INTER RAO Lietuva Group announces the results for the 9-month period – The trading volumes slightly increased, incomes and profits decreased

• Electricity trading volume increasedto 3 221 GWh in the 9M 2016 from 3 152 GWh in the 9M 2015.
• The electricity trading volume in Poland increased to 302 GWh in the 9M 2016 from 207 GWh in the 9M 2015.
• Group’s revenue from sales decreased by 9.2 %, to EUR 124.1 million, compared to EUR 136.7 million in the 9M 2015, due to the lower prices in wholesale and retail markets and the historically low wind speeds.
• Group’s gross profit decreased to EUR 13.9 million from EUR 21.4 million in 9M2015.
• Operating profit reached EUR 8.7 million, versus EUR 16.4 million in 9M 2015.
• Group’s net profit was EUR 6.9 million, compared to EUR 13.5 million in 9M 2015.
• Group’s EBITDA was EUR 10.6 million while EBITDA margin decreased to 8.5 percent from the high 13.4 percent a year ago.

– The results of the INTER RAO Lietuva Group in the third quarter of the year were influenced by the same factors, which affected all the participants of the electricity market in the Baltics. The highly negative meteorological conditions and the historically low wind speeds affected the production and sales of the generated electricity. The average lower and highly volatile electricity prices in the market after introducing NordBalt and LitPol Link power interconnections and their multiple unplanned disconnecting influenced the revenues and the profitability results. Despite this, the Group reached good profitability results, but not so good as in the very successful year 2015. The net profit of the Group was EUR 6.9 million and the net profit margin reached 5.6%. The Group has earned EUR 0.34 per share – says Giedrius Balčiūnas, CEO at INTER RAO Lietuva.

Key Financial figures of IRL Group

Revenue from sales

The total consolidated Group’s sales revenue in January-September of 2016 was equal to EUR 124 million, a 9.2 per cent less than in the first 9 months of 2015. Total revenue declined due to on average lower and highly volatile electricity prices in the market, after introducing NordBalt and LitPol Link power interconnections and their multiple unplanned disconnections during first half of 2016 (the NordBalt was not operational approx. 60% of time during the first half of 2016). The decline was also caused by much worse meteorological conditions, which negatively affected electricity generation and sale from the wind park owned by the Group. The slight increase in the amount of electricity traded was mainly influenced by Estonian and Polish subsidiaries as those companies signed more contracts with their clients.

Group’s revenue from purchases and sales of electricity in the first 9 months of 2016 amounted to EUR 121 million compared to EUR 132.7 million in the same period a year ago. Revenue from produced electricity sales accounted for EUR 3.2 million, the 22 per cent less than in the same period a year ago. During the accounting period Vydmantai wind park, UAB has produced a lower amount of electricity compared to long-term average, due to negative meteorological conditions: historically low wind speeds.

Expenses

Group’s cost of sales in January-September of 2016 accounted to EUR 110.2 million, the 4.5 per cent less than during the first nine months of 2015. Despite the higher amount of electricity traded, the cost of sales of the Group were lower compared to the results a year ago. Cost of sales of electricity production stayed at the same level as at the same period a year ago, and cost of sales of electricity purchased and sales were lower by 4.5 per cent.

Group’s cost of purchased electricity in the first 3 quarters of 2016 amounted to EUR 106.5 million. Group’s cost of purchased electricity comprised 96.7 per cent of total cost of sales.

Earnings

Gross profit of the Group in January-September of 2016 amounted to EUR 13.9 million (compared to the EUR 21.4 million), while the gross profit margin decreased to 11.2 per cent (15.62 per cent a year ago).

Group’s operating profit over the same period accounted to EUR 8.7 million, while the operating profit margin decreased to 6.97 per cent from 11.95 per cent a year ago.

Group’s EBITDA for the first 9 months of 2016 was EUR 10.6 million. Group’s EBITDA profit margin decreased from 13.35 per cent in first 9 months of 2015 to 8.51 per cent in the same period in 2016.

Group’s net profit in the January-September of 2016 amounted to EUR 6.9 million, if compared to the profit of EUR 13.5 million for the same period year ago. The profit margin decreased from 9.87 per cent a year ago to 5.55 per cent in the accounting period.