Eesti Energia Group Q1 results for FY2011

Consolidated revenues of Eesti Energia for Q1 FY 2011 amounted to 237 million euros (+3% y-o-y), operating profit to 44 million euros (-27% y-o-y) and net profit to 42 million euros (-29% y-o-y, excluding discontinued operations)

Key financial indicators

The Group's revenue growth was supported by the deregulation of electricity market in Estonia and Lithuania as well as an establishment of Nord Pool Estonia price area. The revenues from the sale of electricity contributed 9 million euros to revenue growth while network services added 2 million euros. At the same time the decline in the sale of liquid fuels and other revenues by 6 million euros reduced the Group revenue growth.

The decline in Group's EBIT was driven by Retail division (-12 million euros) and Electricity and Heat Generation division (-8 million euros), while operating profit of Fuels division increased by 3 million euros. The Group's EBIT dropped 8 million euros due to decline in electricity sales margin and 9 million euros due to decrease in one-off revenues compared to Q1 2010. The Group's EBITDA decreased 22% to 67 million euros.

Group´s operating cash flow remained positive over the course of Q1 2011, amounting to 128 million euros (+47% y-o-y). Main reasons behind the healthy cash flow performance were the reduced collateral requirements (EUR 24m positive cash flow impact) and improved receivables performance (21 million euros positive cash flow impact).

Key performance indicators

Electricity sales amounted to 3.1 TWh, up 5% y-o-y, of which electricity sold at regulated prices was 1.7 TWh (-23% compared to Q1 2010).

Sales at non-regulated prices to Baltic open market retail customers amounted to 1.4 TWh in Q1 2011, which is 92% more than a year ago. In Estonia, Eesti Energia's average share in the open electricity market was 70% in the Q1 2011. In Latvia and Lithuania the market share was respectively around 11 and 7 percent during the first quarter of 2011.

Total electricity generation in Q1 2011 reached 3.1 TWh, up 3% y-o-y. Shale oil production reached 54 thousand tonnes (+5% y-o.y), while sales of shale oil decreased 20 percent to 44 thousand tonnes. Oil shale production amounted to 4.8 million tonnes, 6.3 percent increase y-o-y.

Capital expenditure

In Q1 2011 Eesti Energia invested 95 million euros, up 119% y-o-y.

Total capital expenditure in Retail division amounted to 11 million euros to new network connections and improvement of distribution network's reliability.

Eesti Energia invested a total of 28 million euros to Electricity and Heat Generation division including desulpurisation equipment in Narva power plants (11 million euros), Iru waste-to-energy plant (5 million euros) and Aulepa windpark (3 million euros).

Fuels division invested 53 million, which included 29 million euros for acquiring 3.1 billion tonnes of oil shale resource in Utah, USA, 14 million euros to Enefit-280 oil plant and 6 million to renovation and acquisition of new mining equipment.

More information on the IQ 2011 financial results of Eesti Energia Group is available at Eesti Energia homepage.

The audited annual report for FY 2010 is publicly available at Eesti Energia website.

Veiko Räim
Head of Investor Relations and Treasury
Eesti Energia AS
Tel: +372 715 2884
Mob: + 372 5668 1568
[email protected]