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Litgrid Group‘s Results for the First Six Months of 2017

Litgrid Group‘s Results for the First Six Months of 2017

During the first six months of the year, Litgrid Group has retained sustainable financial results. Income from core activities was increasing, and both the return on equity ratio and the return on assets ratio were improving.
The revenues from electricity sales in the said period grew by 0.9% to EUR 34 million. The National Commission for Energy Control and Prices had set a 2.75% lower tariff rate for electricity transmission services for 2017, however, growth in this type of income was maintained by larger electricity transmission volumes. Revenues from system services increased 15.4% to EUR 21.4 million. This was determined by an 11% higher system service tariff rate set by the Commission.
‘Income from core activities increased due to a consistent growth in the demand for electricity in Lithuania. During the first six months of 2017, consumption of electricity increased 2.67% to 5.3 TWh year-on-year. The most significant increase in the demand was observed in industry (3%) followed by the service sector (2.4%) and households (2.2%)’, says Daivis Virbickas, Litgrid CEO.
Total income of the Group for the first 6 months of the year was EUR 78.1 million (-7.8% compared with the same period of 2016). The decrease mainly resulted from lower income from balancing energy and other activities. Costs of the Group in the reporting period totalled EUR 71 million (-4.5% compared with 2016). Lower balancing electricity costs were the main contributor to the decrease.
Management of the new power links remained one of the challenges during the first six months of 2017. ‘It is obvious that both the electricity transmission system operator and the market participants are adapting to the new electricity flows generated by NordBalt and LitPol Link. This is demonstrated by the lower demand for balancing electricity. Income from balancing electricity has decreased by one third – to EUR 8.3 million, whereas the costs were cut 37.4% to EUR 5.9 million’, says Daivis Virbickas.
According to Litgrid’s CEO, the duty of the operator is to ensure the reliable operation of the new power links, therefore, as the number of outages in NordBalt is unsatisfactory, preparations are made for a cable joint replacement programme to be implemented jointly with Svenska kraftnät, the Swedish electricity transmission system operator.
The EBITDA of Litgrid Group for the first six months of the year was EUR 20.4 million and the EBITDA margin was 26.1%. The Group’s net profit was EUR 5.2 million (same period of previous year: EUR 8.6 million).
Return ratios of the Group were increasing: compared with the first 6 months of previous year, the return on equity (last 12 months) increased from 3.1% to 5.1%, return on assets (last 12 months) increased from 1.4% to 3.1%.
Litgrid’s investments in the first 6 months of 2017 totalled EUR 10.5 million, 50% of which were earmarked for the implementation of strategic electric power projects and the reconstruction and development of the transmission grid.   
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