QI 2017 Lietuvos Energijos Gamyba, AB (LEG) Egl iuait - - PowerPoint PPT Presentation

Presentation of the Company‘s performance and results QI 2017

Lietuvos Energijos Gamyba, AB (LEG)

Eglė Čiužaitė 15/05/2017Vilnius

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Content

About the Company Most significant events in QI 2017 Market overview Company‘s performance indicators Company‘s financial results A glimpse into the future Your questions

Planned duration: 20 min + Your questions

Presented by

EGLĖ ČIUŽAITĖ

Chairwoman of the Board and CEO Moderated by

VALENTAS NEVIERA

Head of Communication

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LEG provides services that are necessary for the energy system security

ELEKTRĖNAI COMPLEX KRUONS PSHP KAUNAS A. BRAZAUSKAS HPP

Production of electricity and heat Commercial production of electricity Commercial production of electricity System services (main – tertiary reserve), strategic reserve System services (main – secondary reserve) System services Capitalization 31/03/2017

€ 405

million Shareholder structure

96.75% - Lietuvos Energija, UAB 3.25% - minority shareholders

Minority shareholders – more than

5 900

L E

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LEG – reliable and modern company, important part of Lietuvos Energija Group

LEG has 404 high competence employees in total Management system of LEG is in line with the highest standards

• f Corporate

governance practices

15% 85% 85% 15% 10% 54% 36%

SUPERVISORY BOARD

• M. Keizeris

Chairman

• D. Tučkus

Member

• P. Vilkas
• Ind. member

MANAGEMENT BOARD

• E. Čiužaitė

Chairwoman

• D. Kucinas

Member

• M. Kvekšas

Member

• M. Gražys

Member

LEG starts the chain of service value of Lietuvos Energija Group of companies

Production Supply and trading Distribution Client services Services

EURAKRAS TUULEENERGIA

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Most significant events in QI 2017

7th unit was activated for the test

• f tertiary reserve services

provision

6

January

Start of the decommissioning project of units 5 and 6

25

January

Renewal of the organizational structure of LEG

1

March

First technical maintenance services for external clients

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March

Decision to pay dividends for the six-month period ended 31 December 2016

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March

Finish of the decommissioning project of units 1 and 2

31

March

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Market overview: LEG power plants face high competition

0% 20% 40% 60% 80% 100% 2016 IQ 2017 IQ

Electricity balance in Lithuania, % of full demand

Other Wind power plants Kaunas A. Brazauskas HPP Kruonis PSHP Elektrėnai Complex Import

2710 GWh 2649 GWh

10 20 30 40 50 60 70 1 2 3 4 5 6 7 8 9 101112 1 2 3 €/MWh

Axis Title

Wholesale electricity prices in NP Lithuania price zone

Peak (6-22 h) Off-peak (22-6 h) NP LT price (0-24 h) 2016 2017 70 90 110 2016 IQ 2017 IQ

Intraday trading volumes in the Baltic countries, GWh

Buy Sell

+34% +41%

Source: Energijos tiekimas, Nord Pool

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10 20 30 €/MWhA

Axis Title

Purchase price of gas

8 12 16 €/MWhA

Axis Title

Purchase price of biomass

4 6 8 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 €/t CO2

Axis Title

Price of CO2 emission allowances (EUA)

Market overview: prices of materials decreased, as well as pollution taxes

2016 2017

Source: Company‘s accounting information, Platts Remark: gas price – lwithout taxes for user capabilities and without constituent for security of LNGT

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• 32%
• 82%

More production at Kaunas hydro power plant, less operation of other plants

+12%

6 34 104 153 132 118

50 100 150 200 250 300 350 IQ 2017 IQ 2016

Generation of LEG power plants, GWh

Elektrėnai Complex Kruonis PSHP Kaunas A. Brazauskas HPP

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19% 37% 15% 6% 3% 13% 3% 4% 21% 28% 18% 7% 3% 11% 3% 9% Purchases of electricity or related services Gas, biomass and heavy fuel expenses Depreciation and amortisation Wages and salaries and related expenses Repair and maintenance expenses Emission allowance revaluation expenses Reversal of impairment of other non-current assets Other expenses Column1

IQ 2017 COSTS – € 27.4 mln 22% decrease IQ 2016 € 35.2 mln

Decrease in revenue – in line with effective costs‘ control

31% 4% 20% 8% 37% 36% 6% 32% 25% 1% 11% Revenue of sales of electricity energy and related services Revenue of sales of heat production Revenue of sales of capacity reserve services Subsidies for strategic reserve Revenue from other operations Column2 Column3 Column4

IQ 2016 € 53.3 mln IQ 2017 REVENUE – € 32.1 mln 40% decrease

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Profitability of main activities increased

2.3 8.7 5.8 7.3 5.8

28.3 45.2 38.8 25 50 5 10 15 20 IQ 2016 IQ 2017

% € mln

EBITDA and EBITDA margin

Commercial activities Impact of regulators decisions Regulated activities EBITDA margin EBITDA margin considering the impact of regulators decisions

14 4 8.2 7.8

5 10 15 IQ 2016 IQ 2017

€ mln

Net profit

Net profit Net profit after the elimination of one-off factors and EUA market price change

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Efficiency of main activities Decommissioning projects Investment projects New services

A glimpse into the future: long-term perspective

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A glimpse into the future: things to follow in II-IIIQ 2017

Reserve services for 2018:

• Regulation lags behind the market needs, therefore tertiary reserve auctioning for 2018 remains unclear,
• Demand of strategic reserve?

Kruonis PSHP Unit 5:

• Public discussion on development perspectives to be initiated

Compensation from Alstom:

• No official information received

Disputes with the regulator started in 2014-2015:

• Several court decisions are expected

Changes in management:

• New member of the board in June 2017

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A glimpse into the future: good news spring

More production: Flood in river Nemunas, generation in Elektrėnai (by CCGT) Informing more frequently: Preliminary results – every month

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Koliažas

Thank You! Your questions?