Notification on material event
Regarding Lietuvos Energija Board decisions
Lietuvos Energija, UAB, (hereinafter – the Company) identification code 301844044, registered office placed at Žvejų str. 14, Vilnius, Republic of Lithuania. The total nominal value of issued bonds 600 000 000 EUR; ISIN codes XS1646530565; XS1853999313.
The company informs that the Board approved the Consolidated Annual Report for the year 2018 and approved the audited Consolidated and Company’s financial statements for the year 2018, prepared according to the International Financial Reporting Standards and audited by the audit company PricewaterhouseCoopers, and the draft of profit (loss) allocation for the year 2018 (see attached documents). The Company submits these documents to the Supervisory Board and to the Annual General Meeting of Shareholders of the Company.
Key interim audited financial indicators of Lietuvos Energija Group for 2018:
- The Group’s revenue amounted to EUR 1.254 million, which is 13.9% more if compared to EUR 1.100 million earned during 2017;
- Operating expenses amounted to EUR 127.2 million, which is 3.6% (or almost EUR 5 million) less, compared to EUR 132 million during 2017. Lower operating expenses resulted from the improvement of operational efficiency;
- The Group‘s EBITDA decreased by 34% and totaled EUR 149.9 million. The Group’s adjusted EBITDA decreased by 5.7% and totaled EUR 225.1 million, compared to EUR 238.7 million in 2017. The steady growth of the distribution activity results has been offset by the poorer performance of the electricity and gas trading activities, affected by increased market prices;
- The level of the return on equity ratio was equal to -0.6% compared to 7% in 2017. The level of the adjusted return on equity ratio was equal to 8.8% compared to 9.8% in 2017;
- The Group‘s net loss was EUR 7.9 million. The Group’s adjusted net profit amounted to EUR 116.4 million, which is 10.5% less compared to EUR 130.1 million during 2017;
- Investments amounted to EUR 411.3 million, which is 62.3% more compared to EUR 253.4 million during 2017. Investments were mainly allocated for the maintenance (30%) and development (20%) of the electricity distribution network, also investments have increased significantly due to investments in cogeneration plants’ projects in Vilnius and Kaunas (20% from total investments).
Compared to interim financial indicators, published on 28 February 2019, Group‘s net profit has changed (previously announced to be EUR 6.5 million) and EBITDA (previously announced to be EUR 151.2 million).
These changes occurred due to the fact that Lietuvos Energija, UAB, and EPSO-G, UAB, have not yet completed the process of valuation of the shares of Litgrid AB, therefore the estimated impairment of the transaction is accounted in the audited financial statements. In the purchase-sale agreement of shares of Litgrid AB a final price supplement is provided. The amount of a supplement depends on the return of the regulated assets of electricity transmission activity in 2014 – 2018.
In the project of profit (loss) distribution of 2018, it is proposed that the share of the Company's profit for the payment of dividends for the year 2018 will be EUR 13 million. The proposal was made taking into account that during the four quarters of 2018, the financial results of the Group were significantly affected by the price situation in the electricity and gas markets. Due to the specificity of the regulated activity, the Group’s costs increased more than revenue, and the regulatory differences will be compensated in the coming periods.
In addition, in 2018 the largest annual investment flow was created due to the new connections and capacity uprates of ESO clients due to the investments in to the projects of co-generation power plants in Vilnius and Kaunas. The decrease of the dividend flow can be seen comparing to previous years and this is one of the tools of credit risk management, seeking to maintain an optimal capital structure.
*The Group’s EBITDA and net profit is adjusted (1) by eliminating deviation between actual and regulated revenue, by which the Group‘s future financial results will be adjusted; (2) by eliminating gas price discount expenses that are related to the previous periods.
More information: Artūras Ketlerius, Acting Head of Public Relations of Lietuvos Energija +370 620 76076, email@example.com