Eesti Energia sees half year record turnover, profit
In the first half of 2021, Eesti Energia earned a net profit of €16.5 million with a record sales revenue of €538 million. In the same period last year the company made a net profit of €5 million.
Turnover of the first half of the year increased by 36 percent compared to the same period of 2020 and reached the level of €538.4 million. EBITDA increased by 8 percent to €113.2 million.
Turnover in the second quarter increased in yearly comparison by 43 percent to €241.1 million and EBITDA decreased by a quarter to €40.8 million. The company made a net loss of €10 million in the second quarter of the year compared with a profit of €7 million last year.
Andri Avila, member of the management board and Chief Financial Officer of Eesti Energia, said the situation in the energy markets is radically different compared to last year. The high level of market prices has favored the Group's core business without taking into account the impact of derivative transactions, as the sales revenue of all business areas has grown strongly.
Eesti Energia protects itself against large fluctuations in market prices by hedging transactions to ensure business stability.
"We reassess the future value of derivatives in accordance with accounting rules on a monthly basis, although the actual impact will become clear later when these transactions take place. The negative value of derivative transactions arising from fluctuations in market prices had a significant impact on Eesti Energia's second quarter results," she said.
The average market price of electricity in the Estonian price area increased almost twice during a year and reached €55 per MWh, elsewhere in the price areas of the Nord Pool exchange the price growth was even faster.
In the conditions of economic growth, consumption has increased, less wind electricity reached the market due to weather conditions, and low rainfall reduced the production of hydroelectric power in the Nordic countries. In controlled production, this has been compensated by higher prices for fuels and CO2 emissions, which is reflected in higher electricity market prices.
In the second quarter, Eesti Energia produced 904 GWh of electricity, 45 percent more than in the same period last year. The share of renewable electricity in total production was 42 percent or 378 GWh. The amount of renewable electricity produced increased by a third over the year.
Due to the increase in electricity consumption, the sales volume of network services, which increased by 7 percent year-on-year, raised the sales revenue of electricity delivery by 5 percent to €52 million.
The oil market reached the Covid-19 pre-pandemic price level. This supported the production of liquid fuels, which increased by 13 percent over the year and reached 97,000 tons.
The Group's investments almost doubled year-on-year and reached €54 million. The increase is due to the first installment of a new wind farm to be built in Lithuania (Šilale II, 43 MW) and a new liquid fuel plant, and an increase in investments aimed at increasing the reliability of the electricity network.
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Editor: Helen Wright