Analytics, Energy, Estonia, Financial Services

Eesti Energia sales revenues reached 205 million euros in the second quarter of 2014, decreasing by 5% compared to the same period in 2013. The group's EBITDA was 68 million euros in the second quarter of 2014 (-6% year-on-year). The net profit amounted to 6 million euros, which was over seven times less than the 43 mln euros earned at the same time last year, Public Broadcasting reports.

"The significant decline in net profit is related to the company's income tax expense (28.8 million euros) being reflected later than at the same period last year," explained a company spokesman to the Public Broadcasting.

The group sales revenue reduction was mainly driven by electricity sales, whereas shale oil sales were considerably higher, thus helping the group results. Electricity sales volume was 20.6% lower in the second quarter of 2014, affected by lower market share in Estonian retail market and different netting of cross border trades. On the other hand, sales revenue per MWh increased by 1.3%, as lower wholesale market price was balanced by positive financial hedges. In total, electricity sales revenues decreased by 17.9% to 108 million euros. 

Distribution network sales revenues decreased 3.2% to 54.3 million euros as warmer weather conditions resulted in 1.1% lower volume of electricity distributed. Shale oil sales revenues reached 19.9 million euros in the second quarter of 2014, which is 150% higher than in the same period last year. Shale oil revenue growth was driven both by high shale oil sales volume (+107.7%) as well as 20.3% higher average sales price.

Electricity sales reached 2.3 TWh in the second quarter of 2014, of which sales in the retail market amounted to 1.4 TWh (-17.0% y-o-y) and sales in the wholesale market 0.9 TWh (-25.7% y-o-y). Eesti Energia power generation amounted to 2.4 TWh in the second quarter of 2014, which was 2.1% lower compared to the last year.

The group average market share in Estonian retail market reached 58% in the second quarter of 2014, which is 12 percentage points lower year-on-year. After having ended signing new electricity sales contracts with fixed prices in Latvia and Lithuania in September 2013, the group achieved 17% and 7% market shares respectively in the second quarter of 2014, which in total resulted in 26% market share in the Baltic electricity market.

The group distributed 1.4 TWh of electricity in the second quarter of 2014, while network losses amounted to 5.2% (+2.2 percentage points y-o-y). Production of shale oil increased by 53.6% to 56.6 thousand tonnes, while shale oil sales volume increased to 44.8 thousand tonnes in the second quarter of 2014.