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INTER RAO Lietuva Group announces financial results for 9M 2021 – Situation in the markets bumped up the revenues, but the net profit slightly decreased

  • Revenues from sales in 9M 2021 increased by 77.8 per cent y/y to EUR 313.2 million due to higher amounts and prices of the electricity sold, especially in Poland and Latvia.
  • Despite the increase in sales, the Group’s gross profitability shrank to 5.76 per cent compared to 10.13 per cent a year ago.
  • Group’s gross profit on sales reached EUR 27.4 million, versus EUR 17.8 million in 9M 2020.
  • Consolidated EBITDA amounted to EUR 20.5 million versus 14.1 million in 9M 2020, while the EBITDA margin decreased to 6.5 per cent compared to 8.0 per cent a year ago.
  • Operating profit reached EUR 19.4 million, versus EUR 11.4 million in 9M 2020.
  • Group’s net profit amounted to EUR 8.4 million compared to EUR 9.9 million a year ago.
  • Electricity sales volume equalled 5 748 GWh, compared to 4 130 GWh in 9M 2020.
  • The amount of traded electricity in Poland increased to 1 663 GWh, versus 1 336 GWh a year ago.

 “During the reporting period, the INTER RAO Lietuva Group managed to successfully handle risks coming from a challenging market environment and this year’s sudden increase in average electricity prices observed especially in the 3Q 2021. The Group sold a larger amount of electricity in the Polish and Latvian markets but produced less electricity at the Vydmantai wind power plant due to a lower average wind speed in the region. The INTER RAO Lietuva Group generated a gross profit on sales of EUR 27.4 million, EBITDA increased to EUR 20.5 million with the margin of 6.6 per cent, net profit reached EUR 8.4 million with the margin of 2.7 per cent. The Group generated earnings of EUR 0.42 per share,” says Giedrius Balčiūnas, CEO at INTER RAO Lietuva.

Key figures of IRL Group

Financial figures 9 months 2021 9 months 2020
Sales (EUR thousand) 313,199 176,126
Gross profit (EUR thousand) 27,428 17,842
Gross profit margin (%) 8.76% 10.13%
Operating profit (EUR thousand) 19,443 11,369
Operating profit margin (%) 6.21% 6.46%
EBITDA (EUR thousand) 20,504 14,132
EBITDA profit margin (%) 6.55% 8.02%
Net profit (EUR thousand) 8,364 9,939
Net profit margin (%) 2.67% 5.64%
Number of shares (thousand) 20,000 20,000
Earnings per share (EUR) 0.42 0.50

 Revenue from sales

The Group’s sales revenue in the period January-September 2021 was equal to EUR 313.2 million, a 77.8 per cent increase compared to the first 9 months of 2020. The total revenue increased due to higher volumes of electricity sold and higher prices of electricity in the NordPool market. The increase in the amount of electricity traded resulted mainly from the increase in sales in the Polish and Latvian markets.

The Group’s cost of sales in the period January-September 2021 amounted to EUR 281.0 million, 80.5 per cent more than during the first 9 months of 2020. Similarly, the increase was a result of higher amount of electricity traded and higher electricity purchase prices.

Earnings

Despite the increase in sales, the Group’s gross profitability declined to 8.8 per cent in the period of January-September 2021, compared to 10.1 per cent in January-September 2020. The gross profit of the Group amounted to EUR 27.4 million (compared to EUR 17.8 million a year before).

The Group’s operating profit over the same period amounted to EUR 19.4 million, while the operating profit margin slightly decreased to 6.2 per cent from 6.5 per cent a year ago.

In segment breakdown, the contribution of the power generation segment to the Group’s operating profit shrunk to just 1.9 per cent from the high 21.6 per cent reported in the first 9 months of 2020. During the reporting period, Vydmantai wind park, UAB produced less electricity compared to the 9M 2020, due to much worse meteorological conditions.

Operating results by segment

Segment Electricity trade Power generation
(EUR thousand) 9M 2021 9M 2020 9M 2021 9M 2020
Revenues 311,728 171,555 1,471 4,571
Operating profit 19,077 8,908 366 2,461
Operating margin 6.1% 5.8% 24.9% 53.8%

Net result of financial activities of the Group in the first 3 quarters of 2021 amounted to EUR (-11.6) million, if compared to EUR 0.6 million net financial profit during the same period a year ago. It should be noted that the loss is attributed to the cost of financial hedging instruments for hedging electricity sale price.

The Group’s net profit in the period of January-September 2021 decreased by 15.8 per cent to EUR 8.4 million, compared to the profit of EUR 9.9 million for the same period a year ago. The net profit margin shrank from 5.6 per cent a year ago to 2.7 per cent in the reporting period.

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