In the first quarter Lietuvos Energija group improved its operating results
During the first quarter of this year, the state-controlled energy group Lietuvos Energija increased its efficiency and improved operating results in presence of lower service prices to consumers and lower generation of subsidised electric power. Strategic acquisition of shares of Lietuvos Dujos and LESTO completed in the second quarter increased the group’s value and its financial capacity.
Efficiency indicator of Lietuvos Energija group - earnings before interest, tax, depreciation and amortization (EBITDA) margin - accounted for 27.2 per cent during the quarter (compared to 23.1 per cent in the first quarter of 2013). During the first quarter of 2014, the group earned a total of LTL 195.5 million in EBITDA, which was 12.3 per cent more than a year ago.
“By an effective management of group’s activities, we managed to significantly increase group’s results and return on state property even in presence of lower tariffs to consumers, lower generation of subsidised electric power and saving public service obligations (PSO) budget. Financial strength of the group also increased during the quarter - with reducing debts the group’s capability to carry out large investment projects and strategic acquisitions that strengthen the entire energy sector enhanced” - said Dr. Dalius Misiūnas, Chairman of the Board and CEO of parent company of the group Lietuvos Energija.
During the first quarter of this year, Lietuvos Energija earned LTL 66.2 million of consolidated net profit, which was almost four times more than during Q 1 of 2013 (LTL 17.7 million). Revenue earned by the group amounted to LTL 721.4 million (compared to LTL 756 million in the respective period of 2013).
Increased financial strength
Good operating results and increased authorized capital by the transfer of 17.7 per cent of share package of Lietuvos Dujos on 6 March enhanced financial capacity of Lietuvos Energija - the equity of the group increased by 2.9 per cent (LTL 182.9 million) during the quarter and amounted to LTL 6.435 billion, while its assets grew by 1.7 per cent (LTL 168.1 million) to LTL 9.895 billion. Group’s net financial debt accounted for 5.9 per cent of the assets held as at the end of the first quarter (compared to 7.1 per cent at the end of 2013) and was LTL 381.4 million.
“In the second quarter Lietuvos Energija successfully completed a strategic transaction and acquired 38.9 per cent of shares of Lietuvos Dujos and 11.76 per cent of shares of LESTO at a favourable price of LTL 336.9 million. Efficiently used capital strengthened the group, since, as compared to similar transactions, the value of business acquired is greater than the price paid. The acquisition was important for the implementation of the group’s strategy. We believe that utilizing the potential provided by synergy and seeking for better efficiency we will create benefit for electricity and gas consumers” - said Dalius Misiūnas.
Given the prices effective on Nasdaq OMX Vilnius stock exchange 6 months before the transaction, the value of the acquired share package would be about LTL 457 million, or 26 per cent more than the price paid. A favourable share acquisition price is revealed by an enterprise value and EBITDA multiple (EV/EBITDA) – the EV/EBITDA of the acquisition of shares of Lietuvos Dujos was 5.5, while that of LESTO amounted to 3.6. The lower the indicator, the smaller is the price paid for received business activity results. For comparison, respective multiples of companies operating in the European energy sector form an average of about 7.5.
During the first quarter, group-owned Lietuvos Energijos Gamyba produced 0.25 TWh of electricity, while electricity distribution company LESTO distributed 2.21 TWh of electricity. After the withdrawal of four independent electricity suppliers from the electricity supply market in December 2013, LESTO ensured guaranteed electricity supply to their customers. Therefore, during the first quarter, compared to Q 1 of 2013, LESTO supplied to customers 5.1 per cent more electricity (0.91 TWh).
The Board of Lietuvos Energija has approved the group’s Operating Strategy for 2014-2020 aimed at doubling the value of the Group 2020.
SAIDI – System Average Interruption Duration Index.
SAIFI – System Average Interruption Frequency Index.
About Lietuvos Energija Group
The Lietuvos Energija Group is a state-controlled company group operating in power and heat generation and supply, electricity trade and distribution, maintenance and development of the electricity sector,natural gas import, distribution, trade, supply, market development, etc.
The Group companies provide services to more than 1.5 million customers across Lithuania, offer electricity supply services abroad, control and operate key Lithuanian power plants ensuring the security of energy supply, nation-wide distribution network, implement development projects of strategic importance, pursue the objectives of the National Energy Strategy.
The Group is comprised of the following companies: Lietuvos Energijos Gamyba, AB, electricity and heat generation and trading company, AB LESTO, electricity distribution network operator, and their subsidiaries as well as AB Lietuvos dujos, natural gas supplier, UAB LIGAS, UAB VAE SPB, UAB Duomenų logistikos centras, UAB Technologijų ir inovacijų centras.
About Lietuvos Energija, UAB
Parent company Lietuvos Energija, UAB is responsible for transparent management and coordination of activities of the Group.
The Company analyses the activities of the Group, represents the Group, exercises rights and duties of the shareholder, sets operating guidelines and rules, and coordinates the activities in the fields of power generation, commerce, finance, law, strategy and development, human resources, risk management, audit, technologies, communication, etc.
