Eesti Energia set an all-time record in oil production in September
The third quarter results of Eesti Energia were characterised by good production indicators. During the quarter, the energy group produced 85,800 tonnes of shale oil, of which 38,400 tonnes was produced in September, a record result for a single month. In comparison with the previous year, electricity output increased by 43% in the quarter, reaching a combined 2.5 terawatt hours.
The decline in the sales revenues of Eesti Energia came to an end, and the total turnover of the group was EUR 171 million. Earnings before interest, taxes and depreciation (EBITDA) fell by 22%, year on year. Even so, it continued to remain at approximately the same level in the second quarter of the current year. Altogether, the EBITDA increased to EUR 52 million in the third quarter. In the third quarter, Eesti Energia earned a net profit of EUR 13 million.
According to Andri Avila, the Financial Director of the group, the good results in electricity production were influenced by the higher whole sale prices of electricity, lower price for CO2 quotas and the government decision, according to which the environmental and resource charges for oil shale, starting from July, were tied to the global market price of the end product. “From June, we have also massively exported electricity to our neighbouring countries; the total export of Estonia’s electricity in the third quarter has exceeded one terawatt hour, which is a very good indicator. Increased production and export of electricity has been the driver of all Estonian industrial production throughout the quarter,” Avila said. He added that the financial markets are showing a notable increase in the price of electricity for the beginning of next year, as the average market price of electricity in Estonia’s pricing area will be EUR 45 per megawatt hour at the beginning of next year.
In the third quarter, Eesti Energia produced 86,000 tonnes and sold 93,000 tonnes of shale oil. The indicators increased by 6% and 20.5%, respectively. “In comparison with the previous year, the revenue earned from the sale of shale oil still decreased in the quarter by nearly EUR 7 million. The main reason being the fact that while in the third quarter of 2015 we earned significant revenue from the risk hedging transactions concluded earlier at a higher price, then in the third quarter of this year we did not gain any notable help from financial transactions,” Avila said.
In the third quarter Eesti Energia invested EUR 33 million. The group placed most of its investments i.e. EUR 22 million into the distribution network of the network company Elektrilevi. During the quarter, 45 substations were reconstructed and 553 kilometres of weather-proof power lines were built, thereby improving the quality of the electricity network and reducing the number of failures resulting from weather. In addition, the transition program to remotely read metres will end this year, releasing people from submitting electricity meter readings. By the end of the third quarter, 93% of all of Elektrilevi’s meters had remote reading capability.
The Auvere Power Plant operated from July to September at various capacities. “As it is now evident when operating at high capacities that the power plant fails to meet dust emission standards, we are currently in the process of agreeing on a time schedule with the main contractor, General Electric, for the installation of new bag filters for the power plant. This will delay the hand-over of the power plant by General Electric until next year,” Avila said. Until installation of the new bag filter, the Auvere Power Plant will run at capacities where dust emissions remain within the standard.
In June, the Supervisory Board of Eesti Energia approved the strategic action plan of the company until 2020. Out of the new initiatives arising from the strategy we focused in the third quarter on preparing our entry into the energy sales market in Poland and the sale of natural gas to household customers in Estonia. Also, Eesti Energia announced a procurement for the establishment of the largest wind farm in the Baltics, in Pärnu County, at Tootsi Suursoo.