Announcements

Today, 31 May, the unaudited condensed consolidated interim financial statements of Latvenergo Group for the first three months of 2018 are published. 

In Q1 2018, Latvenergo Group’s revenue amounts to EUR 259.7 million, which is 2% less than in the same period last year. EBITDA of the Group is EUR 109.7 million, which is 4% less than in the previous year. Compared to the respective period last year, the amount of electricity generated by the Group has increased by 4%, reaching 1,929 GWh (gigawatt hours). 

The amount of electricity generated by Latvenergo Group in Q1 2018 has reached 1,929 GWh, which is 4% more than in the respective period of the previous year. Due to efficient use of the diversified generation portfolio, the amount of electricity generated by the Groupexceeds the amount sold to retail users (1,766 GWh) by 9%.

Electricity generation at the Riga CHPPs has increased by 31%, reaching 904 GWh. This growth has been determined by the ability to respond effectively to the market situation in the region, planning operational modes and use of fuel in an efficient manner and offering competitive electricity and thermal energy on the market. Whereas Q1 of the previous year was characterised by intense spring flooding, which contributed to increased generation at the Daugava HPPs (hydropower plants), the amount of electricity generated at the HPPs this year has decreased by 12%, amounting to 1,010 GWh due to lower water inflow in the Daugava River. The amount of thermal energy generated in Q1 2018 has grown by 6% compared to Q1 last year due to colder weather conditions and is equal to 1,204 GWh. Under intensifying competition, the Group has sold significantly more thermal energy than was planned. Thus, Latvenergo Group has been the largest thermal energy generator in Latvia, demonstrating high competitiveness in a changing market environment.

In the reporting period, a total of 1,766 GWh of electricity have been sold to Baltic customers. The total number of customers outside Latvia exceeds 35 thousand, and retail electricity trade to these customers accounts for approximately 1/3 of the total amount. In 2017, the Group commenced natural gas trade in Latvia and Estonia. It should be emphasised that the opening of the natural gas market has made it possible to diversify natural gas supplies, thus ensuring the most competitive price, which is especially important for Latvenergo as the second largest natural gas consumer in the Baltic states. In Q1, the Group's auxiliary gas consumption and the amount sold to customers was 2.5 TWh.

Latvenergo Group’s revenue in Q1 2018 has decreased by 2% and amounts to EUR259.7 million. EBITDA of the Group is 4% less than the previous year, reachingEUR109.7 million, while the Group’s profit is EUR 64.8 million. The Group’s results have been negatively impacted by 75% lower revenue from the installed electrical capacity at the Riga CHPPs.

In Q1 2018, the total amount of Latvenergo Group’s investment has not changed significantly compared to the respective period last year; it amounts to EUR 33 million. The majority or 85% of overall investments were made in network assetswith a view to ensuring a high level of quality and safety of their services. The most important investment projects of Latvenergo Group are: reconstruction of hydropower units of the Daugava HPPs, which will ensure their operation for the next 40 years; the Kurzeme Ring project, which significantly increases the security of energy supply in Kurzeme region and Latvia as a whole, allowing further integration of the Baltics into the Nordic electricity market; as well as the Third Estonia-Latvia power transmission network interconnection, a project of major significance for the future electricity transmission infrastructure of the whole Baltic region.

On 20 March 2018, Latvenergo AS registered changes in its capital; it was reduced by EUR 454.4 million. The capital of Latvenergo AS now amounts to EUR 834.3 million. The capital release was carried out taking into account the order of 21 November 2017 by the Cabinet of Ministers of the Republic of Latvia, which supported repurchasing of future liabilities of the state to Latvenergo AS on the electrical capacity payments for Riga CHPP-1 and Riga CHPP-2. Thereby, Latvenergo AShas contributed to the reduction of the average mandatory procurement component starting from 1 January 2018.

To acknowledge that Latvenergo Group has managed to maintain sufficient financial flexibility and good financial performance, on 14 March 2018, Moody’s maintained the credit rating for Latvenergo AS: Baa2 with a stable outlook. In their assessment, Moody’s took into account the recent changes in the support intensity for the Riga CHPPs and the related capital release of Latvenergo AS.

The next interim financial statements of Latvenergo Group for 2018 will be published on 31 August and 30 November. Unaudited condensed consolidated interim financial statements of Latvenergo Group for Q1 2018 are available in the section Investors/Reports.