Eesti Energia profit €54 million so far this year
Eesti Energia posted €1.2 billion in revenue and €54 million in normalized net profit for the first nine months; Q3 brought a €61 million normalized net loss.
Eesti Energia said its results were affected by low electricity prices, higher balancing energy costs and scheduled maintenance at production units.
Marlen Tamm, Eesti Energia's chief financial officer, explained that the third-quarter loss reflects a challenging market environment.
"Quarterly results were significantly impacted by seasonal factors such as scheduled maintenance of production assets. In addition, low market prices and an impairment of the [Auvere] oil plant's book value due to a prolonged construction period affected performance," Tamm said. "To adapt to changing market conditions, we're building an integrated electricity business to improve asset productivity. This shift will help us better monetize energy produced during low-price hours and boost the profitability of our electricity operations."
In the third quarter, Eesti Energia Group produced 425 gigawatt-hours of electricity — 38 percent less than during the same period last year. Of that, 86 percent (369 gigawatt-hours) came from renewable sources.
"The electricity market is adjusting to a new reality — large volumes of renewable energy have entered the Baltic market, pushing prices down. At the same time, balancing costs in the electricity business have surged following the desynchronization of the Baltic grid, while the opening of frequency markets has created new revenue streams," Tamm said. "With low market prices and high balancing costs, it's becoming increasingly difficult for electricity producers to turn a profit."
Due to low market prices, dispatchable generation units were unable to enter the market for much of the quarter, producing just 57 gigawatt-hours of electricity — an 83 percent drop compared to the same period last year.
"The third quarter is typically a seasonal low for our production, primarily due to planned maintenance at both power plants and oil facilities. This is the best time to prepare our plants for the peak production season — the fourth and first quarters — when electricity demand is highest," Tamm said.
The company invested €104 million in the third quarter, down 37 percent year-on-year. Over 40 percent of that went to DSO Elektrilevi's grid investments, while nearly a quarter was directed toward Enefit Green's renewable energy development.
According to Tamm, the company's goal is to continue targeted investments in storage solutions, dispatchable capacity and renewable energy assets in order to grow the group's production portfolio profitability.
"Our goal is to sell electricity from our own production assets and to produce electricity in line with the needs of our customer portfolio, not in response to random market demand. We want to balance production and sales to extract the maximum value from every megawatt-hour," Tamm said.
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Editor: Marcus Turovski
