Estonia, Financial Services, Gas, Gas Market , Good for Business

The group's profitability in 2016 was higher than planned primarily as a result of increased sales volumes, the company said in the annual report.

Eesti Gaas sold 489.3 mln cubic meters of natural gas during the year, compared with 382.8 mln cubic meters in 2015. Revenue from the sale of natural gas meanwhile dropped from 105.8 mln euros to 92.2 mln euros. As a result of lower global oil prices the average market price for gas in both Europe and in Estonia was approximately 30% lower than in 2015.

Gas consumption in Estonia grew by 9.1% compared with 2015. The amount sold by Eesti Gaas increased 27.7%. While the production of heat during the heating period helped Eesti Gaas boost the sale of gas, a reduction in the amounts of gas imported by other suppliers from Lithuania and winning back clients from them was a more important factor still, the annual report says.

Where in 2015 Eesti Gaas had a market share of 80% in the import of natural gas, in 2016 it supplied 93% of the total amount of natural gas consumed in Estonia.

Sales to household consumers grew by 4.6 mln cubic meters to 59.4 mln cubic meters. Corporate customers bought altogether 429.8 mln cubic meters of natural gas, 101.8 mln cubic meters more than in 2015. The factors behind it were both the weather as well as a reduction in alternative sources of supply.

Also the sale of gas to resellers increased substantially, as in 2015 resellers bought 20-30% of the total amount consumed from other suppliers. In 2016 Eesti Gaas regained market share in that segment.

Its market share in the sale of natural gas to the end consumer was 61.1% in 2016, up from 53.6% in 2015.

Revenue from the sale of the natural gas network service grew from 15.7 mln to 17.8 mln euros.

The amount of natural gas used for the production of compressed gas grew 33 % year over year. Altogether 4.5 mln cubic meters of natural gas was used for the production of compressed gas in 2016 and the amount of compressed gas sold was 3,208 tons. The corresponding figures in 2015 were 3.4 mln cubic meters and 2,408 tons.

Eesti Gaas sold 14.4 gigawatt-hours of electricity during the year, 48 % more than in 2015. As at year-end the company had electricity supply contracts with 4,123 consumption points and the number of customers grew 3.8-fold year over year.

Investments made by Eesti Gaas in 2016 totaled 5.9 mln euros, 4 % less than in 2015. Of the investments 3.1 mln euros went to the reconstruction and renovation of gas networks and building of connections to new customers.

The average number of employees dropped from 222 people to 197, but the sum total paid out as remuneration increased from 5.1 mln to 5.4 mln euros.

Eesti Gaas is not planning to pay any dividend in 2017 or in the following years in connection with the need to make investments in expanding its business.

The owners of AS Eesti Gaas are Infortar OU with a holding of 67%, Iglats OU with 12.5%, SKVL Vara OU with 10.5% and GVA Sistems with10%.