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Latvenergo Group's unaudited results for the first nine months of 2021
Emitents Latvenergo, AS (213800DJRB539Q1EMW75)
Veids 2.2. Iekšējā informācija
Valoda EN
Statuss Publicēts
Versija
Datums 2021-11-30 09:38:47
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Today, on November 30, the unaudited interim condensed consolidated financial statements of Latvenergo Group for the nine-month period of 2021 are published.

The world in overall, the Baltic States and Latvia are beginning to recover from the effects of the Covid-19 pandemic. In the nine months of this year, electricity consumption in the Baltic States has increased by 5% and the amount of electricity generated by 2% compared to the same period last year. At the same time, the recovery of the global economy has contributed to record high electricity and energy prices, which also affects Latvenergo's operational results. In the 9-month period of 2021, the price of electricity increased significantly in both the Nordic and Baltic countries - the price of the Nord Pool system increased more than five times, while in Latvia the increase was 119%.

The current situation in the electricity market indicates the need to develop local renewable electricity generation capacity in the region, which would eliminate the dependence of electricity prices on fossil energy sources and thus help to reduce prices in the future.

In the reporting period, Latvenergo Group's revenue is 659.5 million EUR or by 17% more than in the corresponding period last year. Significantly higher prices of purchased energy sources have negatively affected the Group's EBITDA 1, which is by 40% lower than in the nine-month period of 2020, reaching 126.8 million EUR.

In the 9-month period of 2021, Latvenergo Group was the largest electricity producer in the Baltics, providing 31% of the total electricity generated in the Baltics. Latvenergo's power plants generated 3,407 GWh of electricity and 1,320 GWh of heat. The Daugava HPPs generated 2,105 GWh, while generation at the Latvenergo AS CHPPs during the reporting period was 10% higher, reaching 1,283 GWh. The amount of generated thermal energy increased by 20% compared to the same period last year, which was affected by colder weather conditions during heating season at the beginning of the year. In total, in the 9-month period of this year, electricity generation in the Baltics was 2% higher than in the corresponding period last year, reaching 11.2 TWh. The total amount of electricity generated in Latvia was at the same level as the previous year, reaching 4.2 TWh.

Significantly, with the economic recovery from Covid-19 restrictions, colder weather conditions at the beginning of the year and a hot summer, the Baltic States consumed 5% more electricity than last year - 21 TWh. The improvement in the level of economic activity increased the demand for energy sources, which in turn contributed to a significant increase in energy prices. The average price of natural gas in September 2021 reached 63 EUR / MWh (in September 2020 - 11 EUR / MWh). Meanwhile the price of emission allowances in September 2021 exceeded 60 EUR / t. Consequently, electricity prices in both the Nordic and Baltic countries are at a record high, increasing by more than double in Latvia in the 9-month period of 2021.

High electricity and energy resource prices affected the operations of Latvenergo Group - although the Group's revenue is 17% higher than in the same period last year, reaching 659.5 million EUR, EBITDA in the reporting period is 40% lower than in 2020, reaching 126.8 million EUR. This was mainly due to significantly higher prices for purchased electricity, as well as natural gas and emission allowances. These factors also affected the Group's profit, which in the reporting period is 26.4 million EUR.

The rapid development and growth of renewable power plants, as well as electrification, are the main highlights of the Group's new strategy, thus developing local energy generation capacity as a significant direction in reducing electricity prices. At the end of 2020, the development of a mid-term strategy for 2022-2026 was started and will continue in 2021. In addition, on November 9, 2021, the Cabinet of Ministers set a new overall strategic goal for Latvenergo AS - to promote the competitiveness and growth of climate-neutral Latvia and increase the value of Latvenergo Group in the Baltic home market and beyond by developing and providing goods and services in a sustainable, innovative and economically sound manner in the energy and related business value chains and the efficient governance of resources and infrastructure that are strategically important for the country's development and security.

In the nine-month period of this year, Latvenergo Group sold 5.0 TWh of electricity to its customers in the Baltics, which is 7% more than in the corresponding period last year. Electricity sold outside Latvia accounts for about 40% of the total retail electricity sales. The increase in electricity sales was driven by the success in markets outside Latvia, especially in Lithuania's large business and household segments. The amount of electricity sold by Latvenergo Group in Latvia is 3.0 TWh, in Lithuania - 1.2 TWh and in Estonia - 0.8 TWh.

The number of contracts for the sale of solar panels and parts of solar parks concluded in the Baltics significantly increased - almost 800 new contracts, which is 79% more than in the corresponding period last year. The total installed capacity of solar panels in the Baltics for Latvenergo Group's retail customers exceeds 9 MW, making Latvenergo one of the leading providers of this service in the Baltics. 3/4 of the total capacity is installed for customers outside Latvia.

Approaching the goal of closing the year with 84 electric car charging ports, the number of charges increased - in the nine-month period of this year, the number of charges made by Elektrum mobile app customers doubled compared to the same period last year, performing more than 5,500 charges in the amount of 100 MWh.

The unaudited condensed financial statements of Latvenergo Group for 2021 will be published on 28 February 2022.

1 earnings before interest, corporate income tax, share of profit or loss of associated companies, depreciation and amortisation, and impairment of intangible and fixed assets

 

LATVENERGO GROUP KEY PERFORMANCE INDICATORS

As the transmission assets were separated from Latvenergo Group on 10 June 2020, in comparable results, this segment is classified as discontinued operation.

Operational figures

  9M 2021 9M 2020
Electricity supply, incl.: GWh 6,884 6,590
Retail* GWh 4,987 4,650
Wholesale** GWh 1,897 1,940
Retail natural gas GWh 677 318
Electricity generation GWh 3,407 3,298
Thermal energy generation GWh 1,320 1,101
Number of employees   3,176 3,347
Moody’s credit rating   Baa2 (stable)  Baa2 (stable) 

* Including operating consumption

** Including sale of energy purchased within the mandatory procurement on the Nord Pool

 

Financial figures*

million EUR                                                                                                                                                                                     

    9M 2021 9M 2020
Revenue**   659.5 564.4
EBITDA1)**   126.8 212.1
Profit   26.4 94.7
Assets   3,313.6 3,265.4
Equity   2,037.1 2,012.5
Net debt (adjusted)2)**   703.9 584.3
Investments   96.8 130.4

1) EBITDA – earnings before interest, income tax, share of result of associates, depreciation and amortisation, and impairment of intangible assets, property, plant and equipment and right-of-use assets

2) Net debt (until 18 June 2021) = (borrowings at the end of the reporting period minus loans to Augstsprieguma tīkls AS at the end of the reporting period) minus cash and cash equivalents at the end of the reporting period

Net debt (as of 19 June 2021) = borrowings at the end of the reporting period minus cash and cash equivalents at the end of the reporting period

* Information about the financial indicators and coefficients used by the Latvenergo Group is available in the Latvenergo Group's consolidated and Latvenergo AS Unaudited Condensed Interim Financial Statements for the 9-Month Period Ending 30 September 2021 – see the section “Formulas”.

** Financial figures for 2020 are presented by excluding discontinuing operations (unbundling transmission system asset ownership)

 

Financial ratios*

    9M 2021 9M 2020
Net debt / EBITDA (adjusted)3)   3.3 2.1
EBITDA margin4)   22% 36%
Return on equity (ROE)5)   2.4% 6.0%
Return on assets (ROA)6)   1.5% 3.6%
Return on capital employed (ROCE) (adjusted)7)**   2.3% 4.6%
Net debt / equity (adjusted)8)   35% 29%

3) Net debt / EBITDA (adjusted) = (net debt at the beginning of the reporting period + net debt at the end of the reporting period) * 0.5 / EBITDA

4) EBITDA margin = EBITDA / revenue

5) Return on equity (ROE) = profit / average value of equity ((equity at the beginning of the reporting period + equity at the end of the reporting period) / 2)

6) Return on assets (ROA) = profit / average value of assets ((assets at the beginning of the reporting period + assets at the end of the reporting period) / 2)

7) Return on capital employed (ROCE) = operating profit / (average value of equity ((equity at the beginning of the reporting period + equity at the end of the reporting period) / 2) + average value of borrowings ((borrowings at the beginning of the reporting period + borrowings at the end of the reporting period / 2))

8) Net debt / equity = net debt at the end of the reporting period / equity at the end of the reporting period

* Information about the financial indicators and coefficients used by the Latvenergo Group is available in the Latvenergo Group's consolidated and Latvenergo AS Unaudited Condensed Interim Financial Statements for the 9-Month Period Ending 30 September 2021 – see the section “Formulas”.

**Financial ratios for 2020 are presented by excluding discontinuing operations (unbundling transmission system asset ownership)

 

Consolidated Statement of Profit or Loss*

EUR'000

  01/01-30/09/2021 01/01-30/09/2020
     
Revenue 659,543 564,359
Other income 21,174 21,382
Raw materials and consumables (437,510) (254,739)
Personnel expenses (82,028) (82,014)
Other operating expenses (34,405) (36,906)
EBITDA 126,774 212,082
Depreciation. amortisation and impairment of intangible assets. property. plant and equipment and right-of-use assets (92,076) (119,103)
Operating profit 34,698 92,979
Finance income 1,885 1,453
Finance costs (6,949) (8,330)
Profit before tax 29,634 86,102
Income tax (3,231) (1,280)
Profit for the period from continuing operations 26,403 84,822
Profit for the period from discontinued operation 9,843
Profit for the period 26,403 94,665
Profit attributable to:    
  - Equity holder of the Parent Company 25,527 93,416
  - Non–controlling interests 876 1,249

* The Latvenergo Consolidated Unaudited Condensed Interim Financial Statements for the 9-Month Period Ending 30 September 2021 are prepared in accordance with the IFRS as adopted by the European Union

 

Consolidated Statement of Financial Position*

EUR'000

      30/09/2021 31/12/2020
ASSETS        
Non–current assets        
Intangible assets and property, plant and equipment     2,876,846 2,877,354
Right–of–use assets     7,116 8,253
Investment property     3,305 512
Non–current financial investments     40 40
Non-current loans to related parties     86,620
Other non–current receivables     2,520 429
Derivative financial instruments     1,664 291
Other financial investments     2,678 2,693
Total non–current assets     2,894,169 2,976,192
Current assets        
Inventories     146,130 68,754
Current intangible assets     22,565 3,157
Receivables from contracts with customers     113,154 108,178
Other current receivables     80,631 85,316
Deferred expenses     2,063 1,083
Prepayment for income tax     43
Derivative financial instruments     7,396 1,266
Other financial investments     14,143
Cash and cash equivalents     47,449 100,703
Total current assets     419,388 382,643
TOTAL ASSETS     3,313,557 3,358,835
EQUITY AND LIABILITIES        
EQUITY        
Share capital     790,368 790,348
Reserves     1,138,157 1,154,367
Retained earnings     102,311 165,672
Equity attributable to equity holder of the Parent Company     2,030,836 2,110,387
Non–controlling interests     6,223 7,855
Total equity     2,037,059 2,118,242
LIABILITIES        
Non–current liabilities        
Borrowings     559,575 634,077
Lease liabilities     5,654 6,783
Deferred income tax liabilities     2,670 6,401
Provisions     17,365 17,317
Derivative financial instruments     4,358 9,672
Deferred income from contracts with customers     137,081 139,613
Other deferred income     152,351 170,413
Total non–current liabilities     879,054 984,276
Current liabilities        
Borrowings     191,820 109,122
Lease liabilities     1,559 1,561
Trade and other payables     118,843 100,912
Deferred income from contracts with customers     14,809 15,091
Other deferred income     25,014 24,799
Derivative financial instruments     45,399 4,832
Total current liabilities     397,444 256,317
Total liabilities     1,276,498 1,240,593
TOTAL EQUITY AND LIABILITIES     3,313,557 3,358,835

* The Latvenergo Consolidated Unaudited Condensed Interim Financial Statements for the 9-Month Period Ending 30 September 2021 are prepared in accordance with the IFRS as adopted by the European Union

 

Additional information:
Jānis Irbe
Group Treasurer
Phone: +371 29 453 897
E-mail: investor.relations@latvenergo.lv

www.latvenergo.lv

About Latvenergo

Latvenergo Group is one of the leading energy suppliers in the Baltics operating in electricity and thermal energy generation and trade, natural gas trade and electricity distribution services. Latvenergo AS has been acknowledged as the most valuable company in Latvia for several times. International credit rating agency Moody's has assigned Latvenergo AS an investment-grade credit rating of Baa2/stable.

Latvenergo Group is comprised of the parent company Latvenergo AS (generation and trade of electricity and thermal energy, trade of natural gas) and subsidiaries - Sadales tīkls AS (electricity distribution), Elektrum Eesti OÜ (trade of electricity and natural gas in Estonia), Elektrum Lietuva UAB (trade of electricity and natural gas in Lithuania), Enerģijas publiskais tirgotājs AS (administration of mandatory electricity procurement process) and Liepājas enerģija SIA (generation and trade of thermal energy in Liepaja, electricity generation). All shares of Latvenergo AS are owned by the state and held by the Ministry of Economics of the Republic of Latvia.

Pielikumi
01_Latvenergo_Interim_2021_9M_ENG.pdf (2177.13 kB)
02_Latvenergo_Interim_2021_9M_presentation_ENG.pdf (534.11 kB)