Prime Minister Michal: all Eesti Energia's profits benefit taxpayers
Prime Minister Kristen Michal and Finance Minister Jürgen Ligi said Thursday that state-owned energy company Eesti Energia's profits are used to funding everything from road construction to schools.
"People shouldn't be scared with profit figures. If they seem large, there is always some explanation behind them," Ligi said.
Eesti Energia earned €49 million in net profit in the first quarter, which was 30 percent lower compared with the same period last year.
According to Ligi, the profits are also not the result of high electricity prices at the beginning of the year. "Electricity prices were high in January and part of February. By March, prices were already very low, and that's where they are now as well. The overall price trend is downward," he said.
The main problem of Eesti Energia, Ligi noted, is that its capital structure does not allow for sufficient investment to keep prices permanently low. "That's where the structural changes we have implemented — starting to take effect this year — will help," the finance minister said.
"In any case, this company is not swimming in money; its investment needs are very large. And I can also say that the situation with electricity prices has improved over the years, and there is nothing catastrophic about it. Those who, based on January prices, demanded major state interventions were in fact being hypocritical," he added.
Prime Minister Michal said that Eesti Energia's profits go into the state budget.
"Eesti Energia is relatively simple. If there is anything left over, we take it all. We pay pensions with it, fund public broadcasting, invest in national defense and education," Michal said.
"If Eesti Energia earns higher revenue due to temporarily higher energy prices, that money goes toward our shared public interests — from road construction to running schools," the prime minister noted.
At the same time, Michal pointed out that Eesti Energia's net profit has declined compared to last year.
Eesti Energia Group's revenue in the first quarter amounted to €566 million, an increase of eight percent, while EBITDA, a measure of operating profit, reached €119 million, up five percent year on year.
The growth in EBITDA reflects the strength of ongoing operations: higher market prices in January and February allowed electricity to be produced more profitably, and in addition to renewable energy, oil-shale-fired units also entered the market, the group said.
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Editor: Aleksander Krjukov, Argo Ideon
