Eesti Energia Group Q2 results for FY2011

29.07.2011
Consolidated revenues of Eesti Energia for Q2 FY 2011 amounted to 206 million euros (+21% y-o-y), operating profit to 37 million euros (-1% y-o-y) and net profit to 21 million euros (+45% y-o-y)

Key financial indicators

The Group's revenue growth was supported by the sale of electricity at non-regulated prices (+6 million euros), sale of liquid fuels (+6 million euros) and non-recurring income from the sale of 11% stake in Jordanian oil shale development project and revaluation of remaining shareholding (+16 million euros).

The Group's EBITDA amounted to 60.7 million euros (+0.1% y-o-y), while EBIT decreased 1.4% to 37.3 million euros in Q2´11. Group´s results were influenced by increasing operating profit of Fuels division (+20.6 million euros) due to higher revenues from shale oil as well as non-recurring income from the sale of stake in Jordanian development project. This positive influence was balanced by lower EBIT in Retail division (-6.3 million euros) and Electricity and Heat Generation division (-17.5 million euros). Retail Division's EBIT was mostly impacted by increase in the transmission network prices (-2.0 million euros), the extension of Distribution network connection fee amortization period (total impact -1.6 million euros) and higher electricity purchase price (impact -0.9 million euros). The operating profit of Electricity and Heat Generation division decreased due to higher environmental provisions (-8.7 million euros) and repair expenses (-4.8 million euros) as well as lower renewable energy subsidies (-3.0 million euros).

Group´s operating cash flow amounted to 26 million euros (-62% y-o-y). Main reasons behind the decline in cash flows were the increased purchases and prepayments for emission allowances (-13 million euro negative cash flow impact), increased VAT prepayment due to increased capital expenditure program (9 million euros negative cash flow impact) and corporate income tax payment (15 million euros negative cash flow impact) due to dividend payment completed in Q2 2011.

Key performance indicators

Electricity sales amounted to 2.5 TWh, up 8.6% y-o-y, of which electricity sold at regulated prices was 1.2 TWh (+3.7% compared to Q2 2010).

Electricity sales at non-regulated prices amounted to 1.3 TWh in Q2 2011, which is 14% more than a year ago. In Estonia, Eesti Energia's average share in the open electricity market was 75% in the Q2 2011. In Latvia and Lithuania the average market share was respectively around 14 and 7 percent during the second quarter of 2011.

Total electricity generation in Q2 2011 reached 2.3 TWh, up 3% y-o-y. Shale oil sales of shale oil increased 17 percent to 42 thousand tonnes. Oil shale production amounted to 4.1 million tonnes, 9 percent increase y-o-y.

Capital expenditure

In Q2 2011 Eesti Energia invested 132 million euros, up 208% y-o-y.

Total capital expenditure in Retail division amounted to 18 million euros to new network connections and improvement of distribution network's reliability.

Eesti Energia invested a total of 64 million euros to Electricity and Heat Generation division including the construction of new oil-shale fired power plant (29 million euros), Iru waste-to-energy plant (12 million euros) and Narva windpark (11 million euros).

Fuels division invested 47 million, which included 37 million euros to Enefit-280 oil plant, 5 million euros in development of oil shale industry infrastructure and 6 million to renovation and acquisition of new mining equipment.

More information on the Q2 2011 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
Mob: + 372 5668 1568
veiko.raim@energia.ee