In the first quarter of 2017, sales revenue of the Estonian state-owned energy company Eesti Energia increased 9.3 percent on year to €215.3 million while the group's net profit surged 149 percent to €48.3 million.
Eesti Energia's EBITDA, or earnings before interest, taxes, depreciation and amortization, grew 43 percent to €86 million.
Eesti Energia produced 101,000 tons of shale oil during the quarter, marking a 52 percent increase over the same period last year. Sales of shale oil totaled 77,000 tons, marking an increase of 125 percent on year. The increase in sales was the result of Eesti Energia storing rather than selling part of its oil output in the first quarter of 2016 due to low market prices, the company said.
According to CFO Andri Avila, the good financial results were the result of increased production capacity and higher market prices for oil in comparison with the previous year. "The market price of shale oil more than doubled on year, which allowed our oil refineries to operate and sell their output at full capacity at the beginning of the year," he explained. "The reference base for oil prices is exceptionally low, as we experienced very low prices on the oil market at the beginning of last year, the likes of which we last saw in 2004."
The market price of electricity in Estonia increased by three percent on year in the first quarter of 2017 remaining lower than promised by the financial market outlook at the end of 2016. "A cold winter was predicted at the end of last year, which according to the expectations of the financial market should have brought on average €45 electricity price by the beginning of 2017," Avila said. "Reality turned out to be different and the average price of electricity during the first quarter of 2017 was slightly below €33 per megawatt-hour in Estonia." Despite the lower than expected price of electricity, however, electricity generation increased by 29 percent to 2.8 terawatt-hours.
Electricity production exceeds consumption
Estonia is the only country in the Finnish and Baltic region where more electricity is produced than consumed. The three-month net export of Estonian electricity totaled 800 gigawatt-hours.
In the first quarter, Eesti Energia produced 105 gigawatt-hours of renewable energy, 23 percent more than in the same quarter of the previous year. Most renewable energy production came from the wind park of Enefit Taastuvenergia, the output of which increased thanks to better wind conditions and higher reliability than at the beginning of 2016.
In the three months of the first quarter, Eesti Energia's capital expenditure was €26 million, an 18 percent decrease from the year before. A majority of the expenditure was dedicated to improving the distribution network, the investment in which totaled €14 million.
In the first quarter of 2017, the group invested €5 million in development projects, €2 million of which was allocated for the reconstruction of a circulating fluidized bed boiler at Unit 8 of its Estonia Power Plant. As a result of its reconstruction, the unit's capacity for using shale gas for generating electricity will increase to 50 percent, while the environmental effects of the energy production will decrease. The reconstructed generating unit will begin work next year.
Editor: Aili Vahtla