Eesti Energia Group results for Q1 2015

Eesti Energia sales revenues reached 219.8 million euros in the first quarter of 2015, decreasing by 2.9% compared to the same period in 2014. Despite lower sales, Group EBITDA increased by 5.3% to 87.8 million euros in Q1´2015 and net profit amounted to 54.7 million euros (+7.1% y-o-y).

Financial results

Primary reason for group revenues decline in Q1 2015 were lower electricity sales revenues, which were mainly caused by low prices in the Nord Pool Spot wholesale market. Electricity sales revenue decreased by 12.8% to 100 million euros. Sales revenue from electricity distribution decreased 2% to 67 million euros, but a strong result was achieved in shale oil sales, as the sales revenue increased by 87.2% to 25 million euros on the back of doubled sales volume.

Group EBITDA in Q1´2015 was also under pressure by electricity sales, where the EBITDA decreased by 37.6% to 28 million euros. Among several negative influences the largest impacts were lower sales price and lower gains on financial hedges compared to last year. Group EBITDA in electricity distribution increased by 11.1% to 24.2 million euros and shale oil EBITDA more than doubled to 20.9 million euros. Furthermore, Eesti Energia earned 14.7 million euros EBITDA from other products.

Key Performance Indicators

Electricity sales amounted to 2.2 TWh in Q1 2015 (-1.7% y-o-y), of which sales in the retail market amounted to 1.6 TWh (-6.8% y-o-y) and sales in the wholesale market to 0.6 TWh (+13.3% y-o-y). Group average market share in Estonian retail market increased to 62% in Q1 2015, which is 2.2 percentage points higher year-on-year. Eesti Energia maintained 12% and 4% market shares in Latvia and Lithuania respectively, which in total resulted in 26% market share in the Baltic electricity market. Group generated 2.3 TWh of electricity in Q1 2015, which is 3.1% less than in Q1 2014.

Group distributed 1.8 TWh of electricity in Q1 2015(+0.2% y-o-y), while network losses decreased to 5.3% (-1.1 percentage points y-o-y). Production of shale oil increased by 36.9% to 84.7 thousand tonnes in Q1 2015, while sales volume of shale oil reached 70 thousand tonnes.

Capital Expenditure

Group capital expenditure amounted to 52.4 million euros in Q1 2015, which is 29% less than in the same period last year. Key investments were made into distribution network (17 million euros), as the roll out of smart meter program continued. Investment into new 300 MW Auvere power plant amounted to 7 million euros, in total 538 million euros have been invested since the launch of project in 2011. Maintenance investments (mainly in mining subsidiary and Narva power plants) reached 10.3 million in Q1 2015.

Financing, credit ratings and dividends

Group available liquidity as at 31 March 2015 amounted to 456 million euros, consisting of 206 million euros of liquid assets and 250 million euros of undrawn loan facilities. Group´s net debt reached 728 million euros at the end of Q1 2015, with net debt / EBITDA ratio reaching 2.3x and financial leverage 30%. Group retains credit ratings of BBB+ and Baa2 by Standard & Poor´s and Moody´s respectively, both with stable outlook. Government of Estonia has approved a net dividend payable by Eesti Energia at 95 million euros in 2015.


Given the Q1 2015 results and the current status in the wholesale power market, Group has reduced its sales revenues outlook and expects them to post a slight decline in 2015 compared to the year before. Similarly, Eesti Energia has revised lower EBITDA expectation and now forecasts to post declining EBITDA in 2015.

The Group has hedged 5.1 TWh of electricity generation (average price of 40.4 €/MWh) and 159,000 tonnes of shale oil sales (average price of 416 €/tonne) for Q2-Q4 2015. For 2016 the Group has hedged 3.1 TWh of electricity generation (average price of 38 €/MWh) and 11,000 tonnes of shale oil sales (average price of 353 €/tonne). In addition, group has hedged a further 120,000 tonnes of shale oil sales with options maturing in 2016.

To cover the CO2 emission expenses the Group has relied on forward contracts as well as certificates allocated free of charge to construct Auvere power plant. In total Group has CO2 position of 8.8 million tonnes (average price of 2.5 €/tonne) for the year 2015 and 13 million tonnes (average price of 3.8 €/tonne) for the year 2016.

More information on the financial results of Eesti Energia Group is available at Eesti Energia homepage