Eesti Energia posts best-ever Q3 results, over 50 percent rise in revenue

Eesti Energia logo.
Eesti Energia logo. Source: Siim Lõvi /ERR

State-owned electricity generator Eesti Energia has posted its best ever third quarter (Q3) results this year, the company said, with sales revenue rising on year by 52 percent, to €291 million, at a time of high energy prices all round.

Andri Avila, Eesti Energia CFO, says the current high energy prices have had both positive and negative effects on the company.

He said: "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 continued, via a company press release.

Eesti Energia's financial results were mostly influenced by the sharp increase in the market price of electricity, which increased 2.6-fold as a quarterly average, and reached €100 per MWh in the Baltic countries.

Avila added, however, that energy prices reverting back to their usual market level was not out of the question.

High CO2 allowance and natural gas prices have dictated peak prices in electricity generation, and energy demand as a whole shows no signs of abating in the context of economic growth.

Winter is also, as always, an unpredictable factor, one which can bring either relief or additional pressure on prices, Eesti Energia says.

Eesti Energia Q32021 quick facts

  • EBITDA increased by 48 percent to €66 million over the first nine months of the year.
  • Net profit of €16.9 million, compared with Q3 2020 loss of €8 million.
  • 2.2 Twh of electricity sold on domestic markets, 25 percent rise on year. Sales increased the most in Poland and Lithuania.
  • 1.2 Twh of electricity generated (12 percent on-year increase).

January-September 2021 quick facts

  • €829 million in sales revenue (+42 percent).
  • €179 million in EBITDA (up 20 percent on year). invested .
  • Heating output increased by 79 percent over the year to 167 GWh.
  • Production of liquid fuels fell by 22 percent to 90,000 tons, due to different maintenance period at the plants.
  • Electricity consumption rose by six percent during the year, increasing network services sales volume in Q3 2021 to 1.5 Twh.
  • Eesti Energia's investments increased to 60 million, 57 percent more than in Q3 2020.
  • -Bulk of this – €26 million – went on improving the quality of network services, with €8 million going on construction of wind farms in Lithuania and almost 11 million on the construction of the new Enefit280 plant.

The high price of electricity, which saw record levels in Estonian a month ago, is the result combination of several factors, Eesti Energia says. These include the low level of hydro resources in the Nordic countries, the high price of natural gas, a record high for CO2 allowance prices, and  increasing consumption.

All of these indicators were in fact moving in the opposite direction in Q3 2020, Eesti Energia says.

High prices to consumers from a state-owned body are having to be mitigated by several measures, again from the state, however.
The government has approved two packages, one which will subsidize network providers 50 percent of their network fee, to avoid them losing out when prices are reduced to consumers, while the other provides support to the lowest-income households.

The measures are set to run retroactively from the start of October, to next March, i.e. heating season.

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Editor: Andrew Whyte

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