Eesti Energia Group unaudited results for Q1 2012

Consolidated revenues of Eesti Energia for Q1 2012 amounted to 236 million euros (-1% y-o-y), operating profit to 56 million euros (+28% y-o-y) and net profit to 56 million euros (+32% y-o-y).

Key financial indicators

The stability of Group's revenues was supported by the revenues from sale of telecommunication subsidiary (+13.6 million euros), increased sales of network services due to higher network tariffs (+10.1 million euros) and higher sales of liquid fuels (+6.7 million euros) due to higher sales volume and margin. Lower sales of electricity at unregulated prices (-19.2 million euros) and decreased sales of heat (-6.8 million euros) had negative impact on the Group's revenue level.

The Group's EBITDA amounted to 82.4 million euros (+23.7% y-o-y), while operating profit increased 28.1% to 56.5 million euros in Q1 2012.

The Group's operating profit was positively impacted by non-recurring revenues from the sale of telecommunication subsidiary (net impact +11.0 million euros), higher margin of network services (+7.6 million euros) and profitable oil shale sales (+7.0 million euros). Lower electricity sales volumes decreased Group's profitability by 11 million euros.

Group´s operating cash flow amounted to 59.0 million euros (-43.8% y-o-y). Main reasons behind the decrease are the increase in the trade receivable levels (-20.7 million euros), the decrease in provisions for CO2 emissions allowance (-13.4 million euros) due to lower production and CO2 price level.

Key performance indicators

Electricity sales amounted to 2.5 TWh, down 18.8% y-o-y. Sales of electricity at regulated prices amounted to 1.7 TWh (-0.2% compared to Q1 2011).

Sales at non-regulated prices to Baltic unregulated market retail customers amounted to 0.6 TWh in Q1 2012, which is 14.3% more than a year ago. In Estonia, Eesti Energia's average share in the unregulated retail electricity market was around 72% in Q1 2012. In Latvia and Lithuania the market share was around 14 percent and 6 percent, respectively. In Baltic unregulated retail market Eesti Energia holds 21%.

Total sales at non-regulated prices amounted to 0.8 TWh, down by 42.1% from 1.4 TWh a year ago due to unfavourable market prices.

Total electricity generation in Q1 2012 was 2.4 TWh (-20.5% y-o-y). Sales of shale oil amounted to 50 thousand tonnes, up 24.9% year-on-year due to higher production and sale of existing stock. Oil shale sales amounted to 0.5 million tonnes, 20.6 percent decrease y-o-y.

Capital expenditure

In Q1 2012 Eesti Energia invested 129 million euros, up 35% y-o-y.

Total capital expenditure in Distribution Network amounted to 15 million euros to new network connections and improvement of network's reliability.

Eesti Energia invested a total of 81 million euros to Electricity and Heat Generation division including 63 million euros to the new 300-MW CFB power plant, 7 million euros to the desulphurisation equipment in Narva power plants and 5 million euros to Iru waste-to-energy plant.

Fuels division invested 27 million euros, which included 8 million euros to Enefit280 oil plant, 10 million euros to development of oil shale industry infrastructure and 6 million to renovation and acquisition of new mining equipment.

Outlook The Group revenues for 2012 are expected to grow slightly compared to 2011 due to the sale of telecommunication services in March 2012, strong oil prices, increasing shale oil production andhigher network tariff. Lower forecasted electricity sales price levels and volumes are expected to reduce revenues in FY2012.

The Group operating profit for 2012 is expected to remain approximately at the same level as in FY11. In addition to the factors mentioned above the operating profit is impacted by completion of generating assets and higher depreciation.

In 2012 the total capex is expected to amount to 570 million euros including 219 million euros to the new 300-MW CFB power plant, 98 million euros to renovating the distribution network and 52 million euros to completion of Enefit280 oil plant.

More information on the audited 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]