Eesti Energia finished the half-year with a record turnover and a profit of 16.5 million euros
In the first half of 2021, Eesti Energia earned a net profit of 16.5 million euros with a record sales revenue of 538 million euros. The same period last year company made a net profit of 5 million euros.
Turnover of the first half of the year increased by 36 percent compared to the same period of 2020 and reached the level of 538.4 million euros. EBITDA increased by 8 percent to 113.2 million euros.
Turnover in the second quarter increased in yearly comparison by 43 percent to 241.1 million euros and EBITDA decreased by a quarter to 40.8 million euros. If a year ago the company ended the April-June period with a profit of 7 million euros due to a one-time transaction, then in the second quarter of this year there was a net loss of 10 million euros.
According to Andri Avila, Member of the Management Board and Chief Financial Officer of Eesti Energia, the situation in the energy markets is radically different compared to last year. The high level of market prices has favored the Group's core business without taking into account the impact of derivative transactions, as the sales revenue of all business areas has grown strongly.
Eesti Energia protects itself against large fluctuations in market prices by hedging transactions to ensure business stability.
"We reassess the future value of derivatives in accordance with accounting rules on a monthly basis, although the actual impact will become clear later when these transactions take place. The negative value of derivative transactions arising from fluctuations in market prices had a significant impact on Eesti Energia's second quarter results,” commented Avila.
The average market price of electricity in the Estonian price area increased almost twice during a year and reached 55 euros per MWh, elsewhere in the price areas of the Nord Pool exchange the price growth was even faster. In the conditions of economic growth, consumption has increased, less wind electricity reached the market due to weather conditions, and low rainfall reduced the production of hydroelectric power in the Nordic countries. In controlled production, this has been compensated by higher prices for fuels and CO2 emissions, which is reflected in higher electricity market prices.
In the second quarter, Eesti Energia produced 904 GWh of electricity, that is 45 percent more than in the same period last year. The share of renewable electricity in total production was 42 percent or 378 GWh. The amount of renewable electricity produced increased by a third over the year.
Due to the increase in electricity consumption, the sales volume of network services, which increased by 7 percent year-on-year, raised the sales revenue of electricity delivery by 5 percent to 52 million euros.
The oil market reached the Covid-19 pre-pandemic price level. This supported the production of liquid fuels, which increased by 13 percent over the year and reached 97,000 tons.
The Group's investments almost doubled year-on-year and reached 54 million euros. The increase is due to the first installment of a new wind farm to be built in Lithuania (Šilale II, 43 MW) and a new liquid fuel plant, and an increase in investments aimed at increasing the reliability of the electricity network.