In 2019 , the year of transformation, Ignitis Group improved its financial indicators
UAB Ignitis Grupė, (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.
In 2019, international energy company Ignitis Group recorded growth of all key financial indicators. The Group‘s revenue, net profit and EBITDA – all grew if compared to the year 2018.
Last year total revenue of Ignitis Group grew by 0.5% and amounted to EUR 1.095 billion. This growth was caused by higher revenue from energy distribution, green and strategic generation segments which counterbalanced decreased revenue share from the commercial organisation segment.
After eliminating regulatory effects, the Group’s adjusted EBITDA increased by 21.7% and totaled EUR 259 million, compared to EUR 212.8 million during 2018. EBITDA rate grew in all segments. Main reasons of this change were inceased number of new customers to the distribution network, continuous investments to distribution network and development of green energy.
The Group’s net profit in 2019 ammounted to EUR 60.9 million. which is EUR 82.4 million more compared to year 2018. Net profit was higher due to not received loss of regulated income in 2018 caused by the difference between the electricity rate determined by the regulatory authority for 2018, which was included in the public distribution service rate of 2018, and the actual market price; as well as by the impairment of assets recognised in 2018.
“2019 was a year of tremendous change and transformation. After the successful consolidation of our brands, we continued implementing our 2030 goals, as well as focused on sustainable and environmentally friendly development in the international market in order to ensure high customer service quality and efficiency.
Had it not been for the highest standards of governance and transparency, which are an integral part of the Group’s activities, the set goals would not have been achieved. We are excited to have them appraised in 2019 by the Governance Coordination Centre, where Ignitis Group was ranked as number one in the Good Corporate Governance Index published by this centre.
The development of green energy and the improvement of energy distribution quality and efficiency will remain our priority while further implementing ongoing and planning new projects“, says Darius Maikštėnas, CEO and Chairman of the Board of Ignitis Group.
Following the extensive review of energy industry practice and in order to be better comparable to the Group’s peers on international level, the Groups’s accounting principles were changed. Changes in accounting policies are related to the application of IFRS 15 and 9 (International Financial Reporting Standard): (1) offsetting the revenue from public service obligations (PSO) with the corresponding costs (previously PSO revenue and costs were accounted for separately). (2) distributing the recognition of the revenue for the connectivity of new customers over the useful service life of the infrastructure created (previously, in the natural gas segment and in the electricity segment, as of 1 October 2018, the revenue was recognized after fulfilment of the service obligation). (3) Netting the revenue with corresponding costs from trading activity of Group company Ignitis Polska sp.z.o.o.
For comparability purposes, the changes in accounting policies have been implemented retrospectively, i.e. by adjusting financial information for 2018. The changes implemented in accounting policies had no impact on the cash flows of the Group, however the revenue and net profit of 2018 decreased by EUR 164.2 million and EUR 13.6 million respectively. Detailed information about the changes implemented in the accounting policies and their effect on the separate articles in the statement of financial position and profit and loss and comprehensive income is presented in Note 3 to the Interim Financial Statements of the Company.
Key financial indicators of Ignitis Group for 2019:
• The Group’s revenue amounted to EUR 1 095.3 million, which is 0.5% more if compared to EUR 1.090 million during 2018;
• Operating expenses amounted to EUR 1 009.3 million, which is 9.1% (or more than EUR 100 million) less, compared to EUR 1 110.1 million during 2018;
• The Group‘s EBITDA increased by 43.7% and totaled EUR 209.5 million. The Group’s adjusted EBITDA increased by 21.7% and totaled EUR 259 million, compared to EUR 212.8 million during 2018. EBITDA rate grew in all segments. Main reasons of this change were inceased number of new customers to the distribution network and continuous investments to distribution network.
• The Group‘s net profit increased by 382.6% to EUR 60.9 million. The Group’s adjusted net profit amounted to EUR 102.5 million, which is 26.5% more compared to EUR 81 million during 2018;
• The level of the return on equity ratio was equal to 4.6% compared to -1.6% in 2018. The level of the adjusted return on equity ratio was equal to 7.7% compared to 6.1% in 2018;
• Investments increased to EUR 431.2 million, which is 0.5% more compared to EUR 429.3 million during 2018. Investments were mainly allocated for investments in cogeneration plants’ projects in Vilnius and Kaunas (47.7%), development of the electricity distribution network (18.3%) and development of gas distribution network (10.3%).
*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 the significant impact of one-off factors.