Eesti Energia Group unaudited results for Q3 2012

Consolidated revenues of Eesti Energia for Q3 2012 amounted to 202 million euros (+6% y-o-y), operating profit to 40 million euros (+10% y-o-y) and net profit to 37 million euros (-1% y-o-y)

Key financial indicators
In Q3 the Group's revenues from all core services increased with major impact from improved oil sales (+14.3 million euros) and network services due to higher network tariffs (+5.4 million euros). The reduction in other revenues (-11.8 million euros) was mostly impacted by decline in the sale of construction and repair services and electrical equipment as well as sale of telecommunication subsidiary in Q1 2012.

The Group's EBITDA amounted to 71.2 million euros (+18.6% y-o-y), while operating profit increased 10.1% to 39.9 million euros in Q3 2012.

The Group's operating profit was positively influenced by higher profitability of oil sales (+12.9 million euros), higher margin on sales of distribution network services (+3.7 million euros) and lower repair costs (+2.4 million euros). Higher depreciation (-7.5 million euros) and lower profitability of electricity sales (-2.8 million euros) reduced the Group's earnings.

Group´s operating cash flow amounted to 51.8 million euros (-0.7% y-o-y). Increase in EBITDA by 9.7 million euros and 8.9 million euros of lower CO2 prepayments had positive impact on the Group cash flow. Positive impact was almost fully offset by increase in the trade receivables (-10.5 million euros), mainly due to increased sales of liquid fuels.

Key performance indicators
Electricity sales amounted to 2.4 TWh, which is 0.5% higher compared to 2011. Sales of electricity at regulated prices amounted to 1.1 TWh (+2.3% compared to Q3 2011).

Total sales at non-regulated prices amounted to 1.3 TWh, down by 1.0% y-o-y. Sales at non-regulated prices to Baltic retail customers amounted to 0.7 TWh in Q3 2012, which is 40.4% more than a year ago. In Estonia, Eesti Energia's average share in the unregulated retail electricity market was around 74% in Q3 2012. In Latvia and Lithuania the market share was around 28 percent and 9 percent, respectively. In Baltic unregulated retail market Eesti Energia holds approximately 28% market share. Wholesale market sales reached 0.7 TWh in Q3 2012, which is 23.7% less than a year ago, with the main reasons being lower wholesale market price and generation volume. Total electricity generation in Q3 2012 was 2.2 TWh (-6.5% y-o-y).

Sales of shale oil amounted to 60 thousand tonnes, up 68.5% year-on-year. Oil shale sales amounted to 0.3 million tonnes, 40.3 percent decrease y-o-y.

Capital expenditure
In Q3 2012 Eesti Energia invested 110.7 million euros, down 9.3% y-o-y.

Total capital expenditure in Distribution Network amounted to 27 million euros to new network connections and improvement of network's reliability.

Eesti Energia invested a total of 51 million euros to Electricity and Heat Generation division including 41 million euros to the Auvere 300-MW CFB power plant and 5 million euros to Iru waste-to-energy plant.

Fuels division capital expenditure amounted to 27 million euros, which included 13 million euros to Enefit280 oil plant and 9 million euros to renovation and acquisition of new mining equipment.

The Group's available liquidity as at 30 September 2012 amounted to 836 million euros (liquid assets of 241.0 million euros, undrawn revolving credit facility of 500 million euros and 95 million euros investment loan from EIB). In October 2012 the Group decided to reduce the undrawn loans by 100 million euros due to the sufficiency of liquidity buffer.

The 150 million euro equity injection was completed by Government of Estonia on 10 July 2012, increasing the Group's share capital from 471.6 million euros to 621.6 million euros.

As at 30 September 2012 the Group's total net debt amounted to 515.5 million euros. Net debt/EBITDA ratio was 1.7 and financial leverage at 26.5%.

No major revisions have been made to the year 2012 outlook. Eesti Energia expects the Group's revenues in 2012 to remain approximately at the level of 2011 and Group´s profitability to increase compared to last year.

2013 outlook will be published in audited annual report for the financial year 2012 on 1 March 2013.

More information on the unaudited Q3 financial results of Eesti Energia Group is available at Eesti Energia homepage »

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