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Unaudited results of Latvenergo Group of the first 6 months of 2019
Emitents Latvenergo, AS (213800DJRB539Q1EMW75)
Veids 1.2 Pusgada finanšu pārskati un revīzijas ziņojumi / ierobežotas pārbaudes
Valoda EN
Statuss Publicēts
Versija
Datums 2019-08-30 09:38:58
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Today, on 30 August the unaudited interim condensed consolidated financial statements of Latvenergo Group of the first 6 months of 2019 are published. Latvenergo Group's revenue in the first half of 2019 has not changed considerably compared to the respective period a year ago and comprised EUR 451.6 mill. The Group's EBITDA amounts to EUR 147.0 mill. which is 22% below last year and which was determined by the decrease of power generation by the Daugava HPP's due to lower water inflow. During this half of the year Latvenergo Group has successfully continued operations on the natural gas market by selling 143 GWh of natural gas which is almost a triple amount of the relevant period last year. Also the amount of retail sale of the electricity in the Baltic countries has increased by 45 GWh. The number of contracts for installation of solar panels has increased very intensely.

During the first six months of 2019 Latvenergo Group successfully operated on new markets and actively offered new services under Elektrum brand in compliance with the operating strategy.

In February this year, Latvenergo launched sale of natural gas to households and 143 GWh of natural gas in total already sold this year (51 GWh during the first half of 2018). The number of corporate natural gas customers in the Baltic countries is 618. The total volume of natural gas consumed by the Group and sold to customers reaches 3,274 GWh during the report period; Latvenergo Group is the second biggest natural gas consumer in the Baltic countries.

The number of signed contracts on solar panels of Elektrum Solar has increased considerably and there are more than 130 contracts at the end of the first six months of 2019. The biggest increase is on the Lithuanian market. During the 6 months of 2019 solar panels of Elektrum Solar were installed for 66 customers with the total capacity of 530 kW. Elektrum actively developed the sale of products which provide value added to customers, are logically justified, suitable and needed. Besides the products of Elektrum Solar and Smart House, also LED light bulbs and electrical scooters are offered at Elektrum e-shop as from May this year.

During the first half of 2019 Latvenergo Group has generated 2,373 GWh of electricity and 1,139 GWh of thermal energy at its plants. Power generation by the Daugava hydro power plants has decreased by 42% due to twice as low water flow compared to the last year and amounted to 1,141 GWh. Power generation by the combined heat and power plants of Latvenergo AS, whose importance has increased even more on the scale of the Baltic countries due to the considerable reduction of generation at the oil-shale based plants in Estonia, increased by 6% in the first half of 2019 compared to the last year and amounted to 1,205 GWh. The thermal energy generation decreased by 21% during the first half of 2019 compared to the relevant period last year and this has been affected by competition and warmer weather during the heating season.

Totally 3,365 GWh of electricity were sold to customers in the Baltics during the report period and this is 45 GWh more than the respective period last year. The number of customers outside Latvia reaches 35 thousand to whom approximately 1/3 of retailed electricity was sold, amounting to 1,233 GWh.

The revenue of Latvenergo Group during the first half of 2019 is similar to the last year and amount to EUR 451.6 mill. The Group's EBITDA decreased by 22% and equals EUR 147.0 mill. and the Group's profit is EUR 54.0 mill (EUR 97.2 mill. last year). The results were mainly affected by lower power generation at the Daugava HPP's.

The total amount of investment by Latvenergo Group has increased by 3% during the first half of 2019 compared to the first six months last year and amounts to EUR 99.6 mill. 82% of the total investment were made in the network modernisation in order to provide higher quality and safety of the services. In the first half of 2019 EUR 8.5 mill. have been invested in the reconstruction of the hydro power units of the Daugava HPP's and this will secure their operation during the next 40 years. The total envisaged investment in this project exceeds EUR 200 mill. by year 2022. Construction of Kurzeme Ring is scheduled to be completed this year with the total investment of close to EUR 230 mill. Construction of the Third Power Network Connection between Estonia and Latvia is scheduled until the end of 2020 and the investment there will be close to EUR 100 mill.

On 14 June Latvenergo AS was awarded the Platinum (highest) category of the Sustainability Index for the seventh consecutive year and the highest evaluation during its participation record, i.e. 97.3 %. The evaluation of the company according to international requirements in all the corporate social responsibility areas is promoted by sustainable capital investment, responsibility towards the customer, environment and employees and governance compliant with the international practice.

The next interim report 2019 of Latvenergo Group for 9 months will be published on 29 November.

 

LATVENERGO GROUP KEY FIGURES

Operational figures

    1H 2019 1H 2018
Electricity and natural gas supply, incl.: GWh   4,887 5,305
Retail electricity* GWh   3,365 3,320
Retail natural gas GWh   143 51
Wholesale electricity** GWh   1,379 1,934
Electricity generated GWh   2,373 3,139
Thermal energy generated GWh   1,139 1,442
Number of employees     3,478 3,539
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*                                                             

EUR’000

    1H 2019 1H 2018
       
Revenue   451.6 450.2
EBITDA1)   147.0 187.3
Profit   54.0 97.2
Total assets   3,731.7 3,833.7
Total equity   2,202.6 2,341.9
Borrowings   797.9 798.9
Net debt2)   744.3 611.6
Investments   99.6 96.6

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

2) Net debt = borrowings at the end of the year minus cash and cash equivalents at the end of the year

* Information about the financial indicators and coefficients used by the Latvenergo Group is available in Latvenergo Group's consolidated and Latvenergo AS Unaudited Interim Financial statements, see the section “Formulas”

 

Financial ratios*

    1H 2019 1H 2018
EBITDA margin3)   32% 58%
Net debt / EBITDA4)   2.4 1.1
Net debt / equity5)   34% 26%
Return on assets (ROA)6)   0.9% 8.4%
Return on equity (ROE)7)   1.4% 13.5%
Return on capital employed (ROCE)8)   1.8% 6.8%

3) EBITDA margin = EBITDA / revenue

4) Net debt / EBITDA = (net debt at the beginning of the reporting period + net debt at the end of the reporting period) * 0.5 / EBITDA (12-months rolling)

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

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

8) 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))

* Information about the financial indicators and coefficients used by the Latvenergo Group is available in Latvenergo Group's consolidated and Latvenergo AS Unaudited Interim Financial statements, see the section “Formulas”

 

Consolidated Statement of Profit or Loss*

EUR'000

  01/01–30/06/2019 01/01–30/06/2018
     
Revenue 451,592 450,235
Other income 15,183 22,911
Raw materials and consumables used (243,679) (203,397)
Personnel expenses (53,333) (56,579)
Other operating expenses (22,228) (26,436)
EBITDA 146,985 187,275
Depreciation, amortisation and impairment of intangible assets and property, plant and equipment (85,289) (86,139)
Operating profit 61,696 101,136
Finance income 563 576
Finance costs (4,707) (4,400)
Profit before tax 57,552 97,312
Income tax (3,528) (101)
Profit for the period 54,024 97,211
Profit attributable to:    
  - Equity holder of the Parent Company 52,320 95,531
  - Non–controlling interests 1,704 1,680

* The Latvenergo Consolidated and Latvenergo AS Unaudited Condensed Interim Financial Statements for the 6-Month Period Ending 30 June 2019 are prepared in accordance with the IFRS as adopted by the European Union

 

Consolidated Statement of Financial Position*

EUR'000

    30/06/2019 31/12/2018
ASSETS        
Non–current assets        
Intangible assets and property, plant and equipment     3,322,272 3,316,172
Right–of–use assets     7,173                     –
Investment property     340 467
Non–current financial investments     40 40
Other financial investments     16,910 16,935
Other non–current receivables     36,823 30,920
Total non–current assets     3,383,558 3 364 534
Current assets        
Inventories     80,578 71,975
Receivables from contracts with customers     97,037 117,955
Other current receivables     108,933 84,830
Prepayment for income tax     176 11,619
Deferred expenses     3,256 2,598
Derivative financial instruments     4,516 15,853
Cash and cash equivalents     53,619 129,455
Total current assets     348,115 434,285
TOTAL ASSETS     3,731,673 3,798,819
EQUITY AND LIABILITIES        
Equity        
Share capital     834,883 834,791
Reserves     1,084,254 1,125,466
Retained earnings     275,572 351,350
Equity attributable to equity holder of the Parent Company     2,194,709 2,311,607
Non–controlling interests     7,883 8,458
Total equity     2,202,592 2,320,065
Liabilities        
Non–current liabilities        
Borrowings     605,420 700,028
Non–current lease liabilities     5,983                     –
Provisions     20,389 20,178
Deferred income tax liabilities     3,942 12,297
Derivative financial instruments     7,648 3,923
Deferred income on contracts with customers     141,812 143,494
Other deferred income     308,305 303,519
Total non–current liabilities     1,093,499 1,183,439
Current liabilities        
Borrowings     192,504 114,315
Current lease liabilities     1,215                     –
Trade and other payables     170,534 135,008
Income tax payable     1 2
Deferred income on contracts with customers     13,410 13,271
Other deferred income     26,691 26,438
Derivative financial instruments     31,227 6,281
Total current liabilities     435,582 295,315
Total liabilities     1,529,081 1,478,754
TOTAL EQUITY AND LIABILITIES     3,731,673 3,798,819

* The Latvenergo Consolidated and Latvenergo AS Unaudited Condensed Interim Financial Statements for the 6-Month Period Ending 30 June 2019 are prepared in accordance with the IFRS as adopted by the European Union

 

Additional information:
Jānis Irbe
Group Treasurer
Phone: +371 67 728 239
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, electricity distribution services and lease of transmission system assets. 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 seven subsidiaries - Latvijas elektriskie tīkli AS (lease of transmission system assets), 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_2019_6M_ENG.pdf (1642.71 kB)
02_Latvenergo_Interim_2019_6M_presentation_ENG.pdf (886.37 kB)