Iseteenindus

Eesti Energia Group unaudited results for Q3 2013

31.10.2013
Eesti Energia consolidated sales revenues for Q3 2013 amounted to 216 million euros (+9% y-o-y), EBITDA to 72 million euros (+1% y-o-y) and net profit to 42 million euros (+12% y-o-y)

Financial results

The Group’s sales revenues were primarily supported by electricity sales, which increased by 12 million euros compared to Q3 2012. Both the sales volume (+3.0% y-o-y) and average sales price (+9.3%) increased, as the Group sold electricity on average for 46.7 €/MWh in Q3 2013. While the Group earned substantially higher electricity revenues in Q3 2013, higher costs (including full CO2 expenses) reduced sales margin compared to the same period last year and resulted in lower EBITDA contribution. Costs were also higher due to the new auctioning mechanism established on Estonia – Latvia border crossing, which resulted in 7 million euros additional cost to the Group in Q3 2013. Volume of shale oil sold in the quarter was above Q3 2012, but lower sales price and higher costs reduced quarterly EBITDA by 4.1 million euros.

Group´s higher EBITDA in Q3 2013 is mainly attributed to positive performance of distribution network (+1.5 million euros) as well as higher EBITDA from other products (combined positive impact +5.4 million euros, mainly from sales of dismantled equipment as well as heat).

Key performance indicators

Electricity sales amounted to 2.5 TWh (+3% y-o-y) in Q3 2013.

Sales to retail customers in the Baltic market amounted to 1.6 TWh in Q3 2013. In Estonia, Eesti Energia’s average share in the electricity market was around 71% in Q3 2013. In Latvia and Lithuania the market share was around 20% and 10% of the total electricity market respectively. Group´s average market share in the Baltic market was around 31% in Q3 2013.

In Q3 2013 Eesti Energia sold 0.9 TWh of electricity to power exchanges and wholesale companies. This is 33% more when compared to the same period a year ago due to favourable power generation margins.

Group distributed 1.3 TWh of electricity in Q3 2013, which was 1% more than in the respective period of 2012. Distribution network losses reached 5.2% in Q3 2013 compared to 6.2% in Q3 2012.

Sales of shale oil amounted to 63 thousand tonnes (6% more compared to Q3 2012), while the production of shale oil reached 55 thousand tonnes (+9% y-o-y).

Capital expenditure

Eesti Energia´s capital expenditure in Q3 2013 amounted to 125 million euros, which is 13.2% more than in Q3 2012.

The largest investments were made into construction of new 300 MW Auvere power plant (63 million euros), new network connections and improvement of network’s reliability (30 million euros) and completion of Iru waste-to-energy plant (8 million euros). Maintenance and other capital expenditure amounted to 23 million euros in Q3 2013.

Financing and cash flows

Group’s available liquidity as at 30 September 2013 amounted to 403 million euros (liquid assets of 158 million euros, undrawn revolving credit facilities of 150 million euros and 95 million euros investment loan from EIB). Eesti Energia completed the renewal and extension of revolving credit facilities in Q3 2013, with the new facilities available until September 2018. Most recently in October the Group signed a new €100m investment loan with European Investment Bank to fund distribution network investments.

As at 30 September 2013, the Group´s main source of debt were Eurobonds due in 2018 and 2020 with combined face value of 600 million euros. Group’s total net debt amounted to 575 million euros, while Net debt/EBITDA ratio reached 2.1x and financial leverage 28%.

Group´s operating cash flow amounted to 86 million euros (+66% y-o-y). Increased power price combined with non-monetary CO2 provisions in Q3 2013 were the main reason behind the improved cash flow.

Outlook

Eesti Energia´s unaudited consolidated sales revenues have reached 710 million euros (+19% y-o-y), while the Group has earned 217 million euros of EBITDA (-3% y-o-y) in 9m´2013. Group revenues and EBITDA for 2013 are expected to increase compared to FY2012. While expected oil production from Enefit280 has been reduced due to delays in commissioning, Group power generation is forecasted to exceed prior expectations.

Eesti Energia has sold forward 2.2 TWh of power for Q4´2013 at the average price of 45.7 €/MWh. Group has also hedged 39 thousand tonnes of shale oil production for the remaining period at the average price of 464 €/tonne. Group´s CO2 emissions exposure for the whole 2013 has been hedged via forward purchases of 12.9 million tonnes at the average price of 8.2 €/tonne.

Credit ratings

At the end of Q3 2013, Eesti Energia had a credit rating of BBB+ with stable outlook from Standard & Poor’s and Baa1 with negative outlook from Moody’s.

More information on the financial results of Eesti Energia Group is available at Eesti Energia homepage »

Veiko Räim
Head of Investor Relations and Treasury
Eesti Energia AS
Tel: +372 715 2884
Mobile + 372 5668 1568
[email protected]