OREANDA-NEWS. In the first quarter of 2015, Latvenergo Group income constituted 259.5 million euros, or 20% less compared to the first 3 months of 2014. The decrease in revenues was mainly determined by discontinuation of recognising the mandatory procurement public service obligation fee income in the revenue of Latvenergo Group along with Enerģijas publiskais tirgotājs AS entrance into operation on 1 April 2014. EBITDA and profit of the Group have increased by 15% to 94.8 million euros and by 28% to 39.3 million euros respectively. 24.8 million euros have been allocated to investments.

Riga, 2015-05-22 14:22 CEST (GLOBE NEWSWIRE) -- In the first quarter of 2015, Latvenergo Group successfully retained its leadership in electricity supply in the Baltics. We have increased the number of customers in neighbouring countries by more than 10%. Overall, retail electricity supply in the Baltics reached 2,132 GWh. The amount of electricity supplied in Lithuania and Estonia was 645 GWh, which is by 60% higher than the amount provided by competing electricity traders in Latvia.

On 1 January 2015, the electricity market opening for households in Latvia took place. Despite the competition, most households in Latvia have chosen to keep Latvenergo as their electricity supplier.

Latvenergo Group power plants generated 1,027 GWh of electricity and 1,019 GWh of thermal energy in the first quarter of 2015. The amount of electricity generated at Daugava hydropower plants (Daugava HPPs) has increased by 5% compared to the respective period last year, reaching 739 GWh. However, output of electricity at the Riga combined heat and power plants (Riga CHPPs) in the first quarter of 2015 was 42% lower compared to the first quarter of 2014, reaching 273 GWh due to lower electricity prices on the market. Riga CHPPs operated in the market conjuncture, efficiently planning their operating modes and fuel consumption.

In the first 3 months of 2015, Latvenergo Group income constituted 259.5 million euros and profit was 39.3 million euros (first three months of 2014: 324.5 million euros and 30.8 million euros respectively). Decrease in Latvenergo Group revenue was determined by change in accounting principles along with Enerģijas publiskais tirgotājs AS entrance into operation as of 1 April 2014. Therefore, mandatory procurement revenues are no longer recognised in the revenue. Improvement of profitability, in turn, were due to opening of the electricity market to households in Latvia as of 1 January 2015. Until that, Latvenergo Group supplied households at the regulated tariff that was below the market price.

Total investments in the 3 months of 2015 amounted to 24.8 million euros. To maintain high-quality network services, technical performance indicators, and operational reliability, significant investments were made in modernising the network. Investment in network assets accounted for 80% of all investments in the first 3 months of 2015. A significant portion of investments were also allocated to environmentally friendly and environmental improvement projects. After the reporting period, in 2015, an agreement with the European Commission Innovation and Networks Executive Agency was concluded regarding to the final stage of the Kurzeme Ring project, Ventspils–Tume–Rīga, stipulating 45% EU co-funding of eligible project costs. Within the framework of the Daugava HPP hydropower unit reconstruction programme, an agreement was concluded on reconstruction of six hydropower units at the Riga HPP.  As part of its plan to attract borrowed capital and diversify Latvenergo Group borrowing sources, Latvenergo AS is planning to implement a new bond offering programme totalling up to 100 million euros. The bonds are planned to be included in the NASDAQ OMX Baltic Bonds List.

In early 2015, the Moody’s Investors Service international credit rating agency upgraded the Latvenergo AS credit rating to Baa2 with a stable outlook.

Next interim financial statements of Latvenergo Group in 2015 will be published on 31 August and 30 November.

[1] EBITDA – earnings before interest, taxes, depreciation and amortisation.

Key Performance Indicators

Operational Figures

    Q1 2015  Q1 2014
Retail electricity supply GWh 2,132 2,487
Electricity generation GWh 1,027 1,192
Thermal energy supply GWh 0,990 1,077
Number of employees   4,142 4,567
Moody's credit rating   Baa2 (stable) Baa3 (stable)

 

Financial Figures

    Q1 2015 Q1 2014
Revenue MEUR 259.5 324.5
EBITDA 1) MEUR 94.8 82.5
Net profit MEUR 39.3 30.8
Assets MEUR 3,526.8 3,598.0
Equity MEUR 2,059.4 2,050.1
Net debt2) MEUR 688.6 679.7
Investments MEUR 24.8 27.5

 

Financial Ratios

    Q1 2015  Q1 2014 
Net debt /EBITDA 3)   2.8 2.5
EBITDA margin 4)   26% 24%
Capital ratio 5)   58% 57%

 

1) EBITDA: earnings before interest, corporate income tax, share of profit or loss of associates, depreciation and amortisation, and impairment of intangible and fixed assets

2) Net debt: borrowings at the end of the period minus cash and cash equivalents at the end of the period

3) Net debt / EBITDA: net debt to EBITDA ratio (12-month rolling)

4) EBITDA margin: EBITDA / revenue (12-month rolling)

5) Capital ratio: total equity / total assets
 

Consolidated Statement of Profit or Loss*

For the 3 months ended 31st of March 2015

  01/01–31/03/2015 01/01–31/03/2014
  EUR'000 EUR'000
     
Revenue 259,506 324,495
Other income 1,199 1,128
Raw materials and consumables used (127,615) (204,164)
Personnel expenses (22,578) (23,528)
Depreciation, amortisation and impairment of property, plant and equipment (43,702) (43,798)
Other operating expenses (15,698) (15,398)
Operating profit 51,112 38,735
Finance income 694 751
Finance costs (4,959) (5,132)
Share of profit / (loss) of associates – (329)
Profit before tax 46,847 34,025
Income tax (7,591) (3,251)
Profit for the period 39,256 30,774

 

Consolidated Statement of Financial Position*

  31/03/2015 31/12/2014
  EUR'000 EUR'000
ASSETS    
Non–current assets    
Intangible assets and property, plant and equipment 3,059,314 3,079,327
Investment property 1,345 1,343
Non–current financial investments 41 41
Investments in held–to–maturity financial assets 28,513 28,528
Other non–current receivables 12 14
Total non–current assets 3,089,225 3,109,253
     
Current assets    
Inventories 25,032 22,560
Trade receivables and other receivables 261,890 233,752
Cash and cash equivalents 150,656 121,011
Total current assets 437,578 377,323
TOTAL ASSETS 3,526,803 3,486,576
     
EQUITY    
Share capital 1,288,446 1,288,446
Reserves 645,181 645,829
Retained earnings 118,174 79,995
Equity attributable to equity holders of the Parent Company 2,051,801 2,014,270
Non–controlling interests 7,608 6,531
Total equity 2,059,409 2,020,801
     
LIABILITIES    
Non–current liabilities    
Borrowings 709,719 688,297
Deferred income tax liabilities 273,884 268,026
Provisions 14,546 15,588
Derivative financial instruments 12,870 11,698
Other liabilities and deferred income 195,221 194,474
Total non–current liabilities 1,206,240 1,178,083
     
Current liabilities    
Trade and other payables 122,858 139,912
Borrowings 129,581 138,925
Derivative financial instruments 8,715 8,855
Total current liabilities 261,154 287,692
Total liabilities 1,467,394 1,465,775
TOTAL EQUITY AND LIABILITIES 3,526,803 3,486,576

*Unaudited Interim Condensed Consolidated Financial Statements. Prepared in accordance with the IFRS as adopted by the EU