OREANDA-NEWS. Net profit for the Lietuvos Energija group of companies* (hereinafter referred to as the Group) in 2012 totalled 36 million LTL and was eighteen times larger than in 2011, when it equalled two million LTL. The Group’s revenue, in comparison to the previous year, increased by fourteen million LTL and totalled 1.444 billion LTL (1.430 billion LTL in 2011), while expenses decreased by 27 million LTL to 1.389 billion LTL.

Lietuvos Energija's profit increase is primarily attributed to successful commercial activity in the free market and efficient operational management, which helped reduce regulated activity losses. Although competition in the free market increased sharply, the Group of companies’ sales within it increased by more than a fifth, which helped offset decreased sales to Lesto, according to Lietuvos Energija managing director Dalius Misiunas.

The Group’s pre-tax profit from commercial activity in 2012 equalled 58 million LTL before taxes, while losses from regulated activity totalled thirteen million LTL.

Compared to 2011, in 2012 the Group’s EBITDA doubled, equalling 137 million LTL. With profitability indicators improving twofold, the EBITDA margin equalled 9.5 percent.

Elektrenai ensured the security of the electricity supply

The general trend in the electricity market in 2012 was an decrease in prices. This was particularly influenced by the prices that developed in the Estonian and Finnish Nord Pool Spot (NPS) pricing zones.

In the Finnish NPS pricing zone, the average price of electricity in 2012 equalled 126.98 LTL/MWh and was 26 percent lower than in 2011. In the Estonian NPS pricing zone, last year the price equalled 135.53 LTL/MWh and, compared to the average price in 2011, was almost ten percent lower.

Meanwhile, prices in the Lithuanian electricity exchange during this period were fairly stable (the average price of electricity was one percent lower than in 2011 and equalled 154.21 LTL/MWh). Since NPS became the administrator of the Lithuanian electricity exchange on 18 June 2012, Lithuanian and Latvian companies trade not through the Estonian exchange but through the Estonian and Latvian power grid’s ELE exchange area. During the months of June – December 2012, the average price in the NPS ELE zone equalled 144.05 LTL/MWh.

Nevertheless, according to D. Misiunas, although prices did decrease, unexpected spikes were unavoidable in 2012. Ensuring supply security and controlling price fluctuations in such cases was made possible by the reliable operation of power plants belonging to Lietuvos Energija, especially the reserve power plant in Elektrenai.

For example, the January-February records in both 2010 and 2011 were broken by the Lithuanian exchange’s price, which increased to 348.72 LTL/MWh due to a noteworthy cold spell and increased electric power demand during the first ten days of February 2012. Later in Elektrenai, more was produced at the end of the summer; during this time, on 20 August, the price on the Lithuanian electricity exchange grew to the highest level in the history of the exchange and peaked at 692.60 LTL/MWh. This price increase, according to data from Litgrid, the transmission system operator, resulted from an unplanned disconnection of a transmission line in Russia that has a significant effect on the ability to import electric power in Lithuania and Latvia.

More electricity was produced

In total, power plants operated by Lietuvos Energija produced in 2.21 TWh of electric power in 2012, or nine percent more than in 2011. Demand for electric power in Lithuania did not change much during this period and equalled 10.6 TWh.

In Elektrenai in 2012, 1.42 TWh of supported electric power production was produced, or 29 percent more electric power than in 2011. Meanwhile, production in other power plants belonging to the company decreased during this period.

Production at the Kruonis Pumped Storage Plant decreased twelve percent compared to 2011. The scope of electricity production at the Kaunas Hydroelectric Power Plant during the period mentioned fell by twenty percent because the average flow rate of the Nemunas River was significantly lower than the multi-year average.

More was sold in the free market

The Group successfully took advantage of the possibilities provided by another market-freeing stage that ended on 1 January 2012, when users whose maximum capacity exceeded 30 kW were able to choose independent suppliers. The quantity of electric power sold in the free market increased by nineteen percent in 2012 compared to 2011, to 2.45 TWh. Meanwhile, sales of electric power to LESTO AB decreased by sixteen percent due to the ever-increasing number of users who chose independent electric power suppliers. Energijos Tiekimas, a company belonging to the group, served the most free market users, approximately 35-40 percent.

During 2012, the number of users of “Green Lithuanian Energy” produced by the Kaunas Hydroelectric Power Plant also grew. Energijos Tiekimas supplied electric power produced from renewable resources to ten legal entities and one natural person, who collectively used approximately twenty percent of the green energy produced by the Kaunas Hydroelectric Power Plant.

The largest investment project was completed

In 2012, Lietuvos Energija completed the combined cycle unit project in Elektrenai on time and within the framework of the planned budget. Construction took three years, and the total value of the project equalled 1.3 billion LTL. It is planned that the unit, which uses 30 percent less natural gas than the power plant’s old units, will produce the majority of the electric power produced in Elektrenai in 2013. Due to the higher efficiency of the new unit and reduced production quotas, more PSO funds will be saved in 2013.

The Group’s investment in long-term material assets in 2012 equalled 181 million LTL (whereas in 2011 it was 271 million LTL). During both periods, the greatest part of the investment was made up of investments in the combined cycle unit project.