Results of Ignitis Group for the first half of 2021 were driven by Green Generation development

• Adjusted EBITDA of Ignitis Group in H1 2021 reached EUR 168.4 million and recorded 30.5% growth, compared to the same period last year.
• Adjusted EBITDA increase in all segments was mainly led by Green Generation installed capacity growth.
• Considering the solid H1 2021 performance, we maintain the EUR 300–310 million Adjusted EBITDA 2021 guidance.

Adjusted EBITDA of the international energy company Ignitis Group in H1 2021 was 30.5% higher compared to analogous period last year and reached EUR 168.4 million. Solid adjusted EBITDA increase in all segments was mainly led by Green Generation installed capacity growth, also better results in the Customers & Solutions segment and increased volume of distributed energy in the Networks segment.

The growth in Green Generation segment of Ignitis Group was mainly driven by the operations of Kauno Kogeneracinė Jėgainė (Kaunas CHP) and COD of Vilniaus Kogeneracinė Jėgainė (Vilnius CHP) waste-to-energy unit as well as better results of Kaunas HPP. Better results in Customers & Solutions segment were driven by favourable price changes in the gas market, and in the Networks segment – by higher distributed volumes due to colder weather

“The first half of 2021 continued to showcase growth in financial and operational performance of Ignitis Group and progress in the development of objectives set out in the Group strategy and sustainable development. As planned, we launched one of the units of Vilnius CHP and entered the Latvian renewables market by signing conditional contracts to acquire three wind farms in early stage of development. Further focused and sustainable development of Green Generation capacities and effective utilisation of competences of the area should be ensured by the consolidation of renewable energy companies of the Group. We also achieved significant results in the Networks segment – we concluded an agreement with an infrastructure supplier for approximately 1.2 million of smart meters. Additionally, the segment puts a great focus on connection of new customers and capacity upgrades as well as network maintenance”, said Darius Maikštėnas, the Management Board Chair and CEO of Ignitis Group.

Outlook for 2021 

Driven by robust H1 2021 financial results, Ignitis Group reiterates Adjusted EBITDA guidance of EUR 300–310 million for 2021, representing 3-6% increase compared to 2020 actual result, which is mainly supported by the growth in Green Generation segment due to the full-year result of Kaunas CHP which was launched last year, the start of commercial activities of Vilnius CHP’s WtE unit, and Pomerania WF. 

Shareholder return 

Subject to approval at Extraordinary General Meeting of Shareholders and in line with dividend policy, Ignitis Group intends to pay EUR 43.75 million in dividends (or dividend per share in the range of EUR 0.589 – 0.599¹) for the first half of 2021. 

Strategy delivery 

During the reporting period, Ignitis Group increased its Green Generation installed capacity by 43 MW to 1,120 MW compared to H1 2020, as a result of the launch of Kaunas CHP (24 MWe, 70 MWth) in August 2020 and Vilnius CHP’s WtE unit (19 MWe, 60 MWth) in March 2021.  

All remaining Green Generation projects are fully on track with exceptions for Pomerania WF (94MW) and Polish solar portfolio I (up to 170MW). In Pomerania WF all turbines are fully constructed and currently generate electricity, however, COD is expected around Q3 2021 once the generation licence is obtained. This reflects around 6-month COD delay, which resulted mainly due to COVID and other typical development project risks. In Polish solar portfolio I, agreement renegotiations with the developer (Sun Investment Group) have been initiated, as no projects were awarded CfD tariff in the last two auctions.

Additionally, after the reporting period, the Group increased its Green Generation pipeline by around 160 MW as a result of signing a conditional agreement for an acquisition of 3 early-stage wind farm development projects in Latvia. 

Ignitis Group has also initiated  consolidation of the Group’s renewable energy assets. This will allow to ensure a more competitive, flexible and effective implementation of Green Generation projects, strengthen the financial capacity of UAB “Ignitis Renewables”, as well as grow and broaden the competences of the area. 

In the Networks segment, the Group concluded an agreement with a supplier, which will be responsible for the smart metering infrastructure, and set a framework to comply with all high market standards, including cybersecurity related, which resulted in the replanning of the project end date to 2025 (from 2023). On the other hand, the Group continued the Networks expansion by connecting new customers and installing upgrades as well as maintained the grid mostly by replacing the overhead lines to underground cables. 

In H1 2021, investments amounted to EUR 76.9 million and were lower by 58.9% compared to H1 2020. It is mainly due to lower investments in Vilnius CHP due to rescheduled investment timeline, Kaunas CHP as it was launched in August 2020, and Pomerania WF as it is approaching commercial operation date. That said, the decrease was partly offset by higher investments in the Networks segment. 

Sustainability and governance 

In H1 2021, Ignitis Group has continued to develop a GHG management plan for delivering on our commitment to net zero GHG emissions in 2050. The Group is currently working with the Science-based Targets initiative to ensure that its interim reduction targets are aligned with this ambition. We expect to publish the interim targets in Q3 2021. 

As a result of the efforts to move towards ESG excellence, Ignitis Group is now ranked as a leader among global industry peers rated by MSCI, with an ESG rating of ‘AA’ (on a scale of ‘CCC-‘AAA’), which was upgraded from ‘A’ in July 2021. This upgrade is in large part due to the recognition of the Group’s continuous commitment to climate action, expansion of  renewable energy portfolio, and the streamlining of key social and governance practices. 

Corporate governance developments 

Term of the Supervisory Board of the Company expired on 29 August 2021 and due to still ongoing selection process managed by the Majority Shareholder (Ministry of Finance of the Republic of Lithuania), no new members are assigned yet. However, it does not intend to affect performance of the Group as the new Supervisory Board is expected to be appointed in our General Meeting of Shareholders by the end of October 2021.

Key financial indicators (APM²) for the H1 2021 

¹ In case the Company, based on the decision of Extraordinary General Meeting of Shareholders held on 29 July 2021, would acquire its own shares by the end of the rights accounting day, i.e. by the end of 11 October 2021 (dividend record date), dividend per share may proportionally adjust depending on the number of shares acquired by the parent company but would not exceed the maximum level of EUR 0.599 (calculated on the basis of maximum number of shares which the parent company is eligible to acquire). Despite that, the total amount of dividends or EUR 43.75 million would remain the same. 

² All, except net profit are Alternative Performance Measures.Formulas of the Group’s financial indicators are available on the Group’s website (link). 

Earnings call 

In relation to the announcement of the interim report, an earnings call will be held on 31 August 2021 at 11:00 am Vilnius / 9:00 am London.  
To join the earnings call please register at: https://edge.media-server.com/mmc/p/8nqe4aft 
Alternatively, you can join the earnings call through the dial in numbers below: 
United Kingdom, London: +44 20 7192 8338 
Lithuania, Vilnius: +370 5 214 0081 
United States, New York: +1 (646) 7413-167 
Event Plus Passcode: 5082919 

All questions can be directed in advance to the Group’s IR, when registering for the earnings call or live during the call.  

Presentation slides will be available prior to the conference call:  
https://ignitisgrupe.lt/en/reports-and-presentations

The interim report will be available for download at:  
https://ignitisgrupe.lt/en/reports-and-presentations