INTER RAO Lietuva AB

02/14/2020 | Press release | Distributed by Public on 02/14/2020 15:30

INTER RAO Lietuva Group announces financial results for 2019 – The second-best year while listed on WSE with the increase of revenues and profits y/y

  • Electricity sales volume increased to 8 539 GWh in 2019 versus 6 235 GWh in 2018.
  • Revenues from sales reached EUR 317.0 million, compared to EUR 288.3 million in 2018, thanks to higher amount of electricity sold and higher prices in the NordPool system.
  • Group's gross profit in 2019 increased to EUR 24.5 million from EUR 22.7 million in 2018.
  • Operating profit increased to EUR 15.2 million versus EUR 14.9 million a year ago.
  • Group's net profit reached EUR 17.6 million compared to EUR 11.5 million in 2018.
  • Group's EBITDA reached EUR 22.4 million, while the EBITDA margin increased to 7.1%.
  • Electricity production at the Vydmantai wind farm increased by 28.4% y/y due to better wind conditions in the area.
  • The electricity trading volume in Poland amounted to 1 558 GWh versus 330 GWh in 2018.

- We have recorded the second best INTER RAO Lietuva Group's financial results in the last five years. The increase in the amount of electricity traded from 6,235 GWh to 8,539 GWh was mainly caused by the increase in sales in Lithuanian and Polish markets. Better wind conditions than the estimated long-term average led to one of the best results of Vydmantai wind park since the beginning of its operation in 2006: The electricity generated by the wind farm reached 64 GWh. The Group managed to generate 7.72% gross profitability and the net profit of the Group increased to 17.6 million. The net profit margin during the year improved from 3.97 % to 5.57 % and the Group reported earnings of EUR 0.88 per share - says Giedrius Balčiūnas, CEO at INTER RAO Lietuva.

Key figures of IRL Group

Financial figures 2019 2018 2017
Sales [Revenues from contracts with customers] (EUR thousand) 317,034 288,269 179,378
Gross profit (EUR thousand) 24,461 22,716 18,354
Gross profit margin (%) 7.72% 7.88% 10.23%
Operating profit [profit from operations] (EUR thousand) 15,163 14,934 10,911
Operating profit margin (%) 4.78% 5.18% 6.08%
EBITDA (EUR thousand) 22,432 17,743 13,537
EBITDA profit margin (%) 7.08% 6.16% 7.55%
Net profit (EUR thousand) 17,647 11,454 8,974
Net profit margin (%) 5.57% 3.97% 5.00%
Number of shares (thousand) 20,000 20,000 20,000
Earnings per share (EUR) 0.88 0.57 0.45
Financial ratios 2019 2018 2017
Return on capital employed (%) 63% 68% 41%
Return on assets (%) 27% 19% 19%
Return on shareholders' equity (%) 60% 66% 50%
Gearing ratio 0.17 0.45 0.83
Net financial debt to equity -0.75 -0.74 0.54
Equity to assets ratio 0.45 0.28 0.37
Current ratio 1.35 1.02 1.12
Rate of turnover of assets (%) 21% 21% 27%

Revenues from sales

Consolidated sales revenues rose by almost 10% y/y in 2019 to EUR 317.0 million. That increase came on the back of higher volumes of electricity traded (8 539 GWh in 2019 vs. 6 235 GWh in 2018) and despite lower prices in the NordPool system. The average annual electricity price in 2019 in the Lithuanian Nord Pool Spot zone equaled 46.08 EUR/MWh compared to 50.00 EUR/MWh in 2018, a 7.8% decrease y/y.

Revenues from produced electricity sales amounted to EUR 5.6 million in 2019, which represents a 28.3% increase y/y. The increase in electricity production was mainly caused by better wind conditions in the area of the Vydmantai wind park. The average wind speed in the area in 2019 was 6.5 m/s compared to 5.9 m/s during 2018.

In 2019 the Group fulfilled all its contractual obligations and delivered electricity to its clients at prices agreed upon in the contracts. Electricity was provided to clients without any delays or disturbances and the Company remains a trusted counterparty and a reliable electricity supplier. Inter RAO Lietuva Group's client base decreased from 1,453 at end-2018 to 965 at end-2019.

Earnings

Consolidated gross profit in 2019 increased by 7.7% y/y, reaching EUR 24.5 million (vs. EUR 22.7 million in 2018). Gross profit margin in 2019 slightly declined to 7.7% from 7.9% in 2018, but remained at a healthy level.

Consolidated profit from operations increased to EUR 15.2 million in 2019, versus EUR 14.9 million in 2018. Operating profit margin for the Group was equal to 4.8%, compared to 5.2% a year ago.

In segment breakdown, due to better meteorological conditions at the Vydmantai wind power plant and despite its accounting for just 1.8% of the Group's top line, the power generation segment increased its contribution to the Group's operating profit to the level of 17.5% from 9.6% a year before.

Operating results by segment

Segment Electricity trade Power generation
(EUR thousand) 2019 2018 2019 2018
Revenues 311,445 283,913 5,589 4,356
Operating profit 12,520 13,837 2,643 1,097
Operating margin 4.0% 4.9% 47.3% 25.2%

Profit before tax and the net profit of the Group in 2019 increased y/y and amounted to EUR 19.5 million and EUR 17.6 million respectively. The Group's net profit margin in 2019 was equal to 5.6% (compared to 4.0% a year ago).

The Group generated a profit of EUR 0.88 per share in 2019 (EUR 0.57 in 2018).