Eesti Energia group revenues fell in 2014

  • 2015-03-04
  • By Frederic Eger

RIGA - Estonia’s state-owned energy giant Eesti Energia announced on Friday February 27th, that its sales revenues for 2014 reached to 880 million euros, a fall by 8.9% while EBITDA (operating profitability) grew 0.6% to 312 million euros and net profit fell by 0.1% to 159 million euros.
The group turnover decreased in 2014 for all key products. Electricity sales revenue decreased mainly due to lower sales volume (fall by 19.6% compared to 2013) while the average sales price was improved and reached 3.7% higher than in 2013 at 47.9 euros/MWh.

In total, sales revenue from electricity sales reached 451 million euros (-15.6% compared to 2013). Electricity distribution sales revenue decreased by 1% to 241 million euros due to lower distribution tariff.
Shale oil sales volume increased by 10.8% due to record production level, but the sales revenue was held back by lower sales price for shale oil (despite the positive effect of the financial hedges).

Altogether, sales revenue from shale oil sales amounted to 85.3 million euros (fall of 7.4% year-on-year). Sales revenue for other products and services amounted to 103 million euros, which is 6.2% more than in 2013.
The group EBITDA expanded marginally in 2014 despite electricity EBITDA decreasing by 24.9 million euros (17.1%). Lower sales volume as well as higher electricity generation costs were mainly behind the decline of electricity EBITDA.
Reduction of electricity EBITDA was, however, balanced by positive performance in electricity distribution (EBITDA 9.6% higher at 97.3 million euros), shale oil sales (EBITDA 16% higher at 62.2 million euros) and other products and services (EBITDA 41.6% higher at 32.4 million euros).

Electricity sales amounted to 9.1 TWh in 2014, of which sales to retail customers amounted to 6 TWh (-15%) and sales in the wholesale market reached 3.1 TWh (- 27%). Group average retail market share in Estonia was 59% in 2014 maintaining 15% and 7% in market share in the Latvian and Lithuanian retail power markets, respectively. Eesti Energia generated 9.7 TWh of power in 2014, which is 8.3% less than in 2013.

The group distributed 6.3 TWh of electricity last year, which is 0.2% more than in 2013. Eesti Energia sold 231 thousand tones of shale oil in 2014, while the production of shale oil increased by 51.6 thousand tones (+24.2%) compared to 2013.
Eesti Energia currently expects the sales revenues to increase slightly in 2015 on the back of larger power generation and oil production volume.

On the other hand, group expects its EBITDA to decrease slightly in 2015, as lower sales prices put pressure on earnings.