Latvenergo's audited profit last year was 212.733 million euros


In addition, the value of Latvenergo's profit in 2018 was significantly influenced by the dividends received from subsidiaries, which totaled EUR 177,646 million.

At the same time, the Latvenergo Group posted a turnover of 878.008 million euros, which represents 5.1% less than in 2017, but the Group's profit in 2018 decreased by 4.2 times and was 75.955 million euros. In 2017, the Group's profit was a result of the Group's operating profit of EUR 172.9 million and deferred tax deferred of EUR 149.1 million as a result of the corporate income tax reform.

Representatives of the company note that in 2018 the electricity market was affected by the hot and dry climate in Europe, which caused an unexpected increase in electricity prices. In these circumstances, the Group has effectively benefited from its diversified production facilities, generating the largest amount of electricity since 1990 at TECNVENERGO thermal power stations.

The company's management also notes that the Latvenergo Group's results were influenced by a 44% reduction in electricity generation at the Daugava Hydroelectric Plant due to the lower water input, as well as Latvenergo's decision to request a single compensation, rejecting 75% of the annual electricity capacity payments at TEC thus providing opportunities to reduce the mandatory takeover component (OIC).

In 2018, according to the company's management, the operation and results of the Latvenergo Group were also influenced by global and regional operating factors such as rising prices for electricity, natural gas and CO2 emissions. The long term hot and dry climate significantly reduced the development of the HPP, especially in Scandinavia, thus contributing to rising electricity prices across Europe. The average price of electricity in Latvia in 2018 was 44% higher than a year ago, reaching almost € 50 per megawatt-hour (MWh).

The company's management also reports that in January 2018, Latvia's status as the largest exporter of electricity in the Baltic States was maintained by Latvia, but in general the development of Daugava HPU in 2018, compared to the previous year, decreased by 44 % and added 2380 GWh (GWh). Thus, Latvenergo TEC played a very important role in ensuring the demand for electricity, which compensated for the shortage of hydroelectric power. In 2018, TEC's power generation was 2644 GWh, which represents 87% more than a year earlier. In total, Latvenergo produced 5076 GWh of electricity last year.

Retail customers in the Baltic countries sold a total of seven terawatts-hour (TWh) of electricity in 2018, which is approximately the same as a year ago, including 4.4 TWh of electricity in Latvia, 1.6 TWh in Lithuania and 0.9 TWh in Estonia.

The company also notes that in 2018, OIK decreased as a result of Latvenergo's decision to refuse to receive 75% of annual electricity capacity payments to the TEC while receiving a single compensation from the state. Thus, in 2018, the impact of the TEC on mandatory procurement and capacity payment fell from 37% to 15%, or 74.2 million euros.

The total amount of investments made by the Latvenergo Group in 2018 was 220.6 million euros. Big investments are invested in the modernization of networks – about 80% of total investments. 21.1 million euros were invested in the reconstruction of the water units of the Daugava HPP last year. Investments in large transmission projects – Kurzeme Ring and Third Energy Transmission Network between Estonia and Latvia – continued.

In 2018, the Group implemented internal process and management and external scanning projects for customers. At the end of the reference year, the percentage of smart meters installed by the "Distribution Network" was 49% of the total number of meters. Along with the digitization, the efficiency of the Group's operations has been increased, reducing the number of employees and resources needed, for example in the field of transport and real estate.

In 2017, Latvenergo had a turnover of 498.58 million euros and generated a profit of 150.891 million euros, while the Latvenergo Group operated with a turnover of 925.627 million euros and earned 322.021 million euros.

Latvenergo is engaged in the production and commercialization of electric and thermal energy, natural gas trading, electricity distribution service and leasing of transmission assets. The "Latvenergo" securities are listed on the Nasdaq Riga stock exchange.


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