 when 0.8 TWh of natural gas were transported to the Baltic States.
13.5 TWh of natural gas were transported to Kaliningrad District of the Russian Federation within this period (1st half-year of 2018 – 14,7 TWh).
The operation of transmission systems was very reliable – accessibility of the interconnection “NordBalt” to the market in the first six months of 2019 reached 100 percent (1st half-year of 2018 – 96 percent).
The accessibility of the Polish interconnection “LitPol Link” to the market within this period reached 100 percent (1st half-year of 2018 –96 percent). The accessibility of gas transmission network to the system’s users reached 100 percent.
After the regulated heat suppliers had become free participants of gas market, the volume of trade in natural gas exchange GET Baltic in the 1st half-year of 2019 increased almost 2.5 times (up to 1.8 TWh) if compared to the same period last year.
The centralized heat-supply companies, independent heat producers and industrial companies acquired 279 thousand tons of biofuel in the exchange of energy resources “Baltpool” in the first six months of 2019. This value is higher by 52.1 percent if compared to the same period last year.
Income and expenditure
The consolidated income of the group EPSO-G from electricity transmission in the first six months of 2019 increased 5.2 percent up to 34.8 million euros, if compared to the same period last year. This makes 28.0 percent of total income of the Group. The growth of income was determined by 5-percent higher average factual electricity transmission price resulting from servitude compensations, expenses of transfer of auto-transformers, increased energy price, and growing costs of energy purchase in order to cover own needs and expenses in technological devices.
The income from transportation services of natural gas in the first six months of 2019 made 22.5 million euros or 18.1 percent of total income of the group EPSO-G. This was mainly affected by smaller amount of natural gas transported to Kaliningrad District of the Russian Federation.
The consolidated expenditure of the group’s performance made 115.4 million euros in the first six months of 2019. If increased expenses for energy sources and decreased depreciation costs are not taken into account, total level of expenditure decreased by 1.3 million euros, if compared to the same period in 2018.
The majority of performance expenditure consisted of purchase of energy resources and related services – 73.6 million euros or 63.8 percent of total expenditure. The purchase expenditure of electricity and related services made 67.7 million euros. The purchase expenditure of natural gas reached 5.9 million euros.
The net profit of the EPSO-G group was 6.3 million euros in the first half-year of 2019, 26.7 percent lower compared to 8.6 million euros in the same period a year ago.This was due to the balance of income and expenditure of electricity systemic services and the new price-forming principles of natural gas transmission services changed since the start of the year of the new five-year regulatory period.
The group’s earnings before interest, taxes, depreciation and amortization (EBITDA) in the first six months of 2019 reached 24 million euros. If compared to the same period last year, EBITDA decreased by 21.9 percent. EBITDA margin in the first half-year of 2019 was 19.3 percent (it was 25.8 percent in the first half-year of 2018).