The incomes of the Lietuvos Energijos Gamyba group of companies (hereinafter referred to as the Group) amounted to LTL 1 199.4 million (EUR 346 million) in 2013, a drop of 16.9% compared to 2012. This drop is attributed to the decline in the output of subsidised electricity and tense competition on the free market.
Despite the drop in incomes, the Group's EBITDA margin grew by 8.2%age points, from 11.8% in 2012 to 20% in 2013. This growth was triggered by the Group's successful trading of electricity. Although electricity in excess of the quota generated at the Elektrenai complex during October and a few days of November had a negative impact on the Group's financial results in commercial segment, the successful trading of electricity at the end of 2013 improved the Group's annual trading results.
In 2013, the Group reduced its operating costs by more than a fifth (22.4%) to LTL 1 076.7 million (EUR 310 million) compared to 2012, mostly due to the reduction of variable costs.
The Group's net profit in 2013 amounted to LTL 108.6 million (EUR 31 million), an increase by 2.8 times compared to LTL 38.6 million (EUR 11 million) in 2012.
"The year 2013, especially the second half, was particularly challenging due to the complicated situation in the electricity market that made it very difficult to balance the portfolio of power generation and procurement portfolio. Nevertheless, this difficulty was overcome and the Group's financial results reflected the objectives of every employee pursued throughout the entire 2013 – to enhance operating efficiency, use resources sustainably and provide quality services to customers. In 2013, we did our homework and laid the foundations for the implementation of the major project – the construction of heat energy production capacities in Elektrenai. The construction of a biofuel boiler plant in Elektrenai is already underway. We hope that this and other investment projects will ensure efficient power production in the nearest future," said Juozas Bartlingas, CEO and Chairman of the Board of Lietuvos Energijos Gamyba.
The power plants, controlled by Lietuvos Energijos Gamyba, generated a total 1.96 TWh of electricity in 2013, a decline of 11% from 2.2 TWh in 2012.
In 2013, the Elektrenai complex which comprises a Combined Cycle Unit and a Standby Power Plant generated 1.08 TWh of electricity, including 0.18 TWh above the quota of subsidised electricity granted for the Elektrenai complex. The Elektrenai complex exhausted most of its 2013 quota in January-September of 2013. Due to the restriction of electricity import in the fourth quarter of 2013, which resulted in peak power deficit, the Combined Cycle Unit operated nearly the whole October and the 300 MW unit of the Standby Power Plant operated a few days in November to generated power in excess of the quota to maintain the stability of electricity prices.
In 2013, the Kaunas Hydroelectric Power Plant generated 0.41 TWh of electricity from renewable energy resources, a growth by nearly one-third from 0.31 TWh in 2012. This growth is attributed to the higher than average discharge of the Nemunas River. Among the purchasers of the certified Green Lithuanian Energy generated at the Kaunas Hydroelectric Power Plant were 8 household customers and 40 business customers of the Group's company Energijos Tiekimas.
The output of the Kruonis Pumped Storage Hydroelectric Plant did not change remarkably in 2013 and stood at 0.48 TWh compared with 0.47 TWh in 2012.
The Group's regulated activity encompasses electricity generation at the Standby Power Plant in Elektrenai, heat production and power reserving services provided by the Standby Power Plant and Kruonis Pumped Storage Hydroelectric Plant. As the output of subsidised electricity declined in 2013, the Group's incomes from regulated activity amounted to LTL 516.2 million (EUR 149 million) compared to LTL 596.7 million (EUR 172 million) in 2012.
The Group's commercial activity involves power generation at the Kruonis Pumped Storage Hydroelectric Plant and the Kaunas Hydroelectric Power Plant as well as selling electricity on the free wholesale and retail market and providing other services. Due to high competition on the free market, the Group's incomes from commercial activity fell by 19.4% to LTL 683.2 million (EUR 197 million) in 2013 compared to 2012. The effective electricity trading strategy helped the Group to boost its profit before taxes (PBT) from commercial activity by 26.5%, from LTL 59.6 million (EUR 17 million) in 2012 to LTL 75.4 million (EUR 21 million) in 2013.
Electricity distribution network operator's LESTO group was profitable in 2013 – unaudited consolidated net profit amounted to LTL 47.646 million (EUR 13.7 million), while during the same period of 2012 LESTO group's consolidated net loss was LTL 45.586 million (EUR 13.1 million). The results are improved due to more efficient company's operations and increasing volume of network service, writes LETA/ELTA.
Group's revenue increased by 6.5%, from LTL 2,284 billion (EUR 659 million) in 2012 to 2.431 billion (EUR 701 million) in 2013. Such change of revenue was influenced by the increased Public Service Obligations (PSO) fee, increased prices of electricity transmission services and higher electricity purchase prices in 2013 – during the twelve months electricity purchase costs and costs of related services increased by 4.6% comparing with the same period of 2012 and made up 1.668 billion LTL. Volume of network service increased by 1.2% and reached 8.209 billion kWh.
"Several reasons influenced better LESTO results. We reviewed internal processes, improved them, therefore, more efficient activities keeps the operating costs low. Timely investments made, lead to lower electricity losses in technological devices. Significant impact on the company's results made up the recovery of national economy – the volume of network service rose, the number of new customers increased, consequentially the revenue of the company's raises," states Aidas Ignatavicius, CEO of LESTO AB.
The increase in effectiveness of LESTO group determine growing EBITDA margin (Earnings Before Interest, Taxes, Depreciation and Amortization) – during 2013 it was 18.86% when in the same period of 2012 – 17.12%. EBITDA of the group increased by 17.3% comparing with the twelve months of 2012 (LTL 390.964 million (EUR 112 million)) and reached LTL 458.582 million (EUR 132 million).
Technological losses experienced by the Company during 2013 totalled to 7.5% from the amount of electricity received while during the same period of 2012 technological losses totalled to 7.8%. This means that less electricity is lost in the distribution network and the greater part of it is provided to consumers.
"LESTO continues to focus on increasing the efficiency of its activities in 2014. Currently, the long-term investment strategy, which includes the modernisation of distribution network, construction of cable lines that are resistant to the effects of natural disasters, installation of smart meters, information technologies and other important areas, is reviewed. By increasing the efficiency of business services, not only the company's costs reduce, but also the quality of customer service is improved," says Ignatavicius.
32% of electricity network service volume was allocated to residents. Industrial and service institutions consumed 28% and 11% respectively.
The value of LESTO group assets at the end of the reporting period made up LTL 5,087 billion (EUR 1.4 billion). Non-current assets share in total assets was equal to 94.8%.
LESTO is one of the biggest companies by market capitalization in OMX Baltic securities exchange market.
LESTO is part of Lietuvos Energija, UAB, group.
