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Litgrid CEO Daivis Virbickas: We are focusing on sustainable long-term results
2017-02-23

Litgrid CEO Daivis Virbickas: We are focusing on sustainable long-term results

During the year 2016, the Litgrid Group reports an increase in revenues, costs and operating profits. The financial results were determined by the launch of the power links with Poland and Sweden, higher revenues from transmission services, connection of new producers and congestion. The results were also positively affected by higher electricity consumption due to the country’s economy growth.
 
'Good results of 2016 is a reflection of our targeted actions over the past several years. The implementation of power link projects, investments into the reliable operation of the transmission grid and power system, focus on operating efficiency were all very important achievements, yet we see it is far from enough yet. We aim at ensuring our long-term financial health, the factor to play a key role when implementing and financing key synchronisation projects we are now working on',  Daivis Virbickas, CEO of electricity transmission system operator Litgrid, said.
 
Revenues and costs
 
The preliminary unaudited revenues of Litgrid Group in 2016 were EUR 168.1 million, up 68% from the previous year. Revenues from electricity transmission accounted for the bulk of the Group's revenues – 40% Compared with 2015, an increase of 35% can be observed, totalling EUR 68 million. The increase was primarily due to the record growth of transmitted electricity. Electricity consumption in Lithuania amounted to 10.47 TWh (terawatt-hours) in 2016, a 4.5% rise compared to the the previous year and was the highest since 1992.  
 
Following the launch of power links NordBalt and LitPol Link, Litgrid's congestion revenues totalled EUR 11.4 million in 2016. Congestion revenues are the result of the formation of different electricity prices on the Lithuania’s, Swedish, Polish and Latvia’s electricity exchange markets caused by insufficient capacity of the power lines. These earnings can be used exclusively to ensure the distributed capacity of the links, and for investments into the network so as to retain or extend the capacity of the networks and ensure reliability of the system.
 
The Group's costs during 2016 amounted to EUR 146.2 million, up 50% compared to the same period the year before, the growth largely stemming from higher operating costs of the new power lines.
 
Operating profits
 
In 2016, Litgrid Group’s operating profits (EBITDA) totalled EUR 49.9 million, which is 88% higher than that of the previous year. EBITDA margin increased from 26.5% up to 29.7% in the course of the year. During the reporting period, unaudited operating profits Litgrid Group’s rose to EUR 18.5 million from EUR 1.4 million in 2015. The annual return on equity (ROE) ratio and return on assets (ROA) rose to 7.2% from 0.6% and to 0.4% from 0,3% respectively over the reporting period.
 
‘The responsibility of Litgrid to secure reliable electricity transmission increased in 2016 as electricity flows had undergone radical change and the country’s electricity consumption increased. The financial results of Litgrid Group reflect both proper functioning of the transmission network and more efficient management of the company's assets’, said Mr. Virbickas.
 
Investments
 
In 2016, Litgrid invested EUR 36.7 million, 50% for the implementation of strategic power engineering projects, and the reconstruction and development of the transmission network, each.
 
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