EBITDA increased by 48 percent to EUR 66 million over the year. Instead of last year's loss of EUR 8 million, the group earned a net profit of EUR 16.9 million in the third quarter this year.
The company's financial results were mostly affected by the sharp increase in the market price of electricity that increased 2.6-fold as a quarterly average and reached 100 euros per megawatt-hour in the Baltic countries.
High electricity prices have been formed due to a combination of several factors: low level of hydro resources in the Nordic countries, high price of natural gas, record high CO2 allowance prices, and increase in consumption. All factors moved in the opposite direction compared to the same period last year.
According to Andri Avila, Member of the Management Board and Chief Financial Officer of Eesti Energia, high energy prices have both positive and negative effects on the company.
“On the one hand, it increases our sales revenue, increases the competitiveness of renewable energy investments and allows Narva’s hybrid power plants to better access the market. On the other hand, the cost components of our production are more expensive and the purchase cost of electricity is several times higher, putting pressure on our margins,” Avila gave some examples.
More than half of Eesti Energia's customers do not have to worry about the fluctuating market price of electricity, because they have preferred fixed-price electricity packages which are currently below the market price. Eesti Energia fulfills its contractual obligations to its customers as a reliable partner.
By the end of the third quarter, almost 800 business customers across the Baltics had used the opportunity to enter into a green electricity purchase and sale agreement with Eesti Energia for up to ten years in order to gain price security for a longer period of time.
Eesti Energia sold a total of 2.2 terawatt-hours of electricity across its home markets in the third quarter, being 25 percent more than in the same period last year. Sales increased the most in Poland and Lithuania.
The group produced 1.2 terawatt-hours of electricity in the third quarter, which is 12 percent more than last year. Heat output increased by 79 percent over the year to 167 gigawatt-hours. Production of liquid fuels decreased by 22 percent to 90,000 tons due to a different maintenance period of the plants.
Electricity consumption increased by six percent during the year, thus increasing the sales volume of network services in the third quarter to the level of 1.5 terawatt-hours.
The Group's investments increased to 60 million euros, that is 57 percent more than in the third quarter of 2020. The lion's share of this – EUR 26 million – went to improving the quality of network services, 8 million were spent on the construction of wind farms in Lithuania and almost 11 million on the construction of the new Enefit280 plant.
Within the first 9 months of this year, the company earned EUR 829 million in sales revenue (+42%), 179 million in EBITDA (+20%), invested 146 million (+8%) and earned EUR 33 million in net profit (-3 million in 2020).
According to Andri Avila, it is not foreseen that the energy prices would fall to their usual market level. High CO2 allowance and natural gas prices dictate peak prices in electricity generation, and energy demand as a whole shows no signs of abating in the context of economic growth. The weather of the coming winter is an unpredictable factor that can bring either relief or additional pressure on prices.