Eesti Energia’s financial results for 3Q of 2006/2007 financial year
Eesti Energia’s sales revenue for the nine months of 2006/2007 financial year amounted to 427 million EUR, which is 24.5% more than for the same period last year. The group’s net profit for the nine months was million 130 million EUR. Eesti Energia invested a total of 36 million EUR in 3Q of the financial year 2006/2007.
Financial results were primarily affected by the growing domestic consumption, a temporary revenues received from trade of emission allowances, and an effective work in reducing the losses.
Electricity sales in Estonia continued to grow strongly, reaching 4620 GWh in the first nine months of the financial year 2006/2007, which is 7.8% or 333 GWh more than in the same period last year. The sales were primarily affected by the growth of economy and the effective work on reducing the domestic power losses. Eesti Energia’s one of the strategic goals is to reduce the losses of the distribution network to 7%. Distribution network’s nine months losses amounted only for 7.9% - the smallest number in the Group’s history.
The 3Q of the 2006/2007 financial year can be described by the following events: opening of the Estonian–Finnish submarine cable Estlink, which connects the electricity markets of the Baltic States with those of the Nordic countries; furthermore, Eesti Energia can now export electricity to the new markets. In the third quarter of the 2006/2007 financial year, the National Grid completed the construction of the new Balti–Kiisa–Harku 330 kV overhead transmission line, which is the largest high-voltage network construction project since Estonia regained its independence. Overhead transmission line supports the growing consumption of northern and western parts of Estonia.
Other important events of the 3Q are certainly the approval of the results of the feasibility study for the new nuclear power plant in Ignalina; and signing a memorandum of understanding between Eesti Energia’s subsidiary Oil Shale Energy of Jordan and the Government of the Kingdom of Jordan. Launching cooperation between Eesti Energia's subsidiary Televõrgu AS and the Chinese company ZTE Corporation for complete Internet coverage of Estonia’s territory was certainly another key event.
“We have created the first link between the power markets of the Baltic States and the Northern countries, and have started trading electricity in the given region. First gigawatt-hours of electricity were already sold in January and as weather gets colder I am sure energy trade will grow further,” commented the 3Q developments Sandor Liive, CEO of Eesti Energia. “Along with the energy trading developments, essential work has been done in Estonia. We have set the goal to fix the power network and are working towards achieving it. A perfect example of this is the fact that a distribution network’s losses are on the lowest levels in history,” underlined Liive.
Apart from Latvia and Lithuania, the new market for electricity export for Eesti Energia is Finland. Due to the warm weather and water abundance in Latvia Eesti Energia’s export volumes have decreased. However, the addition of Nordic market is certainly a major step forward. During the 3Q of the financial year, Eesti Energia exported 677 GWh of electricity.
Sale of thermal energy decreased by 46 GWh compared to 3Q of the previous financial year due to the exceptionally warm weather in December. Sales of thermal energy amounted to 1 010 GWh.
Eesti Energia invested a total of 36 million EUR in 3Q of the financial year 2006/2007. The investments were focused on power networks, which were the target of 67% of the nine months’ investments. The investment strategy of Eesti Energia follows the criteria of economic efficiency, environmentally friendly conscious development and security of supply. This means the diversification of power production and an increase in efficiency as well as improvements of voltage quality in the power networks.
Revenues received from the sales of emission allowances amounted to 92 million EUR. Eesti Energia will use the revenues as an investment into the environmentally friendly and carbon dioxide free power production development.
The financial results of the Eesti Energia group consolidate the results of subsidiaries responsible for energy production, transmission, distribution and sales, and provision of other services. The financial year for Eesti Energia began on 1 April of last year and will last until 31 March 2007. The financial results and the operating environment of the company are described in greater detail in the interim report due on February 1. The interim report is available on www.energia.ee
Eesti Energia communications specialist
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