INTER RAO Lietuva: Well-timed reactions to the changes in the markets granted the increase of the profitability

- In 2015 INTER RAO Lietuva Group continues to adapt its activities to the changing situations in the markets, which were facilitated by the continuous trend of historically low electricity prices in the Nordpool system as well as by lower prices of electricity sold. Despite the revenue decline, the amounts of electricity traded in Estonia and especially in Poland were higher. Well-timed reactions to the changes in the markets granted the increase of the profitability of the Group in the third quarter of 2015.It was also attributable to the changes in trading structure, further expansion, diversification and development of trading activities in other countries and more effective risk management policies. The Group’s net profit in January – September of 2015 increased by more than EUR 5 million, to EUR 13.5 million versus EUR 8.1 million in 2014. The net profit margin during the same period improved from 5.19 per cent to 9.87 percent. The Group has earned 0.67 EUR per share, 26 EUR cents more than a year ago – says Giedrius Balčiūnas, CEO at INTER RAO Lietuva.

Revenue from sales

The total consolidated Group's sales revenue in January-September of 2015 was equal to EUR 137 million, a 12.77 per cent less than in the first 9 months of 2014. Total revenue declined due to lower amount of electricity traded in Lithuania and Latvia, which was facilitated by the continuous trend of historically low electricity prices in the Nordpool system as well as by lower prices of electricity sold. Despite the revenue decline the amounts of electricity traded in Estonia and especially in Poland  were higher.

Group’s revenue from purchases and sales of electricity in the first 9 months of 2015 amounted to EUR 132.7 million. Revenue from produced electricity sales accounted for EUR 4.1 million, the 18.76 per cent more than in the same period a year ago. During the accounting period Vydmantai wind park, UAB has produced a higher amount of electricity compared to long-term average, due to positive meteorological conditions, the higher wind speeds. The better wind conditions than the estimated long-term average lead to one of the best results of Vydmantai wind park, UAB since the beginning of performance of the wind park in 2006.

Expenses

Group’s cost of sales in January-September of 2015 accounted to EUR 115.4 million, the 18.61 per cent less than during the first nine months of 2014. The decline in cost of sales was due to the lower amount of electricity traded by the Group and lower electricity purchase price in the Nordpool system and the third countries.

Group’s cost of purchased electricity in the first 3 quarters of 2015 amounted to EUR 112.4 million. Group’s cost of purchased electricity comprised 97.41 per cent of total cost of sales.

Earnings

Gross profit of the Group in January-September of 2015 amounted to EUR 21.4 million, while the gross profit margin increased to 15.62 per cent (9.57 per cent a year ago).

Group’s operating profit over the same period accounted to EUR 16.3 million, while the operating profit margin increased to 11.95 per cent from 6.65 per cent a year ago.

Group’s EBITDA for the first 9 months of 2015 was EUR 18.3 million and EBITDA profit margin increased from 7.92 per cent in first 9 months of 2014 to 13.35 per cent in the same period in 2015.

Group’s net profit in the January-September of 2015 amounted to EUR 13.5 million, if compared to the profit of EUR 8.1 million for the same period year ago. The profit margin increased from 5.19 per cent a year ago to 9.87 per cent in the accounting period. Increase in profit was due to the set of risk management policies, change in trading structure the Group undertook in a response to the uncertainties associated with technical limitations of interconnection links, further expansion and diversification of trading activities in all the countries and better results from sales of electricity generated in the wind park.