Eesti Energia’s results for the financial year 2006/2007

In the financial year 2006/2007 Eesti Energia achieved its best results in history. The company’s operating revenues reached 585 million EUR, operating profit 192 million EUR and net profit 171 million EUR.  The most significant event of the financial year was the launch of the Estlink submarine cable, which for the first time connected the Baltic power system with the one in Nordic countries. Apart from the launch of the Estlink cable, financial year 2006/2007 can be illustrated by the following events: feasibility study for the new nuclear power plant in Ignalina confirmed the reasonability of the continuing with the project; besides, because of the investments into the power network, Distribution network’s (OÜ Jaotusvõrk) power losses reached the lowest number in the Group’s history. CEO of Eesti Energia Sandor Liive says the significance of the Estlink cable is far beyond the opportunities to sell and buy electricity. “One of the strategic goals of Estonia is to increase the state’s power independence. In the context of electricity, the key of achieving this goal is to connect Estonian and the Baltic power systems to the Nordic system Nordel and the European power system UCTE (Union for the Co-ordination of Transmission of Electricity).” According to Liive, Estlink is the first step towards achieving these targets. In addition to being connected the NW Russian power system, Estonia and the other Baltic States are now, for the first time, connected to the Nordic region. In the financial year 2006/2007 Eesti Energia’s operating revenues reached 585 million EUR (+10%), operating profit 192 million EUR (+17%) and net profit 171 million EUR (+27%). Revenues from sales of allowances were 96 million EUR. Financial results were primarily affected by above average temperatures of the third and fourth quarters. The average third quarter air temperature was 2.2C and fourth quarter 3.8C higher than in the previous financial year. Twelve month average temperature of the past financial year was all together 1.9C warmer than in the previous financial year. The effect on domestic sales was decrease of 200-220 GWh. Domestic sales in the 2006/2007 financial year amounted to 6 610 GWh, which is 6,0% or 375 GWh more than in the earlier year. The sales were primarily affected by the growth of Estonian economy. Sales on the domestic open market increased 29,8% (168 GWh), sales to the business clients on the closed market 3,1% (107%), residential customers 3,7% (53 GWh) and network operators 6,3% (47 GWh). Sales of domestic power witnessed an increased by 6,9% (22 mln EUR). Distribution network’s losses were the lowest in the Group’s history and amounted to 8,3%. Decrease of network losses is a result of investments in network efficiency. A total of 49 mln EUR was invested into the distribution network in the financial year 2006/2007. The investments were primarily focused on power networks, which were the target of 65% of the total investments. 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.  Investments in the area of power generation and oil shale were mainly related to fulfil the environmental commitments and increase in production efficiency. Eesti Energia invested a total of 138 mln EUR in the 2006/2007 financial year. A decline in Eesti Energia’s export volumes was primarily caused by the warm weather, water abundance in Latvia and the rise of export power price. In comparison with the previous financial year the electricity export to Latvia decreased by 61% (947 GWh). Export volumes to Lithuania decreased by 13 GWh, amounting to 204 GWh. The decrease in export volumes to Latvia is somewhat balanced by the export to Finland, where 195 GWh of electricity was sold via the Estlink cable. Export revenues amounted to 35 mln EUR (- 6 mln EUR in comparison to previous financial year). Sale of heat decreased by 159 GWh compared to 2005/2006 financial year and amounted to 1 822 GWh. Results were affected by an exceptionally warm December and March. A decline is sales was evident across all heat plants: Iru Power Plant 7,7% or (-95%), Narva Power plant 8,4% or (-45 GWh) and Kohtla-Järve Soojus 8.7% or (-18 GWh). Revenues received from the sale of thermal energy amount to 33 mln EUR having increased by 3,6% or 1 mln EUR since last financial year. A total of 107 900 tons of shale oil was sold in financial year 2006/2007.            
The Government of the Republic of Estonia has allocated a total of 46,7 million tons of CO2  emission allowances to Eesti Energia for covering up domestic consumption and export needs during 2005-2007. Sales of emission allowances were at 96 million EUR. Eesti Energia paid a total of 32 mln EUR of dividends. Audited financial results of Eesti Energia will be available from week 23. Additional information:
Iveri Marukashvili
Eesti Energia AS communications specialist
GSM: +372 5341 1813
E-mail: [email protected]