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Latvenergo Group publishes unaudited results for the first quarter of 2022
Emitents Latvenergo, AS (213800DJRB539Q1EMW75)
Veids 3.1. Papildu regulētā informācija, kas ir jāatklāj saskaņā ar dalībvalsts tiesību aktiem
Valoda EN
Statuss Publicēts
Versija
Datums 2022-05-31 09:09:08
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Today, on 31 May, the unaudited condensed consolidated interim financial statements of Latvenergo Group for the first three months of 2022 are published.

The beginning of 2022 was difficult, as it changed the familiar world and economic order. Russia’s invasion of Ukraine has shaken the entire world, including financial and energy markets. The significant upward energy price trend continued in the first quarter of 2022, with the year-on-year price of natural gas in the Baltics multiplying more than 5 times, whilst electricity increased 2.6 times compared to the respective period a year ago.

Latvenergo Group is one of the largest power suppliers and a leader in green energy generation in the Baltics. During the reporting period, the total volume of energy generated at Latvenergo Group’s power plants amounted to 1,140 GWh of electricity and 856 GWh of thermal energy. Notably, the share of electricity generated from renewable energy sources comprised 78%. Due to the increased electricity and natural gas spot prices, Latvenergo Group’s revenue in the first quarter of 2022 was EUR 407.7 million or 63% higher than in the respective period a year ago. The Group’s EBITDA was 53% higher year-on-year, reaching EUR 123.6 million.

In its Growth Strategy approved in March 2022, the Group announced new strategic objectives with balanced and reasonable ambitions for the use of renewable energy sources, working towards the achievement of energy independence and climate neutrality in the European Union. This is also confirmed by the government’s intention of establishing a joint venture with Latvijas valsts meži AS, for the development of wind farms in Latvia.

An unprecedented rise in energy prices in Europe has continued in the first quarter of 2022. While in the Baltics, the price of electricity fluctuated between 135 and 140 EUR/MWh, which was 2.6 times higher than in the respective period a year ago, in Denmark, it was 3.1 times higher, exceeding 150 EUR/MWh, in Germany it was 3.7 times higher, exceeding, 180 EUR/MWh, and in France it was 4.4 times higher, exceeding 230 EUR/MWh. Russia’s invasion of Ukraine has significantly raised geopolitical risk, threatening the physical deliveries of natural gas and causing natural gas prices to soar, reaching as high as an average of 130 EUR/MWh in March. Assessing the risks related to the Russia’s invasion of Ukraine and in accordance with the task given by the government on 24 February 2022 to replenish gas reserves for national security purposes, Latvenergo AS has procured approximately 2 terawatt hours (TWh) of gas.

In the first quarter of 2022, Latvenergo Group was the largest generator of green electricity in the Baltics. The Daugava HPPs generated 888 GWh this year, increasing the share of electricity generated from renewable energy sources to 78%. The output of the Daugava HPPs was 15% higher than in the respective period a year ago. Due to high price of natural gas and CO2 emission allowances, the Latvenergo AS CHPPs generated 244 GWh of electricity, which is 69% less than a year ago. In total, Latvenergo generated 1,140 gigawatt-hours (GWh) or 26% of the total amount of electricity generated in the Baltic States. Due to the warmer weather conditions, the amount of thermal energy generated decreased by 15%, amounting to 751 GWh.

During the reporting period, the number of both electricity and natural gas customers increased by 2% and 28%, respectively. As a result, the Group’s portfolio comprises approximately 760,000 electricity customers, of which more than 100,000 are outside Latvia, while the number of natural gas customers already exceeds 19,000. In the first quarter of 2022, Latvenergo Group supplied 1,422 GWh of electricity and 339 GWh of natural gas in the Baltics.

New business activities, i.e. the sale of solar panels, and electric mobility services, have performed very well.

The number of contracts for the sale of solar panels and parts of solar parks in the Baltics increased almost 11 times, exceeding 1,600. The total capacity of solar panels provided to Latvenergo Group’s retail clients in the Baltics exceeds 13 MW, making Latvenergo one of the leading providers of this service in the Baltics. Solar park projects undergo development as part of the expansion and diversification of the generation portfolio with green technologies. There are currently 9 new solar park projects in the Baltics in the development or construction stage, with a total capacity of 70 MW.

At the end of March, the Elektrum electric car charging network reached 95 charging ports. The number of charges made by Elektrum mobile app users doubled compared to the 3 months of 2021, exceeding 3,900 charges, and comprising 69 MWh.

With electricity and natural gas prices rising, Latvenergo Group’s revenue in the first quarter of 2022 reached EUR 407.7 million. The Group’s EBITDA increased by EUR 43 million compared to the first quarter of 2021, reaching EUR 123.6 million. The Group’s profit in the reporting period was EUR 81.8 million; as per usual, it is higher in the first quarter than during the rest of the year, because higher water inflow in spring results in significantly more electricity being generated at the hydropower plants on the Daugava River. During the reporting period, the average water inflow in the Daugava River was 665 m3/s, compared to 576 m3/s in the respective period a year ago. Consequently, the amount of electricity generated in the first three months of 2022 was 888 GWh and 769 GWh in the respective period a year ago.

As for a state-owned company, the profit of Latvenergo AS is paid as dividends to the state budget. In 2021, the Group paid EUR 113.3 million to the Latvian State Budget, of which EUR 98.2 million was dividends for the use of state capital. In 2022, the dividend payout is planned at the amount of EUR 70.2 million.

The total amount of investments made by Latvenergo Group in the first three months of 2022 was the same as in the first three months a yar ago, comprising EUR 28.3 million, most of which was invested in distribution network assets. The Daugava HPPs’ hydropower unit reconstruction continued, the total amount of investments reaching EUR 196.7 million.

In March, the Supervisory Board of Latvenergo AS approved Latvenergo Group’s medium-term operational strategy for 2022–2026 - the Growth strategy with new operational and financial objectives. It emphasizes a rapid development of renewable energy power plants and electrification to achieve the Group’s objectives and to promote energy independence. Objectives of the strategy: to expand and diversify the generation portfolio through green technologies; to strengthen the position of Elektrum as the most valuable energy trader in the Baltics; to promote electrification of the transport sector; to provide a sustainable and economically justified distribution service, and to improve the security and quality of electricity supply.

The unaudited condensed interim financial statements of Latvenergo Group for the first 6 months of 2022 will be published on 31 August, and for the 9 months on 30 November.

 

LATVENERGO GROUP KEY PERFORMANCE INDICATORS

Operational figures

  3M 2022 3M 2021
Total electricity supply, incl.: GWh 2,076 2,638
Retail* GWh 1,422 1,799
Wholesale** GWh 654 840
Retail natural gas GWh 339 341
Electricity generated GWh 1,140 1,565
Thermal energy generated GWh 856 1,011
Number of employees   3,164 3,298
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                                                                                                                                                                                     

    3M 2022 3M 2021
Revenue**   407.7 249.9
EBITDA**   123.6 80.7
Profit for the reporting period   81.8 35.5
Assets   3,518.8 3,421.6
Equity   2,232.5 2,156.3
Net debt**   544.0 448.3
Adjusted funds from operations (FFO)   110.2 85.0
Capital expenditure   28.3 26.6

* Information about the financial indicators and coefficients used by the Latvenergo Group is available in the Latvenergo Group's consolidated and Latvenergo AS Financial Statements for the 3-month period ending 31 March 2022 – see the section “Formulas”.

** Figures and ratios until 10 June 2020 are presented by excluding discontinuing operations (unbundling transmission system asset ownership). For more details, please see the Group’s annual report for 2020.

 

Financial ratios*

    3M 2022 3M 2021
Net debt / EBITDA   5.4% 4.2%
EBITDA margin   8.9% 5.6%
Return on equity (ROE)   49.3% 52.7%
Adjusted ROE excluding distribution   2.1 1.8
Return on assets (ROA)   20% 32%
Adjusted FFO / net debt   3.4% 2.6%
Net debt / equity   24% 21%

* Information about the financial indicators and coefficients used by the Latvenergo Group is available in the Latvenergo Group's consolidated and Latvenergo AS Financial Statements for the 3-month period ending 31 March 2022 – see the section “Formulas”.

 

Consolidated Statement of Profit or Loss*

EUR'000

  01/01-31/03/2022 01/01-31/03/2021
     
Revenue 407,729 249,888
Other income 7,435 7,127
Raw materials and consumables (246,135) (136,609)
Personnel expenses (29,879) (28,189)
Other operating expenses (15,505) (11,531)
EBITDA 123,645 80,686
Depreciation, amortisation and impairment of intangible assets, property, plant and equipment (PPE) and right–of–use assets (40,027) (42,666)
Operating profit 83,618 38,020
Finance income 433 666
Finance costs (2,013) (2,332)
Profit before tax 82,038 36,354
Income tax (236) (812)
Profit for the reporting period 81,802 35,542
     
Profit attributable to:    
  - Equity holder of the Parent Company 81,586 34,467
  - Non–controlling interests 216 1,075

* The Latvenergo Consolidated Interim Financial Statements for the 3-month period ending 31 March 2022 are prepared in accordance with the IFRS as adopted by the European Union

 

Consolidated Statement of Financial Position*

EUR'000

      31/03/2022 31/12/2021
ASSETS        
Non–current assets        
Intangible assets     52,555 53,557
Property, plant, and equipment     2,815,240 2,826,654
Right–of–use assets     7,922 8,312
Investment property     3,501 3,316
Non–current financial investments     40 40
Other non–current receivables     2,545 2,544
Deferred income tax assets     100 79
Derivative financial instruments     2,262
Total non–current assets     2,884,165 2,894,502
Current assets        
Inventories     105,457 192,132
Current intangible assets     14,838 24,266
Receivables from contracts with customers     159,629 181,136
Other current receivables     53,138 59,740
Deferred expenses     1,767 1,235
Prepayment for income tax     75 65
Derivative financial instruments     51,791 25,735
Cash and cash equivalents     247,958 97,079
Total current assets     634,653 581,388
TOTAL ASSETS     3,518,818 3,475,890
EQUITY AND LIABILITIES        
EQUITY        
Share capital     790,368 790,368
Reserves     1,198,320 1,175,355
Retained earnings     237,310 151,430
Equity attributable to equity holder of the Parent Company     2,225,998 2,117,153
Non–controlling interests     6,511 6,295
Total equity     2,232,509 2,123,448
LIABILITIES        
Non–current liabilities        
Borrowings     604,904 614,075
Lease liabilities     6,216  6,540
Deferred income tax liabilities     605 2,955
Provisions     15,737 15,421
Derivative financial instruments     1,371 2,332
Deferred income from contracts with customers     135,507 137,019
Other deferred income     139,880 146,115
Total non–current liabilities     904,220 924,457
Current liabilities        
Borrowings     187,073 180,954
Lease liabilities     1,828 1,888,
Trade and other payables     151,944 189,018
Deferred income from contracts with customers     15,167 15,031
Other deferred income     24,903 24,906
Derivative financial instruments     1,174 16,188
Total current liabilities     382,089 427,985
Total liabilities     1,286,309 1,352,442
TOTAL EQUITY AND LIABILITIES     3,518,818 3,475,890

* The Latvenergo Consolidated Interim Financial Statements for the 3-month period ending 31 March 2022 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_2022_3M_ENG.pdf (1312.71 kB)
02_Latvenergo_Interim_2022_3M_presentation_ENG.pdf (579.71 kB)