The operating revenue of Eesti Energia (EE) for the 2007/2008 financial year ended in March 2008 totalled 580 MEUR, the operating profit was 67 MEUR and the net profit was 43 MEUR. The financial results were primarily influenced by the ending of the sale of emissions allowances for carbon dioxide.

According to Sandor Liive, Chairman of the Management Board of Eesti Energia, launch of electricity sales in Latvia and Lithuania as well as successful energy trade to Finland were strategically important to the past financial year.  "The commencement of sales activities in the Baltic States will help facilitate the creation of competition on the Baltic market," explained Liive the advantages of the energy trade. Liive stressed that Eesti Energia is the only company selling electricity to its clients in all three Baltic States.

According to Margus Kaasik, CFO of Eesti Energia, the financial results were supported by the growing domestic sale of electricity and increased exports to Finland. “The launch of the Estlink submarine cable substantially expanded the export possibilities of EE, as also confirmed by the increased export volumes,” Kaasik added. Kaasik explained that it was the ending of the sale of emissions quotas for carbon dioxide and the additional expenses incurred from the purchasing of emissions permits that had a decisive impact on the financial results.

The most important event of the financial year was the beginning of the construction of the Aulepa Wind Park, the largest of its kind in the Baltic States. Concerning renewable energy, the other important steps were the launch of the second wind generator at the Virtsu Wind Park and the commencement of the procurement to establish a wind park on the closed ash field of the Balti Power Plant. In addition, other important events included the successful lunch of EE’s mobile internet service KÕU; as of the end of March 2008 more than 15 000 clients had subscribed to the KÕU service. In the last financial year, EE also expanded its growth possibilities on nearby markets. Through subsidiary E.Energy, EE Group became the first newcomer in the sale of electricity in Latvia. EE’s subsidiary Lumen Balticum also started sales activities in Lithuania.

The sale of domestic electricity in the financial year 2007/08 totalled 6 992 GWh, which is 5.4% or 358 GWh more than in the financial year 2006/07. The sale of electricity on the domestic eligible customers increased by 1.5% (11 GWh), sales to business clients in closed markets grew by 6.9% (251 GWh), to domestic clients 6.8% (99 GWh) and sales to other distributors decreased 0.3% (2 GWh).

Through the Estlink cable EE exported electricity to Finland in the amount of 1499 GWh in the financial year 2007/08. Since the launch of Estlink at the beginning of January 2007 until the end of March 2008, EE has exported electricity to Finland in a total amount of 1900 GWh. In addition, exports to Latvia grew, having almost doubled in comparison with the previous year, and comprised 1225 GWh. Export to Lithuania was practically non-existent, remaining at the level of 1 GWh.

The sale of thermal energy in financial year 2007/2008 accounted for 1739 GWh, decreasing by 84 GWh in comparison with financial year 2006/07. The sales results were substantially influenced by an unusually warm winter, particularly February, when the sale of thermal energy was 92 GWh lower compared to the last financial year.

The world market price of heavy fuel oil is closely related to the world market price of petroleum, which increased from $70 to $100 per barrel. The sale of shale oil grew by 17.3%. In terms of natural indicators, 127 945 tons of shale oil was sold in the last financial year. The average price of shale oil was EEK 3631 per ton, which is 3.5% more than in the financial year 2006/2007.

The running 12 month domestic network losses decreased to the level of 7.8% by the end of the financial year, which is the lowest indicator ever. Investments for improving the reliability and quality of the network continue to be one of EE’s priority investment areas.

In financial year 2007/08, EE invested a total of 171 MEUR. The focus of investments remains on power networks, where 61% of the investments was made. The investments in Põhivõrk and in Jaotusvõrk comprised 14 MEUR and 88 MEUR, respectively. In the area of electricity production, the largest investment in the last financial year was the investment in Aulepa Wind Park. EE invested a total of 27 MEUR in the mining of oil shale in the financial year 2007/08.

On the basis of the national allocation plan, the Government of the Republic of Estonia allocated to the companies of EE emissions allowances for 46.0 million tons of CO2 to cover the domestic consumption and export demand of electricity in 2008-2012. The annual volume of emissions allowances allocated for EE was 9.2 million tons, which is ca 40% less compared to the annual allocation of the first period of trade in emission permits, which ended in 2007. If in earlier years EE received additional income from the sale of emission allowances, from 2008 it is necessary to buy additional emission allowances. In the financial year 2007/08 Eesti Energia spent 9 MEUR to buy emission allowances; a year ago EE earned revenue of 96 MEUR from the sale of emissions allowances.

From the profit of the financial year 2007/2008, Eesti Energia pays the owner dividends in the amount of 41 MEUR.

The audited results of Eesti Energia Group for the financial year 2007/2008 will be published by Eesti Energia the week of 25.

Additional information:
Iveri Marukashvili
Eesti Energia AS
Press Officer
T: +372 71 51 218
M: +372 53 411 813
F: +372 715 2806
[email protected]