Iseteenindus

Eesti Energia’s results for the first quarter of the financial year 2007/2008

03.08.2007

Eesti Energia’s operating revenue for the first three months of the financial year 2007/2008 increased by 122.7 million EUR, with the total operating profit amounting to 10.8 million EUR

In the first quarter, the company posted a net loss of 9 million EUR. The loss was conditioned by the 18 million EUR of income tax paid on the biggest dividends ever distributed by the company, and the 24,7-million-EUR reduction of extraordinary income from emissions trading.

"Contributors to the excellent revenue and positive operating profit indicators in the first quarter included growing electricity sales and export. Our efficiency indicators are continually improving. We are expecting net profit in the range of 50 million EUR for the financial year considering the emissions," Margus Kaasik, CFO of Eesti Energia, commented on the results. Kaasik added, however, that based on current information, it is difficult to accurately forecast the full extent of the impact of Phase 2 EU ETS on the company's financial results.

The results for the first quarter were also affected by the personnel expenses, which showed further increase due to the general labour market situation, and the drop in the price of oil-shale-based liquid fuel from the same period last year.

Eesti Energia electricity sales showed continued strong growth, amounting to 2,084 GWh (gigawatt-hours) in the first quarter ― i.e. a 31% increase from the same period last year. Closed market made up 1,200 GWh and open market 709 GWh of the total sales. The increase in energy consumption in the closed market is mainly due to strong economic growth. Open market sales have increased mainly in connection with export growth conditioned by the export sales to Nordic countries which were launched at the beginning of 2007 (285 GWh). In addition, Eesti Energia also exported twice as much of electricity to Latvia than in the last quarter (226 GWh). Thermal energy sales decreased, due to consumer efficiency, by 50 GWh compared to last quarter, amounting to 256 GWh by the end of the quarter.

In the first three months, Eesti Energia invested a total of 36,6 million EUR in improving the services offered to customers. More than a half of this amount was invested in grid renewal, and the rest in enhancing the efficiency of oil shale, liquid fuel and power production. The most important projects of the first quarter included reconstruction of several substations, reduction of voltage issues and power losses, as well as reconstruction of the boiler at Iru Elektrijaam and updating of the ash disposal system in Narva Elektrijaamad.

The highlights of the first quarter of 2007/2008 include launch of KÕU―the pan-Estonian mobile Internet service―and celebration of the 6-month anniversary of the Estlink submarine cable. Several innovations were introduced in the first three months in order to enhance efficiency of the work arrangement―merger of Energoremont and Mäetehnika, disposal of Elektrikontrollikeskus, establishment of the separate energy trading business unit, and separation of AS Narva Õlitehas.

The financial results of the Eesti Energia group include consolidated results of the company’s subsidiaries which render energy production, transition, distribution, sales and other services. The financial year of Eesti Energia began on 1 April 2007 and will end on 31 March 2008.

The company’s financial results and operating environment have been described in detail in the interim quarterly report, which will be available from week 32.

Additional information:
Iveri Marukashvili
Press Officer
Eesti Energia AS
Tel.: +372 71 51 218
GSM: + 372 53 411 813
E-mail: iveri.marukashvili@energia.ee