Latvenergo Group Consolidated
and Latvenergo AS Annual Report
2022
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Latvenergo Group Consolidated and Latvenergo AS Annual Report
Financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS)
This is pdf format of the annual report further converted to the ESEF report to be considered as the official annual report prepared in accordance with the respective requirements
Contents
3 Key Figures
5 Management Report
12 Financial Statements
12 Statement of Profit or Loss
12 Statement of Comprehensive Income
13 Statement of Financial Position
14 Statement of Changes in Equity
15 Statement of Cash Flows
16 Notes to the Financial Statements
63 Independent Auditors’ Report
Notes to the Financial Statements
16 No. 1. Corporate information
16 No. 2. Summary of significant accounting policies
20 No. 3. Financial risk management
23 No. 4. Critical accounting estimates and judgements
27 No. 5. Operating segment information
30 No. 6. Revenue
33 No. 7. Other income
33 No. 8. Raw materials and consumables
33 No. 9. Personnel expenses
34 No. 10. Other operating expenses
34 No. 11. Finance income and costs
34 No. 12. Income tax
35 No. 13. Intangible assets
36 No. 14. Property, plant and equipment
41 No. 15. Leases
43 No. 16. Non–current financial investments
44 No. 17. Inventories
45 No. 18. Receivables from contracts with customers and other receivables
47 No. 19. Cash and cash equivalents
47 No. 20. Share capital
48 No. 21. Reserves, dividends and earnings per share
48 No. 22. Other financial investments
49 No. 23. Borrowings
50 No. 24. Derivative financial instruments
52 No. 25. Fair values and fair value measurement
55 No. 26. Trade and other payables
55 No. 27. Provisions
57 No. 28. Deferred income
58 No. 29. Related party transactions
61 No. 30. Commitments and contingent liabilities
62 No. 31. Events after the reporting year
FINANCIAL CALENDAR
Interim Condensed Financial Statements:
For the 3 months of 2023 (unaudited) – 31.05.2023
For the 6 months of 2023 (unaudited) – 31.08.2023
For the 9 months of 2023 (unaudited) – 30.11.2023
22
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Key figures
In order to ensure an objective and comparable presentation of the financial results, Latvenergo Group and Latvenergo AS uses various financial figures and ratios that are derived from the financial statements.
Latvenergo Group
Operational figures 2022 2021 2020 2019 2018
Total electricity supply, incl.: GWh 7,346 9,260 8,854 9,259 9,984
- Retail* GWh 5,452 6,706 6,394 6,505 6,954
- Wholesale** GWh 1,894 2,554 2,460 2,754 3,030
Total natural gas supply, incl.: GWh 1,040 1,026 516 303 147
- Retail GWh 930 1,026 516 303 147
- Wholesale GWh 110 – – – –
Electricity generated GWh 3,822 4,517 4,249 4,880 5,076
Thermal energy generated GWh 1,777 2,072 1,702 1,842 2,274
Number of employees 3,316 3,153 3,295 3,423 3,508
Moody’s credit rating Baa2 (stable) Baa2 (stable) Baa2 (stable) Baa2 (stable) Baa2 (stable)
EUR’000
Financial figures 2022 2021 2020 2019 2018
Revenue*** 1,841,801 1,065,219 773,391 841,636 838,805
EBITDA*** 360,209 198,813 277,894 243,526 281,947
Operating profit 193,961 81,890 121,350 100,365 81,983
Profit before tax 184,545 74,930 112,699 92,072 74,734
Profit for the year 183,874 71,623 116,309 94,359 75,955
Dividends paid to equity holder of the Parent Company 70,160 98,246 127,071 132,936 156,418
Assets 3,855,330 3,475,890 3,358,835 3,864,941 3,798,819
Non–current assets 3,078,635 2,894,502 2,976,192 2,798,712 3,364,534
Equity 2,356,419 2,123,448 2,118,242 2,265,487 2,320,065
Borrowings 875,918 795,029 743,199 882,671 814,343
Net debt
1)
*** 763,161 697,950 555,876 563,959 505,419
Net cash flows generated from operating activities 173,143 131,749 291,194 315,433 302,869
Adjusted funds from operations (FFO)
2)
378,222 219,534 269,479 271,593 209,732
Capital expenditure 121,666 126,728 168,855 229,427 220,607
Based on the most commonly used financial figures and ratios in the industry, the Latvenergo Group
Strategy for 2022-2026 (see also the Management Report – section Further development, and
Sustainability Report), as well as the binding financial covenants set in the Group’s loan agreements,
Latvenergo Group has set here and therefore uses the following financial figures and ratios:
y profitability measures – EBITDA; EBITDA margin; operating profit margin; profit before tax margin;
profit margin; return on assets (ROA); return on equity (ROE); adjusted ROE excluding distribution;
return on capital employed (ROCE)
y capital structure measures – net debt
1)
; adjusted FFO
2)
/net debt; equity–to–asset ratio; net
debt/EBITDA; net debt / equity; current ratio
y a dividend policy measure – dividend pay–out ratio
Starting from this year report, the financial figures and ratios have supplemented by the following:
adjusted FFO / net debt and adjusted ROE excluding distribution business. These ratios are included in
the Latvenergo Group Strategy for 2022-2026.
* Including operating consumption
** Including sale of energy purchased within the mandatory procurement on the Nord Pool
*** Figures and ratios for 2018 - 10 June 2020 are presented by excluding discontinuing operations (unbundling transmission system asset ownership)
1) Net debt = borrowings at the end of the reporting year – cash and cash equivalents at the end of the reporting year
2) Adjusted funds from operations (FFO) = Net cash flows generated from operating activities – (changes in inventories + changes in receivables from contracts
with customers and other receivables) – changes in trade and other liabilities –compensation from the state-on-state support for the installed capacity of
CHPPs
Financial ratios 2022 2021 2020 2019 2018 Formulas
EBITDA margin 20% 19% 36% 29% 34% EBITDA / revenue
Operating profit margin 10.5% 7.7% 15.7% 11.9% 9.8% Operating profit / revenue
Profit before tax margin 10.0% 7.0% 14.6% 10.9% 8.9% Profit before tax / revenue
Profit margin 10.0% 6.7% 15.0% 11.2% 9.1% Profit for the year / revenue
Adjusted FFO / net debt 52% 35% 48% 51% 42% Adjusted FFO / ((net debt at the beginning of the reporting year + net debt at the end of the reporting year) /2)
Equity–to–asset ratio 61% 61% 63% 59% 61% Equity at the end of the reporting year / assets at the end of the reporting year
Net debt / EBITDA 2.0 3.2 2.0 2.2 1.8 (Net debt at the beginning of the reporting year + net debt at the end of the reporting year) / 2 / EBITDA
Net debt / equity 0.32 0.33 0.26 0.25 0.22 Net debt at the end of the reporting year / equity at the end of the reporting year
Current ratio 1.2 1.4 1.5 1.2 1.5 Current assets at the end of the reporting year / current liabilities at the end of the reporting year
Return on assets (ROA) 5.0% 2.1% 3.2% 2.5% 1.8% Profit for the year / ((assets at the beginning of the reporting year + assets at the end of the reporting year) / 2)
Return on equity (ROE) 8.2% 3.4% 5.3% 4.1% 2.9% Profit for the year / ((equity at the beginning of the reporting year + equity at the end of the reporting year) / 2)
Adjusted ROE excluding distribution 16.3% 5.5% 7.7% 4.8% 2.6%
(Group's profit for the year – Sadales tīkls AS profit for the year) / ((Group's equity at the beginning of the reporting year – Sadales tīkls
AS equity at the beginning of the reporting year + Group's equity at the end of the reporting year – Sadales tīkls AS equity at the end
of the reporting year) / 2)
Return on capital employed (ROCE)*** 6.3% 2.9% 4.2% 3.4% 2.5%
Operating profit / ((equity at the beginning of the reporting year + equity at the end of the reporting year) / 2) + (borrowings at the
beginning of the reporting year + borrowings at the end of the reporting year) / 2)
Dividend pay–out ratio 88% 63% 126% 62% 104% Dividends paid to equity holder of the Parent Company / profit of the Parent Company in the previous year
33
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Latvenergo AS
Operational figures 2022 2021 2020 2019 2018
Total electricity supply, incl.: GWh 4,700 5,304 5,318 5,502 5,826
- Retail* GWh 3,540 3,999 4,235 4,211 4,406
- Wholesale** GWh 1,161 1,305 1,083 1,290 1,419
Total natural gas supply, incl.: GWh 905 804 453 294 145
- Retail GWh 795 804 453 294 145
- Wholesale GWh 110 – – – –
Electricity generated GWh 2,678 4,495 4,215 4,832 5,028
Thermal energy generated GWh 1,531 1,800 1,475 1,603 2,007
Number of employees at the end of the
reporting year 1,329 1,269 1,267 1,328 1,355
Moody’s credit rating Baa2 (stable) Baa2 (stable) Baa2 (stable) Baa2 (stable) Baa2 (stable)
EUR’000
Financial figures 2022 2021 2020 2019 2018
Revenue 1,231,015 592,785 385,612 437,529 435,199
EBITDA 280,325 85,275 197,889 112,651 160,927
Operating profit 198,812 52,367 111,630 45,108 33,803
Profit before tax 209,362 79,520 154,848 101,227 212,760
Profit for the year 209,362 79,520 154,848 101,227 212,733
Dividends paid to equity holder of the Parent Company 70,160 98,246 127,071 132,936 156,418
Assets 3,305,536 2,915,587 2,760,155 3,136,958 3,141,109
Non–current assets 2,434,746 2,215,793 2,307,985 2,615,113 2,661,307
Equity 2,018,694 1,761,070 1,746,436 1,949,287 1,993,823
Borrowings 863,938 782,322 733,392 872,899 802,268
Net debt
1)
*** 763,670 689,904 548,511 555,348 494,944
Net cash flows generated from operating activities 305,063 355,549 446,162 378,142 394,395
Capital expenditure 30,040 29,545 50,999 48,269 41,350
*Including operating consumption
** Including sale of energy purchased within the mandatory procurement on the Nord Pool
*** Figures and ratios for 2018 - 10 June 2020 are presented by excluding discontinuing operations (unbundling transmission system asset ownership)
1) Net debt = borrowings at the end of the reporting year – cash and cash equivalents at the end of the reporting year
Financial ratios 2022 2021 2020 2019 2018 Formulas
EBITDA margin 22.8% 14.4% 51.3% 25.7% 37.0% EBITDA / revenue
Operating profit margin 16.2% 8.8% 28.9% 10.3% 7.8% Operating profit / revenue
Profit before tax margin 17.0% 13.4% 40.2% 23.1% 48.9% Profit before tax / revenue
Profit margin 17.0% 13.4% 40.2% 23.1% 48.9% Profit for the year / revenue
Equity–to–asset ratio 61% 60% 63% 62% 63% Equity at the end of the reporting year / assets at the end of the reporting year
Net debt / equity 0.38 0.39 0.31 0.29 0.25 Net debt at the end of the reporting year / equity at the end of the reporting year
Current ratio 1.5 1.8 2.3 1.8 2.0 Current assets at the end of the reporting year / current liabilities at the end of the reporting year
Return on assets (ROA) 6.7% 2.8% 5.3% 3.2% 6.3% Profit for the year / ((assets at the beginning of the reporting year + assets at the end of the reporting year) / 2)
Return on equity (ROE) 11.1% 4.5% 8.4% 5.1% 9.7% Profit for the year / ((equity at the beginning of the reporting year + equity at the end of the reporting year) / 2)
Return on capital employed (ROCE)*** 7.3% 2.1% 4.4% 1.7% 1.2%
Operating profit / ((equity at the beginning of the reporting year + equity at the end of the reporting year) / 2) + (borrowings at the
beginning of the reporting year + borrowings at the end of the reporting year) / 2)
Dividend pay–out ratio 88% 63% 126% 62% 104% Dividends paid to equity holder of the Parent Company / profit of the Parent Company in the previous year
44
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Management Report
Latvenergo Group (the Group) is one of the largest power suppliers and a leader in green energy
generation in the Baltics, operating in electricity and thermal energy generation and trade, natural gas
trade, supply of products and services related to electricity consumption and energy efficiency, and
electricity distribution services.
Latvenergo Group – one of the largest power suppliers in the Baltics
The parent company of Latvenergo Group is Latvenergo AS which is a power supply utility operating in
electricity and thermal energy generation and trade, natural gas trade, as well as supply of products and
services related to electricity consumption and energy efficiency in Latvia.
Latvenergo Group divides its operations into two operating segments: generation and trade; and
distribution.
Operating Environment
With Russia’s invasion of Ukraine in 2022, Europe experienced a process of reorganization and adaptation
of the natural gas market, gradually abandoning Russian gas and replacing it with supplies of liquefied
natural gas. This process affected the supply of not only natural gas, but also other energy resources,
which contributed to a significant increase in their prices. In 2022, the Nord Pool system price was
2.2times higher than in 2021 (+118%), reaching 136 EUR/MWh. The rapid rise in electricity prices in the
Nord Pool region continued to be affected by record-high energy resource prices and lower generation
of hydropower plants in the Nordics. The electricity price in the Baltics is affected by gas-fired power
plants. Given that the price of natural gas in 2022 was about 2.8 times higher, exceeding 132EUR/MWh
(in 2021, it was 47 EUR/MWh), the price of electricity also increased significantly. The electricity price in
Latvia increased 2.5 times. In August, a historical average monthly price record was reached, exceeding
467EUR/MWh.
In 2022, Europe gained a new energy balance with liquefied natural gas (LNG) supplies, gradually
abandoning Russian gas, while also reducing gas consumption. The high import of LNG during the
reporting year with lower consumption of natural gas due to warmer weather contributed to the increase
in the natural gas reserve fill rate in Europe’s gas storage facilities to 83% at the end of December (a year
ago– 54%).
Record-high electricity and energy resource prices
Average electricity price in Nord Pool regions, EUR/MWh (monthly)
Region 2022 2021 Δ, %
Latvia 225.9 88.6 155%
Lithuania 229.2 90.2 154%
Estonia 192.0 86.5 122%
France 275.9 108.8 154%
Great Britain 239.4 137.1 75%
Germany 235.5 96.6 144%
Denmark 213.7 87.8 143%
Poland 166.7 86.7 92%
Finland 153.5 72.2 113%
Norway 117.0 56.8 106%
Sweden 100.3 57.8 74%
The average price of CO
2
emission allowances (EUA DEC.22) was 1.5 times higher than a year ago,
reaching 81.0 EUR / t. The rise in allowance prices was impacted by rising raw material prices, a lower
amount of emission allowances allocated to the market, and the decision of the European Parliament
on the sale of quotas for the partial financing of REPowerEU in the amount of EUR 20 billion to reduce
Europe’s dependence on Russian energy resources. At the end of the reporting year, the EU approved a
62% reduction in emissions by 2030.
100
200
300
400
500
Jan 2021 Apr 2021 Jul 2021 Oct 2021 Jan 2022 Apr 2022 Jul 2022 Oct 2022
Energy resource prices
EUR/MWh, EUR/t
Electricity: Nord Pool Latvia Natural gas: TTF CO
2
emmission allowances
55
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Significant Events
State aid for the reduction of energy prices
Taking into account the extraordinary increase in energy prices, in January 2022, the Saeima of the
Republic of Latvia adopted a law on measures to reduce it. The aim of this law is to mitigate the negative
socioeconomic impact on the well-being of the population and economic growth which is associated
with this unprecedented sharp rise in energy prices. The original law provided for various types of support
measures to legal and natural persons to partially compensate the rising costs of energy resources
for four months (from 1 January to 30 April 2022). Meanwhile, the amendments made to the Law in
August and September stipulate that support measures will also be realised from 1 September 2022 to
31May2023. The implementation of the support measures specified by law is ensured through the state
budget programme “Contingency Funds”. Various state support mechanisms for reducing energy prices
have been established in Estonia and Lithuania.
Latvenergo is purposefully moving towards developing wind energy in
Latvia
On 22 July, Latvijas vēja parki SIA, a joint venture of Latvenergo AS and Latvijas valsts meži AS for the
development of wind parks of strategic importance, was registered. The objective of the joint venture is to
build wind farms in Latvia with a total capacity of at least 800 MW by 2030, which will ensure a significant
increase in renewable electricity generation capacity and contribute to Latvia’s progress towards energy
independence, security and climate neutrality, while reducing GHG emissions, preserving natural diversity
and developing a circular economy.
Meanwhile, on 16 September, Latvenergo and RWE – the global leader in renewable energy – signed a
memorandum of cooperation to develop, build and manage offshore wind projects off the coast of Latvia.
The new partnership is focused on participating in the upcoming auctions for the rights to develop the
Latvian-Estonian joint project ELWIND for the delivery of 1 gigawatt (GW) of offshore wind energy, as well
as development of offshore wind farms in other Latvian offshore areas.
Russia’s invasion of Ukraine
On 24 February 2022, the Russian Federation launched an invasion of the Republic of Ukraine. Shortly
after the invasion, the EU and the rest of the world, including global bodies, imposed a wide-ranging set
of restrictive measures against Russia which is updated and expanded on a regular basis.
The restrictive measures imposed had no significant impact on the Group’s performance; no significant
direct losses related to the restrictive measures have been incurred. Latvenergo Group has evaluated its
contracts, and as a result several of them were terminated. Latvenergo Group has not entered into any
significant direct agreements with companies in Russia, Belarus, or Ukraine which could have a significant
negative impact on the Group’s operations in the current situation. The general economic downturn could
have an additional impact on Latvenergo Group’s financial results.
Assessing the possible risks related to Russia’s invasion of Ukraine, on 21 April 2022, amendments to
the Energy Law of the Republic of Latvia were accepted which stipulate that the purchase and storage of
natural gas to ensure energy supply reserves on behalf of the state shall be organised by LatvenergoAS.
Thanks to timely deliveries of gas reserves from Norway, the USA, and Qatar, the generation of electricity
and thermal energy in Latvenergo AS thermal power plants was successfully ensured in accordance with
the planned production regime for the reporting year, ensuring the necessary amount of natural gas for
state reserves as well. On 31 December 2022, the natural gas reserves recognized in the Group’s balance
sheet comprised EUR 241.6 million (31/12/2021: – EUR 115.5 million); this has increased the current
assets and net borrowings of the Group accordingly.
As of 1 January 2023, natural gas from Russia is prohibited by law in Latvia. Latvenergo AS has not
imported natural gas from Russia since 24 February 2022, switching to supplies of liquefied natural
gas from other countries. Therefore, this ban will not affect the natural gas supply of Latvenergo AS. In
September 2022, Latvenergo AS participated in the long-term liquid natural gas (LNG) terminal capacity
allocation procedure organised by Klaipėdos nafta AB and obtained the rights to use the Klaipėdos nafta
terminal’s annual capacity of 6 TWh for the next 10 years for regular supplies of natural gas. In 2022,
LatvenergoAS concluded contracts for the supply of 3 TWh of LNG from the USA and Norway for the
first half of 2023.
Operating Results
Generation
Latvenergo Group is the largest green electricity producer in the Baltics. In 2022, Latvenergo Group
produced 24% of the total electricity generated in the Baltics. The total amount generated by Latvenergo
Group’s power plants comprised 3,822 GWh of electricity and 1,777 GWh of thermal energy.
Latvenergo Group is a leader in green energy generation in the Baltics
In 2022, the amount of power generated at the Daugava HPPs was at about the same level as in 2021,
reaching 2,670 GWh. The amount of power generated at the Daugava HPPs was impacted by slightly
higher water inflow in the river Daugava. According to data from the Latvian Environment, Geology and
Meteorology Centre, the average water inflow in the Daugava River in the reporting year was 506 m
3
/s,
while in the year 2021 it was 497 m
3
/s.
The amount generated at the Latvenergo AS CHPPs comprised 1,123 GWh, which is 39% lower than
a year ago. The decrease in the amount of power generated at the CHPPs was impacted by the price
of natural gas, the main fuel resource in the Latvenergo AS CHPPs’ operation, which was almost three
66
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
times higher. Also, the price of CO
2
emission allowances was 53% higher. The operation of the CHPPs is
adjusted to the conditions of the electricity market and heat demand.
With the decrease in the electricity output at the Latvenergo AS CHPPs, the share of electricity generated
from renewable energy sources at Latvenergo Group reached 70%, which is one of the highest levels
historically (in 2021: 59%).
The total amount of thermal energy generated by Latvenergo Group decreased by 14% due to warmer
weather conditions in the heating season. Data from the Central Statistical Bureau show that the average
air temperature in Riga in the reporting year was +3.0 C°, whereas in the respective period a year ago it
was +1.8 C°.
Trade
Latvenergo Group is one of the largest energy traders in the Baltics, offering its customers electricity and
natural gas, as well as a wide range of related products and services, under the Elektrum brand.
The number of electricity customers increased by 8%
In 2022, total electricity consumption in the Baltics was on average 5% lower compared to 2021, reaching
27.7TWh. The decrease was affected by warmer weather conditions at the beginning of the year and
higher prices of electricity throughout 2022.
100
200
300
400
500
600
700
Jan 2021 Apr 2021 Jul 2021 Oct 2021 Jan 2022 Apr 2022 Jul 2022 Oct 2022
Electricity generation at Daugava HPPs and Latvenergo AS CHPPs
GWh
Latvenergo AS CHPPs Daugava HPPs
In the reporting period, there was an 8% increase in the number of electricity customers, which comprised
more than 818 thousand, including more than 175 thousand foreign customers. The electricity customer
portfolio shows a positive increase in both the business and household customer segments, mainly due
to the increase in the number of customers within households in Lithuania.
In 2022, the Group supplied 5,452 GWh of electricity to its customers in the Baltics, which is 19% less
than a year ago. The decrease was mainly impacted by the adjustment of electricity sales strategy for
large business customers.
The overall amount of retail electricity trade outside Latvia accounted for about 35%. The electricity trade
volume in Latvia was 3,540 GWh, while in Lithuania it was 1,174 GWh and in Estonia it was 738 GWh.
Meanwhile, the number of natural gas customers increased by 15%, comprising more than 21 thousand
at the end of December. Given the increase in natural gas prices on the market, demand in Latvia
decreased by almost 30% compared to the year 2021. Despite this, natural gas sales in the Baltics
increased by 1.3%, reaching 1,040 GWh.
With the introduction of state support programmes for the use of renewable energy, the demand for solar
panels increased significantly. The number of contracts for the installation of solar panels and trade of solar
park components in the Baltics increased almost 5 times compared to the year 2021, exceeding6,200.
The total installed solar panel capacity (including remote solar parks) provided to Latvenergo Group’s
retail customers in the Baltics reached 38 MW; thus, Latvenergo is one of the leading providers of this
service in the Baltics. 2/3 of panels are installed for customers outside Latvia.
Moving towards the goal set in the strategy – to expand and diversify the generation portfolio with green
technologies – we continue to develop solar park projects. Currently, we have four Elektrum solar parks
in operation with a total capacity of 11 MW. Meanwhile, there are 12 solar park projects in the project
or construction stage with a total capacity exceeding 190 MW; their gradual commissioning is expected
from 2023-2025.
During the reporting year, the interest of customers in individual energy technology solutions grew
significantly. Elektrum offers its customers in the Baltics the most efficient heat pump technologies, natural
gas heating boilers, e-charging equipment, and other solutions.
In 2022, the Elektrum Drive electric car charging network grew, reaching 195 charging ports. In 2022,
more than 24,000 electric vehicle charges were made, comprising 480 MWh. In July, the most powerful
electric car charging station in the Baltics was unveiled, comprising 11 public charging ports, four of which
are ultra-fast ports with a charging capacity of up to 150 kilowatts (kW). In November, an agreement was
signed with the e-mobi network, which enables Elektrum customers to charge electric cars at more than
300ports in Latvia.
Distribution
Distribution segment provides electricity distribution services in Latvia. Sadales tīkls AS is the largest state
distribution system operator, covering approximately 99% of the territory of Latvia. Distribution system
tariffs are approved by the Public Utilities Commission (PUC).
77
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
The efficiency programme of Sadales tīkls AS was completed
At the end of the reporting year, the efficiency programme of Sadales tīkls AS started in 2017 was
completed; it comprised process reviews, decreasing the number of employees and transportation
units, and optimizing the number of technical and support real estate bases. Within the programme,
the number of workplaces at Sadales tīkls AS has been reduced by about 900. The amount of smart
electricity meters installed by the company exceeded 1,057 thousand, which is almost 98% of the total
number of electricity meters of customers of Sadales tīkls AS.
Under the law on measures to reduce the extraordinary rise in energy prices, all end-users of electricity
from 1 January to 30 April 2022 were granted state aid for the reduction of the electricity distribution
system service fee of 100%, which was fully compensated from the state budget. Meanwhile, from
1October2022 to 30 April 2023, a reduction of the electricity distribution system service fee of 100% will
be applied to legal entities, excepting state and local government institutions and including legal entities
that use the system service tariff intended for households.
In 2022, the amount of electricity distributed was 6,241 GWh, which is 4% less than in 2021. It was
affected by lower consumption due to the higher price of electricity and warmer winter.
In 2022, the intense period of storms and the delays in material deliveries due to Russia’s invasion of
Ukraine significantly impacted SAIDI and SAIFI indicators. However, excluding mass damage, the safety
and quality of electricity supply is increasing every year – SAIDI decreased by 5 minutes and SAIFI by
0.3times compared to 2021.
Considering the increase in costs due to the rapid increase in electricity prices caused by the energy
crisis and general inflation, including the planned tariff increase of the transmission system operator
Augstsprieguma tīkls AS, Sadales tīkls AS developed and submitted a new tariff project for PUC evaluation
in November. Currently, work is being done on clarifying the tariff changes. The new distribution tariff
could enter into force on 1 July 2023.
Financial Results
In 2022, Latvenergo Group’s revenue reached EUR 1,841.8 million, which was EUR 776.6 million or
73%more than a year ago. This was mainly impacted by EUR 711.2 million higher energy sales revenues
mainly due to higher electricity market prices.
Latvenergo Group’s EBITDA increased by 81%
Latvenergo Group’s EBITDA increased by EUR 161.4 million or 81% compared to the year 2021, reaching
EUR360.2 million. This was positively impacted mainly by the adjustment of electricity sales prices to the
market situation and the successfully concluded derivative financial instruments, which partially limited the
negative impact of the increase in costs due to the significant increase in the prices of energy resources
in the market. The results were negatively affected by greater expenses of purchased natural gas and
electricity. In 2022, the electricity spot price in Latvia was 2.5 times higher compared to the year 2021.
Meanwhile, the price of natural gas was almost three times higher, and the average price of CO
2
emission
allowances was 53% higher.
The Group’s profit for the reporting year reached EUR 183.9 million, which was EUR 112.3 million more
than in the previous year.
Investments
In 2022, the total amount of investment comprised EUR 121.7 million, which is 4% or EUR 5.1 million
lower compared to the year 2021.
Investment in power distribution network assets – approximately 2/3 of the total
To ensure high-quality power network service, technical parameters and operational safety, a significant
amount is invested in the modernization of the power distribution network. In the reporting year, the
amount invested in power distribution network assets represented 70% of total investment.
We continued the hydropower unit reconstruction of the Daugava HPPs. By the end of the reporting
year, work completed within the scope of the contract exceeded EUR 200 million. The hydropower unit
reconstruction programme for the Daugava HPPs provides for the reconstruction of 11 hydropower
units in order to ensure environmentally safe, sustainable and competitive operations and efficient water
resource management. In 2022, one hydro unit of Riga HPP was put into operation; thus, a total of 8 of
the11 hydro units included in the programme have already been reconstructed as of 31 December2022.
The total reconstruction costs will exceed EUR 250 million. Reconstruction will ensure functionality of the
hydropower units for more than 40 years.
Funding
Latvenergo Group finances its investments from its own resources and external long-term borrowings,
which are regularly sourced in financial and capital markets in a timely manner.
Continuing bond issuance within the framework of the third bond programme in the amount of
EUR 200 million, on May 5, 2022, Latvenergo AS issued five-year green bonds with a total nominal
value of EUR 100 million, a maturity date of 5 May 2027, a fixed annual interest rate (coupon) and a
yield of2.42%. Meanwhile, after the end of the reporting year, on February 22, 2023, LatvenergoAS
concluded the programme by issuing six-year green bonds with a total nominal value of EUR 50 million
with a maturity date of February 22, 2029, and a fixed interest rate (coupon) and yield of 4.952% per year.
The bonds are listed on Nasdaq Riga AS. The bonds were issued in the format of green bonds, according
to the Green Bond Framework of Latvenergo AS. The independent research centre CICERO Shades
of Green has rated the updated Latvenergo AS Green Bond Framework as Dark Green (the highest
category), indicating the compliance of the planned projects with long-term environmental protection and
climate change mitigation objectives, as well as good governance and transparency.
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– Key Figures
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– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Latvenergo once again receives the award for best investor relations
Also, in 2022, Latvenergo AS attracted new long-term loans from commercial banks in the amount of
EUR 200 million for the financing and refinancing of green investments of Latvenergo Group.
As of 31 December 2022, the Group’s borrowings amount to EUR 875.9 million (31 December2021:
EUR795.0million), including long-term loans in the amount of EUR 756.2 million (31 December2021:
EUR 795.0 million), which include long-term loans from commercial banks and international financial
institutions, as well as green bonds in the amount of EUR 150 million.
External funding sources are purposefully diversified in the long run, thus creating a balance between
lender categories in the total loan portfolio.
In the reporting year, all the binding financial covenants set in Latvenergo Group’s loan agreements were
met.
After the reporting year, on 9 February 2023, Latvenergo AS for the third time won the award for the best
investor relations among all bond issuers on the Nasdaq Baltic regulated markets in the Baltic countries.
Since 2012, the bonds have been issued with consistently high investor valuations.
After the reporting year, on 9 March 2023, Moody’s published an updated Credit Opinion of LatvenergoAS.
The rating of Latvenergo AS remains unchanged: Baa2 with a stable outlook. The credit rating Baa2
for Latvenergo AS has been stable since 2015, confirming the consistency of operations and financial
soundness of Latvenergo Group.
2028 2029-2034
81.9
89.6
Latvenergo Group’s debt repayment schedule
Long-term borrowings as of 31 December 2022: 756.2 MEUR
MEUR
2026 2027
53.3
153.3
2022 20242023 2025
183.6
86.5
106.4
Loans Repaid in the reporting yearGreen Bonds
185.3
Corporate Governance
Along with the financial results of Latvenergo Group, also the Corporate Governance Report of
Latvenergo AS for 2022 is published. It is based on the Corporate Governance Code, which was
published in 2020 by the Corporate Governance Advisory Board established by the Ministry of Justice.
Evaluating both the governance system of the capital company and its compliance with the principles
in 2022, the Management Board considers that Latvenergo AS complies in all material aspects with all
the principles set out in the Code, except for the criterion of gender representation on the company’s
Supervisory Board. For detailed information see the Sustainability Report 2022.
Non-financial Report
Latvenergo Group has prepared a non-financial report in accordance with the Law on the Financial
Instruments Market.
Non-financial report is prepared in accordance with the GRI Standards
For detailed information on corporate social responsibility (CSR) activities, description of the policies and
procedures in relation to those matters, the outcome of the policies, risks and risk management, and non-
financial key performance indicators, please see the Sustainability Report 2022 which is available on the
Latvenergo website. The report is prepared in accordance with the GRIStandards requirements.
The sustainability report addresses such topics as corporate social responsibility, economic performance,
product responsibility, society, employees and the work environment, environmental protection, etc.
Further Development
In March 2022, Latvenergo Group’s medium-term strategy for 2022–2026, with new strategic operational
and financial objectives, was approved by the Supervisory Board of Latvenergo AS.
New strategic objectives comprise:
y expand and diversify the generation portfolio with green technologies;
y strengthen the position of Elektrum as the most valuable energy trader in the Baltics;
y develop electrification of the transport sector;
y ensure a sustainable and economically viable distribution service and improve the security and quality
of electricity supply.
Along with the strategy approval, Latvenergo Group’s financial targets have been set. The targets are
divided into four groups – profitability, capital structure, dividend policy and other.
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About Latvenergo Group
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the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Latvenergo Group’s medium-term strategy was approved in March 2022
The financial targets are set to ensure:
y ambitious, yet achievable profitability, which is consistent with the average ratios of benchmark
companies in the European energy sector and provides for an adequate return on the business risk;
y an optimal and industry-relevant capital structure that limits potential financial risks;
y an adequate dividend policy that is consistent with the planned investment policy and capital structure
targets;
y an investment grade credit rating to secure funding for the strategy’s ambitious investment programme.
Target group Ratio Year 2026
Profitability Return on equity (ROE) excluding Distribution (*) > 7%
Capital structure Adjusted FFO / Net Debt ratio > 25%
Dividend policy Dividend pay–out ratio > 64%
Other Moody's credit rating Maintain an investment grade credit rating
* The profitability of the regulated services provided by the Group is determined by the Public Utilities Commission. The most significant share in the Group’s
regulated services is the distribution service. When evaluating the fulfilment of the ROE target, the Group’s return indicator will be assessed, excluding the
regulated return on the distribution service – ROE excluding distribution.
More information on the 2022 targets and the new strategy can be found in the Sustainability Report2022.
Financial Risk Management
The activities of Latvenergo Group and Latvenergo AS are exposed to a variety of financial risks: market
risks, credit risk, and liquidity and cash flow risk. Latvenergo Group’s Financial Risk Management Policy
focuses on eliminating the potential adverse effects from such risks on financial performance. In the
framework of financial risk management, Latvenergo Group and Latvenergo AS use various financial risk
controls and hedging to reduce certain risk exposures.
a) Market risks
I) Price risk
Price risk might negatively affect the financial results of Latvenergo Group and Latvenergo AS due
to falling revenue from generation and a mismatch between short run electricity production costs or
electricity and natural gas purchase costs at floating market prices and retail sales at fixed prices.
The main sources of Latvenergo Group’s and Latvenergo AS exposure to price risk are the floating
market prices of electricity on the Nord Pool power exchange in Baltic bidding areas and fluctuations
in natural gas price procured for CHPPs’ fuel and retail purposes The financial results of the Group and
the Parent Company may be negatively affected by the volatility of the electricity market price, which
depends on the weather conditions in the Nordic countries, global prices of resources, and the influence
of local factors (water availability and ambient air temperature) on electricity generation opportunities.
Movement in natural gas price due to changing demand–supply factors and seasonal fluctuations may
have a negative effect on the difference between fixed retail electricity prices in contracts with customers
and variable generation costs at CHPPs.
In order to hedge the price risk, the Latvenergo Group and Latvenergo AS enter into long–term fixed
price customer contracts for hedging electricity generation price risk, uses electricity and natural gas
financial derivatives, and enter into fixed price contracts for natural gas supply. The impact of price risk
on generation is hedged gradually – price has been fixed for 60-65% of projected electricity output
prior to the upcoming year. Further hedging of risk is limited by the seasonal generation pattern of the
Daugava HPPs.
II) Interest rate risk
Latvenergo Group’s and Latvenergo AS interest rate risk mainly arises from non–current borrowings at
variable interest rates. They expose the Group and the Parent Company to the risk that finance costs
might increase significantly when the reference rate surges. The borrowings from financial institutions
have a variable interest rate, comprising 6–month EURIBOR and a margin. The Group’s Financial
Risk Management Policy stipulates maintaining more than 35% of its borrowings as fixed interest rate
borrowings (considering the effect of interest rate swaps and issued bonds) with a duration of 1–4 years.
Considering the effect of interest rate swaps and bonds with a fixed interest rate, 36% of the Group’s
and 36% of the Parent Company’s non–current borrowings had a fixed interest rate with an average
duration of 1,8 years for the Group and 1,9 years for the parent Company as of 31 December 2022.
III) Currency risk
Foreign currency exchange risk arises when future transactions or recognised assets or liabilities are
denominated in a currency other than the functional currency, which is the EUR.
As of 31 December 2022, all borrowings of Latvenergo Group and Latvenergo AS are denominated
in euros, and during the reporting year, there was no substantial exposure to foreign currency risk as
regards the Group’s and the Parent Company’s investments in non–current or current assets.
To manage the foreign currency exchange risk, the Financial Risk Management Policy envisages use of
foreign exchange forward contracts. In 2022, several EUR/USD forward foreign currencies exchange
transactions have been concluded in order to limit the currency risk of the payments in US dollars
planned in the natural gas purchase agreement concluded in 2022. As of 31 December 2022, the
Parent Company has outstanding five forward foreign currencies exchange contracts in the amount of
USD153,482thousand with an execution date of 22 February and 26 April 2023.
b) Credit risk
Credit risk is managed at the Latvenergo Group level. Credit risk arises from cash and cash equivalents,
derivative financial instruments and deposits with banks, and receivables. Credit risk exposure of
receivables is limited due to the large number of Group customers as there is no significant concentration
of credit risk with any single counterparty or group of counterparties with similar characteristics.
Credit risk related to cash and deposits with banks is managed by balancing the placement of financial
assets in order to simultaneously choose the best offers and reduce the probability of incurrence of loss.
No credit limits were exceeded during the reporting year, and the management does not expect any
losses due to the occurrence of credit risk.
1010
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Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
c) Liquidity risk and cash flow risk
Latvenergo Group’s liquidity and cash flow risk management policy is to maintain a sufficient amount of
cash and cash equivalents and the availability of long and short–term funding through an adequate amount
of committed credit facilities in order to meet existing and expected commitments and compensate for
fluctuations in cash flows due to the occurrence of a variety of financial risks. On 31 December2022,
Latvenergo Group’s liquid assets (cash and cash equivalents – short–term deposits up to 3 months)
reached EUR 112.8 million (31 December 2021: EUR 97.1million), while the Latvenergo AS liquid assets
reached EUR 100.3 million (31/12/2021: EUR 92.4 million).
The Group and the Parent Company continuously monitor cash flow and liquidity forecasts, which
comprise the undrawn borrowing facilities and cash and cash equivalents.
Events after the reporting period
On 15 February 2023 Latvenergo AS implemented a placement of six-year green bonds in total nominal
value of EUR 50 million with a fixed annual interest rate and a yield to maturity of 4.952%. The issuance
of notes is being implemented under Latvenergo AS EUR 200 million third programme for the issuance
of notes.
On 9 March 2023 the international credit rating agency Moody’s Investors Service has updated
Latvenergo AS credit analysis. The rating of Latvenergo AS remains unchanged Baa2 with a stable
outlook.
On 24 March 2023 Sadales tīkls AS signed an agreement with the Ministry of Economics of Republic of
Latvia on receiving funding from the European Union Recovery Fund in the amount of EUR 41.9 million.
On 11 April 2023, the Cabinet of Ministers of the Republic of Latvia supported amendments to the
Electricity Market Law (hereinafter - the Law) prepared by the Ministry of Climate and Energy, in order to
introduce the norms set by the European Union Council Regulation (EU) 2022/1854 of 6 October 2022,
on emergency measures for tackling high energy prices. The amendments to the Law provide that from
1December2022 to 30 June 2023, electricity producers will be subject to a maximum revenue amount
of 180euros per megawatt hour for the electricity sold. The part of revenue that exceeds the maximum
revenue amount (surplus revenue) must be invested by producers in their companies to promote
investments in decarbonization technologies, renewable energy resources, and energy efficiency. The
proposed amendments to the Law on the use of surplus revenue are in line with the Latvenergo Group’s
medium-term operational strategy for 2022-2026, which aims to promote the development of a portfolio
of renewable energy generation. Therefore, the planned amendments to the Law will not have a negative
impact on the financial indicators of the Latvenergo Group. The final decision on the amendments to the
Law will be made by the Saeima of the Republic of Latvia
All other significant events that would materially affect the financial position of the Latvenergo Group and
Latvenergo AS after the reporting year are disclosed in Note 31 of the Group’s and the Parent Company’s
Financial Statements.
Statement of management responsibility
Based on the information available to the Management Board of Latvenergo AS, the Group consolidated
financial statements and the Company financial statements for the year ended 31 December 2022
have been prepared in accordance with the International Financial Reporting Standards as adopted by
theEU and in all material aspects present a true and fair view of the financial position, profit and loss and
cash flows of Latvenergo Group and Latvenergo AS. Information provided in the Management Report
is accurate.
Profit distribution
According to the Law “On state budget for 2023 and budgetary framework for 2023, 2024 and 2025”
the expected amount of dividends to be paid by Latvenergo AS for the use of state capital in 2023 (for
the reporting year 2022) amounts to 64% or EUR 134.0 million and calculated corporate income tax
EUR26.7million. The distribution of net profit and amount of dividends payable is subject to a resolution
of the Latvenergo AS Shareholders Meeting.
This document is signed with a secure digital signature and contains a time stamp
The Management Board of Latvenergo AS:
Mārtiņš Čakste Dmitrijs Juskovecs Guntars Baļčūns Kaspars Cikmačs Harijs Teteris
Chairman of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board
18 April 2023
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Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Financial Statements
Statement of Profit or Loss
EUR’000
Notes
| Group Parent Company | ||||||
2022 | 2021 | 2022 | 2021 | |||
Revenue | 6 | |||||
Other income | 7 | |||||
Raw materials and consumables | 8 | ( | ( | ( | ( | |
Personnel expenses | 9 | ( | ( | ( | ( | |
Other operating expenses | 10 | ( | ( | ( | ( | |
EBITDA* | ||||||
Depreciation, amortisation and impairment of intangible assets, property, plant and equipment (PPE) and | 13 | a,14a | ||||
| right-of-use assets | 15 | ( | ( | ( | ( | |
Operating profit | ||||||
Finance income | 11 | |||||
Finance costs | 11 | ( | ( | ( | ( | |
Dividends from subsidiaries | 16 | |||||
Profit before tax | ||||||
Income tax | 12 | ( | ( | |||
Profit for the year | ||||||
| Profit attributable to: | ||||||
- Equity holder of the Parent Company | 21 c | |||||
- Non–controlling interests | ||||||
Basic earnings per share (in euros) | 21 c | |||||
Diluted earnings per share (in euros) | 21 c | |||||
* EBITDA – operating profit before depreciation, amortisation and impairment of intangible assets, property, plant, and equipment and right-of-use assets
(Earnings Before Interest, Tax, Depreciation and Amortisation)
The notes on pages 16 to 62 are an integral part of these Financial Statements
Statement of Comprehensive Income
EUR’000
Group | Parent Company | ||||
| Notes | 2022 | 2021 | 2022 | 2021 | |
Profit for the year | |||||
| Other comprehensive income / (loss) to be reclassified | |||||
| to profit or loss in subsequent periods: | |||||
- gains / (losses) from change in hedge reserve | 21 a, 24 | ( | ( | ||
Net other comprehensive income / (loss) to be reclassified to profit or loss in subsequent periods | ( | ( | |||
Other comprehensive income not to be reclassified to profit or loss in subsequent periods: | |||||
- gains on revaluation of non–current assets | 14 a, 21 a | ||||
- gains on remeasurement on defined benefit plan | 21 a, 27 | ||||
Net other comprehensive income not to be reclassified to profit or loss in subsequent periods | |||||
Other comprehensive income for the year | |||||
TOTAL comprehensive income for the year | |||||
| Attributable to: | |||||
- Equity holder of the Parent Company | |||||
- Non–controlling interests | |||||
The notes on pages 16 to 62 are an integral part of these Financial Statements
This document is signed with a secure digital signature and contains a time stamp
The Management Board of Latvenergo AS:
Mārtiņš Čakste Dmitrijs Juskovecs Guntars Baļčūns Kaspars Cikmačs Harijs Teteris
Chairman of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board
Liāna Ķeldere
Accounting director of Latvenergo AS
18 April 2023
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About Latvenergo Group
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Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Statement of Financial Position
EUR’000
Group | Parent Company | ||||
| Notes | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| ASSETS | |||||
| Non-current assets | |||||
Intangible assets | 13 a | ||||
Property, plant, and equipment | 14 a | ||||
Right–of–use assets | 15 | ||||
Investment property | 14 b | ||||
Non-current financial investments | 16 | ||||
Non–current loans to related parties | 29 e | ||||
Other non-current receivables | 18 c | ||||
Deferred income tax assets | |||||
Derivative financial instruments | 24 | ||||
Total non-current assets | |||||
| Current assets | |||||
Inventories | 17 | ||||
Current intangible assets | 13 b | ||||
Receivables from contracts with customers | 18 a | ||||
Other current receivables | 18 b, c | ||||
Deferred expenses | |||||
Current loans to related parties | 29 e | ||||
Prepayment for income tax | |||||
Derivative financial instruments | 24 | ||||
Cash and cash equivalents | 19 | ||||
Total current assets | |||||
TOTAL ASSETS | |||||
EUR’000
Group | Parent Company | ||||
| Notes | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| EQUITY AND LIABILITIES | |||||
| EQUITY | |||||
Share capital | 20 | ||||
Reserves | 21 a | ||||
Retained earnings | |||||
Equity attributable to equity holder of the Parent Company | |||||
Non-controlling interests | |||||
Total equity | |||||
| LIABILITIES | |||||
| Non-current liabilities | |||||
Borrowings | 23 | ||||
Lease liabilities | 15 | ||||
Deferred income tax liabilities | |||||
Provisions | 27 | ||||
Derivative financial instruments | 24 | ||||
Deferred income from contracts with customers | 28 I) a | ||||
Other deferred income | 28 I) b, c | ||||
Other non-current liabilities | |||||
Total non-current liabilities | |||||
| Current liabilities | |||||
Borrowings | 23 | ||||
Lease liabilities | 15 | ||||
Trade and other payables | 26 | ||||
Deferred income from contracts with customers | 28 II) a | ||||
Other deferred income | 28 II) b, c | ||||
Derivative financial instruments | 24 | ||||
Total current liabilities | |||||
Total liabilities | |||||
TOTAL EQUITY AND LIABILITIES | |||||
The notes on pages 16 to 62 are an integral part of these Financial Statements
This document is signed with a secure digital signature and contains a time stamp
The Management Board of Latvenergo AS:
Mārtiņš Čakste Dmitrijs Juskovecs Guntars Baļčūns Kaspars Cikmačs Harijs Teteris
Chairman of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board
Liāna Ķeldere
Accounting director of Latvenergo AS
18 April 2023
1313
About Latvenergo Group
Corporate Governance
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Annexes to
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Annual Report
– Key Figures
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– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Statement of Changes in Equity
EUR’000
Group | Parent Company | ||||||||||
Attributable to equity holder of the Parent Company | Company | Attributable to equity holder of the Parent | |||||||||
| Share | Reserves | Retained | Total | Non- | TOTAL | Share | Reserves | Retained | TOTAL | ||
| capital | earnings | controlling | capital | earnings | |||||||
| Notes | interests | ||||||||||
As of 31 December 2020 | |||||||||||
Increase of share capital | 20 | ||||||||||
Dividends for 2020 | 21 b | ( | ( | ( | ( | ( | ( | ||||
Disposal of non-current assets revaluation reserve | 21 a | ( | ( | ||||||||
Total transactions with owners and other changes in equity | ( | ( | ( | ( | ( | ( | ( | ( | |||
Profit for the year | |||||||||||
Other comprehensive income for the year | 21 a | ||||||||||
Total comprehensive income for the year | |||||||||||
As of 31 December 2021 | |||||||||||
Non-controlling interests’ contributions to share capital | |||||||||||
Dividends for 2021 | 21 b | ( | ( | ( | ( | ( | |||||
Disposal of non–current assets revaluation reserve | 21 a | ( | ( | ||||||||
Total transactions with owners and other changes in equity | ( | ( | ( | ( | ( | ( | ( | ||||
Profit for the year | |||||||||||
Other comprehensive income for the year | 21 a | ||||||||||
Total comprehensive income for the year | |||||||||||
As of 31 December 2022 |
The notes on pages 16 to 62 are an integral part of these Financial Statements
This document is signed with a secure digital signature and contains a time stamp
The Management Board of Latvenergo AS:
Mārtiņš Čakste Dmitrijs Juskovecs Guntars Baļčūns Kaspars Cikmačs Harijs Teteris
Chairman of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board
Liāna Ķeldere
Accounting director of Latvenergo AS
18 April 2023
1414
About Latvenergo Group
Corporate Governance
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Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Statement of Cash Flows
EUR’000
Group | Parent Company | ||||
| Notes | 2022 | 2021 | 2022 | 2021 | |
| Cash flows from operating activities | |||||
Profit before tax | |||||
| Adjustments: | |||||
- Depreciation, amortisation and impairment of intangible assets, property, plant, and equipment (PPE) and | 13 a, | ||||
| right-of-use assets | 14a, 15 | ||||
- Loss from disposal of non-current assets | |||||
- Interest expense | 11 | ||||
- Interest income | 11 | ( | ( | ( | ( |
| - Fair value loss / (income) on derivative financial | |||||
instruments | 8 | ||||
- Dividends from subsidiaries | 16 | ( | ( | ||
- Decrease in provisions | 27 | ( | ( | ||
| - Unrealised loss / (gain) on currency translation | |||||
differences | 11 | ( | ( | ||
| Cash flows from operations before changes in working | |||||
capital | |||||
(Increase) / decrease in inventories | ( | ( | ( | ( | |
(Increase) / decrease in receivables from contracts with customers and other receivables | ( | ( | ( | ( | |
Increase / (decrease) in trade and other liabilities | ( | ( | |||
| Impact of non-cash offsetting of operating receivables | |||||
and liabilities from subsidiaries, net | 29 e | ||||
Cash generated from operating activities | |||||
Interest paid | ( | ( | ( | ( | |
Interest paid on leases | 15 | ( | ( | ( | ( |
Interest received | |||||
Paid corporate income tax | ( | ( | |||
Net cash flows generated from operating activities | |||||
EUR’000
Group | Parent Company | ||||
| Notes | 2022 | 2021 | 2022 | 2021 | |
| Cash flows from investing activities | |||||
Loans issued to subsidiaries, net | 29 e | ( | ( | ||
Repayment of loans to related parties | 29 e | ||||
Purchase of intangible assets and PPE | ( | ( | ( | ( | |
Dividends received from subsidiaries | 16 | ||||
Proceeds from redemption of other financial investments | |||||
Investments in subsidiaries | ( | ||||
Net cash flows used in investing activities | ( | ( | ( | ( | |
| Cash flows from financing activities | |||||
Repayment of issued debt securities (bonds) | 23 | ( | ( | ||
Proceeds on issued debt securities (bonds) | 23 | ||||
Proceeds on borrowings from financial institutions | 23 | ||||
Repayment of borrowings from financial institutions | 23 | ( | ( | ( | ( |
Received financing from European Union | |||||
Lease payments | 15 | ( | ( | ( | ( |
Proceeds from non-controlling interests’ contributions to share capital | |||||
Dividends paid to non-controlling interests | 21 b | ( | |||
Dividends paid to equity holder of the Parent Company | 21 b | ( | ( | ( | ( |
| Net cash flows generated from / (used in) | |||||
financing activities | ( | ( | |||
| Net increase / (decrease) in cash and cash | |||||
equivalents | ( | ( | |||
Cash and cash equivalents at the beginning of the year | 19 | ||||
Cash and cash equivalents at the end of the year | 19 | ||||
The notes on pages 16 to 62 are an integral part of these Financial Statements
This document is signed with a secure digital signature and contains a time stamp
The Management Board of Latvenergo AS:
Mārtiņš Čakste Dmitrijs Juskovecs Guntars Baļčūns Kaspars Cikmačs Harijs Teteris
Chairman of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board Member of the Management Board
Liāna Ķeldere
Accounting director of Latvenergo AS
12 April 2022
1515
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| Financial assets and financial liabilities that are exposed to financial risks disclosed in the table below by measurement categories | Group | Parent Company | EUR’000 | ||||
| Financial assets | Derivatives used for hedging | Financial instruments at fair | Financial assets | Derivatives used for hedging | Financial instruments at fair | ||
| Notes | at amortised cost | value through profit or loss | at amortised cost | value through profit or loss | |||
| Financial assets as of 31 December 2022 | |||||||
Receivables from contracts with customers | 18 a | 314,109 | – | – | 233,192 | – | – |
Other current financial receivables | 18 b | 17,089 | – | – | 36,253 | – | – |
Loans to related parties | 29 e | – | – | – | 713,308 | – | – |
Derivative financial instruments | 24 I | – | 450 | 10,279 | – | 450 | 10,279 |
Cash and cash equivalents | 19 | 112,757 | – | – | 100,268 | – | – |
| Financial assets as of 31 December 2021 | 443,955 | 450 | 10,279 | 1,083,021 | 450 | 10,279 | |
Receivables from contracts with customers | 18 a | 181,136 | – | – | 110,638 | – | – |
Other current financial receivables | 18 b | 57,498 | – | – | 43,212 | – | – |
Loans to related parties | 29 e | – | – | – | 706,378 | – | – |
Derivative financial instruments | 24 I | – | 25,735 | – | – | 25,466 | – |
Cash and cash equivalents | 19 | 97,079 | – | – | 92,418 | – | – |
335,713 | 25,735 | – | 952,646 | 25,466 | – | ||
| Financial liabilities | Derivatives used for hedging | Financial instruments at fair | Financial liabilities | Derivatives used for hedging | Financial instruments at fair | ||
| at amortised cost | value through profit or loss | at amortised cost | value through profit or loss | ||||
| Financial liabilities as of 31 December 2022 | |||||||
Borrowings | 23 | 875,918 | – | – | 863,938 | – | – |
Derivative financial instruments | 24 I | – | 99,154 | 22,865 | – | 99,154 | 22,865 |
Lease liabilities | 15 | 10,675 | – | – | 5,166 | – | – |
Trade and other financial current payables | 26 | 107 811 | – | – | 99 902 | – | – |
| Financial liabilities as of 31 December 2021 | 994 404 | 99,154 | 22,865 | 969 006 | 99,154 | 22,865 | |
Borrowings | 23 | 795,029 | – | – | 782,322 | – | – |
Derivative financial instruments | 24 I | – | 5,933 | 12,587 | – | 5,933 | 12,587 |
Lease liabilities | 15 | 8,428 | – | – | 5,226 | – | – |
Trade and other financial current payables | 26 | 163,950 | – | – | 166,517 | – | – |
967,407 | 5,933 | 12,587 | 954,065 | 5,933 | 12,587 |
20
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| Assessment of maximum possible exposure to credit risk | Group | Parent Company | EUR’000 | ||
| Notes | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Receivables from contracts with customers | 18 a | 314,109 | 181,136 | 233,192 | 110,638 |
Other current financial receivables | 18 b | 17,089 | 57,498 | 36,253 | 43,212 |
Loans to related parties | 29 e | – | – | 713,308 | 706,378 |
Cash and cash equivalents | 19 | 112,757 | 97,079 | 100,268 | 92,418 |
Derivative financial instruments | 24 | 10,729 | 25,735 | 10,729 | 25,466 |
454,684 | 361,448 | 1,093,750 | 978,112 | ||
Group | Parent Company | EUR’000 | ||
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Investment level credit rating* | 112,757 | 97,079 | 100,268 | 92,418 |
112,757 | 97,079 | 100,268 | 92,418 | |
| * Investment level credit rating assigned to the parent companies of banks | ||||
Group | Parent Company | EUR’000 | ||
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Aa3 | 66,596 | 47,149 | 55,722 | 44,111 |
Baa1 | 43,644 | 37,085 | 43,154 | 36,030 |
Baa2 | 1,363 | 12,361 | 1,362 | 12,277 |
Baa3 | 1,154 | 484 | 30 | – |
112,757 | 97,079 | 100,268 | 92,418 | |
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| Liquidity analysis (contractual undiscounted gross cash flows) | Group | Parent Company | EUR’000 | ||||||||
| Less than | From 1 to | From 3 to | Over 5 years | TOTAL | Less than | From 1 to | From 3 to | Over 5 years | TOTAL | ||
| Notes | 1 year | 2 years | 5 years | 1 year | 2 years | 5 years | |||||
| As of 31 December 2022 | |||||||||||
Borrowings from financial institutions | 195,441 | 105,399 | 239,038 | 135,056 | 674,934 | 193,094 | 99,201 | 234,010 | 131,758 | 658,063 | |
Issued debt securities (bonds) | 2,670 | 2,670 | 108,010 | 50,137 | 163,487 | 2,670 | 2,670 | 108,010 | 50137 | 163,487 | |
Overdraft from financial institutions | 119,478 | – | – | – | 119,478 | 119,478 | – | – | – | 119,478 | |
Current borrowings from related parties | – | – | – | – | – | 3,317 | – | – | – | 3,317 | |
Derivative financial instruments | 1,499 | – | – | – | 1,499 | 1,499 | – | – | – | 1,499 | |
Lease liabilities* | 2,023 | 1,798 | 2,939 | 4,581 | 11,341 | 876 | 866 | 1,847 | 1,554 | 5,143 | |
Trade and other current financial payables | 26 | 107,811 | – | – | – | 107,811 | 99,902 | – | – | – | 99,902 |
| As of 31 December 2021 | 428,922 | 109,867 | 349,987 | 186,747 | 1,075,523 | 420,836 | 102,737 | 343,867 | 183,449 | 1,050,889 | |
Borrowings from financial institutions | 82,164 | 179,927 | 241,707 | 154,564 | 658,362 | 79,723 | 175,468 | 238,351 | 151,638 | 645,180 | |
Issued debt securities (bonds) | 102,205 | 250 | 750 | 50,366 | 153,571 | 102,205 | 250 | 750 | 50,366 | 153,571 | |
Derivative financial instruments | 17,604 | 1,451 | 1,681 | 421 | 21,157 | 17,604 | 1,451 | 1,681 | 421 | 21,157 | |
Lease liabilities* | 2,085 | 1,635 | 3,765 | 1,237 | 8,722 | 1,214 | 972 | 2,457 | 813 | 5,456 | |
Trade and other current financial payables | 26 | 163,950 | – | – | – | 163,950 | 166,517 | – | – | – | 166,517 |
368,008 | 183,263 | 247,903 | 206,588 | 1,005,762 | 367,263 | 178,141 | 243,239 | 203,238 | 991,881 | ||
| * The carrying amount of the lease (discounted) for the Group is EUR 10,675 thousand and for the Parent Company EUR 5,166 thousand (31 December 2021: Group – EUR 8,428 thousand, Parent Company – EUR 5,226 thousand (Note 15) | |||||||||||
| The capital ratio figures were as follows | Group | Parent Company | EUR’000 | |
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Total equity | 2,356,419 | 2,123,448 | 2,018,694 | 1,761,070 |
Total assets | 3,855,330 | 3,475,890 | 3,305,536 | 2,915,587 |
Capital Ratio | 61% | 61% | 61% | 60% |
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Group | Parent Company | EUR'000 | |||||||||
| Generation | Distribution | Corporate | TOTAL | Adjustments | TOTAL | Generation | Corporate | TOTAL | Adjustments | TOTAL | |
| and trade | functions | segments | and | Group | and trade | functions | segments | and | Parent | ||
| eliminations | eliminations | Company | |||||||||
| 2022 | |||||||||||
| Revenue | |||||||||||
External customers | 1,533,150 | 300,610 | 8,041 | 1,841,801 | – | 1,841,801 | 1,199,418 | 31,597 | 1,231,015 | – | 1,231,015 |
Inter-segment | 26,421 | 578 | 50,823 | 77,822 | (77,822) | – | 2,175 | 29,192 | 31,367 | (31,367) | – |
TOTAL revenue | 1,559,571 | 301,188 | 58,864 | 1,919,623 | (77,822) | 1,841,801 | 1,201,593 | 60,789 | 1,262,382 | (31,367) | 1,231,015 |
| Results | |||||||||||
EBITDA | 275,216 | 71,268 | 13,725 | 360,209 | – | 360,209 | 266,131 | 14,194 | 280,325 | – | 280,325 |
Depreciation, amortisation and impairment of intangible assets, property, plant and equipment and right-of-use assets | (73,208) | (81,087) | (11,953) | (166,248) | – | (166,248) | (69,418) | (12,095) | (81,513) | – | (81,513) |
Segment profit before tax | 202,008 | (9,819) | 1,772 | 193,961 | (9,416) | 184,545 | 196,713 | 2,099 | 198,812 | 10,550 | 209,362 |
Segment assets at the end of the year | 1,833,099 | 1,791,684 | 117,750 | 3,742,533 | 112,797 | 3,855,330 | 1,700,079 | 144,561 | 1,844,640 | 1,460,896 | 3,305,536 |
Segment liabilities at the end of the year | 359,253 | 181,201 | 12,804 | 553,258 | 945,653 | 1,498,911 | 366,212 | 14,078 | 380,290 | 906,552 | 1,286,842 |
| Other disclosures | |||||||||||
Capital expenditure | 20,659 | 84,633 | 16,374 | 121,666 | – | 121,666 | 13,666 | 16,374 | 30,040 | – | 30,040 |
| 2021 | |||||||||||
| Revenue | |||||||||||
External customers | 754,357 | 303,289 | 7,573 | 1,065,219 | – | 1,065,219 | 562,765 | 30,020 | 592,785 | – | 592,785 |
Inter-segment | 1,068 | 1,175 | 46,422 | 48,665 | (48,665) | – | 1,044 | 25,226 | 26,270 | (26,270) | – |
TOTAL revenue | 755,425 | 304,464 | 53,995 | 1,113,884 | (48,665) | 1,065,219 | 563,809 | 55,246 | 619,055 | (26,270) | 592,785 |
| Results | |||||||||||
EBITDA | 80,386 | 105,732 | 12,695 | 198,813 | – | 198,813 | 70,968 | 14,307 | 85,275 | – | 85,275 |
Depreciation, amortisation and impairment of intangible assets, property, plant and equipment and right-of-use assets | (25,169) | (80,841) | (10,913) | (116,923) | – | (116,923) | (21,773) | (11,135) | (32,908) | – | (32,908) |
Segment profit before tax | 55,217 | 24,891 | 1,782 | 81,890 | (6,960) | 74,930 | 49,195 | 3,172 | 52,367 | 27,153 | 79,520 |
Segment assets at the end of the year | 1,473,344 | 1,801,062 | 104,221 | 3,378,627 | 97,263 | 3,475,890 | 1,341,057 | 130,516 | 1,471,573 | 1,444,014 | 2,915,587 |
Segment liabilities at the end of the year | 299,658 | 190,597 | 19,027 | 509,282 | 843,160 | 1,352,442 | 329,381 | 20,196 | 349,577 | 804,940 | 1,154,517 |
| Other disclosures | |||||||||||
Capital expenditure | 32,545 | 84,786 | 9,397 | 126,728 | – | 126,728 | 20,123 | 9,422 | 29,545 | – | 29,545 |
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| The Group’s and the Parent Company’s revenue from external customers (Note 6) | Group | Parent Company | EUR'000 | ||||||
| Generation | Distribution | Corporate | TOTAL | TOTAL | Generation | Corporate | TOTAL | TOTAL | |
| and trade | functions | segments | Group | and trade | functions | segments | Parent | ||
| Company | |||||||||
| 2022 | |||||||||
| Revenue from contracts with customers recognised over time: | |||||||||
Trade of energy and related supply services | 1,352,745 | 3,349 | – | 1,356,094 | 1,356,094 | 1,052,486 | – | 1,052,486 | 1,052,486 |
Distribution system services | – | 278,169 | – | 278,169 | 278,169 | – | – | – | – |
Heat sales | 150,548 | 146 | – | 150,694 | 150,694 | 133,634 | – | 133,634 | 133,634 |
Sales of goods and energy related solutions | 25,252 | – | – | 25,252 | 25,252 | 12,247 | – | 12,247 | 12,247 |
Other revenue | 4,600 | 18,874 | 6,141 | 29,615 | 29,615 | 1,051 | 28,240 | 29,291 | 29,291 |
Total revenue from contracts with customers | 1,533,145 | 300,538 | 6,141 | 1,839,824 | 1,839,824 | 1,199,418 | 28,240 | 1,227,658 | 1,227,658 |
| Other revenue: | |||||||||
Other revenue | 5 | 72 | 1,900 | 1,977 | 1,977 | – | 3,357 | 3,357 | 3,357 |
Total other revenue | 5 | 72 | 1,900 | 1,977 | 1,977 | – | 3,357 | 3,357 | 3,357 |
TOTAL revenue, including | 1,533,150 | 300,610 | 8,041 | 1,841,801 | 1,841,801 | 1,199,418 | 31,597 | 1,231,015 | 1,231,015 |
Latvia | 884,723 | 300,610 | 7,726 | 1,193,059 | 1,193,059 | 890,216 | 29,470 | 919,686 | 919,686 |
Outside Latvia | 648,427 | – | 315 | 648,742 | 648,742 | 309,202 | 2,127 | 311,329 | 311,329 |
| 2021 | |||||||||
| Revenue from contracts with customers recognised over time: | |||||||||
Trade of energy and related supply services | 661,210 | 3,228 | – | 664,438 | 664,438 | 487,642 | – | 487,642 | 487,642 |
Distribution system services | 1 | 282,949 | – | 282,950 | 282,950 | – | – | – | – |
Heat sales | 84,123 | 91 | 10 | 84,224 | 84,224 | 71,215 | 10 | 71,225 | 71,225 |
Sales of goods and energy related solutions | 5,756 | – | – | 5,756 | 5,756 | 2,972 | – | 2,972 | 2,972 |
Other revenue | 3,267 | 16,949 | 5,636 | 25,852 | 25,852 | 936 | 26,600 | 27,536 | 27,536 |
Total revenue from contracts with customers | 754,357 | 303,217 | 5,646 | 1,063,220 | 1,063,220 | 562,765 | 26,610 | 589,375 | 589,375 |
| Other revenue: | |||||||||
Other revenue | – | 72 | 1,927 | 1,999 | 1,999 | – | 3,410 | 3,410 | 3,410 |
Total other revenue | – | 72 | 1,927 | 1,999 | 1,999 | – | 3,410 | 3,410 | 3,410 |
TOTAL revenue, including | 754,357 | 303,289 | 7,573 | 1,065,219 | 1,065,219 | 562,765 | 30,020 | 592,785 | 592,785 |
Latvia | 416,545 | 303,288 | 7,289 | 727,122 | 727,122 | 399,513 | 28,392 | 427,905 | 427,905 |
Outside Latvia | 337,812 | 1 | 284 | 338,097 | 338,097 | 163,252 | 1,628 | 164,880 | 164,880 |
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| Reconciliation of profit before tax | Group | Parent Company | EUR’000 | ||
| Notes | 2022 | 2021 | 2022 | 2021 | |
EBITDA | 360,209 | 198,813 | 280,325 | 85,275 | |
Depreciation, amortisation and impairment of intangible assets, PPE and right-of-use assets | (166,248) | (116,923) | (81,513) | (32,908) | |
Segment profit before tax | 193,961 | 81,890 | 198,812 | 52,367 | |
Finance income | 11 | 1,414 | 2,110 | 10,767 | 11,391 |
Finance costs | 11 | (10,830) | (9,070) | (10,802) | (9,216) |
Dividends received from subsidiaries | 16 | – | – | 10,585 | 24,978 |
Profit before tax | 184,545 | 74,930 | 209,362 | 79,520 | |
| Reconciliation of assets | Group | Parent Company | EUR’000 | ||
| Notes | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Segment operating assets | 3,742,533 | 3,378,627 | 1,844,640 | 1,471,573 | |
Non-current financial investments | 16 | 40 | 40 | 647,320 | 645,218 |
Loans to related parties | 29 e | – | – | 713,308 | 706,378 |
Prepayment for income and other taxes | – | 144 | – | – | |
Cash and cash equivalents | 19 | 112,757 | 97,079 | 100,268 | 92,418 |
Total assets | 3,855,330 | 3,475,890 | 3,305,536 | 2,915,587 | |
| Reconciliation of liabilities | Group | Parent Company | EUR’000 | ||
| Notes | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Segment operating liabilities | 553,258 | 509,282 | 380,290 | 349,577 | |
Deferred income tax liabilities | 667 | 2,955 | – | – | |
Borrowings | 23 | 875,918 | 795,029 | 863,938 | 782,322 |
Derivative financial instruments | 24 | – | 4,312 | – | 4,312 |
Provisions and other payables | 69,068 | 40,864 | 42,614 | 18,306 | |
Total liabilities | 1,498,911 | 1,352,442 | 1,286,842 | 1,154,517 | |
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| IFRS | Group | Parent Company | EUR’000 | ||
| applied | 2022 | 2021 | 2022 | 2021 | |
| Revenue from contracts with customers | |||||
| recognised over time: | |||||
Trade of energy and related supply services | IFRS 15 | 1,356,094 | 664,438 | 1,052,486 | 487,642 |
Distribution system services | IFRS 15 | 278,169 | 282,950 | – | – |
Heat sales | IFRS 15 | 150,694 | 84,224 | 133,634 | 71,225 |
Sales of goods and energy related solutions | IFRS 15 | 25,252 | 5,756 | 12,247 | 2,972 |
Other revenue | IFRS 15 | 29,615 | 25,852 | 29,291 | 27,536 |
TOTAL revenue from contracts with customers | 1,839,824 | 1,063,220 | 1,227,658 | 589,375 | |
| Other revenue: | |||||
Lease of other assets | IFRS 16 | 1,977 | 1,999 | 3,357 | 3,410 |
TOTAL other revenue | 1,977 | 1,999 | 3,357 | 3,410 | |
TOTAL revenue | 1,841,801 | 1,065,219 | 1,231,015 | 592,785 | |
Group | Parent Company | EUR’000 | ||
2022 | 2021 | 2022 | 2021 | |
Goods and services transferred over time | 1,760,646 | 1,055,018 | 1,159,820 | 584,348 |
Goods and services transferred at a point in time | 79,178 | 8,202 | 67,838 | 5,027 |
TOTAL revenue from contracts with customers | 1,839,824 | 1,063,220 | 1,227,658 | 589,375 |
31
About Latvenergo Group
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Report
Group | Parent Company | EUR’000 | ||
2022 | 2021 | 2022 | 2021 | |
Latvia | 1,191,082 | 725,123 | 916,437 | 424,553 |
Outside Latvia | 648,742 | 338,097 | 311,221 | 164,822 |
TOTAL revenue from contracts with customers | 1,839,824 | 1,063,220 | 1,227,658 | 589,375 |
| Gross amounts invoiced to customers by applying agent accounting principle, | ||||
| recognised on net basis under trade of energy and related supply services | Group | Parent Company | EUR’000 | |
2022 | 2021 | 2022 | 2021 | |
Mandatory procurement PSO fees* | 7,931 | 62,603 | 8,767 | 64,537 |
Distribution system services | 30,780 | 23,478 | 90,892 | 171,200 |
Transmission system services | 706 | 1,744 | 720 | 1,758 |
Insurance intermediation | 1,468 | 579 | 1,440 | 578 |
TOTAL revenue recognised applying agent accounting principle | 40,885 | 88,404 | 101,819 | 238,073 |
| * In accordance with ‘Law on measures to reduce extraordinary rise in energy prices’ adopted by the Saeima of the Republic of Latvia and Regulations | ||||
of the Cabinet of Ministers of the Republic of Latvia No. 50 ‘Regulations regarding the trade and use of electricity’, the government granted support to all end-users for mandatory procurement PSO fees from 1 January to 30 April 2022 and from 1 September to 31 December 2022 by 100% of the fee, which was reimbursed from the state budget. | ||||
| Deferred income from contracts with customers | Group | Parent Company | EUR’000 | ||
| Notes | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Non–current deferred income from connection fees | 28 I, a | 132,381 | 136,217 | – | – |
Current deferred income from connection fees | 28 II, a | 15,386 | 14,794 | – | – |
Non-current other deferred income | 28 I, a | 735 | 802 | 735 | 802 |
Current other deferred income | 28 II, a | 13,944 | 237 | 13,714 | 67 |
TOTAL liabilities | 162,446 | 152,050 | 14,449 | 869 | |
| Movement in deferred income from contracts with customers (non–current and | |||||
| current part) | Group | Parent Company | EUR’000 | ||
| Notes | 2022 | 2021 | 2022 | 2021 | |
At the beginning of the year | 152,050 | 154,704 | 869 | 1,676 | |
Received connection fees for connection to distribution system | 28 | 11,840 | 12,556 | – | – |
Recognised deferred income | 28 | 13,647 | – | 13,647 | – |
Credited to the Statement of Profit or Loss | (15,091) | (15,210) | (67) | (807) | |
At the end of the year | 162,446 | 152,050 | 14,449 | 869 | |
32
About Latvenergo Group
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– Independent Auditors’
Report
Group | Parent Company | EUR’000 | |||
| Notes | 2022 | 2021 | 2022 | 2021 | |
Compensation from the state on state support for the installed capacity of CHPPs | 4 f | 23,990 | 23,990 | 23,990 | 23,990 |
Fines and penalties | 2,457 | 2,536 | 1,539 | 1,803 | |
| Net gain on sale of assets held for sale and property, plant | |||||
and equipment | 2,955 | 1,167 | 2,702 | 1,321 | |
Compensations and insurance claims | 816 | 779 | 294 | 503 | |
Other operating income | 956 | 956 | 165 | 129 | |
TOTAL other income | 31,174 | 29,428 | 28,690 | 27,746 | |
Group | Parent Company | EUR’000 | |||
| Notes | 2022 | 2021 | 2022 | 2021 | |
| Energy costs: | |||||
Electricity and costs of related supply services | 708,114 | 369,388 | 374,581 | 180,864 | |
Electricity transmission services costs | 29 a | 72,583 | 73,747 | 2,999 | 3,053 |
Natural gas and other energy resources costs | 517,052 | 259,160 | 492,537 | 248,699 | |
Losses / (gains) on fair value changes on energy futures, forwards, and swaps | 24 I | 10,096 | 13,373 | 9,827 | 13,642 |
1,307,845 | 715,668 | 879,944 | 446,258 | ||
Raw materials, spare parts and maintenance costs | 25,863 | 24,459 | 11,194 | 12,212 | |
TOTAL raw materials and consumables used | 1,333,708 | 740,127 | 891,138 | 458,470 | |
Group | Parent Company | EUR’000 | ||
2022 | 2021 | 2022 | 2021 | |
Wages and salaries | 89,184 | 78,564 | 39,838 | 34,359 |
State social insurance contributions | 19,800 | 17,918 | 9,242 | 7,952 |
Expenditure of employment termination | 3,044 | 3,719 | 846 | 392 |
Pension costs – defined contribution plan | 4,892 | 4,739 | 2,219 | 2,014 |
Benefits defined in the Collective Agreement and other benefits system costs | 1,572 | 1,674 | 667 | 696 |
Capitalised personnel expenses | (1,499) | (991) | – | – |
TOTAL personnel expenses, including remuneration to the management | 116,993 | 105,623 | 52,812 | 45,413 |
| Remuneration to the management: | ||||
Wages and salaries | 551 | 2,347 | 184 | 855 |
State social insurance contributions | 127 | 547 | 43 | 201 |
Expenditure of employment termination | – | 5 | – | – |
Pension costs – defined contribution plan | 4 | 18 | – | 10 |
Benefits defined in the Collective Agreement and other benefits system costs | 6 | 14 | – | – |
TOTAL remuneration to the management* | 688 | 2,931 | 227 | 1,066 |
Remuneration to the Group’s management includes remuneration to the members of the Management Boards of the Group entities, the Supervisory Board, and the Supervisory body (Audit Committee) of the Parent Company. Remuneration to the Parent Company’s management includes remuneration to the members of the Parent Company’s Management Board, the Supervisory Board, and the Supervisory body (Audit Committee). | ||||
| Number of employees | ||||
Group | Parent Company | |||
2022 | 2021 | 2022 | 2021 | |
Number of employees at the end of the year | 3,164 | 3,153 | 1,274 | 1,269 |
Average number of employees during the year | 3,154 | 3,233 | 1,270 | 1,273 |
33
About Latvenergo Group
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– Independent Auditors’
Report
Group | Parent Company | EUR’000 | |||
| Notes | 2022 | 2021 | 2022 | 2021 | |
Selling expenses and customer services | 10,178 | 35,649 | 3,775 | 31,267 | |
Information technology maintenance | 5,726 | 5,693 | 5,371 | 5,359 | |
Transportation expenses | 6,483 | 5,308 | 1,823 | 1,710 | |
Environment protection and work safety | 8,893 | 8,424 | 7,771 | 7,284 | |
Real estate maintenance and utilities expenses | 5,740 | 5,368 | 3,775 | 3,887 | |
Lease of real estate and fixed assets | 90 | 84 | 48 | 54 | |
Telecommunications services | 2,565 | 2,592 | 2,148 | 2,221 | |
Real estate tax | 941 | 980 | 651 | 699 | |
Public utilities regulation fee | 1,513 | 1,714 | 699 | 781 | |
Audit fee | 103 | 93 | 46 | 46 | |
Changes in impairment losses on financial assets | 2,879 | (27,382) | 2,351 | (27,129) | |
Net losses from sale of assets held for sale and disposal of PPE | 5,379 | 2,951 | 41 | (349) | |
Other expenses | 11,575 | 8,610 | 6,931 | 5,543 | |
TOTAL other operating expenses | 62,065 | 50,084 | 35,430 | 31,373 | |
Group | Parent Company | EUR’000 | |||
| Notes | 2022 | 2021 | 2022 | 2021 | |
Interest income | 27 | 564 | 27 | 564 | |
Interest income on loans to related parties | – | 994 | 9,353 | 10,276 | |
Interest income on interest rate swaps | 279 | – | 279 | – | |
Gains on fair value changes on interest rate swaps | 24 | 1,074 | 316 | 1,074 | 316 |
Net gain on issued debt securities (bonds) | 34 | 111 | 34 | 111 | |
Net gain on redemption of other financial investments | – | 94 | – | 94 | |
Net gain on currency exchange rate fluctuations | – | 31 | – | 30 | |
TOTAL finance income | 1,414 | 2,110 | 10,767 | 11,391 | |
| b) Finance costs | Group | Parent Company | EUR’000 | ||
| Notes | 2022 | 2021 | 2022 | 2021 | |
Interest expense on borrowings from financial institutions | 7,989 | 7,029 | 8,066 | 7,247 | |
Interest expense on issued debt securities (bonds) | 2,679 | 2,041 | 2,679 | 2,041 | |
Interest expense on assets lease | 136 | 138 | 80 | 83 | |
Capitalised borrowing costs | 14 a | (310) | (331) | (310) | (331) |
Net losses on currency exchange rate fluctuations | 29 | – | 5 | – | |
Other finance costs | 307 | 193 | 282 | 176 | |
TOTAL finance costs | 10,830 | 9,070 | 10,802 | 9,216 | |
Group | Parent Company | EUR’000 | ||
2022 | 2021 | 2022 | 2021 | |
Current income tax for the year | 2,880 | 6,832 | – | – |
Deferred income tax on foreseeable profit distributions of subsidiaries | (2,288) | (3,446) | – | – |
Deferred income tax relating to temporary differences | 79 | (79) | – | – |
TOTAL income tax | 671 | 3,307 | – | – |
34
About Latvenergo Group
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the Sustainability Report
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– Independent Auditors’
Report
Group | Parent Company | EUR'000 | |||||||
Goodwill | Usage rights | Software | Assets under | TOTAL | Usage rights | Software | Assets under | TOTAL | |
| and licences | development | and licences | development | ||||||
| As of 31 December 2020 | |||||||||
Cost | – | 58,173 | 52,617 | 315 | 111,105 | 10,800 | 49,593 | 198 | 60,591 |
Accumulated amortisation | – | (20,983) | (40,094) | – | (61,077) | (5,934) | (38,464) | – | (44,398) |
Net book amount | – | 37,190 | 12,523 | 315 | 50,028 | 4,866 | 11,129 | 198 | 16,193 |
| Year ended 31 December 2021 | |||||||||
Additions | 2,546 | – | – | 6,907 | 9,453 | – | – | 4,321 | 4,321 |
Transfers | – | 2,444 | 4,095 | (6,539) | – | 17 | 4,002 | (4,019) | – |
Disposals | – | – | (81) | – | (81) | – | (81) | – | (81) |
Impairment charge | – | – | 81 | – | 81 | – | 81 | – | 81 |
Amortisation charge | – | (3,000) | (2,924) | – | (5,924) | (459) | (2,649) | – | (3,108) |
Closing net book amount as of 31 December 2021 | 2,546 | 36,634 | 13,694 | 683 | 53,557 | 4,424 | 12,482 | 500 | 17,406 |
| As of 31 December 2021 | |||||||||
Cost | 2,546 | 60,617 | 56,449 | 683 | 120,295 | 10,817 | 53,370 | 500 | 64,687 |
Accumulated amortisation | – | (23,983) | (42,755) | – | (66,738) | (6,393) | (40,888) | – | (47,281) |
Net book amount | 2,546 | 36,634 | 13,694 | 683 | 53,557 | 4,424 | 12,482 | 500 | 17,406 |
| Year ended 31 December 2022 | |||||||||
Additions | – | – | – | 4,559 | 4,559 | – | – | 4,387 | 4,387 |
Transfers | – | 253 | 3,998 | (4,251) | – | 48 | 3,960 | (4,008) | – |
Amortisation charge | – | (3,152) | (3,175) | – | (6,327) | (461) | (2,935) | – | (3,396) |
Closing net book amount as of 31 December 2022 | 2,546 | 33,735 | 14,517 | 991 | 51,789 | 4,011 | 13,507 | 879 | 18,397 |
| As of 31 December 2022 | |||||||||
Cost | 2,546 | 60,871 | 59,252 | 991 | 123,660 | 10,865 | 56,135 | 879 | 67,879 |
Accumulated amortisation | – | (27,136) | (44,735) | – | (71,871) | (6,854) | (42,628) | – | (49,482) |
Net book amount | 2,546 | 33,735 | 14,517 | 991 | 51,789 | 4,011 | 13,507 | 879 | 18,397 |
35
About Latvenergo Group
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Notes to the Financial Statements
– Independent Auditors’
Report
Group | Parent Company | |||
2022 | 2021 | 2022 | 2021 | |
| Number of | Number of | Number of | Number of | |
| allowances | allowances | allowances | allowances | |
At the beginning of the year | 1,248,869 | 977,325 | 1,231,852 | 958,122 |
Allowances allocated free of charge* | 145,019 | 8,664 | 137,074 | – |
Purchased allowances | 632,966 | 1,105,000 | 632,966 | 1,105,000 |
Written off verified allowances | (906,491) | (837,120) | (902,628) | (831,270) |
Sold allowances | (4,000) | (5,000) | – | – |
At the end of the year | 1,116,363 | 1,248,869 | 1,099,264 | 1,231,852 |
including estimated allowances used during the reporting year (unverified) | (653,800) | (834,267) | (653,800) | (834,267) |
Allowances available at the end of the year | 462,563 | 414,602 | 445,464 | 397,585 |
| * The number of allowances received by the Group and the Parent Company from the Government free of charge, in accordance with the law “On Pollution” | ||||
and Directives of the Ministry of Environmental Protection and Regional Development of the Republic of Latvia. Therefore, their carrying amount as of 31 December 2022 was nil (31/12/2021: nil) | ||||
| Current intangible assets | Group | Parent Company | EUR’000 | |
2022 | 2021 | 2022 | 2021 | |
Net book amount at the beginning of the year | 24,266 | 3,157 | 24,266 | 3,157 |
Additions | 46,643 | 64,500 | 46,643 | 64,500 |
Disposals | (39,245) | (43,391) | (39,245) | (43,391) |
Closing net book amount at the end of the year | 31,664 | 24,266 | 31,664 | 24,266 |
Type of property, plant and equipment (PPE) | Estimated useful life, years |
Buildings and facilities | 15 – 100 |
| Assets of Hydropower plants: | |
- hydropower plants' buildings and facilities, | 25 – 100 |
- hydropower plants' technology equipment and machinery | 10 – 40 |
| Distribution system electricity lines and electrical equipment: | |
- electricity lines | 30 – 50 |
- electrical equipment of transformer substations | 30 – 35 |
Technology equipment and machinery | 3 – 40 |
Other property, plant and equipment | 2 – 25 |
36
About Latvenergo Group
Corporate Governance
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Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
| Net book amounts and movements of property, plant and equipment by groups, including groups of revalued categories are as follows | Group | Parent Company | EUR’000 | |||||||||||
| Land, | Assets | Distribution | Technology | Other PPE | Assets | Property, | Land, | Assets | Technology | Other PPE | Assets | Property, | ||
| buildings | of Hydro | system | equipment | under | plant and | buildings | of Hydro | equipment | under | plant and | ||||
| and | Power Plant | electricity | and | construction | equipment | and | Power Plant | and | construction | equipment | ||||
| facilities | lines and | machinery | TOTAL | facilities | machinery | TOTAL | ||||||||
| electrical | ||||||||||||||
| equipment | ||||||||||||||
As of 31 December | 2020 | |||||||||||||
Cost or revalued amount | 426,279 | 2,045,830 | 3,006,885 | 649,011 | 156,217 | 89,518 | 6,373,740 | 341,001 | 2,045,830 | 623,104 | 101,718 | 66,188 | 3,177,841 | |
Accumulated depreciation and impairment | (235,197) | (1,267,350) | (1,383,296) | (552,964) | (102,623) | (4,984) | (3,546,414) | (212,151) | (1,267,350) | (538,808) | (83,293) | (4,669) | (2,106,271) | |
Net book amount | 191,082 | 778,480 | 1,623,589 | 96,047 | 53,594 | 84,534 | 2,827,326 | 128,850 | 778,480 | 84,296 | 18,425 | 61,519 | 1,071,570 | |
| Year ended 31 December 2021 | ||||||||||||||
Additions | – | – | – | 4,969 | – | 112,286 | 117,255 | – | – | – | – | 25,203 | 25,203 | |
Invested in share capital | 20 | – | – | – | – | – | 20 | 20 | – | – | – | – | 20 | |
Transfers | 10,457 | 23,096 | 83,272 | 7,285 | 14,320 | (138,430) | – | 7,442 | 23,096 | 7,205 | 5,553 | (43,296) | – | |
Reclassified (to) / from investment property, net | (3,182) | – | – | – | – | – | (3,182) | (692) | – | – | – | – | (692) | |
Reclassified to non–current assets for sale | (27) | – | – | – | (78) | – | (105) | (20) | – | – | – | – | (20) | |
Disposals | (34) | (69) | (5,197) | (43) | (74) | (39) | (5,456) | (84) | (69) | (42) | (136) | (20) | (351) | |
Reversed impairment charge (Note 14 d I) | 9,187 | – | – | 27,537 | – | 4,699 | 41,423 | 9,187 | – | 27,537 | – | 4,669 | 41,393 | |
Depreciation | (13,120) | (25,157) | (70,241) | (30,913) | (11,196) | – | (150,627) | (9,587) | (25,157) | (29,655) | (5,751) | – | (70,150) | |
Closing net book amount as of 31 December 2021 | 194,383 | 776,350 | 1,631,423 | 104,882 | 56,566 | 63,050 | 2,826,654 | 135,116 | 776,350 | 89,341 | 18,091 | 48,075 | 1,066,973 | |
| As of 31 December 2021 | ||||||||||||||
Cost or revalued amount | 427,180 | 2,044,719 | 3,031,424 | 661,828 | 168,431 | 63,334 | 6,396,916 | 346,175 | 2,044,719 | 630,116 | 101,775 | 48,075 | 3,170,860 | |
Accumulated depreciation and impairment | (232,797) | (1,268,369) | (1,400,001) | (556,946) | (111,865) | (284) | (3,570,262) | (211,059) | (1,268,369) | (540,775) | (83,684) | – | (2,103,887) | |
Net book amount | 194,383 | 776,350 | 1,631,423 | 104,882 | 56,566 | 63,050 | 2,826,654 | 135,116 | 776,350 | 89,341 | 18,091 | 48,075 | 1,066,973 | |
| Year ended 31 December 2022 | ||||||||||||||
Additions | – | – | – | – | – | 117,108 | 117,108 | – | – | – | – | 25,653 | 25,653 | |
Transfers | 7,343 | 23,237 | 68,872 | 1,366 | 14,037 | (114,855) | – | 2,225 | 23,237 | 1,021 | 8,563 | (35,046) | – | |
Reclassified (to) / from investment property, net | (823) | – | – | – | – | – | (823) | (315) | – | – | – | – | (315) | |
Reclassified to non–current assets for sale | – | – | – | – | (8) | – | (8) | – | – | – | (8) | – | (8) | |
Disposals | (321) | (47) | (6,751) | (110) | (114) | (52) | (7,395) | (266) | (47) | (36) | (46) | (15) | (410) | |
Increase of assets as a result of revaluation | – | 227,695 | – | – | – | – | 227,695 | – | 227,695 | – | – | – | 227,695 | |
Reversed impairment charge as a result of revaluation | – | 417 | – | – | – | – | 417 | – | 417 | – | – | – | 417 | |
(Impairment) / reversed impairment charge | (2,567) | – | – | 8,613 | – | (8,459) | (2,413) | (2,567) | – | 8,613 | – | (8,410) | (2,364) | |
Depreciation | (13,395) | (29,562) | (68,887) | (30,915) | (13,106) | – | (155,865) | (9,648) | (29,562) | (29,688) | (6,083) | – | (74,981) | |
Closing net book amount as of 31 December 2022 | 184,620 | 998,090 | 1,624,657 | 83,836 | 57,375 | 56,792 | 3,005,370 | 124,545 | 998,090 | 69,251 | 20,517 | 30,257 | 1,242,660 | |
| As of 31 December 2022 | ||||||||||||||
Cost or revalued amount | 430,936 | 2,522,235 | 3,049,406 | 661,918 | 174,442 | 65,536 | 6,904,473 | 345,690 | 2,522,235 | 630,073 | 102,954 | 38,667 | 3,639,619 | |
Accumulated depreciation and impairment | (246,316) | (1,524,145) | (1,424,749) | (578,082) | (117,067) | (8,744) | (3,899,103) | (221,145) | (1,524,145) | (560,822) | (82,437) | (8,410) | (2,396,959) | |
Net book amount | 184,620 | 998,090 | 1,624,657 | 83,836 | 57,375 | 56,792 | 3,005,370 | 124,545 | 998,090 | 69,251 | 20,517 | 30,257 | 1,242,660 | |
37
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Group | Parent Company | EUR'000 | ||||||||||
| Investment properties for | Investment property held | TOTAL Investment | Investment properties for | Investment property held | TOTAL Investment | |||||||
| lease* | for capital appreciation | property | lease* | for capital appreciation | property | |||||||
2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
Cost at the beginning of the year | 1,784 | – | 2,023 | 1,455 | 3,807 | 1,455 | 2,700 | 4,005 | 1,861 | 1,427 | 4,561 | 5,432 |
Accumulated depreciation and impairment at the beginning of the year | (199) | – | (292) | (943) | (491) | (943) | (674) | (1,155) | (285) | (943) | (959) | (2,098) |
Net book amount at the beginning of the year | 1,585 | – | 1,731 | 512 | 3,316 | 512 | 2,026 | 2,850 | 1,576 | 484 | 3,602 | 3,334 |
Reclassified from / (to) property, plant and equipment | – | 1,597 | 823 | 1,585 | 823 | 3,182 | – | (766) | 315 | 1,458 | 315 | 692 |
Disposal | – | – | (31) | (18) | (31) | (18) | – | – | (1,678) | (18) | (1,678) | (18) |
Sold | – | – | (1,799) | (348) | (1,799) | (348) | – | – | – | (348) | – | (348) |
Depreciation | (12) | (12) | – | – | (12) | (12) | (17) | (58) | – | – | (17) | (58) |
Net book amount at the beginning of the year | 1,573 | 1,585 | 724 | 1,731 | 2,297 | 3,316 | 2,009 | 2,026 | 213 | 1,576 | 2,222 | 3,602 |
Cost at the end of the year | 1,784 | 1,784 | 758 | 2,023 | 2,542 | 3,807 | 2,700 | 2,700 | 214 | 1,861 | 2,914 | 4,561 |
Accumulated depreciation and impairment at the end of the year | (211) | (199) | (34) | (292) | (245) | (491) | (691) | (674) | (1) | (285) | (692) | (959) |
Net book amount at the end of the year | 1,573 | 1,585 | 724 | 1,731 | 2,297 | 3,316 | 2,009 | 2,026 | 213 | 1,576 | 2,222 | 3,602 |
| * leased property, plant and equipment and real estate related to distribution and transmission system assets |
38
About Latvenergo Group
Corporate Governance
Operating Segments
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the Sustainability Report
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– Key Figures
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– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
| Group | EUR’000 | ||
| Revalued property, plant and equipment groups | |||
| Assets of | Distribution | TOTAL | |
| Hydropower | system | revalued PPE | |
| plants (the | electricity lines | ||
| Parent | and electrical | ||
| Company) | equipment | ||
| At revalued amounts | |||
| As of 31 December 2022 | |||
Revalued | 2,522,235 | 3,049,406 | 5,571,641 |
Accumulated depreciation | (1,524,145) | (1,424,749) | (2,948,894) |
Revalued net book amount | 998,090 | 1,624,657 | 2,622,747 |
| As of 31 December 2021 | |||
Revalued | 2,044,719 | 3,031,424 | 5,076,143 |
Accumulated depreciation | (1,268,369) | (1,400,001) | (2,668,370) |
Revalued net book amount | 776,350 | 1,631,423 | 2,407,773 |
| At amounts stated on historical cost basis | |||
| As of 31 December 2022 | |||
Cost | 474,331 | 1,575,174 | 2,049,505 |
Accumulated depreciation | (199,859) | (524,748) | (724,607) |
Net book amount | 274,472 | 1,050,426 | 1,324,898 |
| As of 31 December 2021 | |||
Cost | 453,213 | 1,531,323 | 1,984,536 |
Accumulated depreciation | (191,691) | (518,820) | (710,511) |
Net book amount | 261,522 | 1,012,503 | 1,274,025 |
39
About Latvenergo Group
Corporate Governance
Operating Segments
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Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Discount rate | Electricity price* | Natural gas price* | Inflation rate | EUR'000 | ||||
| 1 pp | 1 pp | 10% | 10% | 10% | 10% | 1 pp | 1 pp | |
| increase | decrease | increase | decrease | increase | decrease | increase | decrease | |
Possible changes of CHPPs assets value | (1,400) | 1,500 | 45,900 | (50,800) | (27,800) | 25,500 | (4,100) | 3,900 |
| *Natural gas and electricity commodity costs are historically closely correlated | ||||||||
40
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Key assumptions used in asset valuation | 2022 | 2021 |
Discount rate | 5.92% | 4.37% |
Long-term growth rate, applicable from 2033* | 2.0% | 1.8% |
| * Macroeconomic assumptions for price index changes according to the information published by the Ministry of Finance |
| Discount rate | EUR’000 | |
1 pp increase | 1 pp decrease | |
Possible changes of distribution system assets value | no impairment | no impairment |
41
About Latvenergo Group
Corporate Governance
Operating Segments
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Annexes to
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Statement of Changes in Equity
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Notes to the Financial Statements
– Independent Auditors’
Report
| Right–of–use assets | EUR’000 | |
Group | Parent Company | |
| As of 31 December 2020 | ||
Cost | 10,970 | 5,619 |
Accumulated amortisation | (2,717) | (1,133) |
Net book amount | 8,253 | 4,486 |
| Year ended 31 December 2021 | ||
Recognised changes in lease agreements | 1,925 | 1,723 |
Depreciation | (1,866) | (1,066) |
Closing net book amount as of 31 December 2021 | 8,312 | 5,143 |
| As of 31 December 2021 | ||
Cost | 12,871 | 7,342 |
Accumulated amortisation | (4,559) | (2,199) |
Net book amount | 8,312 | 5,143 |
| Year ended 31 December 2022 | ||
Recognised changes in lease agreements | 4,261 | 1,094 |
Depreciation | (2,047) | (1,171) |
Closing net book amount as of 31 December 2022 | 10,526 | 5,066 |
| As of 31 December 2022 | ||
Cost | 16,784 | 8,436 |
Accumulated amortisation | (6,258) | (3,370) |
Net book amount | 10,526 | 5,066 |
| Lease liabilities | EUR’000 | ||
Notes | Group | Parent Company | |
As of 31 December 2020 | 8,344 | 4,540 | |
| Of which are: | |||
- Non–current | 6,783 | 3,734 | |
- Current | 1,561 | 806 | |
| Year ended 31 December 2021 | |||
Recognised changes in lease agreements | 1,906 | 1,725 | |
Payments for lease liabilities | (1,960) | (1,122) | |
Recognised interest liabilities | 138 | 83 | |
As of 31 December 2021 | 8,428 | 5,226 | |
Of which are - Non–current | 6,540 | 4,085 | |
- Current | 1,888 | 1,141 | |
| Year ended 31 December 2022 | |||
Recognised changes in lease agreements | 4,261 | 1,094 | |
Payments for lease liabilities | (2,150) | (1,234) | |
Recognised interest liabilities | 136 | 80 | |
As of 31 December 2022 | 10,675 | 5,166 | |
Of which are - Non–current | 8,648 | 4,206 | |
- Current | 2,027 | 960 |
Group | Parent Company | EUR’000 | |||
| Notes | 2022 | 2021 | 2022 | 2021 | |
Depreciation for the right-of-use assets (land buildings and facilities) | 2,047 | 1,866 | 1,171 | 1,066 | |
Interest expense on lease liabilities (included in finance costs) | 136 | 138 | 80 | 83 | |
Short–term lease expenses | 90 | 84 | 48 | 54 | |
Variable lease payments not included in the lease liabilities | 31 | – | 31 | – | |
TOTAL expenses from leases | 2,304 | 2,088 | 1,330 | 1,203 | |
| c) Income from leases | |||||
Group | Parent Company | EUR’000 | |||
| Notes | 2022 | 2021 | 2022 | 2021 | |
| Income from leases | |||||
(the Group and the Parent Company is the lessor) | 6 | 1,977 | 1,999 | 3,357 | 3,410 |
| Future minimum lease payments receivable under operating lease contracts by | ||||
| due dates (the Group and the Parent Company are the lessor) | Group | Parent Company | EUR’000 | |
2022 | 2021 | 2022 | 2021 | |
< 1 year | 1,969 | 1,973 | 3,357 | 3,410 |
1–5 years | 2,198 | 2,203 | 7,794 | 2,402 |
> 5 years | 1,486 | 1,602 | 1,486 | 1,602 |
TOTAL rental income | 5,653 | 5,778 | 12,637 | 7,414 |
42
About Latvenergo Group
Corporate Governance
Operating Segments
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Notes to the Financial Statements
– Independent Auditors’
Report
| The Parent Company’s participating interest in subsidiaries and other non–current financial | ||||||
| investments | ||||||
Name of the company | Country of | Business activity held | 31/12/2022 | 31/12/2021 | ||
| incorporation | Interest | EUR’000 | Interest | EUR’000 | ||
| held, % | held, % | |||||
| Investments in subsidiaries: | ||||||
Sadales tīkls AS | Latvia | Electricity distribution | 100% | 641,450 | 100% | 641,450 |
Enerģijas publiskais tirgotājs SIA | Latvia | Administration of mandatory | ||||
electricity procurement process | 100% | 40 | 100% | 40 | ||
Elektrum Eesti OÜ | Estonia | Electricity and natural gas trade | 100% | 35 | 100% | 35 |
Elektrum Lietuva, UAB | Lithuania | Electricity and natural gas trade | 100% | 600 | 100% | 98 |
Latvijas vēja parki SIA | Latvia | Development of wind parks | ||||
and generation of electricity | 80% | 1,600 | – | – | ||
Liepājas enerģija SIA | Latvia | Thermal energy generation and | ||||
trade, electricity generation | 51% | 3,556 | 51% | 3,556 | ||
TOTAL | 647,281 | 645,179 | ||||
| Other non–current financial investments: | ||||||
| Pirmais Slēgtais Pensiju | Latvia | Management of pension plans | ||||
Fonds AS Rīgas siltums AS | Latvia | Thermal energy generation and | 46.30% | 36 | 46.30% | 36 |
trade, electricity generation | 0.0051% | 3 | 0.0051% | 3 | ||
TOTAL | 39 | 39 | ||||
TOTAL non-current financial investments of the Parent Company | 647,320 | 645,218 | ||||
| The Group’s non–current financial investments | ||||||
Name of the company | Country of | Business activity held | 31/12/2022 | 31/12/2021 | ||
| incorporation | Interest | EUR’000 | Interest | EUR’000 | ||
| held, % | held, % | |||||
| Other non–current financial investments | ||||||
| Pirmais Slēgtais Pensiju | ||||||
Fonds AS | Latvia | Management of pension plans | 48.15% | 37 | 48.15% | 37 |
Rīgas siltums AS | Latvia | Thermal energy generation and | ||||
trade, electricity generation | 0.0051% | 3 | 0.0051% | 3 | ||
TOTAL | 40 | 40 | ||||
| Movement in non-current investments | Group | Parent Company | EUR’000 | |
2022 | 2021 | 2022 | 2021 | |
At the beginning of the year | 40 | 40 | 645,218 | 645,218 |
Invested in share capital | – | – | 2,102 | – |
At the end of the year | 40 | 40 | 647,320 | 645,218 |
43
About Latvenergo Group
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Statement of Financial Position
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Notes to the Financial Statements
– Independent Auditors’
Report
Non-current assets | Current assets | Non-current liabilities | Current liabilities | EUR'000 | ||||
| Non-controlling interest of subsidiaries | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 |
Latvijas vēja parki SIA (20%) | 28 | – | 347 | – | – | – | 14 | – |
Liepājas enerģija SIA (49%) | 14,232 | 14,904 | 5,651 | 2,963 | 9,223 | 8,061 | 3,571 | 3,342 |
| Summarised financial information for subsidiaries | Equity | Net profit / (loss) for the year | Dividends from subsidiaries* | Carrying amount of interest | EUR'000 | |||
| from investment | ||||||||
| Subsidiaries | 31/12/2022 | 31/12/2021 | 2022 | 2021 | 2022 | 2021 | 31/12/2022 | 31/12/2021 |
| Subsidiaries of the Parent Company: | ||||||||
Sadales tīkls AS | 970,630 | 1,001,041 | (20,415) | 10,429 | 10,429 | 22,050 | 641,450 | 641,450 |
Enerģijas publiskais tirgotājs SIA | 40 | 40 | – | – | – | – | 40 | 40 |
Elektrum Eesti OÜ | 1,127 | 828 | 455 | 156 | 156 | 239 | 35 | 35 |
Elektrum Lietuva, UAB | 956 | (202) | 656 | (580) | – | 77 | 600 | 98 |
Latvijas vēja parki SIA | 1,809 | – | (191) | – | – | – | 1,600 | – |
Liepājas enerģija SIA | 14,469 | 13,193 | 1,276 | 1,393 | – | 2,612 | 3,556 | 3,556 |
| Subsidiaries of Elektrum Eesti OÜ: | 989,031 | 1,014,900 | (18,219) | 11,398 | 10,585 | 24,978 | 647,281 | 645,179 |
Total Elektrum Eesti OÜ interests | 2,936 | 2,408 | 541 | 188 | – | – | 4,754 | 4,754 |
| * in 2022 dividends from subsidiaries received in cash in the amount of EUR 156 thousand and with non–cash offset in the amount of EUR 10,429 thousand (2021: EUR 2,928 thousand received in cash and with non–cash offset in the amount of EUR 22,050 thousand) | ||||||||
44
About Latvenergo Group
Corporate Governance
Operating Segments
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the Sustainability Report
Annual Report
– Key Figures
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Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Group | Parent Company | EUR’000 | ||
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Raw materials and materials | 18,888 | 17,978 | 1,084 | 847 |
Natural gas | 241,588 | 115,462 | 241,588 | 115,461 |
Goods for sale | 12,802 | 3,896 | 3,259 | 754 |
Other inventories | 16,585 | 8,121 | 16,055 | 8,059 |
Unfinished products and orders | 5,128 | – | – | – |
Prepayments for natural gas and other inventories | 2,027 | 47,786 | 469 | 46,901 |
Allowance for raw materials and other inventories | (1,380) | (1,110) | (869) | (735) |
TOTAL inventories | 295,638 | 192,132 | 261,586 | 171,287 |
| Movement on the allowance for inventories | Group | Parent Company | EUR’000 | |
2022 | 2021 | 2022 | 2021 | |
At the beginning of the year | 1,110 | 991 | 735 | 607 |
Charged / (credited) to the Statement of Profit or Loss | 270 | 119 | 134 | 128 |
At the end of the year | 1,380 | 1,110 | 869 | 735 |
| Receivables from contracts with customers grouped by the expected credit loss | ||||
| (ECL) assessment model, net | Group | Parent Company | EUR’000 | |
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| Individually assessed receivables with lifetime ECL assessment | ||||
(counterparty model) | 59,630 | 37,995 | 46,609 | 16,837 |
| Receivables with lifetime ECL assessment by simplified approach | ||||
(portfolio model) | 254,479 | 143,141 | 186,583 | 93,801 |
TOTAL receivables from contracts with customers | 314,109 | 181,136 | 233,192 | 110,638 |
| a) Receivables from contracts with customers, net | Group | Parent Company | EUR’000 | |
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| Receivables from contracts with customers: | ||||
| - Electricity, natural gas trade and related services customers | ||||
(portfolio model) | 214,542 | 133,497 | 152,285 | 87,828 |
- Electricity and related services customers (counterparty model) | 36,133 | 22,493 | 14,953 | – |
- Heating customers (portfolio model) | 54,228 | 21,233 | 49,237 | 18,807 |
- Other receivables from contracts with customers (portfolio model) | 5,622 | 5,384 | 1,444 | 1,150 |
- Other receivables from contracts with customers (counterparty model) | 23,541 | 15,557 | 18,181 | 12,792 |
- Subsidiaries (counterparty model) | – | – | 13,503 | 4,070 |
Allowances for expected credit loss from contracts with customers: | 334,066 | 198,164 | 249,603 | 124,647 |
| - Electricity, natural gas trade and related services customers | ||||
(portfolio model) | (17,642) | (14,748) | (15,938) | (13,621) |
- Electricity and related services customers (counterparty model) | (18) | (28) | – | – |
- Heating customers (portfolio model) | (448) | (361) | (422) | (343) |
- Other receivables from contracts with customers (portfolio model) | (1,823) | (1,864) | (23) | (20) |
- Other receivables from contracts with customers (counterparty model) | (26) | (27) | (20) | (22) |
- Subsidiaries (counterparty model) | – | – | (8) | (3) |
| Receivables from contracts with customers, net: | (19,957) | (17,028) | (16,411) | (14,009) |
| - Electricity, natural gas trade and related services customers | ||||
(portfolio model) | 196,900 | 118,749 | 136,347 | 74,207 |
- Electricity and related services customers (counterparty model) | 36,115 | 22,465 | 14,953 | – |
- Heating customers (portfolio model) | 53,780 | 20,872 | 48,815 | 18,464 |
- Other receivables from contracts with customers (portfolio model) | 3,799 | 3,520 | 1,421 | 1,130 |
- Other receivables from contracts with customers (counterparty model) | 23,515 | 15,530 | 18,161 | 12,770 |
- Subsidiaries (counterparty model) | – | – | 13,495 | 4,067 |
314,109 | 181,136 | 233,192 | 110,638 | |
45
About Latvenergo Group
Corporate Governance
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Notes to the Financial Statements
– Independent Auditors’
Report
| Receivables from contracts with customers with lifetime expected credit losses (ECL) assessed on the portfolio model basis and grouped by past due days | 31/12/2022 | Group | 31/12/2021 | 31/12/2022 | Parent Company | 31/12/2021 | EUR'000 | ||||||
Receivables | Allowances | Net | Receivables | Allowances | Net | Receivables | Allowances | Net | Receivables | Allowances | Net | ||
Late payment delay in days | ECL rate | for ECL | for ECL | for ECL | for ECL | ||||||||
On time | 0.20% | 248,926 | (543) | 248,383 | 139,516 | (301) | 139,215 | 183,322 | (418) | 182,904 | 91,096 | (209) | 90,887 |
Less than 30 days | 3% | 3,601 | (108) | 3,493 | 2,530 | (76) | 2,454 | 1,843 | (55) | 1,788 | 1,759 | (53) | 1,706 |
Past due 30 - 59 days | 20% | 1,930 | (386) | 1,544 | 901 | (179) | 722 | 1,493 | (299) | 1,194 | 711 | (142) | 569 |
Past due 60 - 89 days | 50% | 722 | (361) | 361 | 281 | (138) | 143 | 462 | (231) | 231 | 240 | (120) | 120 |
Past due 90 - 179 days | 60% | 1,079 | (648) | 431 | 428 | (252) | 176 | 713 | (428) | 285 | 296 | (177) | 119 |
Past due 180 - 359 days | 75% | 994 | (745) | 249 | 721 | (541) | 180 | 652 | (489) | 163 | 597 | (448) | 149 |
Past due more than 360 days | 100% | 10,179 | (10,179) | – | 11,758 | (11,758) | – | 7,929 | (7,929) | – | 9,530 | (9,530) | – |
Individually assessed | 90% | 5,691 | (5,673) | 18 | 2,508 | (2,257) | 251 | 5,691 | (5,673) | 18 | 2,508 | (2,257) | 251 |
Insolvent debtors* | 100% | 1,270 | (1,270) | – | 1,471 | (1,471) | – | 861 | (861) | – | 1,048 | (1,048) | – |
TOTAL | 274,392 | (19,913) | 254,479 | 160,114 | (16,973) | 143,141 | 202,966 | (16,383) | 186, 583 | 107,785 | (13,984) | 93,801 | |
| * receivables under insolvency process and with an established payment schedule | |||||||||||||
| Receivables from contracts with customers with lifetime expected credit losses | |||||
| (ECL) assessed on the counterparty model basis | Group | Parent Company | EUR’000 | ||
| Notes | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Receivables of electricity and related services customers | 36, 133 | 22,493 | 14,954 | – | |
Allowances for expected credit loss on receivables of electricity and related services customers | (18) | (28) | – | – | |
Other receivables from contracts with customers | 23, 541 | 15,557 | 18,180 | 12,792 | |
| Allowances for expected credit loss on other receivables | |||||
from contracts with customers | (26) | (27) | (20) | (22) | |
Receivables from subsidiaries | 29 b | – | – | 11,070 | 3,787 |
Accrued income from subsidiaries | 29 c | – | – | 2,433 | 283 |
| Allowances for expected credit loss on subsidiaries | |||||
receivables | 29 b | – | – | (8) | (3) |
TOTAL | 59, 630 | 37,995 | 46,609 | 16,837 | |
| Movements in loss allowances for impaired receivables from contracts with | ||||
| customers | Group | Parent Company | EUR’000 | |
2022 | 2021 | 2022 | 2021 | |
At the beginning of the year | 17,028 | 44,269 | 14,009 | 41,005 |
Receivables written off during the year as uncollectible | (2,372) | (30,094) | (2,284) | (29,679) |
Allowances for expected credit losses | 5,301 | 2,853 | 4,686 | 2,683 |
At the end of the year | 19,957 | 17,028 | 16,411 | 14,009 |
| b) Other financial receivables (assessed on the counterparty model basis) | Level of | Group | Parent Company | EUR’000 | |
| SICR | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| Current financial receivables: | |||||
| Unsettled revenue on mandatory procurement PSO fee | |||||
recognised as assets* | Stage 1 | 108 | 36,588 | – | – |
| Receivables for lease | Stage 1 | 34 | 16 | 31 | 14 |
Stage 3 | 1 | 2 | 1 | 1 | |
| Other current financial receivables | Stage 1 | 16,084 | 20,448 | 9,347 | 20,124 |
Stage 3 | 2,098 | 2,027 | 4,606 | 1,583 | |
Other accrued income | Stage 1 | 280 | – | 280 | – |
| Allowances for expected credit loss | Stage 1 | (73) | (140) | (66) | (114) |
Stage 3 | (1,443) | (1,443) | (1,132) | (1,133) | |
Receivables for lease from subsidiaries (Note 29 b) | Stage 1 | – | – | 13 | 21 |
Other financial receivables from subsidiaries (Note 29 b) | Stage 1 | – | – | 21,037 | 21,196 |
Other accrued income from subsidiaries (Note 29 c) | Stage 1 | – | – | 2,150 | 1,534 |
| Allowances for expected credit loss on subsidiaries | |||||
receivables (Note 29 b) | Stage 1 | – | – | (14) | (14) |
TOTAL other financial receivables | 17,089 | 57,498 | 36,253 | 43,212 | |
| * by applying agent principle unsettled revenue on mandatory procurement PSO fee is recognised as assets in net amount, as difference between revenue | |||||
| and costs recognised under the mandatory procurement | |||||
46
About Latvenergo Group
Corporate Governance
Operating Segments
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the Sustainability Report
Annual Report
– Key Figures
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Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
| c) Other non-financial receivables | Group | Parent Company | EUR’000 | |
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Non–current non–financial receivables | 482 | 2,544 | 482 | 441 |
Current non–financial receivables | 432 | 2,242 | 198 | 2,190 |
TOTAL non–financial receivables | 914 | 4,786 | 680 | 2,631 |
Group | Parent Company | EUR’000 | ||
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
Cash at bank | 112,757 | 97,079 | 100,268 | 92,418 |
TOTAL cash and cash equivalents | 112,757 | 97,079 | 100,268 | 92,418 |
47
About Latvenergo Group
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Notes to the Financial Statements
– Independent Auditors’
Report
| a) Reserves | ||||||||||
Group | Parent Company | EUR'000 | ||||||||
| Non–current | Hedge | Post–employment | Other | TOTAL | Non–current | Hedge | Post–employment | TOTAL | ||
| assets | reserve | benefit plan | reserves | assets | reserve | benefit plan | ||||
| revaluation | revaluation | revaluation | revaluation | |||||||
| Notes | reserve | reserve | reserve | reserve | ||||||
As of 31 December 2020 | 1,171,154 | (14,001) | (2,896) | 110 | 1,154,367 | 781,773 | (14,001) | (1,657) | 766,115 | |
Disposal of revaluation reserve | 14 a | (13,329) | – | – | – | (13,329) | (3,724) | – | – | (3,724) |
Gains on re–measurement of defined post–employment benefit plan | 27 a | – | – | 1,098 | – | 1,098 | – | – | 121 | 121 |
Gains from fair value changes of derivative financial instruments | 24 I | – | 33,219 | – | – | 33,219 | – | 33,219 | – | 33,219 |
As of 31 December 2021 | 1,157,825 | 19,218 | (1,798) | 110 | 1,175,355 | 778,049 | 19,218 | (1,536) | 795,731 | |
Increase of non–current assets revaluation reserve as a result of revaluation | 14 a | 227,695 | – | – | – | 227,695 | 227,695 | – | – | 227,695 |
Disposal of revaluation reserve | 14 a | (11,529) | – | – | – | (11,529) | (3,470) | – | – | (3,470) |
Gains on re–measurement of defined post–employment benefit plan | 27 a | – | – | 645 | – | 645 | – | – | 210 | 210 |
Losses from fair value changes of derivative financial instruments | 24 I | – | (109,483) | – | – | (109,483) | – | (109,483) | – | (109,483) |
As of 31 December 2022 | 1,373,991 | (90,265) | (1,153) | 110 | 1,282,683 | 1,002,274 | (90,265) | (1,326) | 910,683 | |
Group | Parent Company | |||
2022 | 2021 | 2022 | 2021 | |
| Profit attributable to the equity holder of the Parent Company | ||||
(in thousand EUR) | 183,443 | 70,675 | 209,362 | 79,520 |
Weighted average number of shares (thousand) | 790,368 | 790,360 | 790,368 | 790,360 |
Basic earnings per share (in euros) | 0.232 | 0.089 | 0.265 | 0.101 |
Diluted earnings per share (in euros) | 0.232 | 0.089 | 0.265 | 0.101 |
| The changes in lease liabilities (Note 15): | ||||
Group | Parent Company | EUR’000 | ||
2022 | 2021 | 2022 | 2021 | |
Net book amount at the beginning of the year | 8,428 | 8,344 | 5,226 | 4,540 |
Recognised changes in lease agreements | 4,261 | 1,906 | 1,094 | 1,725 |
Paid lease payments in cash | (1,671) | (1,275) | (649) | (294) |
Paid lease payments by non-cash offset | (372) | (400) | (505) | (524) |
Change in accrued liabilities | (107) | (285) | (80) | (304) |
Recognised interest liabilities | 136 | 138 | 80 | 83 |
Closing net book amount at the end of the year | 10,675 | 8,428 | 5,166 | 5,226 |
48
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Report
Group | Parent Company | EUR’000 | ||
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| Non-current portion of non-current borrowings from financial | ||||
institutions | 424,867 | 564,209 | 411,664 | 553,862 |
Non-current portion of issued debt securities (bonds) | 149,887 | 49,866 | 149,887 | 49,866 |
Total non-current borrowings from financial institutions | 574,754 | 614,075 | 561,551 | 603,728 |
Current portion of non-current borrowings from financial institutions | 177,778 | 79,186 | 175,798 | 76,866 |
Current portion of issued debt securities (bonds) | – | 100,055 | – | 100,055 |
Overdraft from financial institutions | 119,478 | – | 119,478 | – |
Accrued interest on non-current borrowings from financial institutions | 2,161 | 495 | 2,047 | 455 |
Accrued coupon interest on issued debt securities (bonds) | 1,747 | 1,218 | 1,747 | 1,218 |
Total current borrowings from financial institutions | 301,164 | 180,954 | 299,070 | 178,594 |
TOTAL borrowings from financial institutions | 875,918 | 795,029 | 860,621 | 782,322 |
Current borrowings from related parties* | – | – | 3,317 | – |
Total current borrowings | 301,164 | 180,954 | 302,387 | 178,594 |
TOTAL borrowings | 875,918 | 795,029 | 863,938 | 782,322 |
| Movement in borrowings | Group | Parent Company | EUR’000 | |
2022 | 2021 | 2022 | 2021 | |
At the beginning of the year | 795,029 | 743,199 | 782,322 | 733,392 |
Received borrowings from financial institutions | 207,846 | 79,997 | 200,013 | 75,000 |
Repaid borrowings from financial institutions | (129,118) | (77,928) | (123,801) | (75,830) |
Proceeds from issued debt securities (bonds) | 100,000 | 50,000 | 100,000 | 50,000 |
Borrowings received from related parties* | – | – | 3,317 | – |
Repayment of issued debt securities (bonds) | (100,000) | – | (100,000) | – |
Change in accrued interest on borrowings from financial institutions | 2,195 | 19 | 2,121 | 18 |
Changes in outstanding value of issued debt securities (bonds) | (34) | (258) | (34) | (258) |
At the end of the year | 875,918 | 795,029 | 863,938 | 782,322 |
| Borrowings by categories of lenders | Group | Parent Company | EUR’000 | |
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
International Financial Institutions | 273,306 | 286,304 | 273,306 | 286,304 |
Commercial banks | 450,978 | 357,586 | 435,681 | 344,879 |
Issued debt securities (bonds) | 151,634 | 151,139 | 151,634 | 151,139 |
Total borrowings from financial institutions | 875,918 | 795,029 | 860,621 | 782,322 |
Related parties* | – | – | 3,317 | – |
TOTAL borrowings | 875,918 | 795,029 | 863,938 | 782,322 |
| * Within the framework of the Agreement ´On Provision of Mutual Financial Resources´, as of 31 December 2022, Parent Company had a current borrowing | ||||
| from Enerģijas publiskais tirgotājs SIA in the amount of EUR 3,317 thousand (31/12/2021: nil), the information is disclosed in the Note 29. II. | ||||
| Borrowings from financial institutions by contractual maturity, excluding the | ||||
| impact of derivative instruments to the interest rate | Group | Parent Company | EUR’000 | |
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| Fixed rate non–current and current borrowings: | ||||
- < 1 year (current portion of non–current borrowings) | 1,747 | 101,273 | 1,747 | 101,273 |
- 1–5 years | 100,000 | – | 100,000 | – |
- > 5 years | 49,887 | 49,866 | 49,887 | 49,866 |
Total fixed rate borrowings | 151,634 | 151,139 | 151,634 | 151,139 |
| Floating rate non–current and current borrowings: | ||||
- < 1 year (current borrowings) | 119,692 | – | 119,692 | – |
- < 1 year (current portion of non–current borrowings) | 179,704 | 79,660 | 177,610 | 77,300 |
- 1–5 years | 303,329 | 413,279 | 293,199 | 405,750 |
- > 5 years | 121,559 | 150,951 | 118,486 | 148,133 |
Total floating rate borrowings | 724,284 | 643,890 | 708,987 | 631,183 |
TOTAL borrowings | 875,918 | 795,029 | 860,621 | 782,322 |
| Borrowings from financial institutions by repricing of interest, including the | ||||
| impact of derivative instruments | Group | Parent Company | EUR’000 | |
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
- < 1 year | 606,983 | 600,401 | 591,686 | 587,695 |
- 1–5 years | 219,048 | 69,762 | 219,048 | 69,762 |
- > 5 years | 49,887 | 124,866 | 49,887 | 124,865 |
TOTAL borrowings | 875,918 | 795,029 | 860,621 | 782,322 |
49
About Latvenergo Group
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50
About Latvenergo Group
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Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
| I) Outstanding fair values of derivatives and their classification | |||||||||
Group | Parent Company | EUR’000 | |||||||
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | ||||||
| Notes | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |
Interest rate swaps | 24 II | 10,279 | – | – | (4,312) | 10,279 | – | – | (4,312) |
Energy forwards, futures, and swaps | 24 III | 450 | (120,520) | 25,735 | (14,208) | 450 | (120,520) | 25,466 | (14,208) |
Currency exchange forwards | 24 IV | – | (1,499) | – | – | – | (1,499) | – | – |
Total outstanding fair values of derivatives | 10,729 | (122,019) | 25,735 | (18,520) | 10,729 | (122,019) | 25,466 | (18,520) | |
Group | Parent Company | EUR’000 | ||||||
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |
Non–current | 8,131 | – | – | (2,332) | 8,131 | – | – | (2,332) |
Current | 2,598 | (122,019) | 25 735 | (16,188) | 2,598 | (122,019) | 25,466 | (16,188) |
| TOTAL fair values of derivative | ||||||||
financial instruments | 10,729 | (122,019) | 25 735 | (18,520) | 10,729 | (122,019) | 25,466 | (18,520) |
| Gains / (losses) on fair value changes as a result of realised hedge agreements | Group | Parent Company | EUR’000 | ||
| Notes | 2022 | 2021 | 2022 | 2021 | |
Included in the Statement of Profit or Loss | 8 | ||||
Interest rate swaps | 11 a | 1,074 | 316 | 1,074 | 316 |
Energy forwards, futures, and swaps | 8 | (10,096) | (13,373) | (9,827) | (13,642) |
Included in the other comprehensive income | 21 a | (9,022) | (13,057) | (8,753) | (13,326) |
Interest rate swaps | 24 II | 13,517 | 4,876 | 13,517 | 4,876 |
Energy forwards, futures, and swaps | 24 III | (121,501) | 28,336 | (121,501) | 28,336 |
Currency exchange forwards | 24 IV | (1,499) | 7 | (1,499) | 7 |
(109,483) | 33,219 | (109,483) | 33,219 | ||
Total loss on fair value changes | (118,505) | 20,162 | (118,236) | 19,893 | |
| Fair value changes of interest rate swaps | Group | Parent Company | EUR’000 | |||||
2022 | 2021 | 2022 | 2021 | |||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |
Outstanding fair value at the beginning of the year | – | (4,312) | – | (9,504) | – | (4,312) | – | (9,504) |
Included in Statement of Profit or Loss | – | 1,074 | – | 316 | – | 1,074 | – | 316 |
Included in other comprehensive Income | 10,279 | 3,238 | – | 4,876 | 10,279 | 3,238 | – | 4,876 |
| Outstanding fair value at the end | ||||||||
of the year | 10,279 | – | – | (4,312) | 10,279 | – | – | (4,312) |
51
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Notes to the Financial Statements
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Report
| Fair value changes of energy forwards, futures, and swaps | Group | Parent Company | EUR'000 | ||||||
2022 | 2021 | 2022 | 2021 | ||||||
| Notes | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |
Outstanding fair value at the beginning of the year | 25,735 | (14,208) | 1,557 | (4,993) | 25,466 | (14,208) | 1,557 | (4,993) | |
Included in the Statement of Profit or Loss | 8 | 181 | (10,277) | (785) | (12,588) | 450 | (10,277) | (1,054) | (12,588) |
Included in other comprehensive income | (25,466) | (96,035) | 24,963 | 3,373 | (25,466) | (96,035) | 24,963 | 3,373 | |
Outstanding fair value at the end of the year | 450 | (120,520) | 25,735 | (14,208) | 450 | (120,520) | 25,466 | (14,208 |
| Fair value changes of forward currencies exchange contracts | Group | Parent Company | EUR'000 | |||||
2022 | 2021 | 2022 | 2021 | |||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |
Outstanding fair value at the beginning of the year | – | – | – | (7) | – | – | – | (7) |
Included in other comprehensive income | – | (1,499) | – | 7 | – | (1,499) | – | 7 |
| Outstanding fair value at the end | ||||||||
of the year | – | (1,499) | – | – | – | (1,499) | – |
52
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– Independent Auditors’
Report
| Quantitative disclosures of fair value measurement hierarchy for assets at the end of the year | Group | Parent Company | EUR'000 | ||||||
Fair value measurement using | Fair value measurement using | ||||||||
| Quoted prices | Significant | Significant | TOTAL | Quoted prices | Significant | Significant | TOTAL | ||
| in active | observable | unobservable | in active | observable | unobservable | ||||
| markets | inputs | inputs | markets | inputs | inputs | ||||
Type of assets | Notes | (Level 1) | (Level 2) | (Level 3) | (Level 1) | (Level 2) | (Level 3) | ||
| As of 31 December 2022 | |||||||||
| Assets measured at fair value | |||||||||
Revalued property, plant and equipment | 14 c | – | – | 2,622,747 | 2,622,747 | – | – | 998,090 | 998,090 |
Non-current financial investments | 16 | – | – | 40 | 40 | – | – | 39 | 39 |
| Derivative financial instruments, including: | |||||||||
Interest rate swaps | 24 | – | 10,279 | – | 10,279 | – | 10,279 | – | 10,279 |
Energy forwards, futures, and swaps | 24 | – | 450 | – | 450 | – | 450 | – | 450 |
| Assets for which fair values are disclosed | |||||||||
Investment properties | 14 b | – | – | 2,297 | 2,297 | – | – | 2,222 | 2,222 |
| Loans to related parties: | |||||||||
- Floating rate loans | 29 e | – | – | – | – | – | 266,737 | – | 266,737 |
- Fixed rate loans | 29 e | – | – | – | – | – | 446,571 | – | 446,571 |
Current financial receivables | 18 a, b | – | – | 331,198 | 331,198 | – | – | 269,445 | 269,445 |
Cash and cash equivalents | 19 | – | 112,757 | – | 112,757 | – | 100,268 | – | 100,268 |
| As of 31 December 2021 | |||||||||
| Assets measured at fair value | |||||||||
Revalued property, plant and equipment | 14 c | – | – | 2,407,773 | 2,407,773 | – | – | 776,350 | 776,350 |
Non-current financial investments | 16 | – | – | 40 | 40 | – | – | 39 | 39 |
| Derivative financial instruments, including: | |||||||||
Energy forwards, futures and swaps | 24 | – | 25,735 | – | 25,735 | – | 25,466 | – | 25,466 |
| Assets for which fair values are disclosed | |||||||||
Investment properties | 14 b | – | – | 3,316 | 3,316 | – | – | 3,602 | 3,602 |
| Loans to related parties: | |||||||||
- Floating rate loans | 29 e | – | – | – | – | – | 172,313 | – | 172,313 |
- Fixed rate loans | 29 e | – | – | – | – | – | 534,065 | – | 534,065 |
Current financial receivables | 18 a, b | – | – | 238,634 | 238,634 | – | – | 153,850 | 153,850 |
Cash and cash equivalents | 19 | – | 97,079 | – | 97,079 | – | 92,418 | – | 92,418 |
53
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Notes to the Financial Statements
– Independent Auditors’
Report
| Quantitative disclosures of fair value measurement hierarchy for liabilities at the end of the year | Group | Parent Company | EUR'000 | ||||||
Fair value measurement using | Fair value measurement using | ||||||||
| Quoted prices | Significant | Significant | TOTAL | Quoted prices | Significant | Significant | TOTAL | ||
| in active | observable | unobservable | in active | observable | unobservable | ||||
| markets | inputs | inputs | markets | inputs | inputs | ||||
Type of liability | Notes | (Level 1) | (Level 2) | (Level 3) | (Level 1) | (Level 2) | (Level 3) | ||
| As of 31 December 2022 | |||||||||
| Liabilities measured at fair value | |||||||||
| Derivative financial instruments, including: | |||||||||
Energy forwards, futures, and swaps | 24 | – | 120,520 | – | 120,520 | – | 120,520 | – | 120,520 |
Forward currencies exchange contracts | 24 | – | 1,499 | – | 1,499 | – | 1,499 | – | 1,499 |
| Liabilities for which fair values are disclosed | |||||||||
Issued debt securities (bonds) | 23 | – | 151,634 | – | 151,634 | – | 151,634 | – | 151,634 |
Borrowings from financial institutions | 23 | – | 724,284 | – | 724,284 | – | 708,987 | – | 708,987 |
Borrowings from related parties | 23 | – | – | – | – | – | 3,317 | – | 3,317 |
Trade and other financial current payables | 26 | – | – | 107,811 | 107,811 | – | – | 99,902 | 99,902 |
| As of 31 December 2021 | |||||||||
| Liabilities measured at fair value | |||||||||
| Derivative financial instruments, including: | |||||||||
Interest rate swaps | 24 | – | 4,312 | – | 4,312 | – | 4,312 | – | 4,312 |
Energy forwards, futures, and swaps | 24 | – | 14,208 | – | 14,208 | – | 14,208 | – | 14,208 |
| Liabilities for which fair values are disclosed | |||||||||
Issued debt securities (bonds) | 23 | – | 151,139 | – | 151,139 | – | 151,139 | – | 151,139 |
Borrowings from financial institutions | 23 | – | 643,890 | – | 643,890 | – | 631,183 | – | 631,183 |
Trade and other financial current payables | 26 | – | – | 163,950 | 163,950 | – | – | 166,517 | 166,517 |
Carrying amount | Group | Fair value | Carrying amount | Parent Company | Fair value | EUR'000 | ||
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| Financial assets | ||||||||
Fixed rate loans to related parties | – | – | – | – | 446,571 | 534,065 | 414,187 | 545,297 |
| Financial liabilities | ||||||||
Issued debt securities (bonds) | 151,634 | 151,139 | 128,948 | 151,683 | 151,634 | 151,139 | 128,948 | 151,683 |
54
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Notes to the Financial Statements
– Independent Auditors’
Report
Group | Parent Company | EUR’000 | |||
| Notes | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| Financial liabilities: | |||||
Payables for materials and services | 38,750 | 60,945 | 17,794 | 29,672 | |
Payables for electricity and natural gas | 20,642 | 78,053 | 1,489 | 57,297 | |
Payables to related parties | 29 b | 8,191 | 10,969 | 24,026 | 30,541 |
Accrued expenses | 27,204 | 10,889 | 21,351 | 5,832 | |
Accrued expenses from related parties | 29 d | – | 327 | 31,191 | 41,359 |
Other financial current payables | 13,024 | 2,767 | 4,051 | 1,816 | |
TOTAL financial liabilities | 107,811 | 163,950 | 99,902 | 166,517 | |
| Non–financial liabilities: | |||||
Taxes other than income tax | 38,418 | 12,405 | 27,159 | 4,095 | |
Contract liabilities | 15,707 | 9,822 | 5,368 | 4,289 | |
Other current payables | 3,338 | 2,841 | 1,339 | 1,160 | |
TOTAL non–financial liabilities | 57,463 | 25,068 | 33,866 | 9,544 | |
TOTAL trade and other current payables | 165,274 | 189,018 | 133,768 | 176,061 | |
Group | Parent Company | EUR’000 | ||
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| Non-current: | ||||
- post–employment benefits (recognised in profit or loss) | 14,413 | 13,623 | 6,395 | 6,040 |
- post–employment benefits (recognised in equity) | 1,153 | 1,798 | 1,157 | 1,367 |
| Current: | 15,566 | 15,421 | 7,552 | 7,407 |
- termination benefits | – | 311 | – | 133 |
15,566 | 15,732 | 7,552 | 7,540 | |
Group | Parent Company | EUR’000 | |||
| Notes | 2022 | 2021 | 2022 | 2021 | |
At the beginning of the year | 15,421 | 15,698 | 7,407 | 7,233 | |
Current service cost | 1,029 | 1,485 | 497 | 672 | |
Interest cost | 511 | 145 | 246 | 67 | |
Post–employment benefits paid | (750) | (809) | (388) | (444) | |
Losses as a result of changes in actuarial assumptions | 21 a | (645) | (1,098) | (210) | (121) |
At the end of the year | 15,566 | 15,421 | 7,552 | 7,407 | |
Group | Parent Company | EUR’000 | |||
| Notes | 2022 | 2021 | 2022 | 2021 | |
At the beginning of the year | 15,421 | 15,698 | 7,407 | 7,233 | |
(Credited) / charged to the Statement of Comprehensive Income | 21 a | (645) | (1,098) | (210) | (121) |
Charged to the Statement of Profit or Loss | 790 | 821 | 355 | 295 | |
At the end of the year | 15,566 | 15,421 | 7,552 | 7,407 | |
55
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– Independent Auditors’
Report
Assumptions | Date of | Group | Parent Company | EUR’000 | |||||||||
| valuation | Discount rate | Future salary changes | Retirement probability changes | Discount rate | Future salary changes | Retirement probability changes | |||||||
1% increase | 1% decrease | 1% increase | 1% decrease | 1% increase | 1% decrease | 1% increase | 1% decrease | 1% increase | 1% decrease | 1% increase | 1% decrease | ||
| Impact on provisions for | 31/12/2022 | 1,779 | (1,483) | 1,737 | (1,477) | 1,936 | (1,625) | 799 | (664) | 780 | (661) | 869 | (727) |
| post–employment benefits | 31/12/2021 | 1,866 | (1,677) | 1,966 | (1,650) | 2,184 | (1,807) | 830 | (744) | 874 | (732) | 972 | (801) |
Group | Parent Company | EUR’000 | |||||||
Less than 1 year | From 1 to 5 years | Over 5 years | TOTAL | Less than 1 year | From 1 to 5 years | Over 5 years | TOTAL | ||
| Defined benefit obligation | 31/12/2022 | 2,454 | 2,780 | 10,332 | 15,566 | 1,755 | 1,340 | 4,457 | 7,552 |
31/12/2021 | 1,947 | 2,405 | 11,069 | 15,421 | 1,532 | 1,064 | 4,811 | 7,407 | |
Group | Parent Company | EUR’000 | ||
2022 | 2021 | 2022 | 2021 | |
At the beginning of the year | 311 | 2,803 | 133 | 757 |
Termination benefits paid | (1,133) | (4,281) | – | (148) |
Changes in provisions | 822 | 1,789 | (133) | (476) |
At the end of the year | – | 311 | – | 133 |
56
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– Independent Auditors’
Report
Group | Parent Company | EUR’000 | |||
| Notes | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| I) Non-current deferred income | |||||
| a) contracts with customers | |||||
From connection fees | 6 | 132,381 | 136,217 | – | – |
Other deferred income | 735 | 802 | 735 | 802 | |
| b) operating lease | 133,116 | 137,019 | 735 | 802 | |
Other deferred income | 321 | 342 | 321 | 342 | |
| c) other | 321 | 342 | 321 | 342 | |
On grant for the installed electrical capacity of CHPPs | 113,460 | 137,450 | 113,460 | 137,450 | |
On financing from European Union funds | 7,329 | 8,220 | 1,973 | 2,114 | |
Other deferred income | 70 | 103 | 44 | 52 | |
120,859 | 145,773 | 115,477 | 139,616 | ||
TOTAL non-current deferred income | 254,296 | 283,134 | 116,533 | 140,760 | |
| II) Current deferred income | |||||
| a) contracts with customers | |||||
From connection fees | 6 | 15,386 | 14,794 | – | – |
Other deferred income | 13,944 | 237 | 13,714 | 67 | |
| b) operating lease | 29,330 | 15,031 | 13,714 | 67 | |
Other deferred income | 20 | 20 | 20 | 20 | |
| c) other | 20 | 20 | 20 | 20 | |
On grant for the installed electrical capacity of CHPPs | 23,990 | 23,990 | 23,990 | 23,990 | |
On financing from European Union funds | 891 | 896 | 142 | 144 | |
24,881 | 24,886 | 24,132 | 24,134 | ||
TOTAL current deferred income | 54,231 | 39,937 | 37,866 | 24,221 | |
TOTAL deferred income | 308,527 | 323,071 | 154,399 | 164,981 | |
57
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– Independent Auditors’
Report
| Movement in deferred income (non-current and current part) | Group | Parent Company | EUR’000 | ||
| Notes | 2022 | 2021 | 2022 | 2021 | |
At the beginning of the year | 323,071 | 349,916 | 164,981 | 189,177 | |
Received deferred income (financing and other income) | 13,647 | 848 | 13,647 | 848 | |
| Received connection fees for connection to distribution | |||||
system | 6 | 11,840 | 12,556 | – | – |
Other deferred income credited to the Statement of Profit or Loss | (24,920) | (24,907) | (24,142) | (24,106) | |
Deferred income from contracts with customer and operating lease credited to the Statement of Profit or Loss | (15,111) | (15,342) | (87) | (938) | |
At the end of the year | 308,527 | 323,071 | 154,399 | 164,981 | |
| a) Sales/purchases of goods, PPE and services to/from related parties | Group | Parent Company | EUR’000 | |||
2022 | 2021 | 2022 | 2021 | |||
| Other | Other | Subsidiaries | Other | Subsidiaries | Other | |
| related | related | related | related | |||
| parties* | parties* | parties* | parties* | |||
Sales of goods, PPE and services, finance income: | ||||||
- Sales of goods and services | 49,152 | 23,359 | 69,136 | 49,036 | 43,646 | 23,206 |
- Sales of property, plant and equipment | – | 2 | 27 | – | 171 | – |
- Lease of assets | 1,034 | 1,039 | 1,457 | 1,034 | 1,483 | 1,039 |
- Interest income | – | 1,341 | 9,353 | – | 9,282 | 1,341 |
TOTAL | 50,186 | 25,741 | 79,973 | 50,070 | 54,582 | 25,586 |
Purchases of goods, PPE, and services: | ||||||
- Purchases of goods and services | 99,884 | 79,188 | 268,123 | 30,020 | 346,314 | 8,362 |
- including gross expenses from transactions with Sadales tīkls AS recognised in net amount | – | – | 92,691 | – | 226,712 | – |
- Purchases of property, plant and equipment and construction services | 3,296 | 2,540 | 76 | 715 | 76 | 563 |
- Lease of assets | 1,114 | 676 | 168 | 788 | 145 | 296 |
TOTAL | 104,294 | 82,404 | 268,367 | 31,523 | 346,535 | 9,221 |
Other related parties included transmission system operator – Augstsprieguma tīkls AS, Pirmais Slēgtais Pensiju Fonds AS and other entities controlled by the management members of Latvenergo Group |
58
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
Group | Parent Company | EUR’000 | |||
| Notes | 31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| b) Receivables and payables at the end of the year | |||||
arising from sales/purchases of goods, PPE, and services: | |||||
| Receivables from related parties: | |||||
- Subsidiaries | 18 a, b | – | – | 35,120 | 25,004 |
- Other related parties* | 15,873 | 12,404 | 15,701 | 11,866 | |
| - Loss allowances for expected credit loss from receivables | |||||
of subsidiaries | 18 a, b | – | – | (22) | (16) |
| - Loss allowances for expected credit loss from receivables | |||||
of other related parties* | (19) | (22) | (19) | (21) | |
Payables to related parties: | 26 | 15,854 | 12,382 | 50,780 | 36,833 |
- Subsidiaries | – | – | 22,369 | 28,415 | |
- Other related parties* | 8,191 | 10,969 | 1,658 | 2,126 | |
c) Accrued income raised from transactions with related parties: | 8,191 | 10,969 | 24,027 | 30,541 | |
- For goods sold / services provided for subsidiaries | 18 a, b | – | – | 2,483 | 435 |
- For interest received from subsidiaries | 18 a, b | – | – | 2,100 | 1,381 |
d) Accrued expenses raised from transactions with related parties: | 26 | – | – | 4,583 | 1,816 |
- For purchased goods / received services from subsidiaries | – | – | 31,191 | 41,032 | |
- For purchased goods / received services from other related parties* | – | 327 | – | 327 | |
– | 327 | 31,191 | 41,359 | ||
Other related parties included transmission system operator – Augstsprieguma tīkls AS, Pirmais Slēgtais Pensiju Fonds AS and other entities controlled by the management members of Latvenergo Group | |||||
| Non-current and current loans to related parties | Group | Parent Company | EUR’000 | |
31/12/2022 | 31/12/2021 | 31/12/2022 | 31/12/2021 | |
| Non–current loans to subsidiaries | ||||
Sadales tīkls AS | – | – | 494,979 | 467,786 |
Elektrum Eesti OÜ | – | – | 7,260 | 7,560 |
Elektrum Lietuva, UAB | – | – | 8,535 | 1,970 |
Allowances for expected credit loss | – | – | (306) | (306) |
TOTAL non–current loans | – | – | 510,468 | 477,010 |
| Current portion of non–current loans | ||||
Sadales tīkls AS | – | – | 95,312 | 97,000 |
Elektrum Eesti OÜ | – | – | 300 | 300 |
'Elektrum Lietuva, UAB | 904 | – | ||
Allowances for expected credit loss | – | – | (57) | (62) |
| Current loans to subsidiaries | ||||
Sadales tīkls AS | – | – | 10,000 | 10,000 |
Elektrum Eesti OÜ | – | – | 41,700 | 34,880 |
Elektrum Lietuva, UAB | – | – | 54,746 | 56,198 |
Enerģijas publiskais tirgotājs SIA | – | – | – | 31,137 |
Allowances for expected credit loss | – | – | (65) | (85) |
TOTAL current loans | – | – | 202,840 | 229,368 |
TOTAL loans to related parties | – | – | 713,308 | 706,378 |
59
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
| Movement in loans issued to related parties | Group | Parent Company | EUR’000 | |
2022 | 2021 | 2022 | 2021 | |
At the beginning of the year | – | 86,620 | 706,378 | 742,229 |
Change in current loans in cash (net) | – | – | 225,482 | 319,304 |
| Change in current loans by non–cash offsetting of operating | ||||
receivables and payables (net) | – | – | (120,831) | (199,767) |
Issued non–current loans in cash | – | – | – | 7,860 |
Repayment of loan in cash | – | (86,672) | – | (86,672) |
Repaid non–current loans by non–cash offset | – | – | (97,746) | (76,648) |
Impairment for expected credit loss | – | 52 | 25 | 72 |
At the end of the year | – | – | 713,308 | 706,378 |
| incl. loan movement through bank account | ||||
Issued loans to subsidiaries | – | – | 921,687 | 716,106 |
Repaid loans issued to subsidiaries | – | – | (696,205) | (388,942) |
Repaid loans issued to other related parties | – | (86,672) | – | (86,672) |
(Repaid) / issued loans, net | – | (86,672) | 225,482 | 240,492 |
| Interest received from related parties | Group | Parent Company | EUR’000 | |
2022 | 2021 | 2022 | 2021 | |
Interest received | 26 | 1,341 | 9,378 | 10,623 |
TOTAL | 26 | 1,341 | 9,378 | 10,623 |
| Concluded non–current loan agreements with Sadales tīkls AS | EUR’000 | ||||
| Agreement | Principal amount | Outstanding loan amount | Interest rate | Maturity date | |
| conclusion date | of the loan | 31/12/2022 | 31/12/2021 | ||
| 29 September | 6 months EURIBOR + | ||||
2011 | 316,271 | 12,538 | 20,919 | fixed rate | 1 September 2025 |
6 February 2013 | 42,686 | – | 2,134 | fixed rate | 10 September 2022 |
18 September 2013 | 42,686 | 4,269 | 8,537 | fixed rate | 10 August 2023 |
29 October 2014 | 90,000 | 20,000 | 30,000 | fixed rate | 10 September 2024 |
20 October 2015 | 90,000 | 30,000 | 40,000 | fixed rate | 21 October 2025 |
22 August 2016 | 60,000 | 26,667 | 33,333 | fixed rate | 22 August 2026 |
22 August 2016 | 50,000 | 25,000 | 30,000 | fixed rate | 14 June 2027 |
14 December 2018 | 260,000 | 175,811 | 203,875 | fixed rate | 31 January 2030 |
3 March 2020 | 200,000 | 177,067 | 195,988 | fixed rate+ floating rate | 25 March 2030 |
| 6 months EURIBOR + | |||||
8 March 2022 | 175,000 | 118,939 | – | fixed rate | 31 March 2032 |
TOTAL | 1,326,643 | 590,291 | 564,786 | ||
| Non–current loans to Sadales tīkls AS by maturity | Parent Company | EUR’000 |
31/12/2022 | 31/12/2021 | |
| Non–current loan: | ||
- < 1 year (current portion) | 95,312 | 97,000 |
- 1 – 5 years | 334,109 | 315,672 |
- > 5 years | 160,870 | 152,114 |
590,291 | 564,786 |
| Concluded non–current loan agreements with Elektrum Eesti OÜ | EUR’000 | ||||
| Agreement | Principal amount | Outstanding loan amount | Interest rate | Maturity date | |
| conclusion date | of the loan | 31/12/2022 | 31/12/2021 | ||
| 6 months EURIBOR + | |||||
25 August 2021 | 7,860 | 7,560 | 7,860 | fixed rate | 24 August 2031 |
| Non–current loans to Elektrum Eesti OÜ by maturity | Parent Company | EUR’000 |
31/12/2022 | 31/12/2021 | |
| Non–current loan: | ||
- < 1 year (current portion) | 300 | 300 |
- 1 – 5 years | 900 | 900 |
- > 5 years | 6,360 | 6,660 |
7,560 | 7,860 |
60
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
| Concluded non–current loan agreements with Elektrum Lietuva, UAB | EUR’000 | ||||
| Agreement | Principal amount | Outstanding loan amount | Interest rate | Maturity date | |
| conclusion date | of the loan | 31/12/2022 | 31/12/2021 | ||
| 6 months EURIBOR + | |||||
31 October 2021 | 9,439 | 9,439 | 1,970 | fixed rate | 29 September 2031 |
| Non–current loans to Elektrum Lietuva, UAB by maturity | Parent Company | EUR’000 |
31/12/2022 | 31/12/2021 | |
| Non–current loan: | ||
- < 1 year (current portion) | 904 | – |
- 1 – 5 years | 4,340 | 875 |
- > 5 years | 4,195 | 1,095 |
9,439 | 1,970 |
Group | Parent Company | EUR’000 | ||
2022 | 2021 | 2022 | 2021 | |
Interest received | – | – | 18 | 26 |
– | – | 18 | 26 | |
61
About Latvenergo Group
Corporate Governance
Operating Segments
Sustainability Indicators
Annexes to
the Sustainability Report
Annual Report
– Key Figures
– Management Report
– Financial Statements
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
– Independent Auditors’
Report
62