Published: 2019-10-30 15:01:00 CET
Energijos Skirstymo Operatorius AB
Interim information

ESO results of the three quarters: further growth in the number of new customers and stability of financial indicators

AB Energijos Skirstymo Operatorius (hereinafter also referred to as the Company), code 304151376, registered office address Aguonų g. 24, Vilnius. Total number of ordinary registered shares issued by AB Energijos Skirstymo Operatorius – 894 630 333; ISIN code – LT0000130023.

In the three quarters of this year, electricity and gas distribution company Energijos Skirstymo Operatorius (ESO) owned by the largest energy group in the country UAB Ignitis grupė continued refining its activities updating ESO customer self-service system in September 2019, focusing therein on infrastructure activities and services of a distribution operator, and actions simplifying the procedure of connection of generating and remote generating consumers to the distribution network.

Financial indicators of the Company remained consistent and stable when it comes to the activities and the scope of investments provided for in strategic ESO plans. In January – September 2019, ESO earned EUR 135.2 million in adjusted earnings before interest, tax, depreciation and amortization (adjusted EBITDA), which is 11.4% more than a year ago, when this indicator was EUR 121.4 million. This change in the indicator value came as a result of a growing base of regulated assets, higher income from the connection of new customers due to the changed application of international financial reporting standards and increased efficiency of the Company’s operations.

A higher scope of force majeure events, which affect the network reliability level, have remained an important challenge: in the 9 months of 2019, outages (SAIDI) caused by force majeure lasted for 15.16 minutes and, compared to the same period of 2018, their duration was 7.43 minutes longer. Unfavourable weather conditions in the first months of 2019 had a material impact on the deterioration of the indicator. In QIII 2019, after the State Energy Regulation Authority published a report on network reliability indicators, we have pursued a uniform interpretation of different legal acts governing the capturing of reliability indicators with the regulator.

“We have consistently continued the implementation of ESO strategy approved in January 2019 and the 10-year investment plan announced in July, and we continue focusing on our core – distribution – activity, implementation of smart network solutions and assurance of its reliability. We have been implementing the smart meter installation project in Lithuania, and we are pleased to have ESO’s operational transparency rated by Transparency International Lithuanian branch and the improving indicator of getting an electricity connection evaluated in the World Bank’s Doing Business 2020 survey”, says Mindaugas Keizeris, the Chairman of the Board and CEO of ESO.

Key indicators:

• In January – September 2019, ESO revenue totalled EUR 385.4 million, which is 15.4 % more than in the same period of 2018. The Company’s revenue decreased due to discontinued public supply activity. Having eliminated the effect of the public supply activity discontinued in October 2018, revenue increased by 0.9% in the 9 months of 2019 (it totaled EUR 382.0 million exclusive of public supply activity in the 9 months of 2018). The main source of ESO revenue is the distribution of electricity. In January – September 2019, revenue from electricity distribution amounted 79.1 % of the total revenue of the Company, and gas distribution revenue made up 6.3 % of the total revenue.

• Costs of purchasing electricity, natural gas and the related services amounted to EUR 200.05 million in the first nine months of this year and were 38.7 % lower than in the respective period of 2018. This was mainly affected by the hand-over of the public electricity supply activity on 1 October 2018. After the elimination of the effect of the public supply activity, costs of purchase of electricity, natural gas and the related services decreased by 10.8% mainly due to lower prices of acquisition of natural gas and lower costs of electricity transmission services.

• In January – September 2019, ESO net profit grew to EUR 41.7 million compared to EUR 10.8 million in the same period of last year. The increase in net profit came as a result of a decreased difference between the price of acquisition of electricity in regulated services set by the regulator and the actual price of acquisition of electricity as well as the changed principles for recognizing revenue from newly connected customers and increased volumes of electricity distribution.

• In January – September 2019, ESO earned EUR 135.2 million in adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA*), which was 11.4 % more than in the same period of 2018, when this indicator totalled EUR 121.4 million.

• In the nine months of this year, ESO investments in electricity and natural gas distribution networks were nearly EUR 141 million, which is 26.4 % less than in January – September 2018 when they totalled EUR 191.6 million. In January – September 2019, ESO invested EUR 62.5 million in the development of electricity distribution network, which is 2.5 % more than in the same period of 2018. The main reason for the growth of investments in the network development by almost 28 % compared to the same period of last year was an increased number of new customers in electricity segment.

• In the three quarters of this year, ESO ensured a reliable supply of electricity to its customers. The average outage duration for each customer served (SAIDI) inclusive of force majeure effects was 73.58 minutes in the 9 months of 2019, and, compared to the same period of 2018, it was 6.6 minutes longer. The average number of interruptions that a customer would experience (SAIFI) inclusive of force majeure effects was 1.05 times in January – September 2019, which was 0.14 times more than in 2018.


*The Company’s EBITDA and net profit results are presented after adjustments made by the management, eliminating the deviation of actual and regulated revenue and the impact of one-off factors. The purpose of these adjustments is to disclose the results of the ordinary activities of the Company, without the occurrence of atypical, one-off events or factors that are not directly related to the current period. All adjustments made by the management are disclosed in the Company's interim and annual reports.

Spokesman - Tomas Kavaliauskas, tomas.kavaliauskas@eso.lt, tel. +370 617 51616.

Attachments


ESO results 2019 09 30.pdf
9_months_interim_report_2019-10-30.pdf