Eesti Energia’s results for the first 3 quarters of 2005/2006 financial year

Eesti Energia’s revenues in the first 3 quarters of the 2005/2006 financial year amounted to EUR 345 million, an increase of 23% over the same period last year. The Group’s net profit for the period was EUR 57,7 million. The results were mostly influenced by strong sales, favorable market position in shale oil sales, reduction of power network losses, sale of emission allowances and rising environmental fees. Domestic electricity sales increased by 3% over the same period last year. Electricity exports rose in spite of the 9% decrease in volumes. “Domestic electricity sales were boosted by remarkable growth of Estonian economy,” commented Sandor Liive, the CEO of Eesti Energia AS. The growth of exports is directly related to rising energy prices on the Baltic region and the record exports to Lithuania, he added. “The coming years will see an increasing cooperation between Baltic energy companies,” said Liive. According to Margus Kaasik, CFO of Eesti Energia, the good work done in the recent years is best apparent in the fact that the return of capital investments is quickly gaining on other Europe’s energy companies. “We have greatly improved the companies financial figures – our revenues are growing twice as fast as our expenses,” Kaasik added. In the three quarters, Eesti Energia invested almost EUR 128 million, which is more than twice the operating profit. 70% of the investments went to the development of the power network and increasing the security of power supply. Since the beginning of the 1990’s when a substantial reconstruction of the power system started, Eesti Energia’s operating cash flow has not been sufficient to cover the investments. “The results for the three quarters of the financial year indicate, that investments in the current financial year can be covered from the cash flow generated from operating activities,” commented Kaasik on the bright outlook for the year. The profits from the current financial year will, in addition to the renovation of the networks, be directed towards developing production capacity. Revenues from the sale of emission allowances spared due to gains in production efficiency will be invested to the construction of new, environmentally friendly power generation capacity. The main events in the third quarter were the changes in the management of Eesti Energia and the appointment of new Chief Executive Officers at Narva Elektrijaamad and Kohtla-Järve Soojus. Also notable to the company were the successful issuance of new bonds, sales of emission allowances and the first annual correction of regulated grid tariffs. Eesti Energia’s results reflect the consolidated results all the Groups companies operating in the production, transmission, distribution and sales of energy, as well as other services. After three quarters, all areas except for Supply segment are making net profit. Due to the seasonality of energy consumption, Supply segment is also expected to make profit by the end of the financial year. The current financial year started 1st of April 2005 and ends 31st of March 2006. Further information,
Iveri Marukashvili
Eesti Energia
Communication Specialist
Ph: +372 71 51 218
GSM: +372 53 411 813
e-mail: [email protected]