The lowest electricity price in the decade reduced Eesti Energia's first quarter turnover and profitability. At the same time, there was a turnaround in production as the volume of renewable electricity exceeded the volume of oil shale electricity for the first time.

Compared to the first quarter of the previous year, the Group's turnover decreased by 16 percent to the level of 227 million euros. EBITDA was 50 million euros (-41%) and net loss was 2 million euros. The same period last year made a net profit of 9.5 million euros.

According to Andri Avila, Member of the Management Board and Chief Financial Officer of Eesti Energia, the financial results were affected by extraordinary circumstances: declining electricity consumption due to the warmest winter of the half century, additional negative impact of the corona crisis on electricity and oil consumption, and the lowest electricity prices since the opening of the market. In addition to lower consumption, Nord Pool electricity market prices were low due to the very high level of hydro balance in the Nordic countries.

"The Nordic countries have a potential to produce more than 25 terawatt-hours more hydropower than the average. In comparison, Estonian electricity consumption would be covered for three years with this. The effect was felt in the Estonian price area as well, as the price of electricity fell close to 0 euros during some nights. The low price of electricity makes our customers happy, but for the company, it meant lower sales revenue which was not compensated by the increase in sales revenue of liquid fuels and gas,” Avila noted.

In the Estonian price area of the Nord Pool electricity market, the average price for the quarter was 27.6 euros per megawatt-hour, i.e. 20 euros cheaper than a year ago.

In the first three months of the year, Eesti Energia sold 2 terawatt-hours of electricity in Estonia, Latvia, Lithuania, Poland, Sweden and Finland, that is twice as much as its own production. Due to the low market price of electricity and the high price of the CO₂ quota, output of electricity decreased by 57 percent - to 1 terawatt-hour - with the year.

Renewable electricity accounted for half of the electricity production, which showed a 14% annual increase due to better wind conditions and good reliability of wind farms. The other half of the production was formed by electricity from oil shale, oil shale gas and waste.

The share of electricity produced from renewable and alternative sources increased to 61 percent of the total production as a quarterly average. In the first quarter, Eesti Energia's CO₂ emissions decreased by 65 percent to the level of 0.9 million tons. In two years, carbon emissions have decreased almost fourfold, which has helped make Estonia the fastest carbon emissions reducer in Europe.

In the first quarter, Eesti Energia produced 122,000 tonnes of liquid fuels, which was only slightly below last year's record production (125,000 tonnes) due to a different maintenance schedule for oil plants. The sales revenue of liquid fuels increased by 5.2 million euros to 35 million euros (+ 18%) over the year.

"Global demand for petroleum products began to fall sharply in March due to movement restrictions imposed to prevent the spread of the coronavirus. We will see a negative impact on producers for several more quarters, as the market is not expected to recover before the end of this year. We have largely sold liquid fuels in advance through hedging transactions, which offers us some relief in the crisis,” Avila commented.

The sales revenue of the network service decreased by 4 percent to the level of 60 million euros due to reduced transmission volumes because of lower consumption.

Eesti Energia invested 69 million euros over the quarter, the lion's share of which was the investment made in the development of renewable energy, i.e. the acquisition of the land for the Tootsi wind farm.

Andri Avila added that in the coming quarters, most countries will face an economic crisis that will have a direct impact on energy consumption and prices. "The situation ahead forces us to continue to increase efficiency and find points of savings in order to successfully pass the crisis."

At the end of April, the General Meeting of Eesti Energia approved the company's fiscal year report for 2019 and decided not to distribute profits.