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INTER RAO Lietuva Group announces financial results for 2020 – Net profit of EUR 12 million despite lower volumes delivered and the sharp decrease in the electricity market price

  • Electricity sales volume decreased to 5 781 GWh in 2020 versus 8 539 GWh in 2019 due to the sharp decrease in the electricity market price and the decrease in the overall electricity demand.
  • Revenues from sales reached EUR 163.4 million, compared to EUR 317.0 million in 2019, because of lower amount of electricity sold.
  • Group’s gross profit in 2020 was EUR 23.2 million, compared to EUR 24.5 million in 2019.
  • Operating profit decreased to EUR 12.0 million versus EUR 15.2 million a year ago.
  • Group’s net profit reached EUR 12.2 million, compared to EUR 17.6 million in 2019.
  • Group’s EBITDA reached EUR 19.5 million, while the EBITDA margin increased to 12.0%.
  • Electricity production at the Vydmantai wind farm increased by 14.7% y/y due to better wind conditions in the area.
  • The electricity trading volume in Poland increased to 1 825 GWh from 1 558 GWh in 2019.

–  The year 2020 was challenging for all market participants and marked by a sharp decrease of 26,2% y/y in the average electricity market price that caused lower volumes and revenue amounts from electricity traded. The drop-off of the price came on the back of the warm winter in Scandinavia which led to higher electricity production by hydro power plants and lower overall electricity demand in the whole region because of the Covid-19 situation. Despite this decrease, the INTER RAO Lietuva Group fulfilled all of its contractual obligations of electricity sales at prices agreed upon in the contracts. The Group managed to deliver the best possible results in this challenging market situation. Better wind conditions than the estimated long-term average led to one of the best results of Vydmantai wind park since the beginning of its operation in 2006: the electricity produced by the wind farm reached 74 GWh. The Group managed to generate 14.23% gross profitability and the net profit of 12.2 million. The net profit margin during the year improved from 5.57% to 7.47% and the Group reported earnings of EUR 0.61 per share – says Giedrius Balčiūnas, CEO at INTER RAO Lietuva.

Key figures of IRL Group

Financial figures

 

2020

2019

2018

Sales [Revenues from contracts with customers] (EUR thousand)

 

163,371

317,034

288,269

Gross profit (EUR thousand)

 

23,240

24,461

22,716

Gross profit margin (%)

 

14.23%

7.72%

7.88%

Operating profit [profit from operations] (EUR thousand)

 

11,993

15,163

14,934

Operating profit margin (%)

 

7.34%

4.78%

5.18%

EBITDA (EUR thousand)

 

19,543

22,432

17,743

EBITDA profit margin (%)

 

11.96%

7.08%

6.16%

Net profit (EUR thousand)

 

12,209

17,647

11,454

Net profit margin (%)

 

7.47%

5.57%

3.97%

Number of shares (thousand)

 

20,000

20,000

20,000

Earnings per share (EUR)

 

0.61

0.88

0.57

         

Financial ratios

 

2020

2019

2018

Return on capital employed (%)

 

55%

63%

68%

Return on assets (%)

 

24%

27%

19%

Return on shareholders’ equity (%)

 

49%

60%

66%

Gearing ratio

 

0.05

0.17

0.45

Net financial debt to equity

 

-0.85

-0.75

-0.74

Equity to assets ratio

 

0.5

0.45

0.28

Current ratio

 

1.47

1.35

1.02

Rate of turnover of assets (%)

 

31%

21%

21%

Revenues from sales

Consolidated sales revenues declined in 2020 by almost a half y/y to EUR 163.4 million. Total revenue decreased mainly due to a sharp decrease in volume (5 781 GWh in 2020 vs. 8 539 GWh in 2019) and electricity market price. The Group recorder lower volumes and revenue from electricity traded mainly in Lithuania. The average annual electricity price in 2020 in the Lithuanian Nord Pool Spot zone equaled 34.04 EUR/MWh compared to 46.08 EUR/MWh in 2019, a 26.2% decrease y/y.

Revenues from produced electricity sales amounted to EUR 6.4 million in 2020, which represents a 14.7% increase y/y. The increase in electricity production was mainly caused by better wind conditions in the area of the Vydmantai wind park. The average wind speed in the area was 6.7 m/s in 2020 compared to 6.5 m/s in 2019.

In 2020 the Group fulfilled all its contractual obligations and delivered electricity to its clients at prices agreed upon in the contracts. Electricity was provided to clients without any delays or disturbances and the Company remains a trusted counterparty and a reliable electricity supplier. Inter RAO Lietuva Group’s client base decreased from 965 at end of 2019 to 814 at end of 2020.

Earnings

Consolidated gross profit in 2020 decreased by 4.5% y/y, reaching EUR 23.4 million (vs. EUR 24.5 million in 2019). However, the gross profit margin almost doubled to 14.2% in 2020 from 7.7% in 2019.

Consolidated profit from operations decreased to EUR 12.0 million in 2020, versus EUR 15.2 million in 2019. Operating profit margin for the Group increased to 7.3%, compared to 4.8% a year ago.

In segment breakdown, due to better meteorological conditions at the Vydmantai wind power plant and despite the fact that it accounts for just 3.9% of the Group’s top line, the power generation segment reported its contribution to the Group’s operating profit at the level of 12.8%, compared to 17.5% a year before.

Operating results by segment

Segment

Electricity trade

Power generation

(EUR thousand)

2020

2019

2020

2019

Revenues

156,958

311,445

6,413

5,589

Operating profit

10,456

12,520

1,537

2,643

Operating margin

6.7%

4.0%

24.0%

47.3%

Profit before tax and the net profit of the Group in 2020 decreased y/y and amounted to EUR 14.7 million and EUR 12.2 million respectively. The Group’s net profit margin in 2020 increased to 7.5% (compared to 5.6% a year ago).

The Group generated a profit of EUR 0.61 per share in 2020 (EUR 0.88 in 2019).

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