Net profit of the state-owned Estonian energy group Eesti Energia shrank 52 percent last year, to 77 million euros, while revenue grew 1 percent to 868 million euros.
Net profit of Eesti Energia shrinks 52 pct in 2012
1st March 2013, 16:59
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Revenue from electricity sales declined by 24.8 million euros year-on-year. Sales to households, which accounted for 53 million euros or 6 percent of total revenue, remained loss-making. Eesti Energia sold a total of 10 terawatt-hours of electricity last year, 6.4 percent less than the year before, the company said.
Revenue growth was mainly due to the 34.7 million euro increase in the sale of network services and the 16.9 million euro increase in the sale of shale oil. The group sold last year a record 189,000 tons of shale oil, 15.3 percent more than the year before.
The group's earnings before interest, tax, depreciation and amortization (EBITDA) grew 5 percent to 278 million euros. The drop in net profit was caused by a write-down of electricity production assets arising from changes on the electricity market and in state regulations pertaining to the company's business.
The most significant event last year was the end of the monopoly era on the Estonian electricity market, Eesti Energia CEO Sandor Liive said in the company's press release. "Tight competition has sprung up on the market and everybody can freely choose an electricity seller after their own heart," he said.
The opening of the market makes earning from the electricity business less predictable, Liive said. "Changing wholesale prices on the electricity exchange mean that competitiveness of our power plants is more important than ever before. Our future vision is more conservative. We consider it essential to develop flexibility to use oil shale more either in the production of electricity or of liquid oils depending on where it brings the most benefit to Estonians at the moment," he added.
Eesti Energia's investments last year were the biggest ever. The group invested a total of 514 million euros, 1.1 percent more than in the previous year. "More than 97 percent of this sum was invested in Estonia. Investments in foreign projects, which have attracted much attention, remain marginal in the general picture," Liive said.
The group's biggest investment in 2012 was 208 million euros in the construction of a new oil shale-fired power plant at Auvere near the northeastern city of Narva. Eesti Energia also spent 100 million euros on upgrading the networks of its distribution arm Elektrilevi and 54 million euros on completing its Enefit280 oil plant.
In addition 31 million euros was plowed into the waste incineration unit at the Iru power plant, 18 million euros into new wind parks at Narva and Paldiski, and 16 million euros into reducing sulphur emissions.