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Eesti Energia third quarter revenue up 26.7% to nearly €200 million

Eesti Energia CEO Hando Sutter and CFO Andri Avila.
Eesti Energia CEO Hando Sutter and CFO Andri Avila. Source: ERR

The sales revenue for Estonian state-owned energy group Eesti Energia in the third quarter of 2018 totalled €199.7 million, up 26.7% on year. The earnings before interest, taxes, depreciation, and amortisation (EBITDA), meanwhile, totalled €58.4 million, increasing 8.1% on year.

"Compared to last year, the sales volumes of all of our main products increased," Eesti Energia CFO Andri Avila said in a press release on Tuesday. "Higher sales revenue for electricity and liquid fuels resulted both from larger sales volumes as well as increased market prices. The effect of the 9% lowering of the network service tariff was largely compensated by increased sales volumes."

According to the CFO, the sales revenue of other products grew primarily due to higher profits in oil shale sales, while warm weather brought a decrease in the sales revenue of thermal and gas energy.

The Estonian energy group produced 2,182 gigawatt hours of electricity in the third quarter of 2018, exceeding the country's total consumption by 377 gigawatt hours. A total of 2,538 gigawatt hours of electricity was produced in Estonia last quarter, exceeding national consumption by 733 gigawatt hours. Eesti Energia's electricity production accounted for 86% of total electricity production in Estonia.

"We produced 3.8% more electric power than a year ago," Avila noted. "This was favoured by a higher market price compared to the third quarter of last year."

Renewable energy production up

Eesti Energia also produced 77.3 gigawatt hours of renewable energy, 64.4 gigawatt hours of which was produced by renewable energy subsidiary Enefit Green. Compared to last year, Enefit Green's production volume increased by 12%, he added.

The majority of renewable energy production was provided by wind farms, which generated 47.7 gigawatt hours of electricity, 18% more than during the same period last year, due to favourable wind conditions.

Network service revenue, meanwhile, fell by 0.8% compared to the previous year, however the sales volume increased by 1.3%. The average duration of power outages caused by faults was 52.6 minutes, or 12.4 minutes more than a year ago, due to windier weather conditions. According to Avila, replacing bare wires with weatherproof cables helps to decrease the number of power outages. As of the end of the third quarter, 87% of Elektrilevi's low-voltage grid was weatherproofed, as was 38% of the medium-voltage grid.

Network service fee to be reduced

"This period brought good news to our customers — the Estonian Competition Authority approved Elektrilevi's application to reduce the network service fee by an average of 8% beginning next year," the CFO highlighted. "This is in addition to the 9% price cut that took place last year as a result of two price changes." He added that Eesti Energia's customers have also played an important role in the lowering of network fees, having abandoned unnecessary capacities and enabling Elektrilevi to save on operational expenditures.

Eesti Energia produced a total of 103,600 tonnes of liquid fuels, 45.6% more than during the same period last year.

"The volume of production increased thanks to the improved reliability of oil factories and a shorter maintenance repair of [oil plant] Enefit280," Avila said. "This is one of the most successful quarters of all time in oil production."

According to the company, Eesti Energia sold 79,000 tonnes of liquid fuels and earned a sales revenue of €20.7 million. Revenue from liquid fuels sales increased by 35.% on year, while according to Avila, the sales volume increased 9.3% on year.

Eesti Energia also invested a total of €65 million in the third quarter of 2018, one third of which constituted the final payment for Auvere Power Plant.


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Editor: Aili Vahtla

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