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The nine-month results of Litgrid: revenue and profits were up, the electricity transmission system operated reliably, strategic projects are effectively implemented

The Lithuanian electricity transmission system operator Litgrid has received more revenue and generated more net profit, improved the quality of services and, despite the Covid-19 pandemic, has effectively implemented strategic projects during the three quarters of this year.
"The key indicators of system reliability are not only in line with the objectives set but are also better than last year. Our customers can connect to the network much faster: we have shortened the connection time from 30 to 22 months, with the possibility to do everything even faster if it is undertaken by the customer himself. Strategic  projects - in particular, synchronization with the continental European networks - are moving forward with confidence, despite changing work environment and other challenges, presented by pandemic. Currently, the third project of 14 synchronization projects approved by the Government is being completed, namely the reconstruction of the Lithuanian Power Plant-Vilnius line. In total, more than a quarter of all synchronization work is done", says Vidmantas Grušas, Litgrid Interim CEO.
During the third quarter Litgrid has successfully performed a partial test run of the isolated Lithuanian electricity system. In October, the European Commission announced a record funding for the second phase of synchronization, allocating a total of 720 million euros to the three Baltic countries and Poland.
Transmission system operated reliably
The reliability of the system is measured by Litgrid in accordance with international practice by two main indicators - the average interruption time (AIT) and the amount of energy not supplied (ENS). In the first nine months of this year, both of these indicators were better, i.e., smaller than last year.
The AIT amounted to 0.155 minutes, compared to 1.120 minutes last year, and the ENS amounted to 4.818 MWh this year, compared to 32.033 MWh last year. The company's objectives for 2020 stipulate that the AIT may not exceed 0.29 minutes and the ENS 6.300 MWh.
Nine-month overall availability of NordBalt and LitPol Link interconnectors with Sweden and Poland in 2020 was 96.61% and 97.51%, respectively. During the same period last year, NordBalt's overall availability was 96.83% and LitPol Link's (excluding disconnections due to scheduled work) 99.99%.
Revenue was up and costs were reduced
Litgrid's revenue amounted to 149.1 million euros. This is an increase of 9.4% compared to the same period last year, when revenues amounted to 136.2 million euros.
Revenues from electricity transmission increased by 18.6 percent up to 60.6 million and accounted for 40.6% of Litgrid's total revenue. Revenue growth was determined by 22 percent higher average actual electricity transmission price. The above-average winter season temperature and the impact of the COVID-19 pandemic reduced the amount of electricity transmitted by 3.1 percent and amounted to 7.337 TWh.
Revenues from system services increased by 20.8% up to 62.8 million and accounted for 42.1% of Litgrid's total revenue. Growth has been determined by 28 percent higher cost of system services set by the National Energy Regulatory Council on 1 January 2020. The volume of system services decreased by 4.5 per cent during the reporting period. Imbalance and balancing electricity revenues decreased by 28.7 percent, up to 14.4 million and accounted for 9.7% of Litgrid's total revenue. The decrease was due to lower average sales price.
During this difficult period, the company has managed to reduce costs – during 9 months in 2020, they amounted to 128.9 million euros, 6.1 percent lower than in the same period in 2019, when costs were 134.9 million euros.
Purchase costs of electricity and related services decreased by 8% and amounted to 93.3 million euros. Imbalance and balancing electricity costs decreased by 29 percent, up to 14.1 million, whereas the cost of system services increased by 11%, up to 61.3 million euros. The costs aimed to compensate for the technological losses of electricity purchase in the transmission network decreased by 39%, up to 10.5 million euros due to the lower purchase price. Other expenses increased by 13.8 percent, from 18.1 to 20.6 million euros.
Results and investments
EBITDA for the first nine months of 2020 was 36.5 million euros, and compared to the same period last year, when it was 16.6 million euros, increased by 126 percent. EBITDA margin increased from 11.8% up to 24.5 percent.
EBITDA growth was mainly determined by 9.5 million higher electricity transmission revenue, 6.8 million euros lower costs of compensation for technological losses, 1.5 million euros positive balance of revenues and expenses of system services (the balance for the first nine months of 2019 was negative and amounted to -3.4 million).
The company’s net profit for the first nine months of 2020 was 18.5 million euros; as compared to the same time in 2019, it amounted to 0.6 million euros.
Litgrid's total investments for the first nine months of 2020 amounted to 33.4 million euros, of which 56% was allocated for the implementation of strategic and state-important electricity projects, 43 percent - reconstruction and development of the transmission network.
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