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25.02 2016

Eesti Energia earned a net profit of EUR 40 million last year

The energy company’s turnover declined 12%, to EUR 777 million last year. Its operating profit before taxes was EUR 266 million, down 15% from the year before. Its net profit worked out to be EUR 40 million.

Andri Avila, Financial Director of Eesti Energia, said that the lower turnover and profit figures were due to low prices on energy markets. “Over the past year, we have been making a strenuous effort at Eesti Energia in order to improve the efficiency of our operations and cut our costs,” said Avila. “For instance, we have saved EUR 63 million, or 11%, in business expenses compared to 2014. We have been aided by more efficient solutions, including flexible electricity production at Narva Power Plants, selling more to the wholesale market during the hours of higher prices and less when prices have been low,” Avila elaborated. In 2015, the price of electricity declined 17% in the Estonian region of the Nord Pool electricity exchange, whereas the price of oil on the world market dropped 37%.

Last year, Eesti Energia sold a total of 7.2 terawatt-hours of electricity, down 21% from 2014. The lower sales were due to the decline in the prices on the electricity market. “In the area of electricity production, one could single out energy generated from wind and waste, as we achieved a record result for both,” Avila commented. Last year, Eesti Energia produced a total of 223 gigawatt-hours of electricity at its four wind farms, accounting for a third of the wind energy production in Estonia in 2015. At the Iru waste-to-energy unit, 270 gigawatt-hours of heat and 128 gigawatt-hours of electricity were produced.

We posted a record result on shale oil sales, with 315,000 tonnes of shale oil sold in 2015. An increasingly important role in the production of shale oil is being played by the Enefit280 oil plant, which accounted for 40% of the total oil output by the Group.

Last year, the Group invested EUR 246 million, down 11% from the year before. In terms of major projects, control of the Auvere Power Plant has been taken over from its builder, and the final hand-over of the plant by General Electric should happen in the first half of this year. Another major target for investment is the electricity grid, to which EUR 93 million was allocated last year for the improvement of reliability and the transition to remotely read meters.

From the beginning of this year, more stringent EU environmental requirements took effect. For the purposes of greener production, EUR 134 million has been invested in Narva Power Plants over the past few years, as a result of which emissions of nitrogen and sulphur compounds and solid particles have declined several times.

In 2015, Eesti Energia paid its shareholder EUR 62 million in dividends. EUR 65 million in labour taxes and excise duties, plus EUR 28 million in resource charges and EUR 30 million in pollution charges were contributed to the state budget.

In 2015, Eesti Energia had to write down a portion of the value of its assets, mainly due to low energy prices. The write-downs on the assets of the Auvere Power Plant and the Utah project were EUR 39.6 million and EUR 26 million, respectively. Furthermore, there was a write-down on the loan of EUR 11 million provided for the Jordanian oil project. The loan provided for the Jordanian oil project is not connected to the Jordanian electricity project, the funding of which should be completed in the first half of this year. The revaluation of assets reduced Eesti Energia’s net profit by EUR 76 million.

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