Over 12 months of 2009, the Joint Stock Company „Latvijas Gāze” (hereinafter – LG) sold to consumers 1.49 billion m3 of natural gas. In comparison to 2008, natural gas sales have decreased by 8.5%.

The decrease of demand stems from the mild weather conditions and the economic recession in Latvia, which resulted in part of customers either terminating their activity or limiting consumption. Natural gas consumption was also influenced by the varied natural gas price over the course of the year. In the first half, the natural gas price was higher, whereas in the second half – lower if compared to the overall tendencies in the European market. Low natural gas prices in the second half of the year were ensured by reserves at the Inčukalns Underground Gas Storage Facility, purchased in summer when the natural gas prices were low throughout Europe. During the heating season, when other countries experienced a rise of prices, Latvia consumed the previously purchased natural gas available from the storage facility. Over the year from January thru December, the tariffs for households on heating decreased by 27%, whereas those for industrial consumers – by 36% on average.

In 2009, LG sold natural gas and provided services for LVL 330 million, which is by 13% less than in 2008. The reduction of net turnover stems from the changes in the natural gas sale price and volume.

During 2009, LG took a number of measures to ensure for the shareholders a profit at the level of 2008 in the case of falling demand. LG introduced new standards for operation of the gas supply system and reorganized the structure by reducing the number of employees by 9.2%. Working under the circumstances of crisis, additional financial and material resources were shifter for natural gas sales and billing control, reducing the funding for the provision of new connections, advertising and marketing purposes. The same as in previous years, the financing of measures related to system security were set as priority. There were also savings due to more favourable prices and the increased competition in outsourced services purchased via tenders.

The Company’s net profitability of business activity in 2009 was 6%, and LG completed the year with a net profit of LVL 20 million, which did not significantly to that of 2008, still it was by LVL 12 million lower than in 2007. In 2009, the profit from economic activity diminished compared to 2008, while other financial income grew.

LVL 73 million were paid in taxes and duties in 2009.

Within the framework of the capital investment programme, LVL 17 million were taken up over 12 months of 2009. 32% of the total investment were spent on the improvement of operation security and the modernization of equipment at the Inčukalns UGS, 33% - on the modernization and repair of the gas transmission pipeline system, and 30% - on the extension of the distribution networks and the renewal of existing fixed assets.

Vinsents Makaris
Phone + (371) 67 369 144
E-mail: IR@lg.lv