Energy utility posts €85m in profit

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Latvia’s Latvenergo power utility last year earned EUR 85 million in profit, according to the concern’s unaudited financial results for 2015, reported LETA Monday.

In 2014, Latvenergo posted 34.9 million in profit.

Latvenergo group’s revenues in 2015 were EUR 929.1 million, down 8 percent from 2014.

Revenues declined as the company’s accounting rules changed after Energijas Publiskais Tirgotajs launched operations in April 2014 and payments for mandatory power purchases were no longer included in the profit-loss calculus.

EBITDA of the group constitutes EUR 306.9 million, which is by 30 percent more than in 2014. The total amount of investments in 2015 constitutes EUR 190.5 million, which is by 7 percent more than in the previous year.

The estimated amount of dividends payable by Latvenergo for 2015 is EUR 77.4 million compared to EUR 31.5 million in 2014, which after the decision of the shareholder will also be allocated for supporting provision of electricity service to poor and low-income inhabitants, large families, as well as to persons with disabilities and families with a disabled child, as well as for partial reimbursement of the mandatory procurement component costs, ensuring that the mandatory procurement component remains at the current level - EUR 26.79 per MWh.

In 2015, Latvenergo group continued targeted activities for strengthening the market position and has ensured one third of the total electricity market in the Baltics. As a result of targeted sales activities outside Latvia the number of business customers in Lithuania and Estonia has increased by one third compared to the previous year. The total number of customers in neighboring countries has increased by 4 percent, exceeding 35,000.

In total Latvenergo supplied to retail customers in the Baltics 7,880 GWh of electricity, one third or 2,539 GWh of which is supplied to customers in Lithuania and Estonia. The amount of electricity supplied to neighboring markets is by more than 40 percent higher than the amount supplied in Latvia by the competing electricity suppliers.

Last year Latvenergo group generated 3,882 GWh of electricity and 2,408 GWh of thermal energy. The total amount of generated electricity is by 7 percent larger than in 2014. The amount of electricity generated by Riga combined heat and power plants (Riga CHPPs) increased by 23 percent, reaching 2 025 GWh in 2015. Due to efficient operation of the Riga CHPPs the electricity price was stabilized in Latvian and Lithuanian bidding areas and the risk of increased electricity price was limited. Due to unusually low water inflow in Daugava River the amount of electricity generated in Daugava hydropower plants (Daugava HPPs) decreased by 6 percent, generating 1,805 GWh in 2015.

Latvenergo concern’s investments in 2015 constitute EUR 190.5 million, which is by 7 percent more than in 2014. The company made 62 percent of total investments in network assets and their modernization, increasing the quality, technical indicators and safety of operation of network services. Whereas EUR 31.9 million were invested in the ambitious reconstruction of Daugava HPPs, which provides overhaul of 11 yet unreconstructed hydropower units. Once the reconstruction of hydropower units is over, the amount of electricity generated in these units will increase and their operation will be ensured for another 40 years.

Latvenergo group finances its investment projects from its own resources, as well as from externally borrowed long-term funds, which is regularly and timely sourced in financial and capital markets. In June 2015, Latvenergo group issued green bonds in the amount of EUR 75 million. By issuing bonds funding sources have been diversified. Bonds constitute more than 20 percent of the total borrowings of the group.

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