Results of Ignitis Gamyba for January-March 2020: increased production volumes and preparation for important projects
AB “Ignitis gamyba” (hereinafter referred to as the Company) company code 302648707, registered office at Elektrinės st. 21, Elektrėnai. The total number of registered ordinary shares issued by the Company is 648 002 629; ISIN code LT0000128571.
Ignitis Gamyba significantly increased production volumes and actively prepared for important projects in the first quarter of 2020.
The year 2020 started with big news in the area of green energy – the Company signed a contract for a new 3 MW solar power plant in Obeniai, Elektrėnai Municipality. In such a way the 1 MW solar park will be expanded. It will start operating in the beginning of May and it will provide a possibility for the Lithuanian residents to generate electric energy for their flats or houses themselves.
The implementation of other projects was taken forward a lot in the beginning of the year, as well. Disassembly of two unused chimneys in Elektrėnai Complex will be started in summer already. It will be a unique project – demolition works at such height have not been performed in the Baltic States before. The Company plans to finish the disassembly works of these chimneys until autumn 2021.
“The beginning of the year did not promise the changes that happened after declaration of the quarantine in Lithuania in mid-March. However, we are a strategical company, so we had undertaken al the possible precautions to protect our employees already before the quarantine was declared. We understand perfectly well that the specialists operating the equipment are the necessary link for safeguarding of our strategical services”, says Rimgaudas Kalvaitis, chairman of the board and CEO at Ignitis Gamyba.
70 percent of the Company’s employees cannot work in the remote mode. They are needed in the corporate objects, so it was necessary to create conditions for their safe work. Approx. 150 employees have key functions in the production objects. Mainly they belong to the teams of operation and technical maintenance of Elektrėnai Complex, Kruonis Pumped Storage Power Plant (hereinafter “Kruonis PSHP”), and Kaunas Hydroelectric Power Plant (hereinafter “Kaunas HPP”). Therefore, the Company had assessed possibilities of replaceability of key functions already before the quarantine and it was cleared that if needed, the employees may service different power plants. To protect employees, the Company isolated the operation stands, so that only the persons working there could have access to them, and the teams were isolated from each other. Several scenarios have been prepared with regard to the changing situation. They develop from each other and have to safeguard reliable work of the power plants.
R. Kalvaitis says yet it is not possible to assess the scope and consequences of the present crisis; however, it does not impact the Company’s performance and there are no identified threats for the performance continuity.
The Company generated and sold 79.3 percent more electricity in the power plants controlled by the Company in January-March 2020, when compared to January-March 2019. This result has been mainly achieved by effective use of Kruonis PSHP – the Company sold 3 times more of electricity generated in Kruonis PSHP in the first quarter of the year.
Elektrėnai Complex also contributed to better production results. It made 6 times more of electricity in January-March 2020 than in January-March 2019. This result was mainly determined by favourable market conditions for effective operation of the combined cycle unit.
The winter was quite warm again, so the second successive year started by recording decreasing production indicators in Kaunas A. Brazauskas Hydroelectric Power Plant. There was almost no snow in the beginning of the year, so no bigger flood was caused in January-March 2020. Kaunas A. Brazauskas Hydroelectric Power Plant generated 25,4 percent less electricity than in January-March 2019.
With regard to the financial results of the Company, although revenues were decreasing, but the profitability indexes remained quite stable (except for one-time factors). The adjusted EBITDA in January-March 2020 was 14.1 million euros, and thus, decreased by 2.9 percent, if compared with the same period in 2019. The influence of smaller production volumes in Kaunas A. Brazauskas Hydroelectric Power Plant was compensated by effective use of Kruonis PSHP and larger volumes in Elektrėnai Complex.
Besides, important news reached the minor shareholders of the Company in the end of the first quarter of 2020 – the shares of Ignitis Gamyba were being bought out, and that is a significant step in implementation of the Company’s delisting project.
Key performance indicators of Ignitis Gamyba for January-March 2020*:
- The Company’s revenue from contracts with customers totalled EUR 31.8 million in January-March 2020 and decreased by 11.7%, in comparison with January-March 2019. This was mainly influenced by noticeably decreased electricity prices in the market.
- Operating and maintenance costs amounted to EUR 5.1 million in January-March 2020 and were 4.4% or EUR 0.2 million lower in comparison with January-March 2019, mainly due to smaller costs of repair, maintenance and dismantling works at Elektrėnai Complex.
- The adjusted EBITDA** in January-March 2020 was 14.1 million euros, and thus, decreased by 2.9 percent, if compared with the same period in 2019. This indicator remained relatively stable, when compared to the same period in 2019. Effective use of Kruonis PSHP almost compensated smaller production volumes of Kaunas A. Brazauskas HPP and sales of fuel oil and scrap metal that had improved results of 2019.
- The net profit amounted to EUR 7.3 million in January-March 2020. The Company earned EUR 18.6 million of net profit in January-March 2019, when the profit was significantly affected by one-time factors.
- In January-March 2019, the Company invested EUR 0.1 million in non-current tangible and intangible assets, while this investment in January-March 2018 was EUR 2.5 million. Most of the sum in January-March 2018 was intended for the major repairs of the second hydro unit of Kruonis PSHP.
- The Company’s investments into non-current tangible and intangible assets amounted to EUR 0.3 million in January-March 2020, and EUR 0.1 million in January-March 2019.
* Financial indicators of the Company for the year 2019 have been recalculated. Information about the changes is presented in the Company's financial information for the year 2019.
** The Company’s adjusted EBITDA reported after the adjustments made by the management by eliminating the impact of one-off factors, also considering the change in revenue (and, consequently, EBITDA) of the Company's regulated services. These adjustments are made aiming to disclose the results of the Company’s operating activities after the elimination of the impact of non-typical, one-off factors or factors that are not directly related to the current reporting period. All adjustments made by the management are disclosed in the Company’s interim and annual reports.
Tadas Markevičius, Public Relations Manager, +370 676 28911, email@example.com