Quarterly Report • May 19, 2022
Quarterly Report
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Consolidated interim report for the three-month period ended 31 March 2022 and the condensed consolidated and the condensed parent company's financial statements for the three-month period ended 31 March 2022, prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union
Ignitis Group is a leading utility and renewable energy group in the Baltic region.
Our core business is focused on operating electricity distribution Network and managing and developing Green Generation portfolio.
We also manage strategically important Flexible Generation assets and provide Customers & Solutions services, including the supply of electricity and natural gas, solar, e-mobility, improved energy efficiency and innovative energy solutions for households and businesses.
Networks Resilient and efficient energy distribution networks enabling the energy transition.
Green Generation Focused, sustainable and profitable growth.
Flexible Generation Reliable and flexible power system.
Customers & Solutions Innovative solutions for easier life and energy evolution.
| 1 | Overview | 4 | |
|---|---|---|---|
| 1.1 | CEO's statement. | 5 | |
| 1.2 | Business highlights. | 8 | |
| 1.3 | Performance highlights. | 10 | |
| 1.4 | Outlook. | 12 | |
| 1.5 | Investor information. | 13 | |
| 2 | Business overview 15 | ||
| 2.1 | Business profile. | 16 | |
| 2.2 | Market presence. | 17 | |
| 2.3 | Strategy and targets. | 18 | |
| 2.4 | Business environment. | 24 | |
| . 27 | |||
| 3.1 | Results Q1. | 28 | |
| 3.2 | Results by business segment. | 42 | |
| 3.3 | |||
| 4 | Governance report 52 | ||
| 4.1 | Governance framework. 53 | ||
| 4.2 | |||
| 4.3 | Management Board | 59 | |
| 4.4 | Risk and risk management. | 63 | |
| 4.5 | Information about the Group. | 66 | |
| 5 | ESG performance report 68 | ||
|---|---|---|---|
| 5.1 | ESG highlights. | 69 | |
| 5.2 | Overview of our ESG goals. | 70 | |
| 5.3 | Progress on our ESG goals. | 72 | |
| 6 | Financial statements 75 | ||
| 6.1 | Consolidated financial statements. | 76 | |
| 6.2 | Parent company's financial statements. . | 107 | |
| 7 | Further information | 123 | |
| 7.1 | Material events of the parent company. . | 124 | |
| 7.2 | Other statutory information. . | 126 | |
| 8 | Glossary | 127 | |
| 9 | Certification statement | 130 |
| 1.1 CEO's statement | 5 |
|---|---|
| 1.2 Business highlights | 8 |
| 1.3 Performance highlights | 10 |
| 1.4 Outlook | 12 |
| 1.5 Investor information | 13 |
Adjusted EBITDA grew by 42.6% to EUR 111.4 million compared to Q1 2021. The increase was mainly driven by the Green Generation segment due to the launch of Pomerania WF in Poland and better results of our hydro portfolio. Green Generation Adjusted EBITDA accounted for almost 2/3 of the Group's total results in Q1 2022.
2022 guidance for Adjusted EBITDA has been increased to EUR 330–360 million from EUR 290–335 million indicated in Annual report 2021.
A dividend of EUR 0.600 per share for the second half of 2021 confirmed and paid out after the reporting period. In line with the Dividend Policy we distributed a dividend of EUR 1.19 per share for the year 2021, corresponding to EUR 87.6 million.
In Q1 2022, the Group's green share of electricity generated increased by a third to 93.6% (from 61.0% in Q1 2021).
Since the end of 2021 we expanded our Green Generation pipeline by around 230 MW (out of which around 80 MW in Q1 2022) with greenfield projects, by securing land plots for onshore wind and solar projects in Lithuania and Poland.
Due to a global supply chain disruption and workforce shortage mainly affected by the Russia's invasion of Ukraine, we have rescheduled generation of first energy in Vilnius CHP's biomass unit (73 MWe, 169 MWth) to Q1 2023 (from Q4 2022). However, we still expect the project's COD to take place in Q2 2023.
Even though natural gas supply is not the core business of the Group, in relation to the Russia's invasion of Ukraine, we suspended natural gas purchases from Gazprom by replacing its supply with LNG cargoes.
During the reporting period, new members of the Management Board have been elected. 3 out of 5 of the members have served in the previous term of the Management Board, including CEO, thus, allowing to comfortably continue the Group's development.
The Group condemns Russia's unprovoked invasion of Ukraine. This goes against our values, and we have taken and will continue to take actions supporting Ukraine and its people as well as human rights and energy independence.
On the latter, we can proudly say that Lithuania became the first EU member state which swapped Russian natural gas for LNG cargoes, meaning that, since the beginning of April 2022, the Group has stopped the purchases from Gazprom. As an alternative, we have purchased unplanned LNG cargoes from the USA to ensure the natural gas supply by exploiting the Lithuania's LNG terminal in port city Klaipėda. Even though natural gas is not
the core business of the Group, we actively participate in every possible way to reduce natural gas dependency on Russia.
Thus the main financial impact for the Group is related to suspended purchase of Gazprom's natural gas, which was replaced by LNG cargoes. This, together with increase in market prices, led to an increase in working capital needs. In order to ensure market demand and uninterrupted gas supply as well as to fund working capital needs, the Group concluded credit line agreements with banks, with a total limit of around EUR 400 million. Even though there are additional risk factors, proper actions have been taken to manage them and no significant changes in risk levels of key risks of the Group were recorded. The Group constantly monitors the situation and analyses the
latest information and changes in external factors, and their impact on the Group. In the same manner, the Group also ensures uninterrupted supply of energy and business continuity.
On the brighter side, all safety threats accelerated legislation changes, which should speed up renewables' expansion and energy independence even further. For this purpose, in Lithuania the Lithuanian Ministry of Energy presented the energy "Breakthrough" package (link in Lithuanian). Despite it's still pending approval in the Parliament, its goal is to speed up the development of renewables, mainly by easing the excess requirements for environmental impact assessment and sanitary protection zones and establishing a framework of a support scheme for local communities.
In addition, an important milestone was also reached on Lithuanian offshore wind development front. On 31 March 2022 the Parliament of Lithuania adopted amendments to legislation foreseeing the tender on 1 September 2023. The amendments, amongst others, also determined the winner selection method, support (CfD) and grid connection (developer build) models. The next milestones include passing the resolutions on specific tender requirements (e.g., experience and financial capability) by 1 July 2022 and an approval of tender rules by the national regulatory authority (National Energy Regulatory Council, NERC) by 1 September 2022.
We stand with the people of Ukraine and will continue to do so. Since the beginning of the invasion, we contributed to and initiated actions that helped both the people of Ukraine and our colleagues who were willing to support family members, friends or people fleeing the war. Items of medical and other humanitarian aid were collected and sent to the conflict zone. In addition, we financially support our employees who volunteer by transporting people from the war zone and arranging safe accommodation.
In Q1 2022, Adjusted EBITDA increased by 42.6% compared to the same period last year, reaching EUR 111.4 million. The increase was mainly driven by the Green Generation segment, which Adjusted EBITDA accounted for roughly 2/3 of the Group's result in Q1 2022. This, in turn, has been driven by Pomerania WF that reached COD in December 2021 and better performance of Kaunas HPP and Kruonis PSHP, mostly due to higher electricity prices.
Following the solid performance of the Green Generation segment in Q1 2022, we are increasing our Adjusted EBITDA guidance for the full-year of 2022 and expect it in the range of EUR 330–360 million (previous guidance EUR 290–335 million).
Turning to returns to our shareholders, for the second half of 2021 a dividend of EUR 0.600 per share was confirmed at the Ordinary General Meeting of Shareholders, held on 29 March 2022, and paid out after the reporting period. In line with the Dividend Policy, we distributed a dividend of EUR 1.19 per share for the year 2021, corresponding to a total of EUR 87.6 million and assuring annual dividend increase of at least 3%.
In Q1 2022, we continued working on our Green Generation expansion and thus increased the pipeline by around 80 MW with new greenfield projects. In addition, after the reporting period we increased it even further by adding around 150 MW.
After a successful start of early-stage greenfield development in 2021 by securing land plots for onshore wind and solar projects in Lithuania and Poland, our greenfield portfolio now amounts to around 400 MW. It includes different projects, and we expect them on a project-on-project basis to launch during 2024–2026.
All our Green Generation projects are fully on track with a minor deviation in the interim milestone of Vilnius CHP's biomass unit (73 MWe, 169 MWth). We still expect the project's COD to take place in Q2 2023, however, due to a global supply chain disruption and workforce shortage mainly affected by the Russia's invasion of Ukraine, generation of first energy has been rescheduled to Q1 2023 (from Q4 2022).
Other than that, in Q1 2022, our Ignitis Renewables team has been strengthened with an election of a new CEO. Thierry Aelens is a well-respected executive with a wide experience in development of offshore wind projects in leading energy companies. Over the next months, we are planning to form the remaining Ignitis Renewables management team to ensure growth continuity and broaden the competences in the area.
Turning to the Networks segment, since the end of 2021, we have successfully continued maintenance and expansion works. Smart meter roll-out project is on track with meters currently being metrologically certified. We received the first batch of them for testing in Q1 2022. The plan to finalise the information system tests, start installing the first meters in Q2 2022 and to finalise the mass roll-out process by the end of 2025 remains unchanged. However, we continue to face the risk of supply chain disruptions due to a global supply issue ('the semiconductor crisis') as well as the geopolitical crisis, potentially causing disruption in the production of smart meters and, thus, affecting the project by having the smart meters delivered in smaller quantities than planned and/or within a longer timeframe.
With sustainability being at the forefront of Group's strategy and activities, we place a great emphasis on environmental, social and corporate governance criteria in navigating the energy transition and working towards an energy smart world.
Our Adjusted EBITDA grew by 42.6% to EUR 111.4 million compared to Q1 2021. The increase was mainly driven by the Green Generation segment due to the launch of Pomerania WF in Poland and better results of our hydro portfolio.
Occupational safety and health issues of employees and contractors is one of the priorities of the Group. However, in the beginning of Q1 2022 a tragedy occurred when a contractor was fatally injured while clearing trees and shrubs under a highvoltage power line. Such cases severely shock both employees and contractors and we will do everything we can to make sure this doesn't happen again.
In Q1, we presented our GRI-aligned comprehensive Sustainability Report for 2021. We continue to refine our disclosures to provide a wide set of stakeholders a clear view of our performance and progress. In Q1 we also finalised our GHG emissions calculations for 2021 which were externally verified after the reporting period. Total emissions decreased by 11% compared to 2020 and were 4.76m t CO2 -eq in 2021 (including biogenic anthropogenic emissions). In Q1 2022, we became the first Lithuanian company to receive the prestigious Top Employer 2022 Lithuania certificate from the Top Employers Institute, which demonstrates that the working conditions we offer our employees are aligned with highest international standards.
Over 2022, we will devote even more attention to our strategic sustainability priorities: we will focus on fine-tuning our decarbonisation plan to be in line with science-based targets, and also devote significant attention to Taxonomy alignment, biodiversity and waste impact assessments, strengthening employee and contractor safety practices and streamlining our efforts to increase diversity and inclusion.
Q1 2022 was also marked with changes on the Group's corporate governance front as new members of the Management Board have been elected by the Supervisory Board. 3 out of 5 of the members have served in the previous term of the Management Board, including CEO, thus, allowing to comfortably continue the Group's development.
The Group's growing performance during such uncertain geopolitical times is an evidence of our robust business profile. Despite distressing and threatening events, we will continue working on enabling energy transition to increase the energy independence both in Lithuania and our neighbouring countries.
Darius Maikštėnas Chair of the Management Board and CEO Ignitis Group
| January | February | March | April | May | |
|---|---|---|---|---|---|
| Green Generation: A tender for acquisition and installation works of 5th unit in Kruonis PSHP (110 MW increase to a total of 1,110 MW) was announced. |
Governance: New members of the Management Board of Ignitis Group were elected by the Supervisory Board. The new Management Board comprises five members. Three of them, including CEO, were re-elected. Green Generation: Thierry Aelens, a well-respected executive with extensive experience in development of offshore wind projects in leading energy companies, was appointed as the new CEO of Ignitis Renewables. Green Generation: As no agreement regarding acceptable return level which would be in line with our target range was reached, the conditional SPA agreement with the developer (Sun Investment Group) of Polish solar portfolio I (up to 170 MW) was terminated. Strategy: 2022–2025 Strategic Plan was published. |
Green Generation: Lithuanian legislation setting general offshore development framework approved. |
After the reporting period | Finance: A dividend of EUR 0.600 per share was paid out for the second half of 2021. Governance: An international Top Employer 2022 Lithuania Certificate was awarded to the Group for applying the highest HR management standards. Governance: Vilnius District Court dismissed the case on the incentive share options programme for employees of the Group. Customers & Solutions: In relation to the Russian invasion of Ukraine, the Group suspended natural gas purchases from Gazprom by replacing its stock by LNG cargoes. |
Green Generation: A contract was signed with Valmet for the installation of biomass boiler systems of Vilnius CHP biomass unit. Accordingly, due to global supply chain disruption and workforce shortage, mainly affected by the Russia's invasion of Ukraine, generation of first energy in Vilnius CHP biomass unit was rescheduled to Q1 2023. However, COD in Q2 2023 remains unchanged. Governance: The Extraordinary General Meeting of Shareholders of the parent company was convened with a proposed resolution to reduce the parent company's share capital. Customers & Solutions: Lithuanian Parliament amended legislation related to providing consumers with partial compensation due to increasing prices of energy resources. From H2 2022, increasing prices as well as debt of regulated supply customers up to this point will be partially compensated directly from the state budget, which, will have a positive effect on the Group's working capital and debt level. |
2022 Adjusted EBITDA guidance increase driven by Green Generation growth.
Adjusted EBITDA growth was driven by Green Generation segment. Main contributors to the growth were launch of Pomerania WF in Poland and better hydro portfolio results, both driven by higher electricity market prices.
Q1 2021 Q1 2022
Adjusted ROCE LTM increased to 8.7%, mostly due to an increase in Adjusted EBITDA.
Adjusted Net Profit increase was driven by the growth in Adjusted EBITDA, which was partly offset by higher depreciation and amortisation and income tax expenses. Reported net profit was lower than Adjusted net profit mostly due to temporary regulatory differences, mainly caused by difference of energy prices included in regulated tariffs and actual market prices.
Adjusted ROE LTM increased to 9.9% mainly due to increased Adjusted net profit.
Investments increased mainly due to higher investments in the Networks segment. The increase was partly offset by lower investments in Green Generation segment, as new projects have not yet reached heavy investment phase.
| Net debt EURm |
FFO LTM/Net debt % |
|||
|---|---|---|---|---|
| 43.1 +48.6% |
957.2 | 1,000.7 | 30.5 | 29.7 |
Net debt increased by 4.5% mainly due to higher need for working capital, which was partly offset by positive FFO and receivable from Epso-G obtained.
FFO LTM/Net debt decreased from 30.5% to 29.7% due to increase Net debt which was partly offset by increased FFO (from EUR 84.0 million in Q1 2021 to EUR 89.3 million in Q1 2022).
In the outlook announced with Annual report 2021, we expected Adjusted EBITDA to be in the range of EUR 290–335 million for 2022. Following solid performance of Green Generation segment in Q1 2022, we are increasing our guidance to EUR 330-–360 million.
1 To simplify the reporting the management have decided to cease using part of management's adjustments (for more information see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021'). Due to the change of APM made in last two quarters of 2021, the measures of 2021 quarters were recalculated according. 2 Due to the Networks Methodology update, change in accounting policy and reclassifications, all financial indicators were recalculated retrospectively for the quarters of the year 2021 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021'). Alternative Performance Measure - Adjusted figures used in this report refer to measures used for internal performance management. As such, they are not defined or specified under International Financial Reporting Standards (IFRS), nor do they comply with IFRS requirements. Definitions of alternative performance measures can be found in the 'Further information' section of this report and on the Group's website.
An increase in green electricity generated (net) by 56.4% was mainly driven by Pomerania WF (commercial operations started in December 2021) and higher generation at Kaunas HPP (due to higher levels of water in the Nemunas river) and Vilnius CHP's WtE unit (commercial operations started in March 2021).
Green share of generation reached 93.6% as a result of increased green electricity generated (net) and a decline in electricity generated (net) from CCGT (Flexible Generation).
Q1 2021 Q1 2022
Installed Green Generation capacity increased by 95 MW since Pomerania WF reached COD in December 2021. Additionally, Vilnius CHP's WtE unit reached COD in March Q1 2021 and the actual electricity generation capacity was verified by NERC (+1 MW).
eq
GHG emissions in 2021 decreased by 11.4% due to lower electricity generation in Elektrėnai complex (Scope 1), lower electricity consumption in Kruonis PSHP (Scope 2) and lower retail sales of natural gas (Scope 3).
Safety TRIR, times
During Q1 2022, total recordable employee injury rate (TRIR) equated to 2.20 injuries for a million hours worked and worsened by 98.2% compared to Q1 2021, which was mainly due to challenging winter weather conditions (resulting in occurrences of slipping) and the failure to follow proper safety precautions.
During Q1 2022 employee experience has improved, which is indicated by an increase in eNPS of 6.0 pp to 65%.
Supervisory and Management Boards Nationality and gender diversity
Share of female and international professionals in Management and Supervisory Boards is ~42%. International board members share increased by 8.3 pp while share of female remained constant.
Networks quality (electricity) SAIDI, min/SAIFI, units
Electricity quality indicators during Q1 2022 were affected by extreme conditions/natural disasters (that caused 4 mass disconnection in January and February 2022) and strong winds and local storms (up to 28 m/s at the end of March 2022).
Due to the change in calculation based on the auditors' recommendations, the value differs from figures provided in the Group's Annual report 2021 - Biogenic – 230; Scope 1 – 736; Scope 3 – 3 546 (see the Group's greenhouse gas inventory report here).
In the outlook announced in our Annual report 2021, we expected Adjusted EBITDA to be in the range of EUR 290–335 million for 2022. Following the solid performance of the Green Generation segment in Q1 2022, we are increasing our guidance to EUR 330–360 million and reiterate our directional Adjusted EBITDA guidance for business segments.
In 2022, compared to 2021, we expect an increase in results of both of our core segments – Green Generation and Networks. Green Generation is expected to grow mainly due to the full year effect of Pomerania WF, which reached COD in December 2021, as well as due to the implementation of asset rotation programme.
Additionally, due to increased electricity prices in the market we expect better results from our existing Green Generation units' unhedged portfolio part. Better results in the Networks segment are related to the additional tariff component established in the updated regulatory Methodology (for more information, see our Annual report 2021 section 'Significant changes in reporting period of 2021'). However, in the Customers & Solutions segment, skewed results of natural gas business between 2021 and 2022 and ineffective electricity "proxy" hedges are expected to have a negative impact.
| Realised 2021 |
Guidance 28 February 2022 |
Guidance 27 May Q1 2022 |
|
|---|---|---|---|
| Adjusted EBITDA | 332.7 | 290–335 | 330–360 |
| Networks | 145.4 | Higher | Higher |
| Green Generation | 107.5 | Higher | Higher |
| Flexible Generation | 37.2 | Lower | Lower |
| Customers & Solutions | 40.6 | Lower | Lower |
| Other | 2.0 | Stable | Stable |
Adjusted EBITDA indication for the Group is the prevailing guidance, whereas directional effect per business segment serves as a mean to support it. Higher/stable/lower indicates the direction of the business segment's change in 2022 relative to the actual results for 2021.
The interim report contains forward-looking statements, which reflect current views and are, by nature, subject to risks and uncertainties. Because they relate to events and circumstances that will occur in the future, the actual development may differ materially from our expectations. We are unable to predict the impact of these events. For further information about the risks relevant to the Group's activities, see section 4.4 'Risk and risk management'.
In Q1 2022, the Group's share and GDR price yielded a decrease of 10.8% and 15.6%, respectively. During the same period, the price of our benchmark index (Euro Stoxx Utilities) dropped by 8.4%.
Since the beginning of 2022, total (shares and GDRs) turnover was equal to EUR 50.5 million (EUR 34.7 million on Nasdaq Vilnius exchange and EUR 15.8 million on LSE), whereas the average daily turnover totalled to EUR 0.9 million (EUR 0.6 million on Nasdaq Vilnius exchange and EUR 0.3 million on LSE). Compared to Q1 2021, both the total turnover and the average daily turnover decreased by 28.7% and 18.2%1 , respectively.
At the end of the reporting the Group's market capitalisation was EUR 1.4 billion.
Currently, the Group is covered by 7 equity research analysts. Their recommendations and price targets are available on our website.
| Benchmark index | Nasdaq Vilnius | LSE | Combined | |
|---|---|---|---|---|
| MSCI Frontier Markets Index | Period opening4 , EUR |
21.20 | 21.10 | - |
| Period high4 (date), EUR |
21.95 (13 Jan) | 21.60 (13 Jan) | 21.95 | |
| Period low4 (date), EUR | 17.56 (7 Mar) | 16.00 (8 May) | 16.00 | |
| Period VWAP5 , EUR |
19.64 | 18.52 | 19.33 | |
| Tradable index | Period end4 , EUR |
18.90 | 17.80 | - |
| OMX Baltic 10 | Period turnover (average daily), EURm | 34.7 (0.6) | 15.8 (0.3) | 50.5 (0.9) |
| Market capitalisation, period end, EURbn | - | - | 1.4 |
In Q1 2021, total (shares and GDRs) turnover was equal to EUR 70.8 million (EUR 36.1 million on Nasdaq Vilnius exchange and EUR 34.7 million on LSE) whereas the average daily turnover totalled to EUR 1.1 million (EUR 0.6 million on Nasdaq Vilnius exchange and EUR 0.5 million on LSE).
2 Index = 100.
As ex-date of the dividend for H2 2021 fall into the Q2 2022, TSR and securities price changes are equal.
4 As of closing trading market price.
5 Weighted average volume price.
There were no major changes in the composition of our shareholders and only the Republic of Lithuania (the authority implementing shareholder's rights – the Ministry of Finance of the Republic of Lithuania, Majority Shareholder) owns more than 5% of the parent company's share capital.
In Q1 2022, the Annual General Meeting of Shareholders has been held, during which a dividend of EUR 0.60 per share for the second half of 2021, corresponding to EUR 43.85 million, has been confirmed and paid out after the reporting period. In line with our Dividend Policy, we paid out a dividend of EUR 1.19 per share for the year 2021, corresponding to EUR 87.6 million.
During Q1 2022, the parent company's share capital remained unchanged, however, at the next Extraordinary General Meeting of Shareholders, to be held on 24 May 2022, the decision regarding the reduction of the parent company's share capital by annulling the acquired own ordinary registered shares will be considered.
If the acquired ordinary registered shares are annulled, the parent company's share capital will be reduced to 72,388,960 (from 74,283,757) ordinary registered shares and the nominal value of the share capital will decrease to EUR 1,616,445,476.80
| Nasdaq Vilnius | LSE | Combined | |
|---|---|---|---|
| Type | Ordinary registered shares | Global Depositary Receipt (GDR) |
- |
| ISIN-code | LT0000115768 | Reg S: US66981G2075; Rule 144A:US66981G1085 |
- |
| Ticker | IGN1L | IGN | - |
| Nominal value, EUR | - | - | 22.33 per share |
| Number of shares (share classes) | - | - | 74,283,757 (one share class) |
| Number of treasury shares2 | - | - | 1,243,243 |
| Free float, shares (%)3 | - | - | 18,756,757 (25.7%) |
| Ordinary registered shares vs GDRs split | 58.6% | 41.4% | 100% |
| 23 August 2022 | Interim report for the first half of 2022 |
|---|---|
| 29 September 2022 | Extraordinary General Meeting of Shareholders (regarding the potential allocation of dividends for the six-month period ended 30 June 2022) |
| 12 October 2022 | Expected Ex-Dividend Date (for ordinary registered shares) |
| 13 October 2022 | Expected Record Date for dividend payment (for ordinary registered shares) |
| 22 November 2022 | Interim report for the first nine months of 2022 |
Financial calendar is available on our website and is immediately updated if there are any changes.
(from EUR 1,658,756,293.81). This would also cause a free-float change to 25.01% and a proportional increase in each investor's shareholdings.
Further relevant information regarding general meetings of shareholders is available in the 'Governance' section of this report and on our website.
The Group has credit rating of BBB+ (stable outlook) affirmed by a credit rating agency S&P Global Ratings. Further information on the credit rating, including the credit rating report, is available on our website.
For further investor related information, see our Annual report 2021 or visit 'Investors' section on our website.
1 After the reporting period, in April 2022 the parent company acquired further 651,554 own ordinary registered shares, thus increasing the number of treasury shares to 1,894,797 (or from 1.7% to 2.6% of the total number of the parent company's securities). 2 Excluding treasury shares acquired by the parent company in December 2021. 3 After the reporting period, in April 2022 the parent company acquired further 651,554 own ordinary registered shares, thus increasing the number of treasury shares to 1,894,797 (or from 1.7% to 2.6% of the total number of the parent company's securities) and reducing free float from 18,756,757 (25.7%) to 18,105,203 (24.4%). All treasury shares (1,894,797) may be annulled by the decision of the Extraordinary Meeting of Shareholders to be held on 24 May 2022.
| 16 |
|---|
| 17 |
| 18 |
| 24 |
Resilient and efficient energy distribution enabling the energy transition.
Operation, maintenance, management, and development of electricity and natural gas distribution networks to ensure safe and reliable energy distribution. Supply of last resort.
Fully regulated through 5-year regulatory periods based on a transparent RAB-WACC methodology.
Through reduction in network losses, timely connection of renewable energy assets, investments to allow further electrification.
Information reflects data for the full-year 2021, except for electricity capacity which reflects data as of 31 March 2022.
Focused, sustainable, and profitable growth.
Generation of electricity from renewable energy sources including wind, hydro, solar, biomass and waste-to-energy. Development and operation of new generation capacities.
Contracted through renewable energy longterm support schemes (FiT, FiP, CfD), PPAs, and merchant.
Through development of zero carbon electricity generating assets.
Electricity generated (net) Electricity generated (net)
Reliable and flexible power system.
Provision of ancillary services to ensure stability and security of Lithuania's electricity system.
Largely regulated, based on a transparent methodology, with capacities awarded through annual auctions.
Enabling the system to integrate more renewable energy capacities.
Innovative solutions for easier life and energy evolution.
Supply of electricity and gas, wholesale trading and balancing, green energy solutions for businesses and residents and energy efficiency projects.
Regulated tariffs and commercial contracts.
Enabling renewable energy build-out through provision of PPAs, increasing green electricity supply and reducing natural gas supply.
FINLAND
In 2020, we updated our Corporate Strategy by putting sustainability at its core. We are accelerating our transition towards a decarbonized world, transforming our business models by developing and scaling smart solutions, expanding in our region, and exploring new opportunities in the markets undergoing energy transition.
In our strategy we focus on four key strategic priorities. First, we are creating a sustainable future. ESG criteria are an integral part of our strategic goals with strong commitment to a more sustainable future. We align our business targets with the United Nations' Sustainable Development Goals and we are committed to reducing net carbon dioxide emissions to zero by 2050. We also strive to align our businesses with science-based targets to a 1.5°C-compliant business model. Second, we are ensuring resilience and flexibility of the energy system, as well as enabling energy transition and evolution. Third, we are growing renewables to meet regional energy commitments. We target to reach 4 GW of installed green generation capacity by 2030. Fourth, we are capturing growth opportunities and developing innovative solutions to make life easier for the energy smart.
Our focus is on the home markets – the Baltic countries, Poland, and Finland. We also explore new opportunities in countries on the energy transition path.
We pursue our strategic priorities with a strong focus on financial discipline. Our engaged people, agile teams, learning culture, organisation with strong governance model and digital approach are the integral parts of our strategy.
To ensure strategy implementation, on a yearly basis, we announced a strategic plan with targets and KPIs set for the next 4-year period.
In our vision, we transform for a more sustainable world
In everything we do, we are united by the mission to make the world more Energy Smart
Our Strategic Plan 2022–2025 establishes the Group's ambition to work towards decarbonisation and focus on investments into the Green Generation and Networks segments and describes the implementation of priorities and directions of our Corporate Strategy. We provide you with the summary of key targets we aim to deliver by the end of 2025 below.
BUSINESS
Green generation installed capacity:
| FINANCIAL | |
|---|---|
| Adjusted EBITDA, 2025 | 370–410 EURm |
| of which a sustainable share, 2025 | ≥70% |
| Adjusted EBITDA growth, 2025 vs. 2021 | +11–23% |
| Average ROCE, 2022–2025 | 5.5–6.5% |
| Dividend policy | minimum 3% annual grow rate |
| Minimum DPS1 , 2025 |
≥1.35 EUR |
| Dividend yield1 , 2022–2025 |
6.0–6.6% |
| Total CAPEX, 2022–2025 | 1.7–2.0 EURbn |
| of which a sustainable share, 2022–2025 | >90% |
| Net Debt/Adjusted EBITDA, 2022–2025 | <5x |
| Solid investment–grade rating (S&P), 2022–2025 | 'BBB' or above |
1 Minimum dividend per share is calculated based on the No. of shares (73,040,514 ordinary registered shares). Dividend yield is calculated based on the Ignitis group share price: 20.5 €/sh.
2 Calculated based on the National Energy Regulatory Council methodology, excluding (1) interruptions due to natural phenomena corresponding to the values of natural, catastrophic meteorological and hydrological phenomena indicators; (2) interruptions due to failures in the network of the transmission system operator.
The Group's sustainable growth is led by investments in our core business segments – Green Generation and Networks. In total, we expect to deploy around EUR 1.7–2.0 billion of capital over 2022–2025, or around EUR 425–500 million per annum. A large part, or around 50%, of the investments will be directed towards the expansion of Green Generation capacity to between 2.0–2.2 GW, compared to operational portfolio of 1.2 GW at the end of Q1 2022. The second largest proportion of funds, or around 45%, will be directed to Networks maintenance and expansion. The funds will be used for grid maintenance, which will increase its security and reliability, developing new customer connections and upgrades, and digitalising the Lithuanian energy sector with the smart electricity metering programme.
In Q1 2022, our Green Generation pipeline increased by around 80 MW with new greenfield projects. In addition, after the reporting period we increased it even further by adding around 150 MW. After a successful start of early-stage development in 2021 by securing land plots for onshore wind and solar projects in Lithuania and Poland, our greenfield portfolio now amounts to around 400 MW. All the remaining projects are fully on track with a minor deviation in the interim milestone of Vilnius CHP's biomass unit (73 MWe, 169 MWth). We still expect the project's COD to take place in Q2 2023, however, due to global supply chain disruption and workforce shortage mainly affected by the war in Ukraine, generation of first energy is rescheduled to Q1 2023 (from Q4 2022).
On track Time delay and / or budget deviation
Total CAPEX grant for Vilnius CHP (i.e. waste-to-energy (operational since Q1 2021) and biomass units). 2 Other services providers are: EPCM (Engineering, Procurement and Construction Management) consultant – Ramboll (Ramboll Denmark A/S and Ramboll Polska Sp. z o.o.), engineering designer – UAB "Hidroterra", a general contractor – UAB "Conresta" and others. 3 228–242 PLN/MWh, applying inflation index of 1.07 and 0.2154 EUR/PLN rate as of 31 March 2022. 4 After full completion of construction works. 5 Including project acquisition and construction works. 6 237.5 PLN/MWh, applying inflation index of 1.07 and 0.2154 EUR/PLN rate as of 31 March 2022. 7 Tentative schedule is targeted to be aligned with Lithuanian synchronization to European continental networks project. 8 Preliminary estimate equal to the value of tender offer announced in January 2022.
Contents »
Greenfield portfolio
Latvian onshore WF portfolio I
– Status:
(partnership with Ocean Winds, the 50/50 joint venture owned by EDP Renewables and Engie)
– Technology: offshore wind – Capacity: 700 MW – Expected COD: 2028 – Investment: not disclosed – Subsidy scheme: 15-year CfD4 – Ownership: 51%
Lithuanian offshore WF I
– On 31 March 2022 the Parliament of Lithuania adopted amendments to legislation supporting the development of offshore wind in the Baltic Sea and foreseeing the tender to take place on 1 September 2023.
1 After construction permits are granted.
Secured land lease agreements for development of the indicated capacity.
3 As the indicated capacity includes different projects, expected COD depends on the progress of individual projects. Additionally, Lithuanian projects should begin operations towards the end of the indicated time range.
4 According to the Law that was approved by the Parliament of Lithuania, tender participant will have to provide: (i) CfD (EUR/MWh) and (ii) electricity production volume (MWh) for which CfD is asked for. If the developers do not ask for any support from the State (indicates 0 (zero) MWh), they will have to indicate the 'development fee' which they are willing to pay to the State additionally (this fee will have to be included in the primary bid). If all tender participants will ask for support from the State, the winner will be selected according to lowest 'support needed' that will be calculated according to the following formula: (CfD asked by the developer – Minimum CfD (set by the the regulator)) * Electricity production volume (MWh) for which CfD is asked for. If support from the State is not requested the winner will be selected according to the highest 'development fee' suggested.
On track Time delay and / or budget deviation
Since the end of 2021, we have successfully continued implementing maintenance and expansion works in the Networks segment. Smart meter rollout project is on track with meters being metrologically certified in the EU as well as an ongoing process of registration in Lithuanian Metrology Inspectorate. We received the first batch of them for testing in Q1 2022. The plan to finalise the information system tests, start installing the first meters in Q2 2022 and to finalise the mass roll-out process by the end of 2025 remains unchanged. However, we continue to face the risk of supply chain disruptions due to the global supply issue ('the semiconductor crisis') as well as the geopolitical crisis, potentially causing disruption in the production of smart meters and, thus, affecting the project by having the smart meters delivered in smaller quantities than planned and/or within a longer timeframe.
~ EUR 150 million
– Status: – Progress:
testing.
meters.
Narrowband Internet of things).
1
EUR 100–120 million1 – Subsidy scheme: n/a – Ownership: 100%
Expansion Smart meter roll-out
– Investments Q1 2022–2030 (10-year investment plan):
– In Q1 2022 we received the first batch of smart meters for
– Testing and system deployment will be finished in Q2 2021, followed by the start of deliveries and installation of the first
Sagemcom Energy & Telecom SAS (France) is responsible for supplying the smart meters (approximately 1.2 million) and implementation of related IT services (data transfer technology –
– Investments 2022–2025 (Strategic plan):
– Reconstruction of the most affected lines are being continued.
– Ownership: 100%
– Status:
On track Time delay and / or budget deviation
23 / 132
A successful start of early-stage greenfield development projects in 2021 in Lithuania and Poland has led portfolio to around 400 MW.
The Group's performance, to an extent, is governed by macroeconomic and industry dynamics in the markets it operates. Thus, especially during this turbulent period, we closely monitor key economic indicators and developments in the industry to assess the business environment in our home market and provide an overview below.
After the COVID-19 recovery in 2021, the world's economy was shaken by the Russia's invasion of Ukraine in February 2022. Despite the full impact still being difficult to assess, it is projected to cause a slower growth across the countries compared to 2021. During the reporting period, an increase of 5.0% in GDP was captured in the euro area compared to Q1 2021, expecting to reach full-year 4.3% and 2.4% GDP growth in 2022 and 2023 respectively. Turning to Lithuania, the GDP in Q1 2022 increased by 4.1% compared to the same period last year. Over the course of the next two years, Lithuania's economy is expected to grow at a level of 3.4% both in 2022 and 2023. Of course, the forecasts are highly dependent on future geopolitical situation.
| Q1 2022 vs Q4 2021 |
2022F | 2023F | |
|---|---|---|---|
| Lithuania | +4.1 | +3.4 | +3.4 |
| Latvia | +5.6 | +4.4 | +3.8 |
| Estonia | - 1 |
+3.1 | +4.0 |
| Finland | - 1 |
+3.0 | +2.0 |
| Poland | 1 - |
+5.5 | +4.2 |
| Euro area | +5.0 | +4.3 | +2.4 |
| EU | +5.2 | +4.3 | +2.5 |
Source: Eurostat. No data is released yet.
Since the record high inflation captured in 2021, harmonised CPI of the euro area continued to increase, reaching 7.4% in March 2022, with energy prices comprising the major share of its growth. The largest annual harmonised CPI growth of 15.6% was recorded in Lithuania, followed by Estonia, Latvia and Poland at 14.8%, 11.5% and 10.2% respectively. At the same time, harmonised CPI growth in Finland was again the lowest amongst our home market countries, reaching only 5.8% growth rate in Q1 2022.
| Q1 2022 | 2022F | 2023F | |
|---|---|---|---|
| Lithuania | +15.6 | +6.7 | +2.2 |
| Latvia | +11.5 | +5.9 | +0.9 |
| Estonia | +14.8 | +6.1 | +2.1 |
| Finland | +5.8 | +2.6 | +1.9 |
| Poland | +10.2 | +6.8 | +3.8 |
| Euro area | +7.4 | +3.5 | +1.7 |
| EU | +7.8 | +3.9 | +1.9 |
Source: Eurostat.
Commodity markets continued to be extremely volatile, especially since the start of the Russia's invasion of Ukraine. We witnessed an increase in all energy sectors in Q1 2022 from 69.7% in Brent oil to around 418.2% in natural gas at TTF compared to Q1 2021. That is mainly due to intense geopolitical environment across the globe. Due to high market volatility and in order to offset the impact of limited Russian oil exports on the supply, countries (e.g. the United States) are releasing their strategic reserves. However, limited stock constrains might rally the prices further by the end of 2022.
Additionally, coal prices spiked by around 235.5% in Q1 2022 compared to Q1 2021. The increase is a clear reaction to an extremely tight market. By putting on ambitious natural gas storage targets, Europe prioritizes natural gas storage injections over carbon emissions from additional coalfired power generation. A number of countries and companies have announced or are discussing to postpone the scheduled closure of coal plants or even to bring plants back online, which, in turn, pushed the European Union's carbon emissions (ETS) prices up
by 121.3% in Q1 2022 compared to Q1 2021. On top of that, coal supply remains tight as EU countries are ceasing coal imports from Russia, which puts even more pressure on commodity pricing.
| USD / bbl | 104.2 | 61.4 | 69.7% |
|---|---|---|---|
| USD / t | 224.1 | 66.8 | 235.5% |
| 93.8 | 18.1 | 418.2% | |
| 83.2 | 37.6 | 121.3% | |
| EUR / MWh EUR / t CO2 |
Daily futures price average for the year.
1
Lithuania is part of Nord Pool, which is a leading power market in Europe.
During Q1 2022, prices increased remarkably in all bidding areas of the Nord Pool power exchange compared to Q1 2021. With high natural gas prices being the main reason behind the increase, another key driver of upward movement in electricity price in the region was lower hydro generation in Scandinavia. However, about 50% increase in wind generation in Scandinavia (from 16.0 TWh in Q1 2021 to 25.2 TWh in Q1 2022) prevented power prices from skyrocketing further.
The average system price was 161.5% higher in Q1 2022 compared to the same period last year. The largest increase of 166.1% within our home market was captured in Latvia, where prices in Q1 2022 reached 136.1 EUR/MWh. Meanwhile, the growth as well as the price level in Lithuania and Estonia followed closely behind – in Lithuania and Estonia prices increased by 161.5% and 154.4% to 136.1 EUR/MWh and 131.6 EUR/MWh respectively. Nord Pool system price and electricity prices in the Baltics continue to be mainly driven by a tense geopolitical situation, natural gas prices and power prices in the other Continental Europe countries.
| 2021 | 2022 | vs Q1 2021 ∆, % |
Q1 2022 ∆, % |
||
|---|---|---|---|---|---|
| Nord Pool system | 42.1 | 110.1 | 53.8 | 161.5% | (51.1%) |
| Lithuania | 53.7 | 140.3 | 136.1 | 161.5% | (3.0%) |
| Latvia | 52.1 | 138.6 | 136.1 | 166.1% | (1.8%) |
| Estonia | 52.1 | 132.5 | 131.6 | 154.4% | (0.7%) |
| Finland | 48.9 | 91.4 | 56.9 | 86.9% | (37.8%) |
| Poland | 59.7 | 134.0 | 176.0 | 124.5% | 31.3% |
1-year future price as of 31 March 2022.
2 Based on Latvia's forward price (as there is no separate Lithuanian zone).
The largest electricity generation changes across our home market countries were captured in Estonia, Lithuania and Latvia. Estonia generated 26.3% more electricity compared to Q1 2021, mainly due to higher generation levels at fossil oil shale power plants (increased by 39.2%). In the same manner, Lithuania generated 9.1% more electricity compared to Q1 2021, mainly due to higher wind energy generation levels (increased by 68.4%) and higher run-of-river hydro power generation (increased by 66.7%). However, Latvia generated 26.3% less power due to lower generation levels of its fossil fuel power plants (decreased by 69.5%).
| Q1 2022 | Q1 2021 | ∆, % | |
|---|---|---|---|
| Lithuania | 1.2 | 1.1 | 9.1% |
| Latvia | 1.4 | 1.9 | (26.3%) |
| Estonia | 1.8 | 1.4 | 28.6% |
| Finland | 17.8 | 18.6 | (4.3%) |
| Poland | 46.7 | 43.5 | 7.4% |
In terms of domestic generation and consumption, our home market countries remained deficit countries during the reporting period with only Finland almost covering its all electricity needs (95.5%). There were also no material changes in electricity consumption across the countries in Q1 2022. A slight decrease in consumption levels was mainly driven by a milder winter compared to last year.
140.3 EUR/MWh (+161.5%) 91.4 EUR/MWh (+376.0%)
Poland
134.0 EUR/MWh (+124.5%) 111.4 EUR/MWh (+420.6%)
Electricity Natural gas Nord Pool countries
| Q1 2022 | Q1 2021 | ∆, % | |
|---|---|---|---|
| Lithuania | 3.4 | 3.3 | 3.0% |
| Latvia | 1.9 | 1.9 | 0.0% |
| Estonia | 2.3 | 2.4 | (4.2%) |
| Finland | 22.8 | 24.4 | (6.6%) |
| Poland | 45.3 | 45.4 | (0.2%) |
Natural gas prices remain elevated globally with price levels in the home market during Q1 2022 exceeding the price during the same period last year by up to 5 times. The tension in the natural gas market started back in 2021 with limited pipeline flows and relatively lower-than-expect injection into storage rates. In the first quarter of the year the tension was further fuelled by geopolitical events. This created unprecedent intraday TTF price volatility with prices reaching up to 200 EUR/MWh in several days in March 2022. As a result, a combination of high energy prices, a relatively warm winter and an impact of the war on the economies controlled the natural gas demand in Europe throughout Q1 2022.
Storage levels in underground natural gas storage facilities in Europe as of the end of the reporting period were at 26.3% compared to 30.1% during the same period a year ago. Storage levels never reached the desired levels during the injection season in 2021 and the situation could have been much worse than now if not for the LNG flows into Europe during Q1 2022, which supported the supply side and reduced the withdrawal needs from the storage. However, the fill level in storage facilities is still low and will need to be increased in the nearest future.
| Q1 2021 |
Q1 2022 |
2023F1 Q1 2022 vs Q1 2021 ∆, % |
2023F vs Q1 2022 ∆, % |
||
|---|---|---|---|---|---|
| TTF2 | 18.1 | 93.8 | 72.3 | 418.2% | (22.9%) |
| Lithuania4 | 19.2 | 91.4 | - | 376.0% | - |
| Estonia3,4 Latvia – |
18.2 | 88.9 | - | 388.5% | - |
| Finland4 | 19.7 | 88.7 | - | 350.3% | - |
| Poland5 | 21.4 111.4 | 91.1 | 420.6% | (18.2%) |
1 1-year future price as of 31 March 2022.
TTF natural gas front month index.
2
Latvia and Estonia is a common natural gas balancing zone, therefore, data is the same.
4 GET Baltic daily markets, there is no futures market, thus, no information is provided. 5 Weighted Average Day Ahead Price (EUR/MWh).
Natural gas consumption figures during Q1 2022 compared to Q1 2021 were down in all home market countries. This was led by high natural gas prices, mild winter temperatures, uncertainty if businesses would pass rising energy costs onto final consumers and fuel switching.
| Q1 2022 | Q1 2021 | ∆, % | |
|---|---|---|---|
| Lithuania | 5.7 | 8.7 | (34.5%) |
| Latvia | 3.6 | 5.3 | (32.1%) |
| Estonia | 1.6 | 2.1 | (23.8%) |
| Finland | 4.8 | 10.5 | (57.1%) |
| Poland | 52.7 | 57.9 | (9.0%) |
Comparing Q1 2022 to the same period the last year, material changes in local heat price levels were recorded, which were mainly caused by an increase in the price of biomass. This has led to the price of heat energy growing significantly in both districts where our CHP assets operate.
| Q1 2022 | Q1 2021 | ∆, % | |
|---|---|---|---|
| Kaunas district | 36.7 | 16.0 | 129.4% |
| Vilnius district | 39.1 | 23.6 | 65.7% |
During Q1 2022, 55,000 tonnes of waste were delivered to Vilnius CHP. Turning to Kaunas CHP, the power plant incinerated a total of 51,400 tonnes of waste. The total annual capacity of Vilnius CHP and Kaunas CHP remains the same at 160,000 and 200,000 tonnes respectively. The gate fee of waste incineration remained constant with a moderate increase recorded in Kaunas CHP.
| Q1 2022 | Q1 2021 | ∆, % | |
|---|---|---|---|
| Kaunas district | 45.5 | 40.2 | 13.2% |
| Vilnius district1 | 33.0 | 32.7 | 0.9% |
Vilnius CHP started waste incineration in Q3 2020.
| 3.1 Results Q1 | 28 |
|---|---|
| 3.2 Results by business segment | 42 |
| 3.3 Quarterly summary | 50 |
| Q1 2022 | Q1 2021 | ∆ | ∆,% | ||
|---|---|---|---|---|---|
| Revenue | EURm | 991.3 | 393.4 | 597.9 | 152.0% |
| EBITDA | EURm | 91.7 | 87.4 | 4.3 | 4.9% |
| Adjusted EBITDA | EURm | 111.4 | 78.1 | 33.3 | 42.6% |
| Green Generation | EURm | 70.0 | 19.0 | 51.0 | 268.4% |
| Networks | EURm | 45.1 | 44.1 | 1.0 | 2.3% |
| Flexible Generation | EURm | 4.9 | 7.9 | (3.0) | (38.0%) |
| Customers & Solutions | EURm | (9.7) | 6.1 | (15.8) | n/a |
| Other2 | EURm | 1.1 | 1.0 | 0.1 | 10.0% |
| Adjusted EBITDA margin | % | 11.0% | 20.3% | (9.3 pp) | n/a |
| EBIT | EURm | 57.2 | 57.0 | 0.2 | 0.4% |
| Adjusted EBIT | EURm | 76.9 | 47.7 | 29.2 | 61.2% |
| Net profit | EURm | 46.8 | 43.0 | 3.8 | 8.8% |
| Adjusted net profit | EURm | 61.1 | 35.1 | 26.0 | 74.1% |
| Investments | EURm | 43.1 | 29.0 | 14.1 | 48.6% |
| FFO | EURm | 89.3 | 84.0 | 5.3 | 6.3% |
| FCF | EURm | (138.3) | 30.9 | (169.2) | n/a |
| ROE LTM | % | 8.3% | 12.0% | (3.7 pp) | n/a |
| Adjusted ROE LTM | % | 9.9% | 8.9% | 1.0 pp | n/a |
| ROCE LTM | % | 6.8% | 10.2% | (3.4 pp) | n/a |
| Adjusted ROCE LTM | % | 8.7% | 7.7% | 1.0 pp | n/a |
| EPS (Basic) | EUR | 0.64 | 0.57 | 0.07 | 12.3% |
| 31.03.2022 | 31.12.2021 | ∆ | ∆,% | ||
| Total assets | EURm | 4,623.0 | 4,251.3 | 371.7 | 8.7% |
| Equity | EURm | 2,005.3 | 1,849.0 | 156.3 | 8.5% |
| Net debt | EURm | 1,000.7 | 957.2 | 43.5 | 4.5% |
| Net working capital | EURm | 681.3 | 486.4 | 194.9 | 40.1% |
| Net debt/EBITDA LTM | times | 2.95 | 2.85 | 0.10 | 3.5% |
| Net debt/Adjusted EBITDA LTM | times | 2.73 | 2.88 | (0.15) | (5.2%) |
| FFO LTM/Net debt | % | 29.7% | 30.5% | (0.8 pp) | n/a |
1 Due to Networks Methodology update, change in accounting policy and reclassifications as well as reduction of management adjustments, all financial indicators were recalculated retrospectively for all quarters of the year 2021 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021').
2 Other – other activities and eliminations (consolidation adjustments and related party transactions), including financial results of the parent company. More information about it is disclosed in the section '6.2 Parent company's financial statements'.
Adjusted EBITDA grew by 42.6% to EUR 111.4 million compared to Q1 2021. The increase was mainly driven by the Green Generation segment due to the launch of Pomerania WF in Poland and better results of our hydro portfolio due to higher electricity market price. Green Generation Adjusted EBITDA accounted for almost 2/3 of the Group's total results in Q1 2022. Despite revenue growth in Customers & Solutions (+498.1m) Adjusted EBITDA result of the segment was negative for Q1 2022 mainly due to ineffective electricity "proxy" hedges as the spread between Lithuanian and Finish price zones has further increased.
| Networks | Green Generation |
Flexible Generation |
Customers & Solutions |
Other1 | Total Adjusted |
Adjustments | IFRS | |
|---|---|---|---|---|---|---|---|---|
| Q1 2022 | Adjusted | Reported | ||||||
| Revenue | 147.2 | 120.7 | 72.4 | 684.5 | (13.8) | 1,011.0 | (19.7) | 991.3 |
| Purchase of electricity, natural gas and other services | (72.5) | (32.6) | (12.1) | (684.5) | 0.2 | (801.5) | - | (801.5) |
| Wages and salaries and related expenses | (16.0) | (2.5) | (2.1) | (3.1) | (4.6) | (28.3) | - | (28.3) |
| Repair and maintenance expenses | (4.6) | (0.9) | (0.7) | - | - | (6.2) | - | (6.2) |
| Other expenses | (9.0) | (14.7) | (52.6) | (6.6) | 19.3 | (63.6) | - | (63.6) |
| EBITDA | 45.1 | 70.0 | 4.9 | (9.7) | 1.1 | 111.4 | (19.7) | 91.7 |
| Depreciation and amortisation | (21.9) | (6.9) | (3.0) | (0.5) | (1.5) | (33.8) | - | (33.8) |
| Write-offs, revaluation and impairment losses of PPE and intangible assets |
(0.6) | - | - | - | (0.1) | (0.7) | - | (0.7) |
| EBIT | 22.6 | 63.1 | 1.9 | (10.2) | (0.5) | 76.9 | (19.7) | 57.2 |
| Finance activity, net | (7.3) | (2.4) | (4.9) | |||||
| Income tax expenses | (8.5) | 3.0 | (5.5) | |||||
| Net profit | 61.1 | (14.3) | 46.8 | |||||
| Q1 20212 | Adjusted | Reported | ||||||
| Revenue | 132.7 | 35.3 | 29.6 | 186.4 | 0.1 | 384.1 | 9.3 | 393.4 |
| Purchase of electricity, natural gas and other services | (62.5) | (11.7) | (17.7) | (173.5) | 0.1 | (265.3) | - | (265.3) |
| Wages and salaries and related expenses | (14.2) | (1.9) | (1.6) | (3.0) | (4.7) | (25.4) | - | (25.4) |
| Repair and maintenance expenses | (3.5) | (0.7) | (1.3) | - | - | (5.5) | - | (5.5) |
| Other expenses | (8.4) | (2.0) | (1.1) | (3.8) | 5.5 | (9.8) | - | (9.8) |
| EBITDA | 44.1 | 19.0 | 7.9 | 6.1 | 1.0 | 78.1 | 9.3 | 87.4 |
| Depreciation and amortisation | (20.3) | (4.6) | (2.9) | (0.4) | (1.2) | (29.4) | - | (29.4) |
| Write-offs, revaluation and impairment losses of PPE and intangible assets |
- | - | (1.0) | - | - | (1.0) | - | (1.0) |
| EBIT | 23.8 | 14.4 | 4.0 | 5.7 | (0.2) | 47.7 | 9.3 | 57.0 |
| Finance activity, net | (5.9) | - | (5.9) | |||||
| Income tax expenses | (6.7) | (1.4) | (8.1) | |||||
| Net profit | 35.1 | 7.9 | 43.0 |
1 Other – other activities and eliminations (consolidation adjustments and related party transactions).
2 Due to Networks Methodology update, change in accounting policy and reclassifications as well as reduction of management adjustments, all financial indicators were recalculated retrospectively for all quarters of the year 2021 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021'). Adjusted EBITDA reported in 2021 Q1 Interim report was EUR 91.9 million.
In Q1 2022, revenue increased by 152.0%, compared to Q1 2021, and totalled EUR 991.3 million. The main reasons causing revenue changes in our business segments were as follows:
| Q1 2022 | Q1 2021 | ∆ | ∆,% | |
|---|---|---|---|---|
| Customers & Solutions | 677.4 | 184.3 | 493.1 | 267.6% |
| Networks | 134.6 | 146.3 | (11.7) | (8.0%) |
| Green Generation | 120.7 | 33.1 | 87.6 | 264.7% |
| Flexible Generation | 72.4 | 29.6 | 42.8 | 144.6% |
| Other1 | (13.8) | 0.1 | (13.9) | n/a |
| Revenue | 991.3 | 393.4 | 597.9 | 152.0% |
Other – other activities and eliminations (consolidation adjustments and related party transactions).
1
| Q1 2022 | Q1 2021 | ∆ | ∆,% | Q1 2022, % | |
|---|---|---|---|---|---|
| Lithuania | 749.2 | 352.1 | 397.1 | 112.8% | 75.6% |
| Other2 | 242.1 | 41.3 | 200.8 | 486.2% | 24.4% |
| Revenue | 991.3 | 393.4 | 597.9 | 152.0% | 100.0% |
2 Other – Latvia, Estonia, Poland and Finland.
In Q1 2022, the Group earned 75.6% (89.5% in Q1 2021) of its revenue in Lithuania (EUR 749.2 million). The Group's revenue from foreign countries increased by 486.2%, mostly in Finland, Latvia and Poland, and reached EUR 242.1 million (Q1 2021: EUR 41.3 million), mainly due to increased natural gas prices.
| Q1 2022 | Q1 2021 | ∆ | ∆,% | Q1 2022, % | |
|---|---|---|---|---|---|
| Electricity related | 579.8 | 275.2 | 304.6 | 110.7% | 58.5% |
| Natural gas related | 389.0 | 101.8 | 287.2 | 282.1% | 39.2% |
| Other | 22.5 | 16.3 | 6.2 | 38.0% | 2.3% |
| Revenue | 991.3 | 393.3 | 598.0 | 152.0% | 100.0% |
A more detailed description is presented in Interim Consolidated Financial statements for Q1 2022, Note 22 'Revenue from contracts with customers'.
In Q1 2022, electricity related revenue increased by EUR 304.6 million, compared to Q1 2021, mostly due to higher revenue from B2B, B2C electricity supply and related revenue (EUR +174.0 million), higher revenue from sale of generated electricity (EUR +58.5 million), higher income from services ensuring the isolated operation of power system and capacity reserve (EUR +50.8 million) and higher revenue from public electricity supply (EUR +43.6 million). Natural gas related revenue increased by EUR 287.2 million, compared to Q1 2021, due to higher revenue from natural gas sales (incl. LNGT security component) (EUR +288.9 million). Other revenue increased mostly due to higher revenue from heating (EUR +8.3 million).
The Group's purchase of electricity and natural gas amounted to EUR 801.5 million in Q1 2022 and increased by 202.1% compared to Q1 2021. The increase was caused by higher natural gas (EUR +323.9 million) and electricity (EUR +212.1 million) purchases, mainly due to increased market prices.
In Q1 2022, OPEX was equal to EUR 46.6 million and increased by 14.5% (EUR +5.9 million). This change was driven by higher salaries and related expenses (EUR 2.9 million, or +11.4%), mainly due to the growth in the Group's average salary and increased overtime resulted from repair of failures in the electricity distribution network after heavy storms in 2022. Other expenses increased mostly due to higher taxes, IT, transport and utilities expenses.
Changes in fair value of effective hedges that meet the qualifying criteria for hedge accounting are disclosed in Statement of Financial Position in Equity reserves. The gain or loss of settled derivatives are disclosed in the Statement of Profit or Loss as Purchases of electricity, natural gas and other services. Changes in fair value and the result of settled hedges that do not meet the qualifying criteria for hedge accounting are disclosed in the Statement of Profit or Loss, the negative result – in other expenses and the positive hedging result for the period is presented in other revenue.
Energy hedging expenses from ineffective hedging in Q1 2022 are mainly related to the acquired gas reserve in order to comply with new requirements for the isolated regime services (EUR -51.5 million in Q1 2022). There should be no material effect on the result as expenses are expected to be covered by isolated regime services tariff.
Depreciation and amortisation expenses increased due to Vilnius CHP's WtE unit (EUR +1.1 million), as it reached COD in March 2021, and Pomerania WF (EUR +0.9 million), as it reached COD in December 2021, as well as higher expenses of the Networks segment (EUR +1.8 million), mostly due to Investments made.
| Q1 2022 | Q1 20211 | ∆ | ∆,% | |
|---|---|---|---|---|
| Purchase of electricity, natural gas and other services | 801.5 | 265.3 | 536.2 | 202.1% |
| Purchase of natural gas and related services | 411.7 | 87.8 | 323.9 | 368.9% |
| Purchase of electricity and related services | 385.4 | 173.3 | 212.1 | 122.4% |
| Other | 4.4 | 4.2 | 0.2 | 4.8% |
| OPEX | 46.6 | 40.7 | 5.9 | 14.5% |
| Salaries and related expenses | 28.3 | 25.4 | 2.9 | 11.4% |
| Repair and maintenance expenses | 6.2 | 5.5 | 0.7 | 12.7% |
| Other | 12.1 | 9.8 | 2.3 | 23.5% |
| Other | 86.0 | 30.4 | 55.6 | 182.9% |
| Depreciation and amortisation | 33.8 | 29.4 | 4.4 | 15.0% |
| Energy hedging | 51.5 | - | 51.5 | n/a |
| Write-offs, revaluation and impairment losses of PPE and intangible assets |
0.7 | 1.0 | (0.3) | (30.0%) |
| Total | 934.1 | 336.4 | 597.7 | 177.7% |
1 Due to change in accounting policy and reclassifications, expenses were adjusted retrospectively for all quarters of the year 2021 (for more information, see 'Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of Q1 2022').
Adjusted EBITDA amounted to EUR 111.4 million in Q1 2022 and was 42.6%, or EUR 33.3 million, higher than in Q1 2021. Adjusted EBITDA increase was mainly driven by Green Generation segment due to launch of Pomerania WF in Poland and better results of hydro portfolio due to higher electricity market price.
The main reasons behind the change in Adjusted EBITDA were as follows:
(EUR -14.7 million) from ineffective "proxy" hedges as the spread between Lithuanian and Finish price zones has further increased. It was partly offset by independent supply B2C activities (EUR +4.2 million), which turned positive (EUR 1.1 million) mainly due to over-hedge.
| Q1 2022 | Q1 20212 | ∆ | ∆,% | |
|---|---|---|---|---|
| Green Generation | 70.0 | 19.0 | 51.0 | 268.4% |
| Networks | 45.1 | 44.1 | 1.0 | 2.3% |
| Flexible Generation | 4.9 | 7.9 | (3.0) | (38.0%) |
| Customers & Solutions | (9.7) | 6.1 | (15.8) | n/a |
| Other3 | 1.1 | 1.0 | 0.1 | 10.0% |
| Adjusted EBITDA | 111.4 | 78.1 | 33.3 | 42.6% |
1 Due to Networks Methodology update, change in accounting policy and reclassifications as well as reduction of management adjustments, all financial indicators were recalculated retrospectively for all quarters of the year 2021 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021'). Negative Networks Methodology update's impact for comparable figures of Q1 2021 amounted to EUR -12.5 million. Q1 2021 Adjusted EBITDA was EUR 91.9 million. Other – other activities and eliminations (consolidation adjustments and related party transactions).
The growth of our Adjusted EBITDA by 42.6% to EUR 111.4 million was mainly driven by the launch of Pomerania WF (94 MW) in Poland and better results of our hydro portfolio (1,001 MW).
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In Q1 2022, Adjusted EBITDA from regulated and long-term contracted activities amounted to 48.5% of the total Adjusted EBITDA (Q1 2021: 69.3%). The share of such activities decreased due to significantly higher Adjusted EBITDA from Green Generation merchant activities, mainly due to high electricity market prices.
Regulated activities include:
Long-term contracted activities include wind farms with support schemes, i.e., feed-in and feed-in premium tariffs.
| Q1 2022 | Q1 2021 | ∆ | ∆,% | |
|---|---|---|---|---|
| Regulated | 49.5 | 51.0 | (1.5) | (2.9%) |
| Long-term contracted | 4.5 | 3.1 | 1.4 | 45.2% |
| Merchant | 57.4 | 24.0 | 33.4 | 139.2% |
| Adjusted EBITDA | 111.4 | 78.1 | 33.3 | 42.6% |
| Q1 2022 | Q1 2021 | ∆ | ∆,% | |
|---|---|---|---|---|
| EBITDA | 91.7 | 87.4 | 4.3 | 4.9% |
| Adjustments1 | ||||
| Temporary regulatory differences (1) | 19.7 | (11.5) | 31.2 | n/a |
| Result from generation before COD (2) | - | 2.2 | (2.2) | (100.0%) |
| Total EBITDA adjustments | 19.7 | (9.3) | 29.0 | n/a |
| Adjusted EBITDA | 111.4 | 78.1 | 33.3 | 42.6% |
| Adjusted EBITDA margin | 11.0% | 20.3% | (9.3 pp) | n/a |
1 A more detailed description of the management adjustments is presented in Annual Consolidated Financial statements for Q1 2022, Note 29 'Operating segments'.
In Q1 2022, Adjusted EBIT amounted to EUR 76.9 million, which was 61.2% (or EUR +29.2 million) higher than in Q1 2021. The main effect of the change in Adjusted EBIT was higher Adjusted EBITDA (EUR +33.3 million) (the reasons behind the increase are described in 'EBITDA' section), which was partly offset by higher depreciation expenses (EUR -4.4 million).
| Q1 2022 | Q1 20211 | ∆ | ∆,% | |
|---|---|---|---|---|
| Green Generation | 63.1 | 14.4 | 48.7 | 338.2% |
| Networks | 22.6 | 23.8 | (1.2) | (5.0%) |
| Flexible Generation | 1.9 | 4.0 | (2.1) | (52.5%) |
| Customers & Solutions | (10.2) | 5.7 | (15.9) | n/a |
| Other2 | (0.5) | (0.2) | (0.3) | 150.0% |
| Adjusted EBIT | 76.9 | 47.7 | 29.2 | 61.2% |
| Adjusted EBIT margin | 7.6% | 12.4% | (4.8 pp) | n/a |
| Q1 2022 | Q1 2021 | ∆ | ∆, % | |
|---|---|---|---|---|
| EBIT | 57.2 | 57.0 | 0.2 | 0.4% |
| Adjustments | ||||
| Total EBITDA adjustments | 19.7 | (9.3) | 29.0 | n/a |
| Total EBIT adjustments | 19.7 | (9.3) | 29.0 | n/a |
| Adjusted EBIT | 76.9 | 47.7 | 29.2 | 61.2% |
| Adjusted ROCE LTM | 8.7% | 7.7% | 1.0 pp | n/a |
| ROCE LTM | 6.8% | 10.2% | (3.3 pp) | n/a |
Adjusted net profit amounted to EUR 61.1 million in Q1 2022 and was 74.1% higher than in Q1 2021. Adjusted EBITDA's positive impact (EUR +33.3 million) was partly offset by higher depreciation and amortisation (EUR -4.4 million) and income tax (EUR -1.8 million) expenses.
Reported net profit in Q1 2022 increased to EUR 46.8 million compared to EUR 43.0 million in Q1 2021. Reported net profit increase was significantly lower compared to increase in Adjusted net profit, mostly due to temporary regulatory differences (EUR -31.2 million), mainly in Networks segment (EUR -26.2 million).
| Q1 2022 | Q1 20211 | ∆ | ∆,% | |
|---|---|---|---|---|
| Net profit | 46.8 | 43.0 | 3.8 | 8.8% |
| Adjustments | ||||
| Total EBIT adjustments | 19.7 | (9.3) | 29.0 | n/a |
| One-off financial activity adjustments (3) | (2.4) | - | (2.4) | n/a |
| Adjustments' impact on income tax (4) | (3.0) | 1.4 | (4.4) | n/a |
| Total net profit adjustments | 14.3 | (7.9) | 22.2 | n/a |
| Adjusted net profit | 61.1 | 35.1 | 26.0 | 74.1% |
| Adjusted ROE LTM | 9.9% | 8.9% | 1.0 pp | n/a |
| ROE LTM | 8.3% | 12.0% | (3.7 pp) | n/a |
(3) One-off financial activity adjustments include elimination of value increase in Smart Energy Fund's investments (EUR +2.4 million).
(4) An additional income tax adjustment of 15% (statutory income tax rate in Lithuania) is applied to all EBIT adjustments.
1 Due to Networks Methodology update, change in accounting policy and reclassifications as well as reduction of management adjustments, all financial indicators were recalculated retrospectively for all quarters of the year 2021 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021'). 2 Other – other activities and eliminations (consolidation adjustments and related party transactions).
In Q1 2022, Investments amounted to EUR 43.1 million and were EUR 14.1 million higher compared to Q1 2021. The largest part of investments were made to electricity distribution network (61.3% of total Investments).
Investments in the Networks segment amounted to EUR 33.2 million and were EUR 13.2 million higher compared to Q1 2021. Investments in expansion of the electricity distribution network increased by EUR 7.6 million, or +79.2%, due to more new connection points and upgrades, and amounted to EUR 17.2 million, or 39.9% of total Q1 2022 Investments. Investments in maintenance of electricity distribution network increased by EUR +2.9 million, or +46.0%, and amounted to EUR 9.2 million, or 21.3% of total Q1 2022 Investments.
Investments in the Green Generation segment amounted to EUR 6.0 million in Q1 2022 and were EUR 1.3 million lower compared to Q1 2021. Investments were lower than usually as new Green Generation projects have not reached heavy investment phase yet.
In Q1 2022, Grants and Investments covered by customers amounted to EUR 12.9 million and accounted for 29.9% of total Investments. The Group received EUR 5.1 million in grants for Investments in Q1 2022, mainly related to maintenance of electricity and natural gas distribution networks (EUR 4.6 million) and grants for Vilnius CHP project (EUR 0.5 million). Also, part of investments into Networks related to new customer connections, upgrades and infrastructure equipment transfers were covered by customers (EUR 7.8 million).
| Q1 2022 | Q1 2021 | ∆ | ∆,% | |
|---|---|---|---|---|
| Networks | 33.2 | 20.0 | 13.2 | 66.0% |
| Expansion of the electricity network | 17.2 | 9.6 | 7.6 | 79.2% |
| Maintenance of the electricity network | 9.2 | 6.3 | 2.9 | 46.0% |
| Expansion of the gas network | 1.5 | 2.2 | (0.7) | (31.8%) |
| Maintenance of the gas network | 1.2 | 1.1 | 0.1 | 9.1% |
| Other | 4.1 | 0.8 | 3.3 | n/a |
| Green Generation | 6.0 | 7.3 | (1.3) | (17.8%) |
| Pomerania WF | 4.3 | 0.6 | 3.7 | n/a |
| Vilnius CHP | 1.3 | 4.4 | (3.1) | (70.5%) |
| Kaunas CHP | - | 0.7 | (0.7) | (100.0%) |
| Other | 0.4 | 1.6 | (1.2) | (75.0%) |
| Customers & Solutions | 0.3 | 0.4 | (0.1) | (25.0%) |
| Flexible Generation | - | - | - | n/a |
| Other1 | 3.6 | 1.3 | 2.3 | 176.9% |
| Investments | 43.1 | 29.0 | 14.1 | 48.6% |
| Grants | (5.1) | (7.8) | 2.7 | (34.6%) |
| Investments covered by customers2 | (7.8) | (5.8) | (2.0) | 34.5% |
| IInvestments (excl. grants and investments covered by customers) |
30.2 | 15.4 | 14.8 | 96.1% |
1 Other – other activities and eliminations (consolidation adjustments and related party transactions).
Investments covered by customers include new customer connections and upgrades, and infrastructure equipment transfers.
As of 31 March 2022, total assets reached EUR 4,623.0 million (8.7% increase from 31 December 2021).
As of 31 March 2022 non-current assets have increased by EUR 191.7 million, or 6.5%, compared to 31 December 2021. The growth was mainly influenced by an increase in accrued amounts receivable (EUR +94.8 million) of regulated supply activities (Customers & Solutions) due to actual prices and tariffs differences, and receivables related to additional natural gas reserve acquired for isolated regime services (EUR +44.8) (Flexible Generation). Additionally, the increase in non-current assets was affected by higher (EUR +22.6 million) prepayments made the constructions of Mažeikiai WF.
As of 31 March 2022, current assets increased by EUR 180.0 million, or 13.8%, from 31 December 2021, mainly due to an increase in working capital (for more information see section 'Net working capital' below). The increase was partly offset by repaid receivable from EPSO-G for the shares of AB "LitGrid" (EUR 84.1 million).
As of 31 March 2022 equity amounted to EUR 2,005.3 million and increased by EUR 156.3 million, or 8.5%, compared to 31 December 2021, mostly due to an increase in hedging reserve (EUR +153.6 million), net profit in Q1 2022 (EUR +46.8 million), which was partly offset by dividends declared (EUR -43.8 million) for H2 of 2021.
Total liabilities increased by 9.0% or EUR 215.4 million in Q1 2022. Increase in non-current liabilities (+3.7%) was mostly affected by an increase in loans from banks (EUR +67.6 million) due to the loan of EUR 73 million disbursed for implementation of smart meters. Current liabilities increased by 21.7%, or EUR 151.7 million. It was mostly caused by an increase in accrued payables related to natural gas purchases (EUR +86.2 million) and dividend payables (EUR +43.8 million).
As of 31 March 2022 Net working capital amounted to EUR 681.3 million and increased by EUR 194.9 million compared to 31 December 2021, mainly driven by high energy prices. The drivers of the change are the following:
– growth in total inventory by EUR +237.9 million, mainly in Customers & Solutions (EUR +127.7 million), due to increasing volume and value of stored gas, and Flexible Generation (EUR +116.9 million), due to the acquisition of additional natural gas reserve;
| 31.03.2022 | 31.12.2021 | ∆ | ∆,% | |
|---|---|---|---|---|
| Non-current assets | 3,138.7 | 2,947.0 | 191.7 | 6.5% |
| Current assets | 1,484.3 | 1,304.3 | 180.0 | 13.8% |
| TOTAL ASSETS | 4,623.0 | 4,251.3 | 371.7 | 8.7% |
| Equity | 2,005.3 | 1,849.0 | 156.3 | 8.5% |
| Total liabilities | 2,617.7 | 2,402.3 | 215.4 | 9.0% |
| Non-current liabilities | 1,768.5 | 1,704.8 | 63.7 | 3.7% |
| Current liabilities | 849.2 | 697.5 | 151.7 | 21.7% |
| TOTAL EQUITY AND LIABILITIES | 4,623.0 | 4,251.3 | 371.7 | 8.7% |
| Asset turnover LTM | 0.58 | 0.46 | 0.12 | 26.1% |
| ROA LTM | 3.7% | 3.8% | (0.1 pp) | n/a |
| Current ratio | 1.75 | 1.87 | (0.12) | (6.4%) |
| Net working capital | 681.3 | 486.4 | 194.9 | 40.1% |
| Net working capital/Revenue LTM | 27.4% | 37.7% | (10.3 pp) | n/a |
| Capital employed | 3,006.0 | 2,806.1 | 199.9 | 7.1% |
As of 31 March 2022, Net debt amounted to EUR 1,000.7 million, an increase of 4.5%, or EUR 43.5 million, compared to 31 December 2021 due to higher need for working capital, and was partly offset by positive FFO and repaid receivable amount by EPSO-G (for more information see section 'Statement of financial position'). FFO LTM /Net debt slightly decreased from 30.5% to 29.7%, however, ratio is above 23% threshold required for BBB+ credit rating.
| 31.03.2022 | 31.12.2021 | ∆ | ∆,% | |
|---|---|---|---|---|
| Total non-current financial liabilities | 1,232.4 | 1,164.4 | 68.0 | 5.8% |
| Non-current loans | 297.2 | 229.6 | 67.6 | 29.4% |
| Bonds | 889.0 | 888.5 | 0.5 | 0.1% |
| Interests payable (including accrued) | - | - | - | n/a |
| Lease liabilities (IFRS 16) | 46.2 | 46.3 | (0.1) | (0.2%) |
| Total current financial liabilities | 247.6 | 241.9 | 5.7 | 2.4% |
| Current portion of non-current loans | 15.2 | 13.8 | 1.4 | 10.1% |
| Current loans | 214.1 | 214.1 | - | -% |
| Interests payable (including accrued) | 13.8 | 9.3 | 4.5 | 48.4% |
| Lease liabilities (IFRS 16) | 4.5 | 4.7 | (0.2) | (4.3%) |
| Gross debt | 1,480.0 | 1,406.3 | 73.7 | 5.2% |
| Cash and cash equivalents | 479.3 | 449.1 | 30.2 | 6.7% |
| Net debt | 1,000.7 | 957.2 | 43.5 | 4.5% |
| EPSO-G receivable | - | 86.2 | (86.2) | (100.0%) |
| Net debt less EPSO-G receivable | 1,000.7 | 871.0 | 129.7 | 14.9% |
| Net debt / Adjusted EBITDA LTM | 2.73 | 2.88 | (0.15) | (5.2%) |
| Net debt / EBITDA LTM | 2.95 | 2.85 | 0.10 | 3.5% |
| FFO LTM/ Net debt | 29.7% | 30.5% | (0.8 pp) | n/a |
| Gross debt/Equity | 0.74 | 0.76 | (0.02) | (2.6%) |
| Equity ratio | 0.43 | 0.43 | - | -% |
| Outstanding as of 31.03.2022 |
Effective interest rate (%) |
Average time to maturity (years) |
Fixed interest rate |
Euro currency |
|
|---|---|---|---|---|---|
| Bonds (incl. interest) | 913.61 | 1.96 | 7.2 | 100.0% | 100.0% |
| Bank loans | 526.6 | 0.96 | 5.5 | 56.3% | 84.0% |
| Lease liabilities | 50.9 | - | 7.1 | - | 100.0% |
| Total | 1,491.1 | 1.59 | 6.6 | 81.2% | 94.3% |
Nominal value of issued bonds amount to 900 EURm. As of 31 March 2022 bonds accounted for 889.0 EURm in the consolidated balance sheet as the nominal remaining capital will be capitalised until maturity according to IFRS.
The Group has 3 bond issues with a total EUR 900.0 million nominal outstanding amount, out of which 2 are green (EUR 600.0 million).
| Outstanding bond issues | |||
|---|---|---|---|
| 2017 issue | 2018 issue | Q1 2021 issue | |
| ISIN-code | XS1646530565 | XS1853999313 | XS2177349912 |
| Currency | EUR | EUR | EUR |
| Nominal amount | 300,000,000 | 300,000,000 | 300,000,000 |
| Coupon | 2.000 | 1.875 | 2.000 |
| Maturity | 17 July 2027 | 10 July 2028 | 21 May 2030 |
| Credit rating | BBB+ | BBB+ | BBB+ |
During the reporting period, there have been no material changes regarding bonds. Related information, including the structure of bondholders as of the issue date, is available in the Annual report 2021, section '7.1 Further investor related information'.
As of 31 March 2022 outstanding amount of loans from banks were EUR 526.6 million, of which 63.4% were dedicated for Green Generation segment's projects, 19.8% for working capital of Customers & Solutions segment and 13.9% for implementation of smart meters in Networks segment.
Bonds maturing in 2027 (EUR 300.0 million, green), in 2028 (EUR 300.0 million, green) and in 2030 (EUR 300.0 million) make the largest portion of the Group's financial liabilities. Average maturity of the financial liabilities as of 31 March 2022 was 6.6 years (31 December 2021: 6.4 years).
As of 31 March 2022 financial liabilities amounting to EUR 1 210.3 million were subject to fixed interest rate (84.7% of loans, bonds and interests payable) and the remaining amount of financial liabilities were subject to floating interest rate. Effective interest rate was 1.59% as of 31 March 2022. 94.1% of the total debt was in EUR, and 5.9% – in PLN.
The Group manages liquidity risk by entering into credit line agreements with banks. As of 31 March 2022 there were three credit line facilities available with a total limit of EUR 404 million. The disbursed amount was EUR 104 million. The credit line facilities are committed, i.e., funds must be paid by the bank upon request.
Net cash flows from operating activities (CFO) amounted to EUR 29.4 million in Q1 2022. Compared to Q1 2021, CFO decreased by EUR 36.4 million, mainly due to an increase in working capital, which was partly offset by repaid receivable from EPSO-G for the shares of AB "LitGrid" and positive fair value changes of derivatives.
Net cash flows from investing activities (CFI) amounted to EUR -65.7 million in Q1 2022. Compared to Q1 2021, CFI decreased by EUR 28.0 million, mainly due to higher payments for investments (EUR +11.7 million) and higher prepayments for non-current assets (EUR +13.5 million).
Net cash flows from financing activities (CFF) amounted to EUR 66.6 million in Q1 2022. In Q1 2022, CFF were positive mainly due to the loan of EUR 73 million disbursed for implementation of smart meters.
| Q1 2022 | Q1 2021 | ∆ | ∆, % | |
|---|---|---|---|---|
| Cash and cash equiv. at the beginning of the period | 449.1 | 658.8 | (209.7) | (31.8%) |
| CFO | 29.4 | 65.8 | (36.4) | (55.3%) |
| CFI | (65.7) | (37.7) | (28.0) | 74.3% |
| CFF | 66.6 | (14.1) | 80.7 | n/a |
| Increase (decrease) in cash and cash equiv. | 30.3 | 14.0 | 16.3 | 116.4% |
| Cash and cash equiv. at the end of period | 479.4 | 672.8 | (193.4) | (28.7%) |
In Q1 2022, the Group's FFO increased by 6.3% (EUR 5.3 million) and amounted to EUR 89.3 million. The main reason for the growth was higher EBITDA.
| Q1 2022 | Q1 20211 | ∆ | ∆,% | |
|---|---|---|---|---|
| EBITDA | 91.7 | 87.4 | 4.3 | 4.9% |
| Interest received | 0.1 | 0.1 | - | -% |
| Interest paid | (2.1) | (1.7) | (0.4) | 23.5% |
| Income tax paid | (0.4) | (1.8) | 1.4 | (77.8%) |
| FFO | 89.3 | 84.0 | 5.3 | 6.3% |
In Q1 2022, the Group's FCF decreased by EUR 169.2 million and amounted to EUR -138.3 million. The main reason for the decrease was the change in working capital.
| Q1 2022 | Q1 20211 | ∆ | ∆, % | |
|---|---|---|---|---|
| FFO | 89.3 | 84.0 | 5.3 | 6.3% |
| Investments | (43.1) | (29.0) | (14.1) | 48.6% |
| Grants received | 5.1 | 7.8 | (2.7) | (34.6%) |
| Cash effect of new connection points and upgrades | 4.8 | 2.7 | 2.1 | 77.8% |
| Proceeds from sale of PPE and intangible assets2 | 0.5 | 0.6 | (0.1) | (16.7%) |
| Change in net working capital | (194.9) | (35.2) | (159.7) | 453.7% |
| FCF | (138.3) | 30.9 | (169.2) | n/a |
Due to Networks Methodology update, change in accounting policy and reclassifications as well as reduction of management adjustments, all financial indicators were recalculated retrospectively for all quarters of the year 2021 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021').
2 Cash inflow indicated in CF statement line "Proceeds from sale of PPE and intangible assets" excluding gain or loss, which is already included in FFO.
Installed capacity of Green Generation increased by 95 MW since Pomerania WF reached COD in December 2021. Additionally, Vilnius CHP's WtE unit reached COD in March Q1 2021 and the actual electricity generation capacity was verified by NERC (+1 MW).
The total distributed electricity increased by 1.9%. The slight increase was a result of the growing electricity consumption of B2B customers, mainly in retail and service industry.
Electricity generation (net) increased by 2%, compared to Q1 2021, and amounted to 0.58 TWh in Q1 2022. The increase in electricity generated (net) was mainly driven by higher Green Generation volumes: Pomerania WF (+0,10 TWh), Kaunas HPP (+0.06 TWh) and Vilnius CHP's WtE unit (+0.02 TWh). The increase was offset by lower generation of CCGT unit at Elektrėnai Complex (-0.18 TWh) due to unfavourable market conditions for gas fired generation. Increased electricity generated (net) in wind farms was mainly affected by full quarter generation of Pomerania WF (commercial operations started in December 2021). A contributing positive impact of Vilnius CHP's WtE unit was recorded because the unit started commercial operations in March 2021, whereas the increase of electricity generated (net) at Kaunas HPP was driven by higher water levels in the Nemunas river.
An increase in electricity sales (20.9% higher, when compared to the previous period) was mostly affected by higher B2B sales (due to increased number of B2B customers and sales volumes in Lithuania, Latvia and Poland), whereas B2C sales slightly decreased due to ongoing electricity market deregulation in Lithuania.
Electricity SAIFI indicator, which reflects average number of unplanned long interruptions per customer, increased compared to the previous year and was 0.63 interruptions (0.37 interruptions in Q1 2021). In line with higher number of interruptions, electricity SAIDI indicator, which shows average duration of unplanned interruptions, increased to 108.59 minutes (compared to 97.97 minutes in Q1 2021). Q1 2022 quality indicators were negatively affected by extreme weather conditions/natural disasters (that caused 4 mass disconnections in January and February 2022) and strong winds/local storms (up to 28 m/s at the end of March 2022).
| Electricity | |||||
|---|---|---|---|---|---|
| Green Generation capacity | MW | 1,351 | 1,350 | 1 | 0.1% |
| Green Generation installed capacity | MW | 1,215 | 1,120 | 95 | 8.4% |
| Green Generation projects under construction | MW | 136 | 230 | (94) | (40.8%) |
| Electricity distributed | TWh | 2.77 | 2.72 | 0.05 | 1.9% |
| Electricity generated (net) | TWh | 0.58 | 0.57 | 0.01 | 2.0% |
| Green electricity generated (net) | TWh | 0.54 | 0.35 | 0.19 | 56.4% |
| Green share of generation | % | 93.6% | 61.0% | 32.6 pp | n/a |
| Electricity sales | TWh | 2.19 | 1.81 | 0.38 | 20.9% |
| SAIFI | units | 0.63 | 0.371 | 0.26 | 72.0% |
| SAIDI | min | 108.59 | 97.971 | 10.62 | 10.8% |
| Heat | |||||
| Green Generation capacity (Heat) | MW | 349 | 339 | 10 | 2.9% |
| Green Generation installed capacity | MW | 180 | 170 | 10 | 5.9% |
| Green Generation projects under construction | MW | 169 | 169 | - | -% |
| Heat generated (net) | TWh | 0.30 | 0.23 | 0.07 | 29.4% |
| Natural gas | |||||
| Natural gas distributed | TWh | 2.68 | 3.32 | (0.64) | (19.2%) |
| Natural gas sales | TWh | 4.00 | 5.25 | (1.24) | (23.7%) |
| SAIFI | units | 0.001 | 0.0022 | (0.001) | (65.0%) |
| SAIDI | min | 0.05 | 0.162 | (0.11) | (67.5%) |
1 Previously reported electricity SAIDI 100.7, SAIFI 0.38 values were adjusted with regards to new information. 2 Previously reported natural gas SAIDI 0.18, SAIFI 0.003 values were adjusted with regards to new information.
Heat generation (net) in Q1 2022 increased by nearly a third compared to Q1 2021 as Vilnius CHP's WtE unit's commercial operations started only at the end of Q1 2021 (i.e. March 2021).
Natural gas distribution volumes decreased by 19.2% as a result of warmer weather during the heating season.
Natural gas sales decreased by 23.7%. The decrease was mainly influenced by lower wholesale volumes (mainly a one-off 1.44 TW LNG cargo sale in Q1 2021), whereas retail gas sales increased in Latvia, Poland and Finland.
Natural gas distribution SAIFI and SAIDI indicators improved in Q1 2022, compared to the same period last year, as there were no significant disruptions during Q1 2022. Natural gas SAIFI improved to 0.001 interruptions (from 0.002 interruptions in Q1 2021). SAIDI indicator also decreased and was 0.05 minutes (compared to 0.16 minutes in Q1 2021).
Q1 2022 Q1 2021 ∆ ∆,%
1 Indicators provided in this page (except Revenue) are considered as Alternative Performance Measures .
In Q1 2022, the Networks revenue reached EUR 134.6 million and was 8.0%, or EUR 11.7 million, lower than in Q1 2021. The decrease was mainly driven by lower electricity distribution (EUR -12.2 million) and transmission (EUR -5.0 million) revenue due to, on average, 17% lower electricity distribution and transmission tariff components approved by the regulator.
Adjusted EBITDA reached EUR 45.1 million and was 2.3%, or EUR 1.0 million, higher than in Q1 2021. The increase was driven by introduction of an additional tariff component (EUR +7.5 million). The increase was partly offset by lower share of allowed return and D&A recognized in Q1 2022 vs Q1 2021, due to volume effect (EUR -3.6 million) (this effect will level off over the course of the year as annual ROI and compensated D&A is fixed for the year but allocated between months based on distributed volumes) and lower electricity WACC (4.16% in 2022 vs 5.34% in 2021) (EUR -3.2 million) as a result of the updated WACC methodology for the new regulatory period from 2022. Reported EBITDA decreased significantly while Adjusted EBITDA increased slightly, due to temporary regulatory differences (EUR -26.2 million).
Compared to Q1 2021, Investments increased by EUR 13.2 million, or 66.0%. Investments in expansion of the electricity distribution network increased by EUR 7.6 million, or +79.2%, due to higher number of new connection points and upgrades, and amounted to EUR 17.2 million or 39.9% of the total Q1 2022 Investments. Investments in maintenance of the electricity distribution network increased by EUR +2.9 million, or +46.0%, and amounted to EUR 9.2 million, or 21.3% of the total Q1 2022 Investments.
| Key financial indicators, EURm | Q1 2022 | Q1 20211 | ∆ | ∆,% | |
|---|---|---|---|---|---|
| Revenue | 134.6 | 146.3 | (11.7) | (8.0%) | |
| Adjusted EBITDA | 45.1 | 44.1 | 1.0 | 2.3% | |
| EBITDA | 32.6 | 57.6 | (25.0) | (43.4%) | |
| Adjusted EBIT | 22.6 | 23.8 | (1.2) | (5.0%) | |
| EBIT | 10.0 | 37.3 | (27.3) | (73.2%) | |
| Investments | 33.2 | 20.0 | 13.2 | 66.0% | |
| Adjusted EBITDA margin, % | 30.6% | 33.2% | (2.6 pp) | n/a | |
| 31.03. 2022 31.12.2021 | ∆ | ∆,% | |||
| PPE, intangible and right-of-use assets | 1,665.5 | 1,654.6 | 10.9 | 0.7% | |
| Net debt | 740.4 | 710.0 | 30.4 | 4.3% | |
| Key regulatory indicators2 | 2022 | 20211 | ∆ | ∆,% | |
| Regulated activities share in adjusted EBITDA in Q1 |
% | 100.0 | 100.0 | 0.0 pp | n/a |
| Total | |||||
| RAB | EURm | 1,345 | 1,258 | 87 | 6.9% |
| WACC (weighted average) | % | 4.13 | 5.05 | (0.93 pp) | n/a |
| D&A (regulatory) | EURm | 67.8 | 69.1 | (1.3) | (1.9%) |
| Additional tariff component | EURm | 28.0 | 0.0 | 28.0 | n/a |
| Deferred part of investments covered by clients and electricity equipment transfer in Q1 |
EURm | 3.7 | 3.7 | 0.0 | (0.8%) |
| Electricity distribution | |||||
| RAB | EURm | 1,097 | 1,009 | 88 | 8.7% |
| WACC | % | 4.16 | 5.34 | (1.18 pp) | n/a |
| D&A (regulatory) | EURm | 58.5 | 59.6 | (1.1) | (1.8%) |
| Additional tariff component | EURm | 28.0 | 0.0 | 28.0 | n/a |
| Deferred part of investments covered by clients and electricity equipment transfer in Q1 |
EURm | 3.3 | 3.4 | (0.1) | (2.1%) |
| Natural gas distribution | |||||
| RAB | EURm | 248 | 249 | (1.0) | (0.4%) |
| WACC | % | 3.98 | 3.90 | 0.08 pp | n/a |
| D&A (regulatory) | EURm | 9.3 | 9.5 | (0.2) | (2.1%) |
| Deferred part of investments covered by clients and electricity equipment transfer in Q1 |
EURm | 0.4 | 0.3 | 0.0 | 12.4% |
1 Due to Networks Methodology update, change in accounting policy and reclassifications as well as reduction of management adjustments, all financial indicators were recalculated retrospectively for all quarters of the year 2021 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021').
RAB, WACC, D&A and additional tariff component approved and published by NERC. Full year numbers unless stated otherwise. Share of regulated activities and deferred part of investments covered by clients and electricity equipment transfer reflect quarterly values. The annual value of deferred part of investments covered by clients and electricity equipment transfer in 2021 comprise 13.5 EURm and 1.4 EURm in electricity and gas respectively.
The total distributed electricity increased by 1.9%. The slight increase was a result of the growing electricity consumption of B2B customers, mainly in retail and service industry. Technological losses ratio improved by 0.7 pp, when comparing to the last year, due to the effect of the measures taken to minimize electricity losses and the updated processes, which allowed to detect undeclared distributed volumes. The number of electricity distribution customers increased by 25,461 or 1.4% in Q1 2022, when comparing to Q1 2021, which was mainly affected by growing number of new connections of prosumers and producers and relatively stable growth of traditional B2B and B2C customers. The increase in prosumers and producers is related to the support schemes for solar plants and more attractive connection pricing for prosumers. Average time to connect increased by 51.4% due to higher volume of applications, disrupted supply of materials, increased workload for contractors (higher demand and unfavourable weather conditions) as well as expanded scope of mandatory design works.
Electricity distribution quality indicator SAIFI slightly deteriorated when comparing to the previous year and was 0.63 interruptions (0.37 interruptions in Q1 2021). Electricity SAIDI indicator increased to 108.59 minutes (compared to 97.97 minutes in Q1 2021). Q1 2022 quality indicators were negatively affected by extreme weather conditions/natural disasters (that caused 4 mass disconnections in January and February 2022) and strong winds/ local storms (up to 28 m/s at the end of March 2022).
Natural gas distribution volumes decreased by 19.2% because of warmer weather. Average time to connect ratio improved by 10.7% due to stable demand, allowing contractors to complete works within agreed timelines. Both natural gas supply quality indicators SAIFI and SAIDI have improved compared to the same period last year and were equal to 0.001 interruptions and 0.05 minutes respectively. Natural gas quality indicators improved as there were less significant disruptions in Q1 2022 compared to Q1 2021.
| Key operating indicators | Q1 2022 | Q1 2021 | ∆ | ∆,% | |
|---|---|---|---|---|---|
| Electricity distribution | |||||
| Electricity distributed | TWh | 2.77 | 2.72 | 0.05 | 1.9% |
| Distribution network | thousand km | 126.88 | 126.24 | 0.64 | 0.5% |
| Technological losses | % | 5.7% | 6.4% | (0.7 pp) | n/a |
| Number of customers | thousand | 1,807 | 1,782 | 25 | 1.4% |
| of which prosumers and producers | thousand | 18 | 12 | 6 | 49.2% |
| New connection points | thousand | 5.52 | 5.16 | 0.35 | 6.8% |
| Connection point upgrades | thousand | 5.39 | 4.98 | 0.41 | 8.1% |
| Admissible power of new connection points and upgrades |
MW | 127.43 | 117.17 | 10.26 | 8.8% |
| Time to connect (average) | c. d. | 48.39 | 31.961 | 16.43 | 51.4% |
| SAIFI | unit | 0.63 | 0.372 | 0.26 | 72.0% |
| SAIDI | min | 108.59 | 97.972 | 10.62 | 10.8% |
| Natural gas distribution | |||||
| Natural gas distributed | TWh | 2.68 | 3.32 | (0.64) | (19.2%) |
| Distribution network | thousand km | 9.57 | 9.433 | 0.14 | 1.5% |
| Technological losses | % | 1.4% | 1.2% | 0.2 pp | n/a |
| Number of customers | thousand | 620 | 613 | 7 | 1.2% |
| New connection points and upgrades | thousand | 1.21 | 1.40 | (0.19) | (13.6%) |
| Time to connect (average) | c. d. | 56.56 | 63.314 | (6.75) | (10.7%) |
| SAIFI | unit | 0.001 | 0.0025 | (0.001) | (65.0%) |
| SAIDI | min | 0.05 | 0.165 | (0.11) | (67.5%) |
| Customer experience | |||||
| NPS | % | 62% | 36% | 26 pp | n/a |
1 Previously reported 38.66 value was adjusted with regards to new information.
2 Previously reported electricity SAIDI 100.7, SAIFI 0.38 values were adjusted with regards to new information.
3 Previously reported 9.72 value was adjusted with regards to new information. 4 Previously reported 63.57 value was adjusted with regards to new information.
5 Previously reported natural gas SAIDI 0.18, SAIFI 0.003 values were adjusted with regards to new information.
In Q1 2022, Green Generation revenue amounted to EUR 120.7 million and was 264.7%, or EUR 87.6 million, higher than in Q1 2021. The increase was driven by:
In Q1 2022, Adjusted EBITDA reached EUR 70.0 million and was EUR 51.0 million, or 3.7 times higher than in Q1 2021. The main effects were:
Investments in the Green Generation segment amounted to EUR 6.0 million in Q1 2022 and were EUR 1.3 million lower compared to Q1 2021. Investments were lower as new Green Generation projects have not reached the heavy investment phase yet.
| Key financial indicators, EURm | Q1 2022 | Q1 20211 | ∆ | ∆,% |
|---|---|---|---|---|
| Revenue | 120.7 | 33.1 | 87.6 | 264.7% |
| Adjusted EBITDA | 70.0 | 19.0 | 51.0 | 268.4% |
| EBITDA | 70.0 | 16.8 | 53.2 | 316.7% |
| Adjusted EBIT | 63.1 | 14.4 | 48.7 | 338.2% |
| EBIT | 63.1 | 12.3 | 50.8 | 413.0% |
| Investments | 6.0 | 7.3 | (1.3) | (17.8%) |
| Adjusted EBITDA margin, % | 58.0% | 53.8% | 4.2 pp | n/a |
| 31.03.2022 | 31.12.2021 | ∆ | ∆, % | |
| PPE, intangible and right-of-use assets | 770.3 | 773.1 | (2.8) | (0.4%) |
| Net debt | 470.3 | 390.1 | 80.2 | 20.6% |
| Key regulatory indicators2 | 20223 | 20213 | ∆ | ∆, % | |
|---|---|---|---|---|---|
| Regulated activities share in adjusted EBITDA in Q1 |
% | 0.7 | 2.5 | (1.8 pp) | n/a |
| Kruonis PSHP | |||||
| RAB | EURm | 16.54 | 16.74 | (0.2) | (1.2%) |
| WACC | % | 4.03 | 3.50 | 0.53 pp | n/a |
| D&A (regulatory) | EURm | 1.4 | 1.4 | - | -% |
Due to change in accounting policy and reclassifications as well as reduction of management adjustments, all adjusted financial indicators were recalculated retrospectively for all quarters of the year 2021 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021').
2 Full year numbers unless stated otherwise.
Numbers approved and published by NERC.
4 The regulator has halved the RAB of the secondary power reserve since 2021, but allowed to keep half of the profit earned from electricity sales from activities of the secondary power reserve.
45 / 132
Electricity generated (net) in the Green Generation segment increased by 56.4% in Q1 2022, compared to Q1 2021. This was mainly due to higher electricity generation from wind, driven by Pomerania WF (commercial operations started in December 2021), hydro by increased generation at Kaunas HPP due to higher water level in the Nemunas river, and waste by Vilnius CHP's WtE unit (commercial operations started in March 2021).
In Q1 2022 electricity generated (net) by wind farms amounted to 0.17 TWh and increased by 0.11 TWh, compared to Q1 2021; a positive effect of Pomerania WF and more favourable weather in Lithuania last quarter were the key drivers. This also had an impact on the load factor of wind farms, which increased to 45.9% in Q1 2022 compared to 33.5% in Q1 2021. Availability factor of wind farms deteriorated slightly by 1.2 pp when compared to Q1 2021 due to a couple of minor breakdowns. Electricity generated (net) by Kaunas HPP amounted to 0.14 TWh, which is 81.6% higher than in Q1 2021 due to higher water level in the Nemunas river.
Heat generation (net) in Q1 2022 increased by nearly a third compared to Q1 2021 as Vilnius CHP's WtE unit started commercial operations at the end of Q1 2021 (i.e. March 2021).
Installed capacity of heat generation increased by 10 MW YoY since Vilnius CHP's WtE unit reached COD in March 2021 and the actual heat generation capacity was verified by NERC (+10 MW).
| Key operating indicators | Q1 2022 | Q1 2021 | ∆ | ∆,% | |
|---|---|---|---|---|---|
| Electricity generation | |||||
| Installed capacity | MW | 1,215 | 1,120 | 95 | 8.4% |
| Wind | MW | 170 | 76 | 94 | 122.6% |
| Hydro | MW | 1,001 | 1,001 | - | -% |
| Pumped storage | MW | 900 | 900 | - | -% |
| Run-of-river | MW | 101 | 101 | - | -% |
| Waste | MW | 44 | 43 | 1 | 2.3% |
| Projects under construction | MW | 136 | 230 | (94) | (40.8%) |
| Wind | MW | 63 | 157 | (94) | (59.8%) |
| Biomass | MW | 73 | 73 | - | -% |
| Electricity generated (net) | TWh | 0.54 | 0.35 | 0.19 | 56.4% |
| Wind | TWh | 0.17 | 0.05 | 0.11 | 208.7% |
| Hydro | TWh | 0.30 | 0.24 | 0.06 | 24.0% |
| Pumped storage | TWh | 0.16 | 0.16 | - | (2.7%) |
| Run-of-river | TWh | 0.14 | 0.08 | 0.06 | 81.6% |
| Waste | TWh | 0.07 | 0.05 | 0.02 | 47.7% |
| Wind farms availability factor | % | 98.0% | 99.2% | (1.2 pp) | n/a |
| Wind farms load factor1 | % | 45.9% | 33.5% | 12.5 pp | n/a |
| Heat generation | |||||
| Installed capacity | MW | 180 | 170 | 10 | 5.9% |
| Projects under construction | MW | 169 | 169 | - | -% |
| Heat generated (net) | TWh | 0.30 | 0.23 | 0.07 | 29.4% |
| Waste2 | TWh | 0.25 | 0.19 | 0.06 | 29.3% |
| Biomass | TWh | 0.05 | 0.04 | 0.01 | 29.8% |
1 The wind load factor has been recalculated using weighted average method.
2 Vilnius CHP and Kaunas CHP can use natural gas for starting/stopping the power plant, test runs, etc., which are included in reported values of "Waste".
In Q1 2022, Flexible Generation revenue reached EUR 72.4 million and was 144.6%, or EUR 42.8 million, higher than in Q1 2021. The increase was driven by higher revenue from the power reserve (EUR +49.6 million), which is mainly related to the expected revenue for additional natural gas reserve acquired in order to comply with new requirements for the isolated regime services. There should be no material effect on the result as expected additional revenue should cover expenses related to isolated regime services. The increase in revenue was partly offset by lower revenue from CCGT commercial activities (EUR -7.4 million).
In Q1 2022, Adjusted EBITDA amounted to EUR 4.9 million and was 38.0%, or EUR 3.0 million, lower than in Q1 2021. Adjusted EBITDA from regulated activities reached EUR 4.1 million and were 17.0%, or EUR 0.6 million
higher than in Q1 2021. Commercial activities amounted to EUR 0.8 million and were 81.2%, or EUR 3.6 million, lower than in Q1 2021. The decrease was mainly caused by worse results of commercial activities of CCGT unit (EUR -3.0 million) as market conditions were less favourable for generation (clean spark spread was less positive).
Electricity generation (net) volume of CCGT unit as well as units 7 and 8 at Elektrėnai Complex was 0.04 TWh and decreased by 83.3% in Q1 2022, compared to Q1 2021. The decrease was mainly influenced by lower CCGT generation caused by unfavourable market conditions (average clean spark spread was negative).
In Q1 2021 the tertiary active power reserve in the capacity of 482 MW was ensured by units 7 and 8 at Elektrėnai Complex, while in Q1 2022 the tertiary active power reserve was ensured in the scope of 519 MW by the same units.
In Q1 2022, the CCGT was providing isolated system operation services in the scope of 371 MW. The remaining part of the isolated system operation services were provided by unit 8 in the scope of 1 MW.
| Key financial indicators, EURm | Q1 2022 | Q1 20211 | ∆ | ∆,% |
|---|---|---|---|---|
| Revenue | 72.4 | 29.6 | 42.8 | 144.6% |
| Adjusted EBITDA | 4.9 | 7.9 | (3.0) | (38.0%) |
| EBITDA | 4.9 | 7.9 | (3.0) | (38.0%) |
| Adjusted EBIT | 1.9 | 4.0 | (2.1) | (52.5%) |
| EBIT | 1.9 | 4.0 | (2.1) | (52.5%) |
| Investments | - | - | - | n/a |
| Adjusted EBITDA margin, % | 6.8% | 26.6% | (19.8 pp) | n/a |
| 31.03.2022 | 31.12.2021 | ∆ | ∆,% | |
| PPE, intangible and right-of-use assets | 301.0 | 307.4 | (6.4) | (2.1%) |
| Net debt | 12.0 | (37.5) | 49.5 | n/a |
| Key operating indicators | Q1 2022 | Q1 2021 | ∆ | ∆,% | |
|---|---|---|---|---|---|
| Installed electricity capacity | MW | 1,055 | 1,055 | - | -% |
| Electricity generated (net) | TWh | 0.04 | 0.22 | (0.18) | (83.3%) |
| Total reserve and Isolated regime services |
MW | 891 | 891 | - | -% |
| Tertiary power reserve services |
MW | 519 | 482 | 37 | 7.7% |
| Isolated system operation services |
MW | 372 | 409 | (37) | (9.0%) |
| Key regulatory indicators2 | 20223 | 20213 | ∆ | ∆,% | |
|---|---|---|---|---|---|
| Regulated activities share in adjusted EBITDA in Q1 |
% | 84.4 | 44.7 | 39.7 pp | n/a |
| CCGT | |||||
| RAB | EURm | - | - | - | - |
| WACC | % | - | - | - | - |
| D&A (regulatory) | EURm | 9.3 | 10.0 | (0.7) | (7.0%) |
| Units 7 and 8 | |||||
| RAB | EURm | 32.0 | 33.8 | (1.8) | (5.3%) |
| WACC | % | 4.03 | 3.50 | 0.53 pp | n/a |
| D&A (regulatory) | EURm | 3.9 | 4.0 | (0.1) | (2.5%) |
Due to change in accounting policy and reclassifications as well as reduction of management adjustments, all adjusted financial indicators were recalculated retrospectively for all quarters of the year 2021 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021').
2 Full year numbers unless stated otherwise.
3 Numbers approved and published by NERC.
In Q1 Customers & Solutions revenue reached EUR 677.4 million and was 267.6%, or EUR 493.1 million, higher than in 2021. However, higher sales did not translate into significantly better results since sales margins are fixed using hedging instruments.
Higher revenue of B2B electricity business (EUR +187.2 million) was due to higher market prices (+122% on average) and higher volume sold (+44%). Total B2C electricity sales have increased (EUR +50.9 million) driven by regulated activities (EUR +42.9 million).
An increase in gas business was driven by higher natural gas B2B sales (EUR +173.4 million), mainly due to higher average TTF gas price index (+415%), which is mainly reflected in the company's gas supply. Natural gas B2C sales increased (EUR +81.4 million) due to higher regulated tariff and temporary regulated differences recognized right away as revenue due to changes in regulation applicable for H1 of 2022.
Adjusted EBITDA dropped to EUR -9.7 million and was EUR 15.8 million lower than in Q1 2021. The main effects were:
| Key financial indicators, EURm | Q1 2022 | Q1 20211 | ∆ | ∆,% |
|---|---|---|---|---|
| Revenue | 677.4 | 184.3 | 493.1 | 267.6% |
| Adjusted EBITDA | (9.7) | 6.1 | (15.8) | n/a |
| EBITDA | (16.8) | 4.1 | (20.9) | n/a |
| Adjusted EBIT | (10.2) | 5.7 | (15.9) | n/a |
| EBIT | (17.3) | 3.7 | (21.0) | n/a |
| Investments | 0.3 | 0.4 | (0.1) | (25.0%) |
| Adjusted EBITDA margin, % | (1.4%) | 3.3% | (4.7 pp) | n/a |
| 31.03. 2022 31.12.2021 | ∆ | ∆,% | ||
| PPE, intangible and right-of-use assets | 6.1 | 6.5 | (0.4) | (6.2%) |
| Net debt | 512.5 | 474.4 | 38.1 | 8.0% |
| Net working capital | 598.8 | 534.6 | 64.2 | 12.0% |
| Key regulatory indicators2 | 20223 | 20213 | ∆ | ∆,% | |
|---|---|---|---|---|---|
| Regulated activities share in adjusted EBITDA in Q1 |
% | n/a | 46.7 | n/a | n/a |
| RAB4 | EURm | 14.2 | 25.7 | (11.5) | (44.7%) |
| WACC | % | 3.05 | 2.93 | 0.12 pp | n/a |
1 Due to change in accounting policy and reclassifications as well as reduction of management adjustments, all adjusted financial indicators were recalculated retrospectively for all quarters of the year 2021 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021').
2 Full year numbers unless stated otherwise.
Numbers approved and published by NERC.
4 RAB for businesses of the Customers & Solutions segment comprises net working capital for covering the demand of public supply of electricity.
Compared to 31 December 2021, net working capital further increased (EUR +64.2 million). The increase was mainly driven by increased value of stored gas inventory (EUR +125.2 million), regulated price differences in electricity (EUR +31.4 million) and gas (EUR +63.4 million). Partly offset by lower advance payments (EUR -37.2 million), and higher accruals (EUR -111.4 million), all related to liquefied natural gas cargoes.
After the reporting period, Lithuanian Parliament amended legislation related to providing consumers with partial compensation due to increasing prices of energy resources. From H2 2022, increasing prices as well as debt of regulated supply customers up to this point will be partially compensated directly from the state budget. Out of planned EUR 570 million from the state budget, a part will be allocated to cover regulatory differences accumulated in 2021 and 2022. It is expected not only to prevent from further increase in Group's net working capital in H2 2022, but also to reduce currently accumulated debts that have been used to finance regulatory differences until the second half of this year.
Total electricity sales in retail market in Q1 2022 increased by 26.4% compared to Q1 2021. The increase was mainly caused by higher B2B sales in Lithuania, Latvia and Poland. The number of B2B customers nearly doubled due to competitive spot pricing, increased activity in the market and more effective sales processes which helped reaching targeted customers and turned into supply contracts. Sales to B2C customers in Lithuania were lower (-0.05 TWh) and number of customers decreased (-0.02 million), when comparing to Q1 2021, due to electricity market deregulation effect. However, it can be noted that we still maintain the leadership position (68.3% B2C customer share of independent supply market).
The volume of natural gas sold in Q1 2022 decreased by 23.7%. The main driver for the decrease is a single wholesale transaction, i.e., a one-off sale of 1.41 TWh LNG cargo last year (Q1 2021). This was offset by 11.6% increase in retail sales driven by B2B segment (Latvia, Poland and Finland).
In Q1 2022 customer experience (NPS) ratio in B2B Customers & Solutions segment decreased by 9 pp compared to Q1 2021. Impaired customer experience is related to nearly doubled B2B customers between Q1 2021 and Q1 2022 as well as growing electricity and natural gas prices, which increased the number of inquiries and led to longer response time.
| Key operating indicators | Q1 2022 | Q1 2021 | ∆ | ∆,% | |
|---|---|---|---|---|---|
| Electricity sales | |||||
| Lithuania | TWh | 1.68 | 1.43 | 0.25 | 17.4% |
| Latvia | TWh | 0.35 | 0.23 | 0.12 | 52.8% |
| Other1 | TWh | 0.10 | 0.02 | 0.07 | 338.9% |
| Total retail | TWh | 2.12 | 1.68 | 0.44 | 26.4% |
| of which B2C | TWh | 0.73 | 0.77 | (0.05) | (5.9%) |
| of which B2B | TWh | 1.40 | 0.91 | 0.49 | 53.9% |
| Number of customers | m | 1.55 | 1.56 | (0.01) | (1.0%) |
| Natural gas sales | TWh | 4.00 | 5.25 | (1.24) | (23.7%) |
| Lithuania | TWh | 2.16 | 2.39 | (0.23) | (9.5%) |
| Latvia | TWh | 0.16 | 0.09 | 0.07 | 79.9% |
| Finland | TWh | 1.22 | 0.752 | 0.47 | 62.9% |
| Poland | TWh | 0.06 | 0.00 | 0.06 | 3,730.1% |
| Total retail | TWh | 3.60 | 3.22 | 0.37 | 11.6% |
| of which B2C | TWh | 1.11 | 1.26 | (0.15) | (12.1%) |
| of which B2B | TWh | 2.49 | 1.962 | 0.53 | 26.8% |
| Wholesale market | TWh | 0.40 | 2.023 | (1.62) | (80.2%) |
| Number of customers | m | 0.62 | 0.61 | 0.01 | 1.1% |
| Customer experience | |||||
| NPS (B2C) | % | 60.3% | 48.3% | 12.0 pp | n/a |
| NPS (B2B) | % | 37.0% | 46.0% | (9.0 pp) | n/a |
Electricity sales in Poland and Estonia.
2 Previously reported 0.72 and 1.93 values were adjusted with regards to new information.
5.60 value reported in Interim report Q1 2021 was corrected after updating the sales volumes in Poland.
Contents »
| Key financial indicators1 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | EURm | 991.3 | 725.0 | 427.3 | 344.7 | 393.4 | 354.3 | 277.9 | 265.3 | 325.7 |
| EBITDA | EURm | 91.7 | 80.0 | 83.8 | 84.2 | 87.4 | 105.0 | 79.0 | 88.2 | 62.1 |
| Adjusted EBITDA | EURm | 111.4 | 111.3 | 72.2 | 71.0 | 78.1 | 90.6 | 72.9 | 60.4 | 22.0 |
| Adjusted EBITDA margin | % | 11.0% | 14.7% | 17.4% | 21.4% | 20.3% | 26.7% | 26.8% | 25.4% | 7.7% |
| EBIT | EURm | 57.2 | 22.0 | 53.0 | 52.5 | 57.0 | 72.5 | 48.9 | 60.8 | 32.8 |
| Adjusted EBIT | EURm | 76.9 | 78.1 | 41.4 | 39.3 | 47.7 | 58.1 | 42.8 | 33.0 | (7.3) |
| Net profit | EURm | 46.8 | 41.7 | 51.2 | 18.0 | 43.0 | 61.7 | 36.4 | 48.2 | 24.3 |
| Adjusted net profit | EURm | 61.1 | 70.1 | 29.2 | 28.7 | 35.1 | 49.5 | 31.2 | 24.5 | (9.8) |
| Investments | EURm | 43.1 | 103.1 | 54.1 | 48.7 | 29.0 | 76.0 | 83.7 | 124.5 | 62.6 |
| FFO | EURm | 89.3 | 74.8 | 67.5 | 65.5 | 84.0 | 102.1 | 65.3 | 81.7 | 60.3 |
| FCF | EURm | (138.3) | (333.4) | (47.3) | 54.3 | 30.9 | (7.7) | 23.6 | (1.1) | (9.9) |
| ROE LTM | % | 8.3% | 8.4% | 11.1% | 10.1% | 12.0% | 10.8% | 9.4% | 7.8% | 5.0% |
| Adjusted ROE LTM | % | 9.9% | 8.9% | 9.1% | 9.1% | 8.9% | 6.0% | 5.9% | 5.2% | 4.8% |
| ROCE LTM | % | 6.8% | 7.1% | 9.9% | 9.7% | 10.2% | 9.1% | 7.0% | 5.8% | 4.1% |
| Adjusted ROCE LTM | % | 8.7% | 7.9% | 7.8% | 7.9% | 7.7% | 5.4% | 4.6% | 4.0% | 3.9% |
| Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | ||
| Total assets | EURm | 4,623.0 | 4,251.3 | 4,131.1 | 3,967.5 | 3,975.2 | 3,920.9 | 3,408.8 | 3,368.4 | 3,183.4 |
| Equity | EURm | 2,005.3 | 1,849.0 | 1,811.2 | 1,831.0 | 1,810.7 | 1,813.3 | 1,312.7 | 1,320.4 | 1,356.2 |
| Net debt | EURm | 1,000.7 | 957.2 | 620.4 | 571.6 | 579.2 | 600.3 | 1,026.8 | 1,019.2 | 950.6 |
| Net working capital | EURm | 681.3 | 486.4 | 169.5 | 99.1 | 129.7 | 94.4 | 31.4 | 55.9 | 88.1 |
| Net debt/EBITDA LTM | times | 2.95 | 2.85 | 1.72 | 1.61 | 1.61 | 1.80 | 3.64 | 4.04 | 4.42 |
| Net debt/Adjusted EBITDA LTM | times | 2.73 | 2.88 | 1.99 | 1.83 | 1.92 | 2.44 | 4.51 | 4.80 | 4.50 |
| FFO/Net debt LTM | % | 29.7% | 30.5% | 51.4% | 55.5% | 57.5% | 51.5% | 24.8% | 22.5% | 20.7% |
Due to Networks Methodology update, change in accounting policy and reclassifications as well as reduction of management adjustments, all financial indicators were recalculated retrospectively for all quarters of the years 2021 and 2020 (for more information, see Annual report 2021 section 'Annual results' part 'Significant changes in reporting period of 2021').
| Key operating indicators | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Electricity | ||||||||||
| Green Generation capacity | MW | 1,351 | 1,350 | 1,350 | 1,350 | 1,350 | 1,350 | 1,350 | 1,287 | 1,287 |
| Green Generation installed capacity | MW | 1,215 | 1,214 | 1,120 | 1,120 | 1,120 | 1,101 | 1,101 | 1,077 | 1,077 |
| Green Generation projects under construction | MW | 136 | 136 | 230 | 230 | 230 | 249 | 249 | 210 | 210 |
| Electricity distributed | TWh | 2.77 | 2.77 | 2.45 | 2.43 | 2.72 | 2.55 | 2.30 | 2.17 | 2.53 |
| Electricity generated (net) | TWh | 0.58 | 0.59 | 0.57 | 0.58 | 0.57 | 0.65 | 0.86 | 0.56 | 0.39 |
| Green electricity generated (net) | TWh | 0.54 | 0.49 | 0.28 | 0.35 | 0.35 | 0.34 | 0.32 | 0.26 | 0.34 |
| Green share of generation | % | 93.6% | 84.1% | 50.0% | 61.0% | 61.0% | 52.0% | 36.7% | 46.8% | 87.1% |
| Electricity sales | TWh | 2.19 | 1.97 | 1.67 | 1.67 | 1.81 | 1.83 | 1.64 | 1.62 | 1.71 |
| SAIFI | units | 0.63 | 0.35 | 0.38 | 0.36 | 0.37 | 0.23 | 0.25 | 0.41 | 0.45 |
| SAIDI | min | 108.59 | 28.64 | 30.80 | 44.54 | 97.97 | 13.49 | 16.36 | 34.15 | 143.67 |
| Heat | ||||||||||
| Green Generation capacity | MW | 349 | 339 | 339 | 339 | 339 | 339 | 339 | 339 | 339 |
| Green Generation installed capacity | MW | 180 | 170 | 170 | 170 | 170 | 110 | 110 | 40 | 40 |
| Green Generation projects under construction | MW | 169 | 169 | 169 | 169 | 169 | 229 | 229 | 299 | 299 |
| Heat generated (net) | TWh | 0.30 | 0.28 | 0.12 | 0.21 | 0.23 | 0.15 | 0.03 | 0.09 | 0.06 |
| Natural gas | ||||||||||
| Natural gas distributed | TWh | 2.68 | 2.74 | 1.02 | 1.41 | 3.32 | 2.48 | 0.99 | 1.18 | 2.41 |
| Natural gas sales | TWh | 4.00 | 2.85 | 1.39 | 2.07 | 5.25 | 3.84 | 3.62 | 2.98 | 4.26 |
| SAIFI | units | 0.001 | 0.001 | 0.001 | 0.001 | 0.002 | 0.003 | 0.004 | 0.002 | 0.001 |
SAIDI min 0.05 0.10 0.12 0.09 0.16 0.76 0.61 0.19 0.05
| 4.1 Governance framework | 53 |
|---|---|
| 4.2 Supervisory Board and committees | 56 |
| 4.3 Management Board | 59 |
| 4.4 Risk and risk management | 63 |
| 4.5 Information about the Group | 66 |
The Group's governance structure and model have been developed on the basis of the most advanced international and national practices, following the recommendations published by the OECD, having regard to the Corporate Governance Code for the companies listed on Nasdaq Vilnius and the Guidelines on the Governance for State-Owned Enterprises (SOEs) recommended by the Baltic Institute of Corporate Governance (BICG). Additionally, the corporate governance model of state-owned group of energy companies was implemented in observance of the Corporate Governance Guidelines approved by the Ministry of Finance of the Republic of Lithuania (Corporate Governance Guidelines) and amended several times. The most recent amendments were adopted on 2 July 2021, and the latest wording of Corporate Governance Guidelines is available here.
Our governance commitments were also recognised by independent parties. The parent company has a track record of being awarded the highest rating in Good Corporate Governance Index, assessing corporate governance of Lithuania's SOEs, since 2012. Additionally, the parent company has also received a separate award in the Corporate Governance Index ranking for 2020–2021 for leading in sustainability among SOEs.
In addition to local recognitions, in July 2021 the Group's rating of 'A' was upgraded to 'AA' (on a scale of 'CCC' to 'AAA') in the MSCI ESG Ratings assessment. This places the Group among the industry leaders and significantly above the utility group average of 'BBB'.
On top of that, in 2021, the Group received a score of 20.4 (on a scale of 100–0, from highest to lowest risk, previous 26.5) in the ESG Risk Rating assessment performed by Sustainalytics, a leading independent ESG ratings firm. This places the Group among the top 12 percent of utility peers that manage their ESG risks optimally. Sustainalytics designated our overall ESG risk level as 'medium' (approaching 'low' risk category), whereas overall ESG risk management was rated as 'strong'. For more information on our ESG achievements in Q1 2022, please refer to section 'ESG performance report'.
The parent company employs a corporate governance system designed to manage and control the Group as a whole, with a view to achieve common objectives. The corporate governance of the Group is exercised through the parent company's functions, e.g., by coordinating common Group areas such as finance, law, risk management, etc. Activities of the Group in these areas are based on mutual agreement, i.e., cooperation with a focus on achieving a common result, and are coordinated by policies (common provisions and norms) applicable to the whole Group.
The parent company has a CEO and a two-tier board system consisting of a Management Board and a Supervisory Board. The CEO represents the parent company in all matters and, together with the Management Board, is responsible for its management, while the Supervisory Board is the body that oversees the Management Board and the CEO. The CEO manages the parent company's day-to-day operations and is entitled to solely represent the parent company.
During the reporting period, there has been a change in the composition of the Management Board. The new members of the Management Board, its Chair and the CEO were elected on 18 February 2022. For more information on the new CEO and the members of the Management Board, see sections 'Management Board' and 'CEO'.
More detailed description of key corporate governance principles, each collegial body and its members is available in our Annual report 2021 and on our website.
Our shareholders exercise their rights at the General Meeting. The General Meeting is the highest decision-making body of the parent company and passes resolutions in accordance with the Law on Companies of the Republic of Lithuania (Link in Lithuanian). We provide a detailed description of shareholders' competences in our Annual report 2021.
The Majority Shareholder of the parent company, the Republic of Lithuania, owns 73.08% of the parent company's shares. The rights and obligations of the Republic of Lithuania are exercised by the Ministry of Finance of the Republic of Lithuania (Majority Shareholder). In accordance with the Property Guidelines (Link in Lithuanian), the Majority Shareholder submits a Letter of Expectations to the parent company at least once every four years on the objectives pursued by the Majority Shareholder in the SOE and its expectations. With that in mind, the Letter of Expectations in relation to the activities of the Group was approved by the Order of the Minister of Finance on 13 April 2018, with the last amendment supporting the Group's strategy published on 17 February 2021. For a more detailed description of the Majority Shareholder's obligations and expectations, see our Annual report 2021.
On 29 July 2021 and 29 March 2022, the General Meetings of Shareholders of the parent company were held, which passed resolutions on the acquisition of the parent company's own ordinary registered shares, the purpose of which is to reduce the parent company's share capital by annulling it, thus potentially increasing each investor's shareholdings, including the Majority Shareholder's. Respectively, on 16 December 2021 and 29 April 2022, the parent company completed the acquisitions of own ordinary registered shares and in total acquired 1,894,797 units or 2.6% of total number of the parent company's securities.
In relation to the above, after the reporting period an Extraordinary General Meeting was convened to be held on 24 May 2022, during which the decision regarding the reduction of the parent company's share capital by annulling the acquired own ordinary registered shares will be considered. If the acquired ordinary registered shares are annulled, the parent company's share capital will be reduced to 72,388,960 (from 74,283,757) ordinary registered shares and the nominal value of the share capital will decrease to EUR 1,616,445,476.80 (from EUR 1,658,756,293.81). This would also cause a free-float change from to 25.01%.
During the reporting period, one General Meeting of the parent company's shareholders was held. On 29 March 2022 , the Ordinary General Meeting of Shareholders passed the following resolutions:
Further information, including resolutions of previously held General Meetings of the parent company's shareholders, is available on our website.
The Supervisory Board is a collegial supervisory body provided in the Articles of Association of the parent company. The Supervisory Board is functioning at the Group level, i.e., where appropriate, it addresses the issues related not only to the activities of the parent company, but also to the activities of its subsidiaries or the activities of their management and supervisory bodies. The Supervisory Board also elects its Chair from its members.
During the reporting period, the Supervisory Board of the parent company comprised seven members: five independent members and two representatives of the Majority Shareholder. The term of current Supervisory Board ends on 22 October 2025.
Further information on the Supervisory Board's functions, selection criteria, management of conflicts of interests and remuneration as well as information on education, experience and place of employment of the Supervisory Board members are available in our Annual report 2021. During the reporting period, there were no significant changes in the information provided.
There were no changes in the composition of the Supervisory Board during the reporting period and no members of the Supervisory Board had any participation in the capital of the parent company or its subsidiaries.
Overall, 6 meetings of the Supervisory Board were held in Q1 2022, covering the following key areas:
In order to perform its functions and duties effectively, the parent company's Supervisory Board forms committees. The committees submit their conclusions, opinions and suggestions to the parent company's Supervisory Board in accordance with their competence. The committee must comprise at least three members, where at least one member is a member of the Supervisory Board and at least 1/3 of the members are independent. The members of the committees are elected for a period of four years.
The operating committees of the Supervisory Board are the following:
Further information on the Supervisory Board committees' functions, selection criteria, management of conflicts of interests and remuneration as well as information on education, experience and place of employment of the Supervisory Board committees' members are available in our Annual report 2021.
There were no changes in the composition of the committees during the reporting period and no members of the Supervisory Board committees had any participation in the capital of the parent company or its subsidiaries.
After the reporting period, due to the end of term (19 April 2022) of the Risk Management and Business Ethics Supervision Committee, the parent company's Supervisory Board on 22 April 2022 elected new members of the Risk Management and Business Ethics Supervision Committee for a new term, which will end on 25 October 2025. It comprises two members, Tim Brooks (the Chair of the Committee) and Alfonso Faubel and regarding the third member of the Committee there is no decision made yet. Both members also served in the previous Risk Management and Business Ethics Supervision Committee. Information on education, experience, place of employment and shareholdings in Group companies of the newly elected Risk Management and Business Ethics Supervision Committee members is available on our website.
| Supervisory Board | Nomination and Remuneration Committee |
Risk Management and Business Ethics Supervision Committee |
|
|---|---|---|---|
| Term of office | 26 October 2021 – 25 October 2025 |
3 November 2021 – 2 November 2025 |
20 April 2018 – 19 April 2022 |
| Independence, including the Chair | 71% | 67% | 100% |
| Meeting attendance | 100% | 100% | 67% |
| Share holdings of the parent company or its subsidiaries |
None | None | None |
| Member | Supervisory Board | Nomination and Remuneration Committee |
Risk Management and Business Ethics Supervision Committee |
|---|---|---|---|
| Alfonso Faubel | 6/6 | - | 1/1 |
| Lorraine Wrafter | 6/6 | 5/5 | - |
| Tim Brooks | 6/6 | - | 0/1 |
| Judith Buss | 6/6 | - | - |
| Bent Christensen | 6/6 | 5/5 | - |
| Aušra Vičkačkienė | 6/6 | 5/5 | - |
| Ingrida Muckutė | 6/6 | - | - |
| Šarūnas Rameikis | - | - | 1/1 |
1 The numbers indicate how many meetings the members have attended out of total meetings during the reporting period.
The Group has a centralised internal audit function established since 5 January 2015. This helps ensure independence and objectivity of the internal audit, consistency in application of uniform methodology and reporting principles, and a more rational allocation of available audit resources and competences.
Overall, the Audit Committee is responsible for monitoring the process of preparation of financial statements of the Group, with a focus on the relevance and consistency of accounting methods used. In addition, it is responsible for monitoring the effectiveness of the Group companies' internal control and risk management systems affecting the audited Group's financial statements as well as the effectiveness of internal audit. Also, the committee oversees the audit of the annual financial statements of Group companies which are public interest entities and the consolidated financial statements of the Group.
During the reporting period, the Audit Committee of the parent company comprised five members: four independent members and one representative of the Majority Shareholder. The term of the current Audit Committee ends on 26 September 2025.
Further information on the Audit Committee's functions, selection criteria, management of conflicts of interests and remuneration as well as information on education, experience and place of employment of the Audit Committee's members are available in our Annual report 2021.
There were no changes in the composition of the committee during the reporting period. During the reporting period, Saulius Bakas hold 1,800 shares of the parent company which he sold after 31 March 2022. No other members of the Audit Committee had any participation in the capital of the parent company or its subsidiaries.
Overall, 4 meetings of the Audit Committee were held in Q1 2022, covering the following key areas:
| Audit Committee | |
|---|---|
| Term of office | 27 September 2021 – 26 September 2025 |
| Independence, including the Chair | 80% |
| Meeting attendance | 95% |
| Share holdings of the parent company or its subsidiaries |
1,800 |
| Member | Attendance |
|---|---|
| Irena Petruškevičienė | 4/4 |
| Saulius Bakas | 4/4 |
| Marius Pulkauninkas | 4/4 |
| Ingrida Muckutė | 4/4 |
| Judith Buss | 3/4 |
1 The numbers indicate how many meetings the members have attended out of total meetings during the reporting period.
New members of the Management Board have been elected. 3 out of 5 members have served in the previous term of the Management Board, including CEO.
Management Board is a collegial management body set out in the Articles of Association of the parent company. The activities of the Management Board are regulated by the Law on Companies (link in Lithuanian), its implementing legislation, the Corporate Governance Guidelines, the Articles of Association of the parent company and the Rules of Procedure of the Management Board. During the reporting period, the rules governing the election of the members of the Management Board of the parent company were not amended.
The main functions of the Management Board include developing and implementing the Group's strategy, making decisions regarding the acquisition and establishment of new companies as well as approving candidates for supervisory and management bodies of subsidiaries. Its responsibilities also cover approval of material transactions, making decisions on common rules and principles (policies, guidelines, recommendations) applicable to the entire Group, and other decisions assigned by the Law on Companies, the Articles of Associations or the decisions of the General Meeting of Shareholders.
During the reporting period, there were changes in the composition of the parent company's Management Board. On 18 February 2022, the Supervisory Board recalled the previous Management Board in corpore and elected new members to the Management Board as well as submitted an opinion regarding the CEO of the Group. After the decision of the Supervisory Board, the new Management Board elected its Chair from among its members in its first meeting, who was also appointed as CEO of the parent company. The term of the current Management Board ends on 17 February 2026.
The Management Board comprises five members. Information on their education, experience and place of employment is provided in the next section.
All Management Board members hold shares of the parent company (please refer to the table on the right side). The Group publishes relevant transactions through stock exchanges according to Article 19 of the Market abuse regulation (EU) No. 596/2014 and other relevant disclosure requirements.
Further information on the Management Board's functions, selection criteria, management of conflicts of interests is available in our Annual report 2021. Remuneration for the activities of the Management Board, available on our website, is paid in accordance with the Group's Remuneration Policy approved by the General Meeting of Shareholders.
Overall 20 meetings of the Management Board were held in Q1 2022, covering the following key areas:
| Member | Position | Attendance1 | Number of shares |
|---|---|---|---|
| Darius Maikštėnas | Chair, CEO | 20/20 | 3,000 |
| Jonas Rimavičius | Member, CFO | 10/102 | 500 |
| Dr. Živilė Skibarkienė | Member, Group Head of Organisational Development |
20/20 | 300 |
| Vidmantas Salietis | Member, Group Head of Commercial Activities |
20/20 | 200 |
| Mantas Mikalajūnas | Member, Group Head of Regulated Activities |
10/102 | 220 |
1 The numbers indicate how many meetings in Q1 2022 the members have attended out of total meetings during the reporting period.
2 Darius Maikštėnas, Dr. Živilė Skibarkienė and Vidmantas Salietis were re-elected, while Jonas Rimavičius and Mantas Mikalajūnas were newly elected members of the Management Board on 18/02/2022, causing attendance differences.
Darius Maikštėnas
Chair, CEO since 01/02/2018 Re-elected 18/02/2022 Area of supervision: Strategy and Management, Sustainability Term of office expires 17/02/2026
Darius is a top-level executive with 10+ years of executive experience in energy, telecommunications, IT, and venture capital sectors. He joined the Group in 2018 and since then he served as Member, Chair of the Management Board, and CEO. Darius successfully prepared the Group for transitioning from a local monopoly to a competitive customer-oriented regional player, oversaw Ignitis Group's IPO, and has been leading the Group towards ESG excellence. Prior to joining the Group, he had led an international company based in Silicon Valley that offers innovative telecommunications solutions and operates in the United States and the UK under the WiderFi brand, had worked as an advisor for a venture capital fund Nextury Ventures, and had served as Vice President at Telia (previously Omnitel).
Harvard Business School, General Management Program; Baltic Management Institute, Executive MBA degree; Kaunas University of Technology, Bachelor's degree in Business Administration.
Energijos Skirstymo Operatorius, Chair and Member of the Supervisory Board; Eurelectric, Member of the Management Board.
Owned shares of the parent company 3,000.
Jonas Rimavičius
Member, CFO since 18/02/2022 Area of supervision: Finance Term of office expires 17/02/2026
Jonas is a strategic-level finance professional. Since joining the Group in 2016, Jonas has been leading M&A activities and capital raising projects, including Ignitis Group's IPO, and Green Bonds issues. Additionally, Jonas has been serving as Chair and Member of the Management Board at Ignitis Renewables since January 2019. Prior to joining the Group, Jonas had accumulated experience in the areas of investment banking and corporate finance at Swedbank, EY and Telia.
University of Cambridge, Master's degree in Business Administration; University of Warwick, Bachelor's degree in Accounting and Finance; former CFA charterholder.
Ignitis Renewables, Chair and Member of the Management Board; Vilniaus Kogeneracinė Jėgainė, Member of the Management Board.
Owned shares of the parent company 500.
Dr. Živilė Skibarkienė
Member, Group Head of Organisational Development since 01/02/2018 Re-elected 18/02/2022 Area of supervision: Organisational Development Term of office expires 17/02/2026
Živilė is a professional in law and organisational development with 5+ years of executive experience. She joined the Group in 2018 and since then she has transformed how the Group is governed, and has successfully implemented digitalisation and operational excellence programmes. She also serves as Member of the Supervisory Board at Ignitis Gamyba. Prior to that, Živilė had gained executive experience while working in the financial sector. She was Head of Legal and Administrative Department at Šiaulių Bankas, Member of the Management Board and deputy CEO at Finasta Bank as well as Head of Compliance at DNB Bankas (now Luminor), and Head of Legal Department at SEB Bankas.
Mykolas Romeris University, Doctoral degree in Social Sciences Field of Law; Vilnius University, Master's degree in Law; Saïd Business School, University of Oxford, Executive Leadership Programme.
Ignitis Grupės Paslaugų Centras, Chair and Member of the Management Board; Elektroninių Mokėjimų Agentūra, Member of the Management Board; Ignitis Gamyba, Member of the Supervisory Board.
Owned shares of the parent company 300.
Vidmantas Salietis
Member, Group Head of Commercial Activities since 01/02/2018 Re-elected 18/02/2022 Area of supervision: Commercial activities Term of office expires 17/02/2026
Vidmantas, who is a professional with 10+ years of experience in top-level positions in the energy sector, joined the Group in 2011 and since has served as an executive in various Group companies. During this time, he spearheaded one of the major changes in the electricity sector – market deregulation. In addition to becoming a Member of the Management Board of Group in 2018, Vidmantas has also been serving as Chair of the Supervisory Board of Ignitis Gamyba and Member of the Management Board of Ignitis Renewables. Prior to that, he had served as CEO at Energijos Tiekimas, and had led an electricity wholesale trading department at Ignitis Gamyba. He had also served as Chair and Member of the Management Board of Elektroninių Mokėjimų Agentūra and Member of the Management Board of Gamybos Optimizavimas.
Stockholm School of Economics in Riga (SSE Riga), Bachelor's degree in Economics and Business.
Ignitis, Chair and Member of the Supervisory Board; Ignitis Gamyba, Chair and Member of the Supervisory Board; Ignitis Renewables, Member of the Management Board.
Owned shares of the parent company 200.
Mantas Mikalajūnas
Member, Group Head of Regulated Activities since 18/02/2022 Area of supervision: Regulated activities Term of office expires 17/02/2026
Mantas, who has almost 20 years of executive experience in various energy sector's companies, launched his career in Lietuvos Dujos. Later, he had an internship in a German energy group. After returning to Lithuania, he was working in strategic positions at Lietuvos Dujos, where he served as an executive team member and was responsible for issues related to investor relations, state authorities and the regulator as well as integration of Lietuvos Dujos into Lietuvos Energija (current Ignitis Group). Before transitioning to the current position of Group Head of Regulated Activities, Mantas had served as Head of Business Development of Ignitis Group and CEO of Lietuvos Dujų Tiekimas (later, Lietuvos Energijos Tiekimas).
Vilnius University, Master's degree in Business Administration and Management.
Ignitis, Member of the Management Board; Elektroninių Mokėjimų Agentūra, Member of the Management Board; Vilniaus Kogeneracinė Jėgainė, Member of the Management Board; Kauno kogeneracinė jėgainė, Member of the Management Board.
Owned shares of the parent company 220.
In accordance with the Articles of Association of the parent company, each candidate for the Management Board must provide the Supervisory Board with a written consent to stand as a candidate of the members of the Management Board and the declaration of interests of the candidate, by stating therein all circumstances which may give rise to a conflict of interests between the candidate and the parent company. In the light of new circumstances that could result in a conflict of interests between a member of the Management Board and the parent company, the member of the Management Board must immediately notify the Management Board and the Supervisory Board in writing of such new circumstances. Also, members of the Management Board cannot do other work or hold other positions which are incompatible with their activities on the Management Board, including executive positions in other legal entities (except for positions within the parent company and the Group companies), work in civil service, statutory service. The members of the Management Board may hold another office or do other work, except for positions within the parent company and other legal entities of which the parent company is a member, and may carry out pedagogical, creative, or authorship activities only with the prior consent of the Supervisory Board. This rule also applies to the management of all Group companies.
At the executive employees' level, the parent company is managed by the Chief Executive Officer and the Management Board. CEO is a single-person management body of the parent company, who organizes, directs, acts on behalf of the parent company and concludes transactions unilaterally, as provided by the Law on Companies (link in Lithuanian), its implemented legislation and the Articles of Association of the parent company. CEO is entitled to solely represent the parent company and execute documents on the parent company's behalf.
The competence of a CEO, the procedure of appointment and removal, the terms of office are established according to the Law on Companies (link in Lithuanian), its implemented legislation, the Corporate Governance Guidelines and the Articles of Association of the parent company. In accordance with the Corporate Governance Guidelines, the Chair of the Management Board elected by the Management Board is appointed as CEO of the parent company. It should be noted that CEO of the parent company, as a SOE, is also subject to special recruitment features set out in the Law on Companies (link in Lithuanian), according to which the term of a CEO is limited to five years. It stipulates that the same person can only be appointed for two consecutive five-year terms.
During the reporting period, on 18 February 2022 the Supervisory Board elected the new members of the Management Board and submitted an opinion regarding the CEO of the parent company. During the first meeting of the new Management Board held on the same day, Darius Maikštėnas was elected as the CEO of the parent company.
At the end of the reporting period, the parent company's CEO Darius Maikštėnas held 3,000 shares of the parent company.
Further information on the CEO's functions, responsibilities remuneration, including key contractual terms and conditions of his employment agreement with the parent company, is available in our Annual report 2021.
In connection with the business activities, the Group is exposed to strategic, operational (activity), financial and external risks that might affect our performance. To ensure their mitigation to an acceptable level, we apply uniform risk management principles, which are based on the best market practices, including the guidance of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and AS/NZS ISO 31000:2009. A clear segregation of risk management and control duties is controlled by applying the three-lines-of-defence principle in the Group, where the duties are distributed between management and supervisory bodies, structural units, and functions.
In order to ensure that risk management information and decisions are relevant to and reflect the changes in the Group, each year the Group initiates a risk management process related to the Group's risks and the Group's strategic objectives, which include all the Group companies and functions. In order to ensure control, we monitor risks, risk management measures, key risk indicators and prepare internal reports to the management (both at the level of individual functions or Group companies and at the Group level) on a quarterly basis.
Further information on our risk management framework is available in our Annual report 2021.
During and after the risk review of Q1 2022, no significant adverse changes were recorded among the risks and their levels identified for 2022 compared to the 2021 year-end. An overview of their potential impact and probability is provided as a heat map below with detailed disclosure of their mitigation strategies available in our Annual report 2021. Additionally, Risk of occupational health & safety accidents (of employees and contractors) on Group level is added to the heat map (risk No. 10). Although this risk is assessed as medium risk level and falls within Group's risk appetite, it is also being actively monitored because it is closely related with achievement of strategic goals of the Group. Moreover, Working capital management / liquidity risk assessed as relevant on Group level (risk No. 11) for the current period and added to the heat map.
However, in addition to the COVID-19 crisis continuing for the third year, at the end of February 2022 the world faced a new geopolitical crisis – the Russia's invasion of Ukraine. Considering that both challenges have impact on businesses and people across the globe, we provide separate disclosures on the issues below to ensure the transparency to the extent possible of their potential impact on the Group.
The Group has assessed the actual and potential direct and indirect impact of Russia's invasion of Ukraine on business activities, the Group's exposure to the affected markets, supply chains, its financial situation and economic performance using all the information available at the time and did not identify any material threats to the Group's business continuity. However, it should be noted that, due to the ongoing uncertainty, the final impact of the Russia's invasion of Ukraine on the business of the Group companies cannot be assessed in full yet.
General potential effects that are tightly related to the Group's activities, are an increase in electricity and natural gas prices, possible disruptions in supply chains as well as increased inflation and growing prices of other materials. Furthermore, the level of vigilance in cybersecurity is being raised nationwide while the Group is classified as the owner of critical infrastructure.
The Networks segment is highly exposed to the growing energy prices, which may increase the need for working capital due to temporary regulatory differences as the gap between actual energy prices and the ones included in tariff may widen. Nevertheless, in the long run, the regulatory mechanism should ensure that the effects on consumption and prices will be eliminated. Currently, no significant changes in the level of bad debts was detected.
Growing electricity prices have positive impact on EBITDA result of Green Generation segment. However, considering Green Generation projects, there is a risk of longer lead times and higher expenditures for investments due to growing price of materials. Currently, there is a risk of possible delays in the milestones of constructions in Vilnius CHP biomass unit (first energy generation was rescheduled to Q1 2023 due to global supply chain disruption and shortage of workforce) and major overhaul of Kruonis PSHP (spare parts were manufactured in Ukraine, thus alternative solutions are needed). Furthermore, due to growing price of materials, expenditures for investments may increase.
Given the geopolitical situation, Flexible Generation segment, as a provider of isolated regime services, was directly affected through an emerged need to prepare for uninterrupted electricity generation in advance, which required to acquire approx. 1.1 TWh of natural gas. Another issue is related to the supply of spare parts for the major overhaul of unit 8 of Elektrėnai Complex, as the necessary parts were manufactured in Ukraine, thus an alternative solution is needed.
The main impact on Customers & Solutions segment is related to the suspended purchase of Gazprom's natural gas, which was replaced by LNG cargoes. This led to an increase in working capital needs and additional hedging transactions. With the refusal of Russian natural gas, potential new challenges related to the infrastructure (slot booking in the terminal and storage issues) and a more limited supply are being closely monitored and addressed. From other perspective, possible pipeline gas disruptions might open up new opportunities for additional LNG sales to Finland and other Baltic countries. Growing energy prices increased working capital due to higher temporary regulatory differences as the gap, between actual energy prices and the ones included in the tariff, widens. Despite growing electricity and natural gas prices, any significant changes in the level of bad debts were not detected but the risk of increase in receivables will be closely monitored.
| Business segment | Overall impact |
|---|---|
| – Growing energy prices may cause temporary regulatory differences. |
|
| Networks | – Uncertainty regarding the supply and increase in price of key materials. |
| – Growing electricity prices have positive impact on EBITDA of Green Generation portfolio. |
|
| – Rescheduled first energy generation in Vilnius CHP's biomass unit. |
|
| Green Generation | – Shortage of spare parts for Kruonis PSHP major overhaul. |
| – Potential increase in investment expenditures in new projects due to growing commodity prices. |
|
| – Potentially longer lead times of Green Generation projects. |
|
| Flexible Generation | – Shortage of spare parts for major overhaul of unit 8 of Elektrėnai Complex. |
| – Additional natural gas reserve of 1.1 TWh acquired. |
|
| – Natural gas purchases from Gazprom replaced by LNG cargoes increased net working capital and caused infrastructure issues as well as more limited supply. |
|
| Customers & Solutions | Growing electricity and natural gas prices cause higher – temporary regulatory differences and increase net working capital needs. |
| – Possible pipeline gas disruptions open up new opportunities for additional LNG sales to Finland and other Baltic countries. |
Even though there are risk factors, proper actions have been taken to manage them and no significant changes in risk levels of key risks of the Group were recorded. In order to ensure market demand and uninterrupted gas supply as well as to fund growth in working capital needs, the Group concluded several short-term loan agreements with banks (as for 31 March 2022 there were three credit line facilities with total limit of EUR 404 million). After the reporting period, Lithuanian Parliament amended legislation related to providing consumers with partial compensation due to increasing prices of energy resources. From H2 2022, increasing prices as well as debt of regulated supply customers up to this point will be partially compensated directly from the state budget. Out of planned EUR 570 million from the state budget, a part will be allocated to cover regulatory differences accumulated in 2021 and 2022. It is expected not only to prevent from further increase in Group's net working capital in H2 2022, but also to reduce currently accumulated debts that have been used to finance regulatory differences until the second half of this year.
The Group constantly monitors the situation and analyses the latest information as well as changes in external factors, and their impact on the Group. In the same manner, the Group also ensures uninterrupted supply of energy and business continuity.
Despite the resilient economic environment in the home market, COVID-19-related crisis could impact the Group's activities mostly by affecting our employees, contractors, suppliers, customers, and capital markets. We manage risks related to employees based on their functions and by ensuring the possibility to work remotely. Additionally, for some employees we provide additional personal protection, hygiene measures and restrict unnecessary contact with others.
So far we did not experience any significant disruptions due to COVID-19 in main business activities, investment strategies and development of projects, except for some delays in projects' milestones. However, using all the information available at this time, we are continuously assessing potential disruptions of cash flow, supply of services or goods, issues with attracting sources of financing, potential decrease in electricity and gas consumption due to economic slowdown, the risks of COVID-19 infection of critical personnel and the risk of delays in ongoing projects. We have not identified any circumstances yet which may give a reason to doubt the actions of the Group as a whole and the business continuity of subsidiaries of the Group, and we have also taken actions to manage risks arising from the Group's activities.
We will continue monitoring the potential impact on the Group based on the changes in internal and external factors to ensure the Group's business continuity.
The Group strives for maximum transparency, effective management of inside information and equality of all financial market participants in respect of availability of the issuer's material information. Effective prevention of market abuse is one of our main priorities. The Group is listed both in London and Nasdaq Vilnius stock exchanges – it complies with all relevant EU, Lithuanian and UK laws and regulations.
We comply with the Market abuse regulation (EU) No. 596/2014 (MAR) and all related laws. Persons discharging managerial responsibilities and persons associated with them are under a duty to disclose their transactions related to the parent company's financial instruments when a EUR 5,000 notification threshold has been reached within a calendar year. Trading of those individuals is also governed by "Trading guidelines
for the issuer's managers and persons closely associated with them". The Group's own internal insider and transparency rules are updated regularly and a specialized internal inside information management training is regularly performed by all Group employees who are included in an Insider List. Insider Management Committee effectively deals with complex insider management and relevant issues. Moreover, guidelines for the prevention of market abuse have been creasted in order to help employees identify illegal actions and provide relevant recommendations.
More detailed information regarding transparency and market abuse administration, persons discharging managerial responsibilities and a duty to disclose, Closed Period and internal supervision of insiders and relevant affairs is available in the Annual report 2021.
The parent company follows the provisions of the Law on Companies of the Republic of Lithuania when conducting related party transactions. It must be noted that the Supervisory Board of the parent company considers the conclusions of the Audit Committee and makes decisions regarding the related party transactions of the parent company and the Group companies if they are conducted under unusual market conditions and/or are not attributable to the usual economic activities, and/or have a significant impact on the parent company, its finances, assets and obligations, i.e., the value of such transaction is over 1/50 of the parent company's equity (excluding transactions that are necessary to ensure core activities of the Group companies and transactions which must be concluded under the requirement of the law, also short-term lending transactions as well as lending, collateral of obligations and services of collateral transactions between the parent company and a subsidiary of the Group (including subsequent subsidiaries), if the value of this transaction during the financial year does not exceed 1/10 of the value of the assets indicated in the latest published audited balance sheet of the parent company).
We disclose information about the concluded related party transactions on our website and in accordance with the IFRS requirements in the section 'Financial statements' of this report.
At the time of reporting, the Group consists of the parent company and 27 fully consolidated subsidiaries. Ignitis Grupė is the Group's parent company and is responsible for coordinating its activities and transparent management of the Group. Detailed information regarding the subsidiaries is available on our website and in the Annual report 2021.
The entities showed on the next page are directly or indirectly controlled by the Group, which applies the governance system as per below (i.e. each number indicated below and on the next page corresponds to governance system type the company uses):
The Supervisory Board is formed out of 7 non-executive members (2 shareholder's representatives, 5 independent). The Management Board is formed out of 5 executive members. Chief Executive Officer is also the Chair of the Management Board.
The Supervisory Board is formed out of 5 non-executive members1 or 3 nonexecutive members (2 shareholder's representatives and 1 independent member). The Management Board is formed out of 5 or 3 executive members. Chief Executive Officer is also the Chair of the Management Board.
The Management Board is formed out of 3 non-executive members (2 shareholder's representatives and 1 independent member). The Management Board's structure might be different in some companies and it is not formed until the company starts its operations2 . General Manager is not a member of the Management Board.
4 General Manager is a sole management body. The Management Board is not formed.
At ESO: 2 shareholder's representatives, 2 independent members and 1 employees' representative.
2 The Management Boards of Ignitis Latvija and Ignitis Polska are formed out of 1 member – CEO, the Supervisory Board of Ignitis Latvija is formed out of shareholder's representatives, whilst the Supervisory Board of Ignitis Polska is formed out of 2 shareholder's representatives and 1 independent member. The Management Board of Ignitis Suomi Oy is formed out of 1 ordinary member and 1 deputy member. The Management Board of Dolcetto Sp. z. o. o. is formed out of 2 non-executive members (shareholder's representatives).
2
Customers and solutions
| 5.1 ESG highlights | 69 |
|---|---|
| 5.2 Overview of our ESG goals | 70 |
| 5.3 Progress on our ESG goals | 72 |
Sustainability is at the core of the Group's strategy. The ambition to lead the energy transition across the region towards an energy smart world requires strengthening of our ESG performance and accountability. The most significant external benchmarks marking the Group's progress in implementing the principles of sustainability are presented below.
| MSCI ESG | Sustainalytics | CDP climate | |
|---|---|---|---|
| Rank compared to utility peers |
Top 28%1 | Top 12% | In line |
| 'AA' | 20.4 | 'B' | |
| Utiities average | 'BBB'1 | 36.72 | 'B' |
| Rating scale (worst to best) |
'CCC' to 'AAA' | 100 to 0 | 'D-' to 'A' |
MSCI utilities rank and average based on utilities included in the MSCI ACWI index. Based on publicly available data.
| Following globally recognised standards | ||
|---|---|---|
| Integrated reporting using globally recognised standards. | ||
| Joined TCFD supporters list and expect to fully implement TCFD guidelines for the 2022 reporting period. |
||
| Validated GHG emissions targets for 2030 with the SBTi. Following net zero by 2050 trajectory. |
1
2
In Q1 2022, the Supervisory Board of the Group approved the Strategic Plan 2022–2025, which establishes the Group's commitment to create a sustainable future and pursue its goals under the four main pillars: Climate action, Preserving natural resources, Future-fit employees and a Robust organisation. The overview of the Group's ESG goals and progress towards them is presented in the table below and detailed in section '5.3 Progress on our ESG goals'.
The Group will continue to monitor its progress in accordance with the evaluation results of international ratings agencies Sustainalytics and MSCI, which asses ESG risk management, as well as CDP, a globally recognised environmental disclosure organisation. For more in-depth information, see section 'Sustainability (Corporate Social Responsibility) report' in the Group's Annual report 2021.
| Sustainability pillar | 2020 baseline | 2021 | Q1 2022 status | 2022–2025 target | |
|---|---|---|---|---|---|
| Environmental dimension | |||||
| Installed green generation capacity, GW | 1.1 | 1.2 | 1.2 | 2.0–2.2 | |
| Climate action | GHG emissions reduction, million t CO2 -eq1 |
5.37 | 4.76 | 4.76 (2021) | 23% reduction (vs. 2020) |
| Preserving natural resources | Each business segment to implement at least one circularity transformation2 |
N/A | N/A | N/A | Implemented at least one circularity transformation in each business segment |
| Net gain in biodiversity3 | N/A | N/A | N/A | Net gain in biodiversity | |
| Social dimension | |||||
| Fatal employee and contractor accidents | 0 | 0 | 1 | 0 | |
| Future-fit employee | Total recordable injury rate (TRIR) for a million hours worked by employees4 |
0.45 | 2.01 | 2.20 | ≤1.90 |
| Employee net promoter score (eNPS), % | 56.0 | 57.4 | 65.0 | ≥50 | |
| Share of women in top management5 , % |
28 | 27 | 21 | ≥34% | |
| Governance dimension | |||||
| Share of employees intolerant of corruption6 , % |
96 | 97 | 97 (2021) | ≥95 | |
| Robust organisation | Share of sustainable adjusted EBITDA7 | 70% (EUR 171 million) |
64% (EUR 212 million) |
64% (EUR 212 million; 2021) |
≥70% |
1 Including scope 1,2,3 and biogenic emissions. 2020 value is the baseline for the validated science-based 2030 targets.
2 Four business segments, for each: at least one significant initiative involving significant resource use reduction, reuse or recycling.
3 Involving first, an assessment of total biodiversity impact, and second, coordination with environmental experts to create a positive impact on biodiversity (restore, compensate natural habitat and species loss).
4 Total recordable injury rate: Total recordable injuries x 1 million hours worked divided by all hours worked during the reporting period. After implementing contractor TRIR monitoring we plan to set targets that also cover contractors.
5 Includes boards, general managers and 1st management level below them. Excludes double-counting (when same person holds more than one top management position in the same company).
6 Based on an annual employee survey question about how likely employees are to report potential corruption if they see it. Lithuania's public sector average – 19% (2020).
Sustainable activity as defined by the EU Taxonomy version in force as of Q1 2022.
We received the prestigious TOP Employer 2022 Lithuania certificate, which demonstrates that our HR practices and working conditions are aligned with highest international standards.
| ENVIRONMENTAL | ||||
|---|---|---|---|---|
| Sustainability pillar |
Climate action | Preserving natural resources | ||
| Sustainability programme |
Expanding green generation | Decarbonising operations & living | Adopting circularity | Preserving ecosystems & biodiversity |
| Progress in Q1 2022 |
– We increased the installed capacity of the Green Generation segment by 95 MW in Q1 2022 compared to Q1 2021. Green Generation installed capacity, MW 1,215 1,120 31 Mar 2021 31 Mar 2022 – Since the end of 2021 we expanded our Green Generation pipeline by around 230 MW (out of which around 80 MW in Q1 2022) with greenfield projects, by securing land plots for onshore wind and solar projects in Lithuania and Poland. Our greenfield portfolio now amounts to around 400 MW. – In addition, we sold 5 times more solar plants – 1,195, representing 6.4 MW, to business and private customers compared to the same period last year. – Increase in prosumers: ESO received a record number of applications for the connection of residential solar power plants to the grid. Last year in Q1 the company received 2,801 applications, and in Q1 2022 – as many as 5,811, twice as much as usual. |
– The final GHG emissions of the Group for the year 2021 were calculated (using the market-based method) and externally verified after the reporting period. Total emissions decreased by 11% compared to 2020 (from 5.37m t CO2 -eq in 2020 to 4.76m t CO2 -eq in 2021, including biogenic anthropogenic emissions).1 Total emissions, million t CO2 -eq 5.37 4.76 3.9 Biogenic 3.3 Scope 1 0.53 0.58 Scope 2 0.73 0.77 Scope 3 0.12 0.22 2020 2021 – Pursuant to the agreement with the Lithuanian Ministry of Energy, we have reported our achievements in implementing consumer education and consultation and energy savings measures to the Lithuanian Ministry of Energy and the Lithuanian Energy Agency. The validation process of the reports is ongoing. |
– The ISO 14001 environmental management system was implemented in Vilnius CHP. Now, 72% of the Group's operations are covered by certified environmental management systems. – The Environmental Protection Agency under the Ministry of Environment approved the Environmental Impact Assessment Report according to which Kaunas CHP will be able to convert 255,000 tonnes of non-hazardous waste remaining after sorting into energy per year (a 55,000 tonne increase compared to the current capacity). Currently procedures of increasing capacity are ongoing. – Successfully completed demolition works of 250 m and 150 m tall chimneys of the Elektrėnai Complex (Flexible Generation) which are no longer used and pose a threat to people and the surrounding buildings. Hazardous and non-hazardous waste generated during the demolition was transferred to waste management companies, and the waste that can be recycled or reused has been treated accordingly. |
– There were no new environmental inspections in Q1 2022. However, an unscheduled inspection was ongoing since Q4 2021 and was completed in March 2022 in Vilnius CHP. Accordingly, a written warning due to a minor violation in the procedure for filling in documents was issued. – The analysis of the Group's biodiversity and ecosystems management started in Q1 2022. After completing the analysis, we plan to implement measures to mitigate our impact on natural ecosystems. |
| At the end of 2021 |
1,214 MW of installed Green Generation capacity |
GHG emissions: 4.76m t CO2 -eq |
N/A | N/A |
| 2025 strategic milestones and goals |
2.0–2.2 GW of installed Green Generation capacity |
23% GHG emissions reduction (vs. 2020)2 |
Each business segment to implement at least one circularity transformation3 |
Net gain in biodiversity4 |
Due to the change in calculation based on the auditors' recommendations, the value differs from figures provided in the Group's Annual report 2021 (see the Group's greenhouse gas inventory report here). Including scopes 1, 2 and 3 and biogenic emissions. 2020 value is the baseline for the validated science-based 2030 targets.
3 Four business segments, where each must implement at least one significant initiative involving significant resource use reduction, reuse or recycling.
4 Involving (1) an assessment of total biodiversity impact, and (2) coordination with environmental experts to create a positive impact on biodiversity (restore, compensate the loss of natural habitat and species).
| SOCIAL | |||
|---|---|---|---|
| Sustainability pillar |
Future-fit employees | ||
| Sustainability programme |
Increasing safety at work | Cultivating a collaborative and nurturing workplace | Growing a diverse and inclusive workplace |
| Progress in Q1 2022 |
– Total recordable injury rate (TRIR) for a million hours worked by employees was 2.20 in Q1 2022. The change was largely due to the challenging weather conditions and the failure to follow proper safety precautions. TRIR, times 2.20 2.01 2021 Q1 2022 – Working with contractors on occupational safety and health (OSH) issues is one of the priorities of the Group. The importance of it were, unfortunately, illustrated by real examples. In January 2022, a tragedy occurred – a contractor employee was fatally injured while clearing trees and shrubs under a high-voltage power line. – The entire month of February 2022 was devoted to employee health – a series of events about healthy living, well-being, sports, food, sustainable fashion, etc. were held. 10 different lectures and practices were organised during the Health Month, which introduced exceptional personalities: a virologist, designer, Paralympic champion and others. Several hundred employees of the Group attended the events. |
– The Group became the first Lithuanian company to receive the prestigious Top Employer 2022 Lithuania certificate from the global certification company Top Employers Institute, which demonstrates that our HR practices and working conditions are aligned with highest international standards. – Employee net promoter score (eNPS) – one of the measures of employee satisfaction – has increased by 6 pp. Employee satisfaction, eNPS, % (1–100) 65.0 59.0 Q1 2021 Q1 2022 – At the beginning of the year, the Well-being Mentors' project was launched with a community of trained employees acting as volunteer mentors that provide emotional support to their colleagues. In the first quarter, mentors had 34 individual conversations with their colleagues who reached out to mentors to talk about various troubling issues: relationship with colleagues or managers, self-esteem, anxiety, workload, illness, career, family relationships, etc. On 24 February 2022, after Russia invaded Ukraine, many employees of the Group felt anxious. To take care of employees' emotional well-being, the Group organised three special meetings during which the employees could ask questions related to the Russia's invasion of Ukraine and discuss aspects of safety and business security and resilience. – In Q1 2022, the Group's employees actively engaged in voluntary activities to help refugees from Ukraine and other initiatives. The Group's actions in support of Ukraine and war impact to the Group are described in more detail in the 'CEO's statement' and 'Risk and risk management' sections of the report. |
– We are focusing our diversity efforts on improving gender balance at the Group. We pay particular attention to two areas where there is an identified gender disbalance: among our colleagues who work in engineering and IT as well as among top management. Women in top management share was 21%, in IT and engineering positions - 20% in Q1 2022. – As part of our diversity efforts, we continued our partnership with the Women Go Tech initiative. In Q1 2022, 10 women from our organisation began to develop their tech skills as part of the 6-month training programme, whereas 7 further employees are serving as mentors to participants from other organisations. – Employee Diversity and Inclusion Group organised 4 online educational events that attracted an audience of almost 200 employees. The topics of presentations and discussions included diversity and inclusion at international energy companies, spotting discrimination and understanding anti-discrimination laws, and best practices from other organisations. – The Group conducted an employee survey called "Equal Opportunity Ruler" that measures the status of equal opportunities at the workplace on different dimensions, namely organisational culture, discriminatory attitudes, HR processes, and the company's policy on diversity and inclusion. The Equal Opportunity Ruler is certified and managed by the Office of the Equal Opportunities Ombudsperson of Lithuania. After evaluating the results, the Office awarded the Group with a score of 8.9 out of 10 (10 being the maximum score), which signifies a very high level of equal opportunities at the Group. |
| At the end of 2021 |
TRIR 2.01 | eNPS 57.4% | Women in top management share 27% |
| 2025 strategic milestones and goals |
0 employee and contractor fatalities TRIR <1.90 |
≥50% net share of employees promoting the Group as an employer (eNPS) |
≥34% share of women in top management |
Total recordable injury rate (TRIR): Total recordable injuries x 1 million hours worked divided by all hours worked during the reporting period. After implementing the contractor TRIR monitoring, we plan to set targets that also cover contractors. 2 Includes boards, heads of companies and the 1st management level below them. Excludes double-counting (when same person holds more than one top management position in the same company).
| GOVERNANCE | ||
|---|---|---|
| Sustainability pillar |
Robust organisation | |
| Sustainability programme |
Running transparent and ethical operations | Ensuring operational resilience and sustainable value creation |
| Progress in Q1 2022 |
– 100% of new employees participated in Anticorruption and Code of Ethics knowledge tests (2021–2024 target – 100%1 ), pass rate – 97.4% (2021–2024 target – 80%1 ). Testing of all employees is scheduled for Q3 2022. – In Q1 2022, the Group published a Sustainability Report, prepared in accordance with GRI and Nasdaq requirements. – At the beginning of 2022, the Group launched a socially responsible procurements initiative aimed at having a positive impact on society by including new criteria for assessing social aspects, promoting employment opportunities, upskilling and retraining, decent work, social inclusion, equal opportunity, diversity, good corporate governance practice, transparency, ethical trade, etc. The share of socially responsible procurements in terms of value of all successfully completed procurements in Q1 2022 was 9%. – Mandatory compliance with the Supplier Code of Ethics is incorporated in more than 90% of public procurement. – Share of procurements (by value) where supplier screenings were conducted as part of procurement procedures was 96.5%. – Share of published procurements that received only one bid was 14.86% (2021–2024 target – ≤15)2 |
– Q1 2022 started with intense storms – wind reached catastrophic speed and lasted for five days. About 400,000 people faced power outages. Nevertheless, only 2% of customers experienced disruptions for longer than 12 hours. 59% of all affected customers had their electricity supply restored in less than 3 minutes using automated solutions. Compared to the record-breaking snowfall in the winter of 2021, a single power interruption has been fixed, on average, in about half the time compared to 2021. – In March 2022, the Networks (ESO), together with the State Forest Service (SFS), finished the pilot project of identifying trees that pose the greatest threat to the electricity grid. Special LiDAR (Light Detection and Ranging) technology was used to identify the trees too close to the medium-voltage power lines. An inter-institutional agreement between ESO and SFS was signed, which will implement the principles of long-term cooperation and long-term management plans for trees posing a threat to power lines in the forests managed by the SFS. This cooperation will help to balance forest conservation and the stability of electricity supply. – ESO has agreed with the transmission system operator LITGRID on a faster connection process for large electricity producers (>15 MW): large producers can apply directly to LITGRID, which accelerates the process by 5 business days. – Given the geopolitical situation, NATO allies are deploying an increasing number of forces in Lithuania, leading to the formation of new military camps in Marijampolė, Kazlų Rūda and Pabradė. The Ministry of National Defence approached the Group for help in setting up the camps (to urgently increase power capacity, install new electrical inlets, etc.). At the end of Q1 2022, we completed the work on increasing the available power capacity by installing a new transformer substation in the 'Herkus' camp. The whole process was completed 6 to 7 times faster than usual since this is a priority for us as we are contributing to ensure the national energy security of Lithuania. |
| At the end of 2021 |
Corruption intolerance among employees 97% | Sustainable Adjusted EBITDA share 64% (EUR 212 million out of EUR 332.7 million) |
| 2025 strategic milestones and goals |
≥95% corruption intolerance among employees3 |
≥70% Sustainable Adjusted EBITDA share4 |
The goals of the Group's Strategic Plan 2021–2024 in some cases do not overlap with the goals included in the Strategic Plan 2022–2025, therefore the progress towards them is noted separately.
A low value of the indicator could indicate good governance practices in procurement. A low share of published procurements that received only one bid could signal that there are sufficient providers of such services or goods on the market and/or that procurement terms are not favouring any particular suppliers.
Based on an annual employee survey question about how likely employees are to report potential corruption if they see it. Lithuania's average was 21% (2021).
4 Sustainable activity as defined by the EU Taxonomy and delegated acts adopted as of Q1 2022.
2
| 6.1 Consolidated financial statements | 76 |
|---|---|
| 6.2 Parent company's financial statements | 107 |
Unaudited interim condensed consolidated financial statements for the three months period ended 31 March 2022, prepared in accordance with International accounting standard 34 'Interim financial reporting' as adopted by the European Union
| Interim Condensed Consolidated Statement of Financial Position | 77 |
|---|---|
| Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income |
78 |
| Interim Condensed Consolidated Statement of Changes in Equity | 79 |
| Interim Condensed Consolidated Statement of Cash Flows | 80 |
| Explanatory notes | 81 |
The Group's interim condensed consolidated financial statements were prepared and signed by AB "Ignitis grupė" management on 19 May 2022:
Darius Maikštėnas Chief Executive Officer
Jonas Rimavičius Chief Financial Officer
Giedruolė Guobienė UAB "Ignitis grupės paslaugų centras", Head of Accounting acting under Order No IS-22-22 (signed 4 April 2022)
| Notes | 31 March 2022 | 31 December 2021 | |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 5 | 117,742 | 114,035 |
| Property, plant and equipment | 6 | 2,616,170 | 2,609,576 |
| Right-of-use assets | 7 | 51,104 | 57,543 |
| Prepayments for non-current assets | 38,977 | 15,768 | |
| Investment property | 4,546 | 4,546 | |
| Non-current receivables | 9 | 245,267 | 96,139 |
| Other financial assets | 10 | 33,919 | 30,094 |
| Other non-current assets | 13,860 | 3,712 | |
| Deferred tax assets | 17,109 | 15,547 | |
| Total non-current assets | 3,138,694 | 2,946,960 | |
| Current assets | |||
| Inventories | 11 | 423,522 | 185,606 |
| Prepayments and deferred expenses Trade receivables |
12 | 33,578 282,292 |
68,476 274,897 |
| Other receivables | 13 | 209,634 | 292,529 |
| Other current assets | 55,655 | 33,218 | |
| Prepaid income tax | 112 | 134 | |
| Cash and cash equivalents | 479,369 | 449,073 | |
| 1,484,162 | 1,303,933 | ||
| Assets held for sale | 176 | 360 | |
| Total current assets | 1,484,338 | 1,304,293 | |
| TOTAL ASSETS | 4,623,032 | 4,251,253 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Issued capital | 14.1 | 1,658,756 | 1,658,756 |
| Treasury shares | (23,000) | (23,000) | |
| Reserves | 426,065 | 248,861 | |
| Retained earnings | (56,493) | (35,636) | |
| Equity attributable to equity holders of the parent Non-controlling interests |
2,005,328 - |
1,848,981 - |
|
| Total equity | 2,005,328 | 1,848,981 | |
| Liabilities | |||
| Non-current liabilities | |||
| Non-current loans and bonds | 16 | 1,186,109 | 1,118,077 |
| Non-current lease liabilities | 46,299 | 46,275 | |
| Grants and subsidies | 281,419 | 279,134 | |
| Deferred tax liabilities | 40,659 | 47,187 | |
| Provisions | 19 | 26,093 | 30,058 |
| Deferred income | 18 | 187,382 | 183,608 |
| Other non-current amounts payable and liabilities | 536 | 420 | |
| Total non-current liabilities | 1,768,497 | 1,704,759 | |
| Current liabilities | |||
| Loans | 16 | 243,027 | 237,274 |
| Lease liabilities | 4,592 | 4,688 | |
| Trade payables Advances received |
109,392 53,435 |
100,183 57,508 |
|
| Income tax payable | 48,249 | 11,567 | |
| Provisions | 19 | 34,989 | 41,561 |
| Deferred income | 18 | 14,262 | 18,046 |
| Other current amounts payable and liabilities | 20 | 341,261 | 226,686 |
| Total current liabilities | 849,207 | 697,513 | |
| Total liabilities | 2,617,704 | 2,402,272 | |
| TOTAL EQUITY AND LIABILITIES | 4,623,032 | 4,251,253 | |
All amounts are in EUR thousand unless otherwise stated
| Notes | I qtr. 2022 | I qtr. 2021 (restated)1 |
|
|---|---|---|---|
| Revenue from contracts with customers Other income |
22 | 989,807 1,449 |
386,653 6,756 |
| Total revenue and other income | 991,256 | 393,409 | |
| Purchases of electricity, natural gas and other services | (801,492) | (265,224) | |
| Salaries and related expenses | (28,348) | (25,379) | |
| Repair and maintenance expenses | (6,174) | (5,523) | |
| Other expenses Total |
(63,592) (899,606) |
(9,855) (305,981) |
|
| EBITDA2 | 91,650 | 87,428 | |
| Depreciation and amortisation | (33,814) | (29,424) | |
| Write-offs, revaluation and impairment losses of property, plant and equipment and intangible assets | (634) | (994) | |
| Operating profit (loss) (EBIT)2 | 57,202 | 57,010 | |
| Finance income | 3,002 | 864 | |
| Finance expenses | (7,920) | (6,790) | |
| Finance activity, net | (4,918) | (5,926) | |
| Profit (loss) before tax | 52,284 | 51,084 | |
| Current period income tax (expenses)/benefit | 24 | (15,576) | (3,387) |
| Deferred tax (expenses)/benefit | 24 | 10,067 | (4,712) |
| Net profit for the period | 46,775 | 42,985 | |
| Attributable to: | |||
| Equity holders of the parent | 46,775 | 42,116 | |
| Non-controlling interest | - | 869 | |
| Other comprehensive income (loss) | |||
| Items that will not be reclassified to profit or loss in subsequent periods (net of tax) | |||
| Change in actuarial assumptions | 20 | (222) | |
| Items that will not be reclassified to profit or loss in subsequent periods, total | 20 | (222) | |
| Items that may be reclassified to profit or loss in subsequent periods (net of tax) | |||
| Cash flow hedges – effective portion of change in fair value | 107,971 | - | |
| Cash flow hedges – reclassified to profit or loss | 45,585 | - | |
| Foreign operations – foreign currency translation differences | (180) | (1,181) | |
| Items that may be reclassified to profit or loss in subsequent periods, total | 153,376 | (1,181) | |
| Total other comprehensive income (loss) for the period | 153,396 | (1,403) | |
| Total comprehensive income (loss) for the period | 200,171 | 41,582 | |
| Attributable to: | |||
| Equity holders of the parent | 200,171 | 40,713 | |
| Non-controlling interests | - | 869 | |
| Basic earnings per share (in EUR) | 25 | 0.64 | 0.57 |
| Diluted earnings per share (in EUR) | 25 | 0.64 | 0.57 |
| Weighted average number of shares | 25 | 73,040,514 | 74,283,757 |
1Part of the amounts do not agree with the interim condensed financial statements issued for the three months period ended 31 March 2021 due to accounting policy changes. See more information disclosed in Note 4.
2EBITDA – earnings before finance activity, taxes, depreciation, and amortization, write-offs, revaluation and impairment losses of property, plant and equipment and intangible assets. For more information on EBITDA as an alternative performance measure – see Note 29. EBIT – earnings before finance activity, taxes. For more information on EBIT as an alternative performance measure – see Note 29.
All amounts are in EUR thousand unless otherwise stated
| Equity, attributed to equity holders of the parent | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Notes | Issued capital |
Share premium |
Treasury shares |
Legal reserve |
Revaluation reserve |
Hedging reserve |
Treasury shares reserve |
Other reserves |
Retained earnings |
Subtotal | Non controlling interest |
Total | |
| Balance as at 1 January 2021 (restated)1 | 1,658,756 | - | - | 116,029 | 119,132 | - | - | (2,229) | (79,864) | 1,811,824 | 1,469 1,813,293 | ||
| Net profit for the period1 | - | - | - | - | - | - | - | - | 42,116 | 42,116 | 869 | 42,985 | |
| Other comprehensive income (loss) for the period1 | 15 | - | - | - | - | - | - | - | (1,181) | (222) | (1,403) | - | (1,403) |
| Total comprehensive income (loss) for the period (restated)1 | - | - | - | - | - | - | - | (1,181) | 41,894 | 40,713 | 869 | 41,582 | |
| Transfer of revaluation reserve to retained earnings (transfer of | |||||||||||||
| depreciation, net of tax) | - | - | - | - | (2,741) | - | - | - | 2,741 | - | - | - | |
| Transfers to legal reserve | - | - | - | 10,153 | - | - | - | - | (10,153) | - | - | - | |
| Transfer to reserves to acquire treasury shares | 14.2 | - | - | - | - | - | - | 23,000 | - | (23,000) | - | - | - |
| Dividends | 26 | - | - | - | - | - | - | - | - | (43,010) | (43,010) | - | (43,010) |
| Dividends paid to non-controlling interest | 26 | - | - | - | - | - | - | - | - | (1,152) | (1,152) | - | (1,152) |
| Share-based payments | - | - | - | - | - | - | - | - | 16 | 16 | - | 16 | |
| Balance as at 31 March 2021 (restated)1 | 1,658,756 | - | - | 126,182 | 116,391 | - | 23,000 | (3,410) | (112,528) | 1,808,391 | 2,338 1,810,729 | ||
| Balance as at 1 January 2022 | 1,658,756 | - | (23,000) | 125,820 | 84,148 | 18,639 | 23,000 | (2,746) | (35,636) | 1,848,981 | - 1,848,981 | ||
| Net profit for the period | - | - | - | - | - | - | - | - | 46,775 | 46,775 | - | 46,775 | |
| Other comprehensive income (loss) for the period | 15 | - | - | - | - | - | 153,556 | - | (180) | 20 | 153,376 | - | 153,376 |
| Total comprehensive income (loss) for the period | - | - | - | - | - | 153,556 | - | (180) | 46,795 | 200,171 | - | 200,171 | |
| Transfer of revaluation reserve to retained earnings | |||||||||||||
| (depreciation, disposals and other movements, net of tax) | - | - | - | - | (2,450) | - | - | - | 2,450 | - | - | - | |
| Transfers to legal reserve | - | - | - | 11,618 | - | - | - | - | (11,618) | - | - | - | |
| Transfer to reserves to acquire treasury shares | 14.2 | - | - | - | - | - | - | 14,660 | - | (14,660) | - | - | - |
| Dividends | 26 | - | - | - | - | - | - | - | - | (43,824) | (43,824) | - | (43,824) |
| Balance as at 31 March 2022 | 1,658,756 | - | (23,000) | 137,438 | 81,698 | 172,195 | 37,660 | (2,926) | (56,493) | 2,005,328 | - 2,005,328 |
1 Part of the amounts do not agree with the interim condensed financial statements issued for the three months period ended 31 March 2021 due to accounting policy changes. See more information disclosed in Note 4.
All amounts are in EUR thousand unless otherwise stated
| Notes | I qtr. 2022 | I qtr. 2021 (restated)1 |
|
|---|---|---|---|
| Cash flows from operating activities | |||
| Net profit for the period | 46,775 | 42,985 | |
| Adjustments to reconcile net profit to net cash flows: | |||
| Depreciation and amortisation expenses | 5, 6, 7 | 36,639 | 31,759 |
| Impairment of property, plant and equipment, including held for sale | - | (678) | |
| Fair value changes of derivatives | 21 | 40,273 | (2,334) |
| Fair value change of financial instruments | 10 | (2,408) | - |
| Impairment/(reversal of impairment) of financial assets | 10, 12, 13 | 635 | (258) |
| Income tax expenses/(benefit) | 24 | 5,509 | 8,099 |
| Depreciation and amortisation of grants | (2,825) | (2,335) | |
| Increase/(decrease) in provisions | (13,623) | 3,403 | |
| Inventory write-off to net realizable value/(reversal) | 11 | 266 | |
| Expenses/(income) of revaluation of emission allowances | - | 142 | |
| Loss/(gain) on disposal/write-off of assets held for sale and property, plant and equipment | 529 | 1,620 | |
| Share-based payments expenses | - | 16 | |
| Interest income | (222) | (245) | |
| Interest expenses | 6,650 | 5,884 | |
| Other expenses of financing activities | 898 | 287 | |
| Changes in working capital: | |||
| (Increase)/decrease in trade receivables and other amounts receivable | (74,380) | (13,032) | |
| (Increase)/decrease in inventories, prepayments and other current and non-current assets | (203,912) | (22,517) | |
| Increase/(decrease) in trade payables, deferred income, advances received, other non-current | |||
| and current amounts payable and liabilities | 189,268 | 14,583 | |
| Income tax (paid)/received | (432) | (1,802) | |
| Net cash flows from operating activities | 29,385 | 65,843 | |
| Cash flows from investing activities | |||
| Acquisition of property, plant and equipment and intangible assets | (70,401) | (46,686) | |
| Proceeds from sale of property, plant and equipment, assets held for sale and intangible assets | 442 | 550 | |
| Grants received | 5,110 | 7,788 | |
| Interest received | 139 | 120 | |
| Finance lease payments received | 442 | 533 | |
| Investments in Innovation Fund | 10 | (1,417) | - |
| Net cash flows from investing activities | (65,685) | (37,695) | |
| Cash flows from financing activities | |||
| Loans received | 17 | 73,000 | - |
| Repayments of loans | 17 | (2,780) | (3,129) |
| Lease payments | 17 | (1,565) | (9,217) |
| Interest paid | 17 | (2,051) | (1,785) |
| Other cash flow from financing activities | (8) | (4) | |
| Net cash flows from financing activities | 66,596 | (14,135) | |
| Increase/(decrease) in cash and cash equivalents (including overdraft) | 30,296 | 14,013 | |
| Cash and cash equivalents (including overdraft) at the beginning of the period | 449,073 | 658,795 | |
| Cash and cash equivalents (including overdraft) at the end of the period | 479,369 | 672,808 |
1Part of the amounts do not agree with the interim condensed financial statements issued for the three months period ended 31 March 2021 due to accounting policy changes. See more information disclosed in Note 4.
For the three months period ended 31 March 2022
Ignitis grupė AB (hereinafter – "the Company" or "parent company") is a public limited liability company registered in the Republic of Lithuania. The Company's registered office address is Laisvės pr. 10, LT-04215, Vilnius, Lithuania. The Company was registered on 28 August 2008 with the Register of Legal Entities managed by the public institution the Centre of Registers. Company code 301844044.
The Company's shares are listed on the Main List of NASDAQ OMX Vilnius Stock Exchange, as well the global depositary receipts are admitted to the standard listing segment of the Official List of the United Kingdom Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange. The Company has been founded for an indefinite period.
The Company and its subsidiaries are hereinafter collectively referred to as "the Group". The Group engages in electricity and heat generation (including electricity generation from renewable energy sources), supply, electricity import and export, distribution and trade, natural gas distribution and supply, as well as the maintenance and development of the electricity sector, management and coordination of activities. Information on the Group's structure is provided in Note 8.
The Group's principal shareholder is the Republic of Lithuania (73.08%).
| 31 March 2022 | 31 December 2021 | ||||
|---|---|---|---|---|---|
| Shareholders of the Group | Share capital, in EUR '000 |
% | Share capital, in EUR '000 |
% | |
| Republic of Lithuania represented by the Ministry of Finance of the Republic of Lithuania |
1,212,156 | 73.08 | 1,212,156 | 73.08 | |
| Other shareholders | 418,838 | 25.25 | 418,838 | 25.25 | |
| Own shares | 27,762 | 1.67 | 27,762 | 1.67 | |
| 1,658,756 | 1,658,756 |
These interim consolidated financial statements were prepared and signed by Group's management on 19 May 2022. These are interim condensed consolidated financial statements of the Group. The Company also prepares separate interim condensed financial statements in accordance with local requirements.
These interim condensed consolidated financial statements are prepared for the three months period ended 31 March 2022 (hereinafter "interim financial statements") and have been prepared in accordance with International Accounting Standard (hereinafter "IAS") 34 "Interim Financial Reporting".
These interim financial statements do not provide all the information required for the preparation of the annual financial statements, therefore this must be read in conjunction with the annual financial statements for the year ended 31 December 2021, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (hereinafter "IFRS").
The Group's interim financial statements as at and for the three months period ended 31 March 2022 have been prepared on a going concern basis applying measurement based on historical cost, except for certain items of property, plant and equipment, investment property, and certain financial instruments measured at fair value.
These interim financial statements are presented in euros and all values are rounded to the nearest thousand (EUR '000), except when otherwise indicated. The Group's interim financial statements provide comparative information in respect of the previous period. The financial year of the Group coincides with the calendar year.
During 2021 the Group made changes in accounting policy – see Note 2.2.1 of annual financial statements for the year ended 31 December 2021 and Note 4 for detailed explanation.
2.2 New standards, amendments, interpretations and changes in accounting policy
The accounting policies applied in the preparation of these interim financial statements are consistent with the accounting policies applied in the preparation of the Group's annual financial statements for the year ended 31 December 2021, with the exception of the new standards which entered into force during I qtr. of 2022.
Preparing these interim financial statements the significant management judgements regarding the application of the accounting policies and accounting estimates were the same as used in preparing the annual financial statements for the year ended 31 December 2021 except for mentioned in Note 3.
Preparing these interim financial statements, the Group did not adopt new standards, amendments and interpretations, the effective date of which is later than 31 March 2022 and early adoption is permitted. The following are new standards and/or amendments to the standards that have been endorsed in European Union (hereinafter – EU) during the reporting period ended as at 31 March 2022:
The objective of the Amendments is to develop guidance and examples to help entities apply materiality judgements to accounting policy disclosures. More specifically, the Amendments require entities to disclose their "material" accounting policy information rather than their "significant" accounting policies. The Amendments shall be applied prospectively for annual periods beginning on or after 1 January 2023 with earlier application permitted.
The management of the Group has assessed that these amendments have no significant impact on these interim financial statements.
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates
The objective of the Amendments is to help entities distinguish accounting policies from accounting estimates introducing a definition of accounting estimates and provide other clarifications to help entities distinguish accounting policies from accounting estimates. The Amendments shall be applied for annual reporting periods beginning on or after 1 January 2023 with earlier application permitted. An entity shall apply the amendments to changes in accounting estimates and policies that occur on or after the beginning of the first annual reporting period in which it applies the Amendments.
The management of the Group has assessed that these amendments have no significant impact on these interim financial statements.
Preparing these interim financial statements the significant management judgements regarding the application of the accounting policies and accounting estimates were the same as used in preparing the annual financial statements for the year ended 31 December 2021 except the following:
Total amount of the investment to Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB increased for an amount EUR 3,825 thousand during the I qtr. of 2022.
The fair value gain of Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB recognised for an amount EUR 2,408 thousand and is presented as "Finance income" in SPLOCI for the I qtr. of 2022. The fair value of this financial asset is determined by reference to new investment rounds or other recent events and data (Note 30).
Remaining change is related to new investments made during I qtr. of 2022 for an amount EUR 1,417 thousand.
Fair value corresponds to Level 3 in the fair value hierarchy. Fair value of this financial asset will change depending on future investment rounds or other significant events
On 14 November 2019, NERC adopted a resolution No O3E–715 'On approval of the methodology for establishing the prices for electricity, capacity reserve and services ensuring isolated operation of the power system'. This resolution stipulates that Companies that discontinue capacity reserve ensuring services or services ensuring isolated operation of the power system shall reimburse any discrepancies between the projected and actual costs of providing these services to the transmission system operator if the costs actually incurred by the Group were less than the revenues received from the transmission system operator. If the actual costs incurred by the Group were higher than the income of the transmission system operator, the transmission system operator shall reimburse this amount to the Group.
With regard to the resolution above, the Group recognises assets and liabilities of the regulated activities that are intended to eliminate the mismatches between the current year earnings and the regulated level regardless the difference under the provision of services in the future.
On 8 February 2022 an additional agreement with LitGrid AB was signed. Under the agreement the Group undertook to purchase the required amount of gas and sell the set amount of electricity in advance on the electricity market in accordance with the electricity generation schedule submitted by LitGrid AB, and LitGrid AB undertook to reimburse the costs incurred by the Group under the schedule - the difference between the balancing energy price and the electricity exchange price will be reimbursed. Due to this additional agreement during I qtr. of 2022 the Group has entered into a derivative financial instruments transaction, which hedges the sale price of gas. As at 31 March 2022 the Group accounted accrued revenue to cover the loss associated with this transaction total amount of loss which will be reimbursed EUR 49 million:
As at 31 March 2022 the Group has also accounted EUR 13,185 thousand as current liabilities under the caption "Provisions" in the statement of financial position as this part already confirmed by NERC as liability (Note 19) (as at 31 December 2021 the Group accounted EUR 7,107 thousand as noncurrent liabilities and EUR 15,161 thousand as current liabilities under the caption "Provisions" in the statement of financial position).
According to the Rules for the Use of Electricity Networks, the result of the sale of gas required for the provision of a regulated service will have to be assessed in the price of the regulated service in future periods.
On 4 November 2021 amendments were established to Laws on Natural Gas and Electricity, which provide for price amortization mechanisms in the face of high gas and electricity market prices. The price amortization mechanism means that the gas or electricity supplier agrees to set a lower price for the product and to spread the return of the accumulated losses within 5 year period.
The Group did take an opportunity to set lower prices, due to that the losses (loss of revenue) caused by the lower gas price in the tariff will be returned to the Group through the additional component which is included in distribution service tariff. Losses will be reimbursed regardless of whether the Group continues to provide supply services in the future or not. Therefore with regard to these Law amendments the Group did recognize accrued revenue in amount of EUR 63,346 thousand (Note 9) to eliminate mismatches between the current period earnings and the regulated level. According to Law at the end of reporting period the Group did not expect to receive part of this amount during upcoming 12 months period, due to that total amount was recognised as non-current receivable. More information on amendments on legislation after the reporting period is provided in Note 31.2.
The Group participates in the greenhouse gas emissions (hereinafter – European Union emission allowances or EUEA) trading system. In 2021 the management has concluded that the current accounting policy for emission allowances does not present the SPLOCI and the statement of financial position in the best interest of the users of the financial statements. Therefore, the management has determined that there is a need for a voluntary change in accounting policy. The new accounting policy is described in Note 2.3 of annual financial statements as at 31 December 2021.
The main arguments for changing the accounting policy are:
As IAS 8 requires that the users of financial statements need to be able to compare the financial statements of an entity over time to identify trends, the management presents the information regarding the accounting policy changes, that are performed retrospectively.
Retrospective corrections of consolidated SPLOCI for three months period ended 31 March2021:
| I qtr. 2021 | Restatement I qtr. 2021 after | ||
|---|---|---|---|
| before | restatement | ||
| restatement | |||
| Revenue from contracts with customers | 386,653 | - | 386,653 |
| Other income | 6,756 | - | 6,756 |
| Total revenue and other income | 393,409 | - | 393,409 |
| Purchases of electricity, natural gas and other services | (264,733) | (491) | (265,224) |
| Salaries and related expenses | (25,379) | - | (25,379) |
| Repair and maintenance expenses | (5,523) | - | (5,523) |
| Other expenses | (9,855) | - | (9,855) |
| Total | (305,490) | (491) | (305,981) |
| EBITDA | 87,919 | (491) | 87,428 |
| Depreciation and amortisation | (29,424) | - | (29,424) |
| Write-offs, revaluation and impairment losses of property, plant and equipment and intangible assets | (994) | - | (994) |
| Revaluation of emission allowances | (6,159) | 6,159 | - |
| Operating profit (loss) (EBIT) | 51,342 | 5,668 | 57,010 |
| Finance income | 864 | - | 864 |
| Finance expenses | (6,790) | - | (6,790) |
| Finance activity, net | (5,926) | - | (5,926) |
| Profit (loss) before tax | 45,416 | 5,668 | 51,084 |
| Current income tax (expenses)/benefit | (3,617) | 230 | (3,387) |
| Deferred tax (expenses)/benefit | (4,712) | - | (4,712) |
| Net profit for the period | 37,087 | 5,898 | 42,985 |
| Attributable to: | |||
| Equity holders of the parent | 36,636 | 5,480 | 42,116 |
| Non-controlling interest | 451 | 418 | 869 |
| Other comprehensive income (loss) | |||
| Items that will not be reclassified to profit or loss in subsequent periods (net of tax) | |||
| Revaluation of emission allowances through other comprehensive income | 22,547 | (22,547) | - |
| Change in actuarial assumptions | (222) | - | (222) |
| Items that will not be reclassified to profit or loss in subsequent periods, total | 22,325 | (22,547) | (222) |
| Items that may be reclassified to profit or loss in subsequent periods (net of tax) | - | ||
| Exchange differences on translation of foreign operations into the Group's presentation currency | (1,181) | - | (1,181) |
| Items that may be reclassified to profit or loss in subsequent periods, total | (1,181) | - | (1,181) |
| Total other comprehensive income (loss) for the period | 21,144 | (22,547) | (1,403) |
| Total comprehensive income (loss) for the period | 58,231 | (16,649) | 41,582 |
| Attributable to: | |||
| Equity holders of the parent | 57,363 | (16,649) | 40,713 |
| Non-controlling interests | 869 | - | 869 |
| Basic earnings per share (in EUR) | 0.49 | 0.08 | 0.57 |
| Diluted earnings per share (in EUR) | 0.49 | 0.08 | 0.57 |
| Weighted average number of shares | 74,283,757 | - | 74 283,757 |
Retrospective corrections of consolidated statement of cash flows for three months period ended 31 March 2021:
| I qtr. 2021 | I qtr. 2021 | ||
|---|---|---|---|
| before restatement |
Restatement | after restatement |
|
| Cash flows from operating activities | |||
| Net profit for the period | 37,087 | 5,898 | 42,985 |
| Adjustments to reconcile net profit to net cash flows: | |||
| Depreciation and amortisation expenses | 31,759 | - | 31,759 |
| Impairment of property, plant and equipment, including held for sale | (678) | - | (678) |
| Fair value changes of derivatives Impairment/(reversal of impairment) of financial assets |
(2,334) (258) |
- - |
(2,334) (258) |
| Income tax expenses/(benefit) | 8,329 | (230) | 8,099 |
| Depreciation and amortisation of grants | (2,335) | - | (2,335) |
| Increase/(decrease) in provisions | 4,736 | (1,333) | 3,403 |
| Inventory write-off to net realizable value/(reversal) | 266 | - | 266 |
| Expenses/(income) of revaluation of emission allowances | 6,159 | (6,159) | - |
| Emission allowances utilised | (1,682) | 1,824 | 142 |
| Loss/(gain) on disposal/write-off of assets held for sale and property, plant and equipment |
1,620 | - | 1,620 |
| Share based payments | 16 | - | 16 |
| Interest income | (245) | - | (245) |
| Interest expenses | 5,884 | - | 5,884 |
| Other expenses of financing activities | 287 | - | 287 |
| Changes in working capital: | |||
| (Increase)/decrease in trade receivables and other amounts receivable | (13,032) | - | (13,032) |
| (Increase)/decrease in inventories, prepayments and other current and non-current | (22,536) | 19 | (22,517) |
| assets Increase/(decrease) in trade payables, deferred income, advances received, other |
|||
| non-current and current amounts payable and liabilities | 14,583 | - | 14,583 |
| Income tax (paid)/received Net cash flows from operating activities |
(1,802) 65,824 |
- 19 |
(1,802) 65,843 |
| Cash flows from investing activities | |||
| Acquisition of property, plant and equipment and intangible assets | (46,686) | - | (46,686) |
| Proceeds from sale of property, plant and equipment, assets held for sale and | 569 | (19) | 550 |
| intangible assets | |||
| Grants received | 7,788 | - | 7,788 |
| Interest received Finance lease payments received |
120 533 |
- - |
120 533 |
| Net cash flows from investing activities | (37,676) | (19) | (37,695) |
| Cash flows from financing activities | |||
| Repayments of loans | (3,129) | - | (3,129) |
| Lease payments | (9,217) | - | (9,217) |
| Interest paid | (1,785) | - | (1,785) |
| Other cash flow from financing activities Net cash flows from financing activities |
(4) (14,135) |
- - |
(4) (14,135) |
| Increase/(decrease) in cash and cash equivalents (including overdraft) | 14,013 | - | 14,013 |
| Cash and cash equivalents (including overdraft) at the beginning of the period | 658,795 | - | 658,795 |
| Cash and cash equivalents (including overdraft) at the end of the period | 672,808 | - | 672,808 |
Movement on the Group's account of intangible assets is presented below:
| Patents and licences Computer software | Other intangible assets |
Goodwill | Servitudes and security zones |
In total | ||
|---|---|---|---|---|---|---|
| As at 31 December 2021 | ||||||
| Acquisition cost | 310 | 40,702 | 72,588 | 4,927 | 33,567 | 152,094 |
| Accumulated amortisation | (267) | (23,246) | (14,546) | - | - | (38,059) |
| Carrying amount | 43 | 17,456 | 58,042 | 4,927 | 33,567 | 114,035 |
| Carrying amount at 1 January 2022 | 43 | 17,456 | 58,042 | 4,927 | 33,567 | 114,035 |
| Additions | - | 8 | 2,852 | - | 3,488 | 6,348 |
| Reclassified from (to) property plant and equipment | - | (23) | - | - | - | (23) |
| Reclassifications between categories | - | 11 | (11) | - | - | - |
| Amortisation | (6) | (1,585) | (1,027) | - | - | (2,618) |
| Carrying amount at 31 March 2022 | 37 | 15,867 | 59,856 | 4,927 | 37,055 | 117,742 |
| As at 31 March 2022 | ||||||
| Acquisition cost | 310 | 40,698 | 75,428 | 4,927 | 37,055 | 158,418 |
| Accumulated amortisation | (273) | (24,831) | (15,572) | - | - | (40,676) |
| Carrying amount | 37 | 15,867 | 59,856 | 4,927 | 37,055 | 117,742 |
As at 31 March 2022 and 31 December 2021 other intangible assets mainly comprise of rights to produce electricity with an incentive rate.
The Group reviewed the carrying amount of its goodwill to determine whether there are any indications that those assets have suffered an impairment loss. Goodwill has not showed any indications of impairment.
The Group has significant acquisition commitments of intangible assets which will have to be fulfilled during the later years. Group's acquisition commitments amounted to EUR 3,657 thousand as at 31 March 2022 (EUR 2,310 thousand as at 31 December 2021).
Movement on the Group's account of property, plant and equipment is presented below:
| Land | Buildings | Electricity networks and their structures |
Gas distribution pipelines, gas technological equipment and installations |
Assets of Hydro Power Plant, Pumped Storage Power Plant |
Wind power plants and their installations |
Combined Cycle Unit and Reserve Power Plant |
Cogeneration plants |
Other property, plant and equipment |
Construction in-progress |
In total | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| As at 31 December 2021 | |||||||||||
| Cost or revalued amount | 3,371 | 42,629 | 1,166,416 | 285,812 | 212,108 | 194,973 | 772,490 | 258,827 | 96,650 | 251,289 | 3,284,565 |
| Accumulated depreciation | - | (390) | - | (13,282) | (118,614) | (27,063) | (441,451) | (10,821) | (28,130) | - | (639,751) |
| Accumulated impairment Carrying amount |
- 3,371 |
- 42,239 |
- 1,166,416 |
(9,392) 263,138 |
- 93,494 |
- 167,910 |
(25,623) 305,416 |
- 248,006 |
- 68,520 |
(223) 251,066 |
(35,238) 2,609,576 |
| Carrying amount at 1 January 2022 | 3,371 | 42,239 | 1,166,416 | 263,138 | 93,494 | 167,910 | 305,416 | 248,006 | 68,520 | 251,066 | 2,609,576 |
| Additions | - | - | 56 | 2 | 4 | 4,153 | 10 | 24 | 1,320 | 29,789 | 35,358 |
| Sales | - | - | (8) | - | - | - | - | - | (42) | - | (50) |
| Write-offs | - | (2) | (592) | (11) | - | - | - | - | (29) | 1 | (633) |
| Reclassifications between categories | - | 1,041 | 35,484 | 1,822 | - | - | 41 | (787) | 2,631 | (40,232) | - |
| Reclassified from (to) intangible assets | - | - | - | - | - | - | - | - | 23 | - | 23 |
| Reclassified from (to) finance lease | - | - | - | - | - | - | - | - | 130 | - | 130 |
| Reclassified from (to) assets held for sale | - | - | - | - | - | - | - | - | (104) | - | (104) |
| Reclassified from (to) inventories | - | - | - | - | 9 | - | 12 | (63) | (22) | - | (64) |
| Reclassified from (to) right-of-use assets | - | - | - | - | - | 6,061 | - | - | - | - | 6,061 |
| Depreciation | - | (564) | (16,912) | (1,592) | (1,355) | (1,696) | (5,104) | (2,663) | (2,766) | - | (32,652) |
| Foreign currency exchange difference | - | - | - | - | - | (1,433) | - | - | - | (42) | (1,475) |
| Carrying amount at 31 March 2022 | 3,371 | 42,714 | 1,184,444 | 263,359 | 92,152 | 174,995 | 300,375 | 244,517 | 69,661 | 240,582 | 2,616,170 |
| As at 31 March 2022 | |||||||||||
| Cost or revalued amount | 3,371 | 43,668 | 1,201,386 | 287,573 | 212,121 | 205,446 | 772,593 | 258,000 | 100,001 | 240,805 | 3,324,964 |
| Accumulated depreciation | - | (954) | (16,942) | (15,524) | (119,969) | (30,451) | (449,870) | (13,483) | (30,340) | - | (677,533) |
| Accumulated impairment | - | - | - | (8,690) | - | - | (22,348) | - | - | (223) | (31,261) |
| Carrying amount | 3,371 | 42,714 | 1,184,444 | 263,359 | 92,152 | 174,995 | 300,375 | 244,517 | 69,661 | 240,582 | 2,616,170 |
Additions of property, plant and equipment during I qtr. of 2022 include the following major acquisitions to the construction in progress:
− acquisitions related to the development of the electricity and gas distribution network;
− acquisitions related with the construction of new high-efficiency waste-fired cogeneration power plant and its biofuel unit.
The Group reviewed the carrying amount of its property, plant and equipment which are recognised at acquisition cost less depreciation and impairment to determine whether there are any indications that those assets have suffered an impairment loss. As at 31 March 2022 the Group has not identified any property, plant and equipment impairment indications. Additionally, the Group analysed whether there were any significant changes in the regulatory environment or other areas which could impact fair value of property, plant and equipment which is recognized at revalued amount. The Group did not notify any significant changes which could materially impact carrying amount of such assets.
The Group has significant acquisition commitments of property, plant and equipment which will have to be fulfilled during the later years. Group's acquisition and construction commitments amounted to EUR 154,558 thousand as at 31 March 2022 (31 March 2021: EUR 111,324 thousand).
Movement on Group's account of right-of-use asset is presented below:
| Land | Buildings | Structures and machinery |
Wind power plants and their installations |
Vehicles | Other property, plant and equipment |
In total | |
|---|---|---|---|---|---|---|---|
| As at 31 December 2021 | |||||||
| Acquisition cost | 28,319 | 31,321 | 78 | 7,753 | 354 | 170 | 67,995 |
| Accumulated depreciation | (1,409) | (7,136) | (67) | (1,652) | (143) | (45) | (10,452) |
| Carrying amount | 26,910 | 24,185 | 11 | 6,101 | 211 | 125 | 57,543 |
| Carrying amount as 1 January 2022 | 26,910 | 24,185 | 11 | 6,101 | 211 | 125 | 57,543 |
| Additions | 735 | 935 | 2 | - | - | - | 1,672 |
| Write-offs | - | (1) | - | - | - | - | (1) |
| Reclassifications between categories | - | (28) | - | - | 28 | - | - |
| Reclassified from / (to) property, plant & equipment | - | - | - | (6,061) | - | - | (6,061) |
| Depreciation | (189) | (1,077) | (3) | (40) | (43) | (17) | (1,369) |
| Foreign currency exchange difference | (676) | (2) | - | - | (2) | - | (680) |
| Carrying amount at 31 March 2022 | 26,780 | 24,012 | 10 | - | 194 | 108 | 51,104 |
| 31 March 2022 | |||||||
| Acquisition cost | 28,379 | 32,137 | 17 | - | 380 | 170 | 61,083 |
| Accumulated depreciation | (1,599) | (8,125) | (7) | - | (186) | (62) | (9,979) |
| Carrying amount | 26,780 | 24,012 | 10 | - | 194 | 108 | 51,104 |
During I qtr. of 2022 the lease agreements were finalised by paying in full remaining liability of the group of wind power plants and other installations. Therefore, right of use assets attributable to this group were transferred to the property, plant and equipment with its carrying value of EUR 6,061 thousand.
The Group reviewed the carrying amount of its right-of-use-assets to determine whether there are any indications that those assets have suffered an impairment loss. Right-of-use-assets have not showed any indications of impairment.
The Group's structure as at 31 March 2022:
| Group's effective | Non-controlling | ||
|---|---|---|---|
| Company name | Country of business | ownership interest, % | interest's effective Profile of activities |
| ownership interest, % | |||
| Ignitis grupė AB | Lithuania | - | - Parent company - management and coordination of activities of the Group companies |
| Subsidiaries of the Group: | |||
| Energijos skirstymo operatorius AB | Lithuania | 100.00 | - Distribution of electricity and gas, supply of last resort service |
| Ignitis gamyba AB | Lithuania | 100.00 | - Generation and trading of electricity |
| NT Valdos UAB | Lithuania | 100.00 | - The subsidiary is under liquidation |
| Energetikos paslaugų ir rangos organizacija UAB | Lithuania | 100.00 | - The subsidiary is under liquidation |
| Elektroninių mokėjimų agentūra UAB | Lithuania | 100.00 | - Payment aggregation |
| Ignitis UAB | Lithuania | 100.00 | - Electricity and gas supply, trading, energy efficiency projects |
| Ignitis Eesti, OÜ | Estonia | 100.00 | - Supply of electricity |
| Ignitis Latvija SIA | Latvia | 100.00 | - Supply of electricity and gas |
| Ignitis Polska Sp. z o. o. | Poland | 100.00 | - Supply and trading of electricity and gas |
| Ignitis Suomi OY | Finland | 100.00 | - Supply of gas |
| Ignitis grupės paslaugų centras UAB | Lithuania | 100.00 | - Shared business support services |
| Vilniaus Kogeneracinė Jėgainė UAB | Lithuania | 100.00 | - Development and operation of cogeneration power plant project |
| Kauno Kogeneracinė Jėgainė UAB | Lithuania | 51.00 | 49.00 Electricity and heat production from waste |
| Tuuleenergia OÜ | Lithuania | 100.00 | - Generation of renewable electricity |
| Transporto valdymas UAB | Lithuania | 100.00 | - Vehicle rental, leasing, repair, maintenance, renewal and service |
| Gamybos optimizavimas UAB | Lithuania | 100.00 | - Planning, optimization, forecasting, trading, brokering and other electricity related services |
| Ignitis renewables UAB | Lithuania | 100.00 | - Coordination of operation, supervision and development of renewable energy projects |
| Eurakras UAB | Lithuania | 100.00 | - Generation of renewable electricity |
| Vėjo Vatas UAB | Lithuania | 100.00 | - Generation of renewable electricity |
| Vėjo Gūsis UAB | Lithuania | 100.00 | - Generation of renewable electricity |
| VVP Investment UAB | Lithuania | 100.00 | - Development of a renewable energy (wind) power plant project |
| Pomerania Wind Farm Sp. z o. o. | Poland | 100.00 | - Generation of renewable electricity |
| Ignitis Renewables Polska Sp. z o. o. | Poland | 100.00 | - Sub-holding controlling wind/solar assets |
| Ignitis Res Dev Sp. z o. o. | Poland | 100.00 | - Development of wind/solar projects |
| Ignitis renewables projektai, UAB | Lithuania | 100.00 | - Development of wind/solar projects |
| Altiplano Elektrownie Wiatrowe B1 Sp. z o. o. | Poland | 100.00 | - Development of wind/solar projects |
| Ignitis renewables Latvia SIA | Latvia | 100.00 | - Development of wind/solar projects |
| IGN RES DEV1 SIA | Latvia | 100.00 | - Development of wind/solar projects |
| IGN RES DEV2 SIA | Latvia | 100.00 | - Development of wind/solar projects |
The Group established 3 new entities in Latvia during the I qtr. of 2022 which were established for further development of wind and solar projects in Latvia:
− On February 16 Ignitis renewables Latvia SIA was registered;
− On March 29, IGN RES DEV1 SIA was registered;
− On March 30 IGN RES DEV2 SIA was registered.
Amounts receivable after one year comprised as follows:
| 31 March 2021 31 December 2021 | ||
|---|---|---|
| Accrued revenue related to regulatory activity of the public electricity | ||
| supply | 128,120 | 86,520 |
| Accrued revenue related to natural gas supply to household | ||
| customers (Note 3.3) | 63,346 | - |
| Accrued revenue related to isolated power system operations' and | ||
| system services (Note 3.2) | 41,786 | - |
| Finance lease | 7,105 | 7,600 |
| Loans granted | 87 | 87 |
| Other non-current amounts receivable | 4,823 | 1,932 |
| Carrying amount | 245,267 | 96,139 |
Line item "Accrued revenue related to regulatory activity of the public electricity supply" has increased because discrepancies between the Group's forecasted and actual costs incurred in providing public electricity supply services during the reporting period are recognized as assets or liabilities of regulated activities.
During I qtr. of 2022 electricity prices in the market remained high. As at 31 March 2021 amount of regulatory difference is almost EUR 157 million (for current part see Note 13), EUR 42 million of this amount is related to services provided during the I qtr. of 2022 (to equalize the current period's profit to the regulated level, regardless of whether the services will be provided in the future). Full amount will have to be returned to the Group through the electricity distribution system operator (Group company) in future periods (not later than 31 December 2027).
As to decision of the National Energy Regulatory Council the remaining amount to be returned during II-IV qtr. of 2022 is EUR 28 million. Amount will be returned to the Group through the electricity distribution system and therefore are recognised as current portion of accrued revenue related to regulatory activity of the public electricity supply as at 31 March 2021.
The Group's other financial assets comprised as follows:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB | ||
| (Note 3.1) | 28,919 | 25,094 |
| Investment into Moray West Holdings Limited | 5,000 | 5,000 |
| Carrying amount | 33,919 | 30,094 |
The Group's inventories comprised as follows:
| 31 March 2022 | 31 December 2021 | |
|---|---|---|
| Natural gas | 391,518 | 149,112 |
| Emission allowances | 23,678 | 30,172 |
| Consumables, raw materials and spare parts | 3,388 | 2,916 |
| Other | 4,938 | 3,406 |
| Carrying amount | 423,522 | 185,606 |
During I qtr. 2022 the Group wrote down its inventory by EUR 11 thousand. The write-down is included in Other expenses in SPLOCI (during I qtr. 2021 the Group wrote down its inventory by EUR 278 thousand).
Carrying amount of natural gas 31 March 2022 increased as during I qtr. 2022 the Group has borrowed from the terminal part of upcoming month's gas cargo (Note 20).
The Group's trade receivables comprised as follows:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Amounts receivable under contracts with customers | ||
| Receivables from electricity related sales | 162,058 | 170,167 |
| Receivables from gas related - non-household | 111,448 | 102,182 |
| Receivables from gas related - household | 4,285 | 4,309 |
| Other receivables under contracts with customers | 14,707 | 8,109 |
| Amounts receivable under other contracts | ||
| Receivables for lease of assets | 38 | 50 |
| Other receivables | 61 | - |
| In total | 292,597 | 284,817 |
| Less: impairment of trade receivables | (10,305) | (9,920) |
| Carrying amount | 282,292 | 274,897 |
As at 31 March 2022 and 31 December 2021, the Group had not pledged the claim rights to trade receivables.
No interest is charged on trade receivables and the regular settlement period is between 15 and 30 days. Trade receivables for which the settlement period is more than 30 days comprise insignificant part of total trade receivables. The Group doesn't provide the settlement period longer than 1 year. The Group didn't identify any financing components.
The table below presents information on the Group's trade receivables under contracts with customers as at 31 March 2022 that are assessed on a collective basis using the loss ratio matrix:
| Loss ratio | Trade receivables | Impairment | |
|---|---|---|---|
| Not past due | 0.02 | 233,787 | 1,455 |
| Up to 30 days | 0.34 | 7,137 | 384 |
| 30–60 days | 1.16 | 3,370 | 176 |
| 60-90 days | 7.94 | 315 | 105 |
| 90-120 days | 6.98 | 315 | 115 |
| More than 120 days | 88.85 | 9,722 | 6,567 |
| As at 31 March 2022 | 3.46 | 254,646 | 8,802 |
The table below presents information on the Group's trade receivables under contracts with customers that are assessed on an individual basis:
| 31 March 2021 | |||
|---|---|---|---|
| Trade receivables | Impairment | ||
| Not past due | 34,988 | - | |
| Up to 30 days | 1,068 | - | |
| 30–60 days | 45 | 1 | |
| 60-90 days | 188 | 17 | |
| 90-120 days | 197 | 57 | |
| More than 120 days | 1,465 | 1,428 | |
| Carrying amount | 37,951 | 1,503 |
The Group's other receivables comprised as follows:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Deposits for electricity related derivatives in electricity market (Note | ||
| 13.2) | 79,820 | 60,210 |
| Value added tax | 33,106 | 14,612 |
| Accrued revenue related to regulatory activity of the public electricity | ||
| supply (Note 9.1) | 28,437 | 39,024 |
| Accrued amounts receivable for natural gas | 23,151 | 1,416 |
| Unbilled accrued revenue from electricity sales | 20,950 | 26,254 |
| Deposits for gas related derivatives to commodity traders | 5,852 | 39,210 |
| Granted current loans | 5,455 | 3,578 |
| Current portion of finance lease | 2,440 | 2,517 |
| Cash reserved for guarantees | 774 | 3,648 |
| Other receivables | 10,759 | 15,027 |
| Receivable on sale of LitGrid AB (Note 13.1) | - | 84,128 |
| Receivable payments made to SIG (Note 13.3) | - | 3,782 |
| In total | 210,744 | 293,406 |
| Less: impairment of other receivables | (1,110) | (877) |
| Carrying amount | 209,634 | 292,529 |
Line items "Unbilled accrued revenue from electricity sales" and "Accrued amounts receivable for natural gas" represent contract assets (Note 22.2).
The fair values of other receivables as at 31 March 2022 and 31 December 2021 approximated their carrying amounts.
In 2012, the shares of LitGrid AB held by the parent company were transferred to a newly established private limited liability company EPSO-G UAB in return for a certain consideration based on the market value of the shares established by independent valuers. According to the shares salepurchase agreement EPSO-G UAB must repay the debt to the Group for the shares of AB LitGrid acquired in 30 September 2012 until 30 September 2022. During the I qtr. of 2022 EPSO-G UAB has repaid total debt of EUR 84,128 thousand to the parent company.
The Group has made deposits for derivative instruments as assurance of contractual obligations with the Commodities exchange and Commodity traders for trading of derivatives linked to electricity and gas market prices. Deposits are in a form of cash collateral and the value moves on a daily basis, i.e. depends on market prices. The Group estimates that the whole amount of cash collateral will be recovered as the amounts payable are related to the realization of the future hedge and the sales contracts will be realized together with the hedge, thus invoices for derivative instruments will be covered with sales income and after this payment cash collateral will be returned.
On 16 September 2020 the Group's subsidiary Ignitis renewables UAB signed preliminary share purchase agreement with UAB "SIG Poland 3" having the intention to purchase all the shares in all project companies – "Sun Investment Group" (hereinafter "SIG") once the photovoltaic installations become operational.
Due to the fact that there were no operational projects started in 2020 and 2021, share purchase agreement was not signed and the Management was of an opinion, that the development will not continue and whole investment will be returned as to the agreement. Accordingly, total carrying amount of investment related with SIG was classified as "Other receivables" as at 31 December 2021. The Group received whole investment amount related to SIG during the I qtr. of 2022.
Issued capital of the Group consisted of:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Authorised shares | ||
| Ordinary shares, EUR | 1,658,756,294 | 1,658,756,294 |
| Ordinary shares issued and fully paid, EUR | 1,658,756,294 | 1,658,756,294 |
As at 31 March 2022 and 31 December 2021 the Group's issued capital comprised EUR 1,658,756,294 and was divided in to 74,283,757 ordinary registered shares with EUR 22.33 nominal value for a share.
At the ordinary general meeting of shareholders held on 29 March 2022 it was decided to form additional reserve of EUR 14,660 thousand for the acquisition of treasury shares in 2022. As at 31 March 2022 reserve for treasury shares amounted to EUR 37,660 thousand (31 December 2021: EUR 23,000 thousand).
The Group anticipates to carry out second round of acquisition of ordinary registered shares of the Group in 2022 (Note 31).
Other comprehensive income (loss) in reserves:
| Revaluation | Hedging | Other | Retained | |
|---|---|---|---|---|
| Total | ||||
| (222) | ||||
| (1,181) | ||||
| (1,403) | ||||
| - 107,971 | ||||
| 45,585 | ||||
| 20 | ||||
| (180) | ||||
| 153,376 | ||||
| reserve - - - - - - - - |
reserve - - - 107,971 45,585 - - 153,556 |
reserves - (1,181) (1,181) - - - (180) (180) |
Equity, attributed to equity holders of the parent earnings (222) - (222) - 20 - 20 |
Hedging reserve movement comprises recognition of effective portion of EUR 107,971 thousand (gross before tax EUR 127,024 thousand) and reclassification to profit or loss of SPLOCI of EUR 45,586 thousand (gross before tax 53,630 thousand) Purchases of electricity, gas and other services.
Borrowings of the Group consisted of:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Non-current Bonds issued Bank loans |
888,955 297,154 |
888,524 229,553 |
| Current Current portion of non-current loans Bank loans Accrued interest |
- - 15,209 214,068 13,750 |
13,857 214,100 9,317 |
| In total | 1,429,136 | 1,355,351 |
Non-current borrowings by maturity:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| From 1 to 2 years | 25,089 | 18,880 |
| From 2 to 5 years | 64,988 | 73,793 |
| After 5 years | 1,096,032 | 1,025,404 |
| In total | 1,186,109 | 1,118,077 |
Movement of borrowings during the I qtr. 2022 mainly consisted of the following:
During the I qtr. of 2022 the Group borrowed EUR 73,000 thousand according to the long-term loan contract with European Investment bank signed on 21 September 2020. The balance of loan as at 31 March 2022 is EUR 73,000 thousand.
The loan agreements provide for financial and non-financial covenants that the individual Group entities are obliged to comply with. All Group companies complied with the covenants as at 31 March 2022 and 31 December 2021.
As at 31 March 2021, the Group's unwithdrawn balance of loans and bank overdrafts amounted to EUR 37,000 thousand (31 December 2021: EUR 115,291thousand).
Net debt is a non-IFRS liquidity metric used to determine the value of debt against highly liquid assets owned by the Group. Management is monitoring net debt metric as a part of risk-management strategy. For the purpose of net debt calculation, borrowings comprise only debts to financial institutions, issued bonds and related interest payables. This note sets out an analysis of net debt, a non-IFRS measure for the purposes of these financial statements presentation defined by management as presented below.
Net debt balances:
| 31 December 2021 31 December 2021 | ||
|---|---|---|
| Cash and cash equivalents | (479,369) | (449,073) |
| Non-current borrowings payable after one year | 1,186,109 | 1,118,077 |
| Current borrowings payable within one financial year (including overdraft and accrued interest) | 243,027 | 237,274 |
| Lease liabilities | 50,891 | 50,963 |
| Net debt | 1,000,658 | 957,241 |
Reconciliation of the Group's net debt balances and cash flows from financing activities:
| Assets | Lease liabilities | Borrowings | ||||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | Non-current | Current | Non-current | Current | Total | |
| Net debt at 1 January 2022 | (449,073) | 46,275 | 4,688 | 1,118,077 | 237,274 | 957,241 |
| Cash changes | ||||||
| (Increase) decrease in cash and cash equivalents | (30,296) | - | - | - | - | (30,296) |
| Proceeds from borrowings | - | - | - | 73,000 | - | 73,000 |
| Repayments of borrowings | - | - | - | - | (2,780) | (2,780) |
| Lease payments | - | - | (1,565) | - | - | (1,565) |
| Interest paid | - | - | (216) | - | (1,835) | (2,051) |
| Non-cash changes | ||||||
| Lease contracts concluded | - | 1,389 | 283 | - | - | 1,672 |
| Accrual of interest payable | - | - | 305 | 431 | 6,268 | 7,004 |
| Reclassification of interest payable from (to) trade and other payables | - | - | (58) | - | - | (58) |
| Lease liabilities written-off | - | (2) | (14) | - | - | (16) |
| Reclassifications between items | - | (1,178) | 1,178 | (4,164) | 4,164 | - |
| Change in foreign currency | - | (185) | (9) | (1,235) | (64) | (1,493) |
| Net debt at 31 March 2022 | (479,369) | 46,299 | 4,592 | 1,186,109 | 243,027 | 1,000,658 |
Deferred income of the Group consisted of:
| 31 March 2022 | 31 December 2021 | ||||
|---|---|---|---|---|---|
| Current portion |
Non-current portion |
Current portion |
Non-current portion |
||
| Deferred income under contracts with customers | |||||
| Deferred income related to new customers fees | 9,593 | 187,382 | 9,347 | 183,608 | |
| Deferred income related to electricity over declaration | - | - | 1,502 | - | |
| Deferred income related to gas over declaration | 4,649 | - | 7,197 | - | |
| Deferred revenue related to other contracts with | |||||
| customers | 20 | - | - | - | |
| In total | 14,262 | 187,382 | 18,046 | 183,608 |
Movement in the Group's deferred income:
| I qtr. 2022 | |||
|---|---|---|---|
| Current portion | Non-current portion | ||
| Balance as at 1 January | 18,046 | 183,608 | |
| Increase during the period | 5,799 | 5,972 | |
| Recognised as revenue | (11,781) | - | |
| Reclassifications between items | 2,198 | (2,198) | |
| Balance as at 31 March | 14,262 | 187,382 |
Revenue from new customers fees is recognised over the average useful life of related items of property, plant and equipment.
The Group's provisions were as follows:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Non-current | 26,093 | 30,058 |
| Current | 34,989 | 41,561 |
| Total | 61,082 | 71,619 |
Movement of the Group's provisions was as follows:
| Emission allowance liabilities |
Provisions for employee benefits |
Provisions for servitudes |
Provisions for registration of protection zones |
Provision for isolated power system operations' and system services |
Other provisions | Total | |
|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2022 | 12,207 | 5,521 | 14,376 | 10,687 | 22,268 | 6,560 | 71,619 |
| Increase (decrease) during the period | 2,149 | 78 | - | - | (7,258) | 3,110 | (1,921) |
| Utilised during the period | (6,494) | (3) | - | - | (1,976) | (132) | (8,605) |
| Result of change in assumptions | - | (24) | - | - | - | - | (24) |
| Discount effect | - | - | - | - | 151 | - | 151 |
| Reclassifications between categories | - | - | 1 | - | - | (1) | - |
| Foreign currency exchange difference | - | - | - | - | - | (138) | (138) |
| Balance as at 31 March 2022 | 7,862 | 5 572 | 14,376 | 10,687 | 13,185 | 9,400 | 61,082 |
| Non-current | - | 4,942 | 13,397 | 4,511 | - | 3,243 | 26,093 |
| Current | 7,862 | 630 | 979 | 6,176 | 13,185 | 6,157 | 34,989 |
| Balance as at 31 March 2022 | 7,862 | 5,572 | 14,376 | 10,687 | 13,185 | 9,400 | 61,082 |
EUR 13,185 thousand current provision for isolated power system operations' and system services is related to NERC's letter where stated that reimbursement period is 2022. During I qtr. of 2022 provision for isolated power system operation and system services was decreased by EUR 7,258 thousand, as isolated power system operation and system services related accrued income were booked to reimburse loss incurred (see Note 3.2 for detail explanation).
During the I qtr. of 2022 "Other provision" has also increased due to formed dismantling provision EUR 3,110 thousand, as to Poland Law dismantling provision should be formed for dismantling of wind farms, as the Group has wind farms operating in Poland, dismantling provision was formed.
The Group's other current amounts payable and liabilities were as follows:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Accrued expenses | 152,744 | 48,046 |
| Taxes (other than income tax) | 53,807 | 30,600 |
| Dividend payable | 43,824 | - |
| Payroll related liabilities | 27,289 | 19,157 |
| Put option redemption liability | 20,919 | 20,919 |
| Derivative financial instruments | 16,821 | 71,431 |
| Amounts payable for property, plant and equipment | 12,433 | 23,263 |
| Irrevocable commitment to acquire a minority interest | 3,714 | 3,751 |
| Non-controlling interest dividends | 3,350 | 3,358 |
| Other amounts payable and liabilities | 6,360 | 6,160 |
| Carrying amount | 341,261 | 226,685 |
Accrued expenses has increased mainly due to increased quantity of gas (Note 11), as the Group has borrowed from the terminal part of upcoming month's gas cargo.
The Group's derivative financial instruments mainly comprises of:
Fair value of Nasdaq contracts are being set-off with cash on day-to-day basis. Accordingly no financial assets or liabilities are being recognized in statement of financial position. Gain or loss of such transactions is recognized same as all derivative financial instruments.
Movement of assets and liabilities related to the Group's agreements on derivative financial instruments were as follows:
| Note | Movement during I qtr. 2022 |
|
|---|---|---|
| Derivative financial instruments | ||
| Other non-current assets | 3,624 | |
| Other current assets | 9,859 | |
| Other non-current amounts payable and liabilities | (21) | |
| Other current amounts payable and liabilities | 20 | (71,431) |
| Carrying amount as at 31 December 2021 | (57,969) | |
| Change in the value | ||
| Fair value change of derivative financial instruments recognised in | ||
| Other expenses | (168) | |
| Fair value change of OTC recognised in Other expenses | (40,105) | |
| Fair value change of OTC recognised in OCI | 126,542 | |
| Total change during I qtr. 2022 | 86,269 | |
| Derivative financial instruments | ||
| Carrying amount as at 31 March 2022 | 28,300 | |
| Other non-current assets | 13,524 | |
| Other current assets | 31,597 | |
| Other current amounts payable and liabilities | 20 | (16,821) |
Derivative financial instruments included in SPLOCI:
| Note | I qtr. 2022 | I qtr. 2021 | |
|---|---|---|---|
| Fair value change of derivative financial instruments | 21.1 | (168) | - |
| Fair value change of OTC | 21.1 | (40,105) | 2,202 |
| Fair value change of Nasdaq | (14,072) | (1,234) | |
| Hedge ineffectiveness recognised - Nasdaq | 2,410 | 4,968 | |
| Hedge ineffectiveness recognised - OTC | 437 | (562) | |
| Total recognised in Other income/ (Other expenses) | 23 | (51,498) | 5,374 |
| Effective hedges reclassified from Hedging reserve to SPLOCI | (53,630) | - | |
| In total | (105,128) | 5,374 |
The Group's revenue from contracts with customers were as follows:
| I qtr. 2022 | I qtr. 2021 | |
|---|---|---|
| Electricity related revenue | ||
| Revenue from the sale of electricity | 242,507 | 68,530 |
| Revenue from sale of produced electricity | 101,929 | 44,509 |
| Revenue from electricity transmission and distribution | 96,045 | 117,158 |
| Revenue from public electricity supply | 76 681 | 33,102 |
| Revenue from services ensuring the isolated operation of power | ||
| system and capacity reserve | 62,672 | 11,923 |
| Gas related revenue | ||
| Revenue from gas sales | 367,255 | 74,177 |
| Revenue from gas distribution | 16,447 | 18,178 |
| Revenue of LNGT security component | 5,314 | 9,450 |
| Other revenue | ||
| Revenue from sale of heat energy | 11,451 | 3,120 |
| Revenue from new customers' connection fees | 2,198 | 1,972 |
| Other revenue from contracts with customers | 7,308 | 4,534 |
| In total | 989,807 | 386,653 |
The Group's revenue based on the timing of transfer of goods or services:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Performance obligation settled over time | 988,399 | 1,854,368 |
| Performance obligation settled at a specific point in time | 1,408 | 14,549 |
| In total | 989,807 | 1,868,917 |
Balances arising from contracts with customers as at the end of the period are as follows:
| Notes | 31 March 2022 | 31 December 2021 | |
|---|---|---|---|
| Trade receivables1 | 12 | 282,193 | 274,847 |
| Contract assets | 44,101 | 27,670 | |
| Accrued revenue from gas sales | 13 | 23,151 | 1,416 |
| Accrued revenue from electricity related sales | 13 | 20,950 | 26,254 |
| Contract liabilities | 251,619 | 256,624 | |
| Deferred income | 18 | 201,644 | 201,654 |
| Advances received | 49,975 | 54,970 |
1 Trade receivables related to lease contracts and other trade receivables are excluded. First quarter 2022 interim report / Financial statements Contents »
All amounts are in EUR thousand unless otherwise stated
The Group does not have any significant contracts with the customers' right to return goods.
The remaining performance obligations expected to be recognised after the end of the reporting period relate to new customers' connection fees:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| More than one year | 187,382 | 183,608 |
| Within one year | 14,262 | 18,046 |
| Total liability under connection contracts | 201,644 | 201,654 |
The Group's other expenses were as follows:
| I qtr. 2022 | I qtr. 2022 | |
|---|---|---|
| OTC and Nasdaq contracts (Note 21.2) | 51,498 | - |
| Customer service | 2,090 | 2,147 |
| Taxes | 1,992 | 1,526 |
| Telecommunications and IT services | 1,981 | 1,496 |
| Utilities | 1,098 | 831 |
| Transport | 1,008 | 748 |
| Impairment/(reversal of impairment) of financial assets | 635 | (258) |
| Consultation services | 589 | 599 |
| Personnel development | 532 | 65 |
| Expenses of low-value inventory items | 415 | 685 |
| Write-offs of non-current and current amounts receivable (bad debts) | 209 | 271 |
| Other | 1,545 | 1,745 |
| In total | 63,592 | 9,855 |
The Group's income taxes recognised in profit or loss were as follows:
| I qtr. 2022 | I qtr. 20211 | |
|---|---|---|
| Income tax expenses (benefit) for the year | 15,576 | 3,387 |
| Deferred tax expenses (benefit) | (10,067) | 4,712 |
| In total | 5,509 | 8,099 |
1 Part of the amounts do not agree with the interim condensed financial statements issued for the three months period ended 31 March 2021 due to accounting policy changes. See more information disclosed in Note 4.
Income tax on the Group's profit before tax differs from the theoretical amount that would arise using the tax rate applicable to profit of the Group:
| I qtr. 2022 I qtr. 2022 | I qtr. 2021 | I qtr. 2021 | ||
|---|---|---|---|---|
| (restated)2 | (restated)2 | |||
| Profit (loss) before tax | 52,284 | 51,084 | ||
| Income tax expenses (benefit) at tax rate of 15% | 15.00% | 7,843 | 15.00% | 7,663 |
| Expenses not deductible for tax purposes | 16.15% | 8,446 | 5.39% | 2,753 |
| Income not subject to tax | (18.60)% | (9,726) | (4.11)% | (2,101) |
| Income tax recognised in other comprehensive income | 48.15% | 25,175 | - | - |
| Other | (2.02)% | (1,054) | (0.42)% | (216) |
| Income tax expenses (benefit) | 58.69% | 30,684 | 15.85% | 8,099 |
2 Part of the amounts do not agree with the interim condensed financial statements issued for the three months period ended 31 March 2021 due to accounting policy changes. See more information disclosed in Note 4.
Income tax recognised in other comprehensive income related to derivative financial instruments held by the Group. They are treated as deductible expenses (or taxable income) for tax purposes.
The Group's earnings per share and diluted earnings per share were as follows:
| I qtr. 2022 I qtr. 20211 | ||
|---|---|---|
| Net profit (loss) | 46,775 | 42,985 |
| Attributable to: | ||
| Equity holders of the parent | 46,775 | 42,116 |
| Non-controlling interests | - | 869 |
| Weighted average number of nominal shares | 73,040,514 74,283,757 | |
| Basic earnings/(loss) per share attributable to shareholders of the parent company | 0.64 | 0.57 |
| Diluted earnings/(loss) per share attributable to shareholders of the parent company | 0.64 | 0.57 |
| 1 |
Part of the amounts do not agree with the interim condensed financial statements issued for the three months period ended 31 March 2021 due to accounting policy changes. See more information disclosed in Note 4.
Basic and diluted earnings per share indicators have been calculated based on 73,040,514 weighted average number of ordinary shares for I qtr. of 2022 as Ignitis grupė AB reacquired its own ordinary shares (treasury shares) as at 16 December 2021. Treasury shares are not regarded as outstanding, thus were excluded from the outstanding shares count at the period for which they are held by Ignitis grupė AB.
Dividends declared by the Company during the I qtr.:
| I qtr. 2022 | I qtr. 2021 | |
|---|---|---|
| Ignitis grupė AB | 43,824 | 43,010 |
EUR 43,824 thousand dividends for the second half of 2021 was approved at the Ordinary General Meeting of shareholders on 29 March 2022.
During I qtr. of 2022 there were no significant changes in litigations reported in annual financial statements for 2021 or new significant litigations except for mentioned below.
Šiaulių energija AB filed a claim against the Group's subsidiary ESO for indemnification of losses incurred due to a failure in LitGrid AB networks on 25 March 2019.
On 6 April 2021 the Vilnius Regional Court has ruled to dismiss the claim of AB Šiaulių energija against ESO. On 11 May 2021 Šiaulių energija AB and LitGrid AB filed appeals against the decision. On 30 May 2021, ESO filed its replies to the appeals.
By a ruling of 24 March 2022 the Lithuanian Court of Appeal upheld the 6 April 2021 decision of the Vilniaus Regional Court against ESO. The ruling became info effect immediately, but within 3 months a cassation appeal may be lodged against the ruling.
The Group believes that it will defend its interests in these proceedings successfully and has not made provisions for these proceedings.
Natural gas supply to household customers activity is regulated by NERC. The NERC regulates natural gas tariff paid by customers. Regulatory differences defined as the difference between the fixed natural gas sale price and the actual natural gas purchase price are were not recognized in the financial statements till 31 December 2021 as Company had no guarantee for this difference will be returned in future according to the legislation base.
On 4 November 2021 amendments were established to Laws on Natural Gas and Electricity, which provide for price amortization mechanisms in the face of high gas and electricity market prices (Note 3.3). The Group did take an opportunity to set lower prices, due to that the losses (loss of revenue) caused by the lower gas price in the tariff will be returned to the Group through the additional component which is included in distribution service tariff.
Total uncollected unrecognised amount as at 31 March 2022 is EUR 71 million (31 December 2021: EUR 64 million).
Designated supply activity is also regulated by NERC. When the actual costs differ from those estimated Company recognize them as regulatory differences but does not account a regulated asset or liability in the financial statements as the difference will be refunded by providing the services in the future. The overcollected amount of EUR 56 million as of 31 March 2022 will be included in the LNGT security component in the future (overcollected amount of EUR 53 million as of 31 December 2021).
The Group transactions with related parties and period-end balances arising on these transactions are presented below:
| Accounts Receivable 31 March 2022 |
Accounts Payable 31 March 2022 |
Sales I qtr. 2022 |
Purchases I qtr. 2022 |
Finance income (expenses) I qtr. 2022 |
|
|---|---|---|---|---|---|
| EPSO-G UAB | 3 | - | 7 | - | 64 |
| LitGrid AB | 11,636 | 18,010 | 19,929 | 46,368 | - |
| Amber Grid AB | 5,794 | 8,891 | 8,205 | 9,638 | - |
| Baltpool UAB | 5,455 | 4,615 | (12,377) | 8,706 | - |
| GET Baltic UAB | 3,523 | 4,439 | 16,579 | 9,007 | - |
| Other related parties | 246 | 9,144 | 386 | 1,527 | 2 |
| Total | 26,657 | 45,099 | 32,729 | 75,246 | 64 |
| Accounts Receivable 31 December 2021 |
Accounts Payable 31 December 2021 |
Sales I qtr. 2021 |
Purchases I qtr. 2021 |
Finance income (expenses) I qtr. 2021 |
|
|---|---|---|---|---|---|
| EPSO-G UAB | 84,131 | 78 | 7 | - | 143 |
| LitGrid AB | 19,520 | 38,727 | 19,403 | 47,601 | - |
| Amber Grid AB | 8,146 | 5,009 | 10,940 | 12,560 | - |
| Baltpool UAB | 788 | 33,587 | 15,081 | 30,110 | - |
| GET Baltic UAB | 7,304 | - | 12,986 | 9,518 | - |
| Other related parties | 701 | 2,760 | 68 | 999 | - |
| Total | 120,590 | 80,161 | 58,509 | 100,788 | 143 |
Negative sales amount in I qtr. of 2022 to Baltpool UAB is related with credit invoices issued for PSO services. Revenue from PSO funds is calculated for 1 MW electricity as the difference between the fixed tariff set by the NERC and the weighted average price of electricity sold in Power exchange of electricity. If the electricity market prices exceeds fixed tariff credit invoices are issued.
| I qtr. 2022 | I qtr. 2022 | |
|---|---|---|
| Wages and salaries and other short-term benefits to key management personnel | 330 | 231 |
| Whereof: | - | - |
| Short-term benefits | 235 | 218 |
| Termination benefits | 95 | - |
| Share-based payment expenses | - | 13 |
| Number of key management personnel | 12 | 12 |
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of directors that makes strategic decisions.
Management follows performance by operating segments that are consistent with the lines of business specified in the Group's strategy:
Other activities and eliminations include:
The Group has a single geographical segment – the Republic of Lithuania. Electricity sales in Latvia, Estonia and Poland are not significant for the Group. The chief operating decision-maker monitors the results with reference to the financial reports that have been prepared using the same accounting policies as those used for the preparation of the financial statements, i.e. information on profit or loss, including the reported amounts of revenue and expenses. The primary performance measure is adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (adjusted EBITDA – a non-IFRS alternative performance measure). Another performance measure is adjusted Earnings Before Interest and Taxes (adjusted EBIT – a non-IFRS alternative performance measure). Both measures are calculated starting from the data presented in the financial statements as adjusted by management for selected items which are not defined by IFRS. Additionally to adjusted EBITDA and adjusted EBIT management also analyses Investments and Net debt of each individual segment.
Total revenue and other income - Purchases of electricity, natural gas and other services - Salaries and related expenses - Repair and maintenance expenses - Other expenses
EBITDA
The Group management calculates adjusted EBITDA as follows:
EBITDA + Management adjustments
Adjusted EBITDA
The Group management calculates EBIT as follows:
Total revenue and other income - Purchases of electricity, natural gas and other services - Salaries and related expenses - Repair and maintenance expenses - Other expenses - Depreciation and amortisation - Write-offs, revaluation and impairment losses of property, plant and equipment and intangible assets
EBIT
The Group management calculates adjusted EBIT as follows:
EBIT + Management adjustments - Significant one-off revaluation and impairment losses of property, plant and equipment and intangible assets
Adjusted EBIT
The Group management calculates adjusted EBITDA margin as follows:
Adjusted EBITDA ÷ (Total revenue and other income + Management adjustments)
Adjusted EBITDA margin
The Group management calculates Investments as follows:
Additions of property, plant and equipment + Additions of intangible assets + Assets acquired through the acquisition of subsidiaries + Additions of other financial assets + Additions of investment property
Investments
The Group management calculates Net debt as indicated in Note 17.
Management's adjustments include:
In 2021, to simplify the reporting the management have decided to cease the use of management's adjustments (for more detailed information on reduction of management's adjustments see Annual report section '3.1 Annual Results') for:
Adjusted EBITDA is EBITDA further adjusted by adding management's adjustments. Management's adjustments all may have both positive and negative impact on the reporting period results. Adjusted EBIT is EBIT further adjusted by adding management's adjustments and eliminating the result of significant one-off revaluation and impairment losses of property, plant and equipment and intangible assets related to electricity and natural gas assets of Networks segment in 2021.
Management's adjustments used in calculating adjusted EBITDA and adjusted EBIT:
| Segment / Management's adjustments | I qtr. 2022 | I qtr. 2021 (restated)1 |
|---|---|---|
| Networks | ||
| Temporary regulatory differences of Energijos skirstymo operatorius AB | 12,584 | (13,551) |
| Green generation | ||
| Result from generation before COD | - | 2,192 |
| Customers and Solutions | ||
| Temporary regulatory differences of Ignitis UAB | 7,121 | 2,073 |
| Total Management's adjustments for Adjusted EBITDA | 19,705 | (9,286) |
| Total Management's adjustments for Adjusted EBIT | 19,705 | (9,286) |
1Part of the amounts do not agree with the interim condensed financial statements issued for three months period ended as at 31 March 2021 due to change in accounting policy (see more information disclosed in Note 4) and Alternative performance measurement (hereinafter – APM) calculation changes as disclosed in Annual report section '3.1 Annual results'.
Adjusted EBIT is presented, for each period, as adjusted EBITDA less depreciation and amortisation expenses, write-offs, revaluation and impairment losses of property, plant and equipment and intangible assets and impairment and write-offs of current and non-current amounts receivables, loans, goods and others except significant one-off items (if any).
In managements view, adjusted EBITDA and adjusted EBIT more accurately present results of operations and enable to better compare results between the periods as it indicate the amount that was actually earned by the Group in the reporting period by:
The table below shows the Group's information on segments for the I qtr. of 2022:
| Networks | Green generation | Flexible generation | Customers and Solutions |
Other activities and eliminations |
Total Group | |
|---|---|---|---|---|---|---|
| IFRS1 | ||||||
| Sales revenue from external customers | 134,521 | 120,578 | 72,306 | 663,198 | 653 | 991,256 |
| Inter-segment revenue (less dividend) | 75 | 109 | 87 | 14,158 | (14,429) | - |
| Total revenue and other income | 134,596 | 120,687 | 72,393 | 677,356 | (13,776) | 991,256 |
| Purchases of electricity, natural gas and other services | (72,474) | (32,613) | (12,148) | (684,462) | 205 | (801,492) |
| Salaries and related expenses | (16,019) | (2,477) | (2,078) | (3,050) | (4,724) | (28,348) |
| Repair and maintenance expenses | (4,583) | (902) | (680) | (2) | (7) | (6,174) |
| Other expenses | (8,963) | (14,660) | (52,617) | (6,679) | 19,327 | (63,592) |
| EBITDA | 32,557 | 70,035 | 4 870 | (16,837) | 1,025 | 91,650 |
| Depreciation and amortization | (21,928) | (6,941) | (2,978) | (502) | (1,465) | (33,814) |
| Write-offs, revaluation and impairment losses of property, plant and | ||||||
| equipment and intangible assets | (632) | (1) | - | - | (1) | (634) |
| Operating profit (loss) (EBIT) | 9,997 | 63,093 | 1,892 | (17,339) | (441) | 57,202 |
| Adjusted2 | ||||||
| EBITDA | 32,557 | 70,035 | 4,870 | (16,837) | 1,025 | 91,650 |
| Management adjustments | 12,584 | - | - | 7,121 | - | 19,705 |
| Adjusted EBITDA2 | 45,141 | 70,035 | 4,870 | (9,716) | 1,025 | 111,355 |
| Adjusted EBITDA margin | 30.7% | 58.0% | 6.7% | (1.4%) | (7.4%) | 11.0% |
| Depreciation and amortisation | (21,928) | (6,941) | (2,978) | (502) | (1,465) | (33,814) |
| Write-offs, revaluation and impairment losses of property, plant and | ||||||
| equipment and intangible assets | (632) | (1) | - | - | (1) | (634) |
| Total adjusted operating profit (loss) (adjusted EBIT) | 22,581 | 63,093 | 1,892 | (10,218) | (441) | 76,907 |
| Property, plant and equipment, intangible and right-of-use assets | 1,665,455 | 770,341 | 301,001 | 6,126 | 42,093 | 2,785,016 |
| Investments | 33,226 | 5,952 | 37 | 251 | 3,656 | 43,122 |
| Net debt | 740,360 | 470,264 | 11,997 | 512,537 | (734,500) | 1,000,658 |
1 Amounts are presented according to Consolidated Statement of Profit or Loss and other Comprehensive Income of these financial statements
2 The indicators of Adjusted EBITDA and adjusted EBIT both of which are a non-IFRS alternative performance measures are presented in the manner calculated by the management. Management believes that adjusted indicators more accurately present results of operations and enable to better compare results between the periods
The table below shows the Group's information on se qtr. of 20211 :
| Networks | Green generation | Flexible generation | Customers and Solutions |
Other activities and eliminations |
Total Group | |
|---|---|---|---|---|---|---|
| IFRS2 | ||||||
| Sales revenue from external customers | 147,139 | 33,055 | 29,569 | 182,976 | 670 | 393,409 |
| Inter-segment revenue (less dividend) | (876) | 77 | 80 | 1,354 | (635) | - |
| Total revenue and other income | 146,263 | 33,132 | 29,649 | 184,330 | 35 | 393,409 |
| Purchases of electricity, natural gas and other services | (62,453) | (11,666) | (17,668) | (173,496) | 59 | (265,224) |
| Salaries and related expenses | (14,165) | (1,855) | (1,616) | (2,996) | (4,747) | (25,379) |
| Repair and maintenance expenses | (3,533) | (664) | (1,327) | (1) | 2 | (5,523) |
| Other expenses | (8,486) | (2,125) | (1,178) | (3,765) | 5,699 | (9,855) |
| EBITDA | 57,626 | 16,822 | 7,860 | 4,072 | 1,048 | 87,428 |
| Depreciation and amortization | (20,336) | (4,570) | (2,864) | (415) | (1,239) | (29,424) |
| Write-offs, revaluation and impairment losses of property, plant and | ||||||
| equipment and intangible assets | 29 | - | (1,018) | - | (5) | (994) |
| Operating profit (loss) (EBIT) | 37,319 | 12,252 | 3,978 | 3,657 | (196) | 57,010 |
| Adjusted3 | ||||||
| EBITDA | 57,626 | 16,822 | 7,860 | 4,072 | 1,048 | 87,428 |
| Management adjustments | (13,551) | 2,192 | - | 2,073 | - | (9,286) |
| Adjusted EBITDA3 | 44,075 | 19,014 | 7,860 | 6,145 | 1,048 | 78,142 |
| Adjusted EBITDA margin | 33.2% | 53.8% | 26.5% | 3.3% | 2,994.3% | 20.3% |
| Depreciation and amortisation | (20,336) | (4,570) | (2,864) | (415) | (1,239) | (29,424) |
| Write-offs, revaluation and impairment losses of property, plant and | ||||||
| equipment and intangible assets | 29 | - | (1,018) | - | (5) | (994) |
| Total adjusted operating profit (loss) (adjusted EBIT) | 23,768 | 14,444 | 3,978 | 5,730 | (196) | 47,724 |
| Property, plant and equipment, intangible and right-of-use assets | 1,616,327 | 752,130 | 319,588 | 6,288 | 19,037 | 2,713,370 |
| Investments | 20,042 | 7,269 | 25 | 387 | 1,296 | 29,019 |
| Net debt | 644,964 | 374,446 | (32,467) | 61,416 | (424,204) | 624,155 |
1Certain amounts presented above do not correspond to the consolidated financial statements prepared for three months period ended as at 31 March 2021 due to change in accounting policy (see more information disclosed in Note 4) and APM calculation changes as disclosed in Annual report section '3.1 Annual results'.
2 Amounts are presented according to Consolidated Statement of Profit or Loss and other Comprehensive Income of these financial statements
3 The indicators of Adjusted EBITDA and adjusted EBIT both of which are a non-IFRS alternative performance measures are presented in the manner calculated by the management. Management believes that adjusted indicators more accurately present results of operations and enable to better compare results between the periods
The Group's derivative financial instruments (Level 2 of the fair value hierarchy), the Group's option right to acquire shares in subsidiary (Level 2 of the fair value hierarchy) and investment into "Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB" (Level 3 of the fair value hierarchy) are measured at fair value.
As at 31 March 2022 and 31 December 2021, the Group has accounted for assets and liabilities arising from financial derivatives. The Group accounts for financial derivative assets and liabilities at fair value and their accounting policies are set out in Note 2.31 in annual financial statements prepared for the year 2021. Market values that are based on quoted prices (Level 1) comprise quoted commodities derivatives that are traded in active markets. The market value of derivatives traded in an active market are often settled on a daily basis, thereby minimising the market value presented on the balance sheet. Market values based on observable inputs (Level 2) comprise derivatives where valuation models with observable inputs are used to measure fair value. All assets and liabilities measured at market value are measured on a recurring basis. The Group attributes to Level 2 of the fair value hierarchy derivative financial instruments linked with the Lithuanian/Latvian and Estonian/Finish electricity price areas. Derivatives acquired directly from other market participants (OTC contracts) and physical transmission rights acquired are estimated based on the prices of the NASDAQ Commodities exchange.
As at 31 March 2022 and 31 December 2021, the Group has accounted for investment into "Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB". Fair value corresponds to level 3 in the fair value hierarchy. The fair value measurement of this financial asset is based on investment rounds. Fair value of this financial asset will change depending on future investment rounds or other significant events.
As at March 2022 and 31 December 2021 the Group the Group has accounted for investment into Moray West Holdings Limited. Fair value corresponds to level 3 in the fair value hierarchy. The fair value measurement of this financial asset is based on the valuation performed by external valuator. The valuation was performed based on discounted cash flows.
As at 31 March 2022 and 31 December 2021, the Group accounted for the option to acquire all the shares of Kauno kogeneracinė jėgainė UAB held by Gren Lietuva UAB (49%), the calculation of which is defined in the shareholders' agreement. In the opinion of the Group's management, the exercise price of the put option that the Group will have to pay to Gren Lietuva UAB for the redeemable Gren Lietuva UAB owned Kauno kogeneracinė jėgainė UAB shares, if they choose to sell them, equals the fair value of these shares within materiality limits (materiality limits are set, as to best markets practice, +/-15% of market value). Fair value corresponds to level 2 in the fair value hierarchy.
The Group's fair value of loans granted is approximately equal to carrying amount. The measurement of financial assets related to the loans issued is attributed to Level 3 of the fair value hierarchy.
The Group's fair value of financial liabilities related to the debt liabilities to commercial banks and state-owned investment banks is calculated by discounting future cash flows with reference to the interest rate observable in the market. The cash flows were discounted using a weighted average discount rate of 3.19% as at 31 March 2022 (31 December 2021 – 2.76%). The measurement of financial liabilities related to the debts is attributed to Level 2 of the fair value hierarchy.
The Group's bond issue debt (Note 16) fair value was calculated by discounting future cash flows related to the coupon payments with reference to the interest rate observable in the market and the regular future payments related to issued bonds. The cash flows were discounted using a weighted average discount rate of 4.39% as at 31 March 2022 (31 December 2021 – 2.90%). Discount rates for certain bond issues are determined as market interest rate increased by EUR interest rate swap for tenors that are similar to period left until redemption of issued bonds. The bond issue debt is attributed to Level 2 of the fair value hierarchy.
The table below presents allocation between the fair value hierarchy levels of the Group's financial instruments as at 31 March 2022:
| Level 1 | Level 2 | Level 3 | ||||
|---|---|---|---|---|---|---|
| Note | Carrying amount |
Quoted prices in active markets |
Other directly or indirectly observable inputs |
Unobserva ble inputs |
In total | |
| Financial instruments measured at fair value through profit (loss) or other comprehensive income | ||||||
| Assets Derivative financial instruments Innovation Fund Smart Energy Fund |
21 | 45,121 | - | 45,121 | - | 45,121 |
| powered by Ignitis Group KŪB | 10 | 28,919 | - | - | 28,919 | 28,919 |
| Investment into Moray West Holdings Limited |
10 | 5,000 | - | - | 5,000 | 5,000 |
| Liabilities Put option redemption liability |
20 | 20,919 | - | 20,919 | - | 20,919 |
| Derivative financial instruments | 21 | 16,821 | - | 16,821 | - | 16,821 |
| Financial instruments for which fair value is disclosed | ||||||
| Assets Loans granted Liabilities |
9, 13 | 5,698 | - | - | 5,698 | 5,698 |
| Bonds issued | 16 | 902,444 | - | 791,814 | - | 791,814 |
| Debt liabilities to commercial banks Debt liabilities to state-owned |
16 | 229,864 | - | 228,738 | - | 228,738 |
| investment banks | 16 | 296,828 | - | 230,974 | - | 230,974 |
On 22 April 2022 the Vilnius District Court approved the settlement agreement and dismissed the civil case. Under the settlement agreement, the Prosecutor has abandoned the claims brought against the Group and the Ministry of Finance of the Republic of Lithuania. The parties have also agreed under the settlement agreement to waive any current or future claims regarding the basis and subject matter of the case.
The Group on 19–27 April 2022 has conducted an acquisition of the Group's ordinary registered shares (hereinafter – ORS or treasury shares) through the auction for tender offers of AB "Nasdaq Vilnius" stock exchange, with AB SEB bankas acting as an intermediary. Treasury shares acquired by the Group on 29 April 2022, when the right of ownership transferred to the Group. Shares purchase price EUR 15.30 per share, number of shares acquired 651,554 and total value of treasury shares acquired EUR 9,967 thousand.
The purpose of the ORS acquisition is the reduction of share capital by annulling the ORS acquired by the Group in relation to the stabilisation that occurred after the initial public offering of 5 October 2020.The Group acquired the majority of the stabilised securities and does not intend to initiate further acquisitions of own ORS in relation to the stabilisation.
On 12 May 2022 Lithuanian Parliament amended legislation related to providing consumers with partial compensation due to increasing prices of energy resources. It is planned that EUR 570 million will be allocated from the state budget. Part of the allocated funds will be used to cover Ignitis UAB regulatory differences accumulated until the second half of 2022 in the public electricity supply and natural gas supply for households customers and to amortize electricity and natural gas prices increase during the second half of 2022 for all household customers, including independent supply. Accordingly, part out of planned EUR 570 million from the state budget will be allocated to cover the regulatory differences accumulated in the Group, while other part will be allocated to the customers of Ignitis UAB or other independent suppliers in the market as compensation. Due to these amendments, the regulatory differences arising in the public supply will be reduced in the forthcoming periods and the energy prices for the customers of independent suppliers will be lower. From the Group perspective, these amendments are expected not only to prevent from further increase in Group's net working capital in second half of 2022, but also to reduce currently accumulated debts that have been used to finance regulatory differences until the second half of 2022.
There were no other significant events after the reporting period till the issue of these financial statements.
*****
Unaudited parent company's interim condensed financial statements for the three months period ended 31 March 2022, prepared in accordance with International accounting standard 34 'Interim financial reporting' as adopted by the European Union
| Interim Condensed Statement of Financial Position | 108 | |
|---|---|---|
| Interim Condensed Statement of Profit or Loss and Other Comprehensive Income |
109 | |
| Interim Condensed Statement of Changes in Equity | 110 | |
| Interim Condensed Statement of Cash Flows | 111 | |
| Explanatory notes | 112 |
The Group's interim condensed consolidated financial statements were prepared and signed by AB "Ignitis grupė" management on 19 May 2022:
Darius Maikštėnas Chief Executive Officer
Jonas Rimavičius Chief Financial Officer
Giedruolė Guobienė UAB "Ignitis grupės paslaugų centras", Head of Accounting acting under Order No IS-22-22 (signed 4 April 2022)
As at 31 March 2022
| Notes | 31 March 2022 | 31 December 2021 | |
|---|---|---|---|
| ASSETS | |||
| Non-current assets Intangible assets Property, plant and equipment Right-of-use assets |
1,823 80 17,142 |
1,839 64 17,602 |
|
| Investment property Investments in subsidiaries Non-current receivables Other financial assets |
4 5 8 |
77 1,255,858 1,163,322 28,919 |
77 1,255,858 1,088,397 25,094 |
| Deferred tax assets Total non-current assets |
495 2,467,716 |
513 2,389,444 |
|
| Current assets Prepayments and deferred expenses Trade receivables |
169 479 |
80 494 |
|
| Other receivables Other current assets |
7 | 211 19,975 |
184,597 20,014 |
| Current loans and interest receivable Cash and cash equivalents Total current assets |
8 | 218,767 229,569 469,170 |
136,452 125,323 466,960 |
| TOTAL ASSETS | 2,936,886 | 2,856,404 | |
| EQUITY AND LIABILITIES | |||
| Equity Issued capital Treasury shares acquired Reserves Reserve for treasury shares |
9.1 9.2 9.2 |
1,658,756 (23,000) 99,637 37,660 |
1,658,756 (23,000) 88,059 23,000 |
| Retained earnings (deficit) Total equity |
118,809 1,891,862 |
186,393 1,933,208 |
|
| Liabilities | |||
| Non-current liabilities Non-current loans and bonds Non-current lease liabilities Other non-current amounts payable and liabilities |
11 | 961,955 15,554 4 |
888,524 15,994 9 |
| Total non-current liabilities | 977,513 | 904,527 | |
| Current liabilities Loans Lease liabilities Trade payables Advances received Other current amounts payable and liabilities |
11 | 13,578 1,760 1,035 21 51,117 |
9,143 1,755 976 99 6,696 |
| Total current liabilities | 67,511 | 18,669 | |
| Total liabilities | 1,045,024 | 923,196 | |
| TOTAL EQUITY AND LIABILITIES | 2,936,886 | 2,856,404 |
| Notes | I qtr. 2022 | I qtr. 2021 | |
|---|---|---|---|
| Revenue from contracts with customers | 13 | 803 | 828 |
| Other income | 1 | 1 | |
| Dividend income | 14.2 | 185 | 115,442 |
| Total revenue and other income | 989 | 116,271 | |
| Salaries and related expenses | (969) | (1,308) | |
| Depreciation and amortisation | (481) | (70) | |
| Other expenses | (1,070) | (893) | |
| Total expenses | (2,520) | (2,271) | |
| Operating profit (loss) | (1,531) | 114,000 | |
| Finance income | 15 | 9,800 | 5,348 |
| Finance expenses | 16 | (5,764) | (5,901) |
| Finance activity, net | 4,036 | (553) | |
| Profit (loss) before tax | 2,505 | 113,447 | |
| Current period income tax (expenses)/benefit | (9) | (24) | |
| Deferred tax (expenses)/benefit | (18) | 188 | |
| Net profit for the period | 2,478 | 113,611 | |
| Total other comprehensive income (loss) for the period | - | - | |
| Total comprehensive income (loss) for the period | 2,478 | 113,611 | |
| Basic earnings per share (in EUR) | 0.03 | 1.53 | |
| Diluted earnings per share (in EUR) | 0.03 | 1.53 | |
| Weighted average number of shares | 73,040,514 | 74,283,757 |
| Notes | Issued capital |
Treasury shares |
Share premium |
Legal reserve |
Treasury shares reserve |
Retained earnings |
Total | |
|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2021 | 1,658,756 | - | - | 82,330 | - | 71,869 | 1,812,955 | |
| Net profit for the period | - | - | - | - | - | 113,611 | 113,611 | |
| Other comprehensive income (loss) for the period | - | - | - | - | - | - | - | |
| Total comprehensive income (loss) for the period | - | - | - | - | - | 113,611 | 113,611 | |
| Transfer to reserves to acquire treasury shares | 9.2 | - | - | - | - | 23,000 | (23,000) | - |
| Transfers to legal reserve | 9.2 | 5,729 | - | (5,729) | - | |||
| Dividends | 14.2 | - | - | - | - | - | (43,010) | (43,010) |
| Share-based payments | - | - | - | - | - | 16 | 16 | |
| Balance as at 31 March 2021 | 1,658,756 | - | - | 88,059 | 23,000 | 113,757 | 1,883,572 | |
| Balance as at 1 January 2022 | 1,658,756 | (23,000) | - | 88,059 | 23,000 | 186,393 | 1,933,208 | |
| Net profit for the period | - | - | - | - | - | 2,478 | 2,478 | |
| Other comprehensive income (loss) for the period | - | - | - | - | - | - | - | |
| Total comprehensive income (loss) for the period | - | - | - | - | - | 2,478 | 2,478 | |
| Transfer to reserves to acquire treasury shares | 9.2 | - | - | - | - | 14,660 | (14,660) | - |
| Transfers to legal reserve | 9.2 | - | - | - | 11,578 | - | (11,578) | - |
| Dividends | 14.2 | - | - | - | - | - | (43,824) | (43,824) |
| Balance as at 31 March 2022 | 1,658,756 (23,000) | - | 99,637 | 37,660 | 118,809 | 1,891,862 |
| Cash flows from operating activities Net profit for the period 2,478 113,611 Adjustments to reconcile net profit to net cash flows: Depreciation and amortisation expenses 481 Fair value changes of financial instruments 8 (2,408) Income tax expenses/(income) 27 Share-based payments expenses - 11 Interest income 15 (7,392) Interest expenses 16 5,067 Dividends 14 (185) (115,442) Other expenses of financing activities 697 684 Changes in working capital: (Increase)/decrease in trade receivables and other receivables 84,215 (Increase)/decrease in prepayments and deferred expenses, other current and other non-current assets (50) (75) Increase/(decrease) in trade payables, advances received, other current amounts payable and liabilities (1,343) 1,034 Net cash flows from (to) operating activities 81,587 (2,688) Cash flows from investing activities Acquisition of property, plant and equipment and intangible assets (21) Loans granted (153,255) Loan repayments received 3,075 Acquisition of a subsidiary - (7) Interest received 15 1,473 Dividends received 100,440 Investments in Innovation Fund 8 (1,417) Net cash flows from investing activities (49,705) Cash flows from financing activities Loans received 11 73,000 Lease payments 11 (435) (65) Interest paid 11 (201) (186) Net cash flows from financing activities 72,364 (251) Increase/(decrease) in cash and cash equivalents (including overdraft) 104,246 Cash and cash equivalents (including overdraft) at the beginning of the period 125,323 |
Notes | I qtr. 2022 | I qtr. 2021 |
|---|---|---|---|
| - (164) (5,347) 5,216 (2,286) - (83,629) 59,698 1,581 2,244 - (20,113) - (23,052) 421,289 |
70 | ||
| Cash and cash equivalents (including overdraft) at the end of the period 229,569 398,237 |
Ignitis grupė AB (hereinafter "the Company" or "the parent company") is a public limited liability company registered in the Republic of Lithuania. The Company's registered office address is Laisvės pr 10, LT-04215, Vilnius, Lithuania. The Company was registered on 28 August 2008 with the Register of Legal Entities managed by the public institution the Centre of Registers. Company's code 301844044.
The Company's shares are listed on the Main List of NASDAQ OMX Vilnius Stock Exchange, as well the global depositary receipts are admitted to the standard listing segment of the Official List of the United Kingdom Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange. The Company has been founded for an indefinite period.
The Company is a parent company, which is responsible for the management and coordination of activities of the group companies (Note 4) engaged in electricity and heat generation (including electricity generation from renewable energy sources), supply, electricity import and export, distribution and trade, natural gas distribution and supply, as well as the maintenance and development of the power system, management and coordination of activities. The Company and its subsidiaries are hereinafter collectively referred to as "the Group".
The Company analyses the activities of the Group companies, represents the whole group, implements its shareholders' rights and obligations, defines operation guidelines and rules, and coordinates the activities in the fields of finance, law, strategy and development, human resources, risk management, audit, technology, communication, etc.
The Company seeks to ensure effective operation of group companies, implementation of goals related to the Group's activities set forth in the National Energy Independence Strategy and other legal acts, ensuring that it builds a sustainable value in a socially responsible manner.
The Company's principal shareholder is the Republic of Lithuania (73.08%).
| 31 March 2022 | 31 December 2021 | |||
|---|---|---|---|---|
| Shareholders of the Company | Share capital, in EUR '000 |
% | Share capital, in EUR '000 |
% |
| Republic of Lithuania represented by the Ministry of Finance of the Republic of Lithuania |
1,212,156 | 73.08 | 1,212,156 | 73.08 |
| Other shareholders | 418,838 | 25.25 | 418,838 | 25.25 |
| Own shares | 27,762 | 1.67 | 27,762 | 1.67 |
| 1,658,756 | 1,658,756 |
These interim condensed financial statements were prepared and signed by Company's management on 19 May 2022. These are interim condensed separate financial statements of the Company which are prepared in accordance with local law requirements. The Group also prepares consolidated interim condensed financial statements.
These interim condensed financial statements are prepared for the three months period ended 31 March 2022 (hereinafter "interim financial statements") and have been prepared in accordance with International Accounting Standard (hereinafter – IAS) 34 "Interim Financial Reporting".
These interim financial statements do not provide all the information required for the preparation of the annual financial statements, therefore this must be read in conjunction with the annual financial statements for the year ended 31 December 2021, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (hereinafter – IFRS).
The Company's interim financial statements as at and for the three months period ended 31 March 2022 have been prepared on a going concern basis applying measurement based on historical cost (hereinafter "acquisition cost"), except for certain financial instruments measured at fair value.
These interim financial statements are presented in euros and all values are rounded to the nearest thousand (EUR '000), except when otherwise indicated. The Company's financial year coincides with a calendar year. These interim financial statements provide comparative information in respect of the previous period
The accounting policies applied in the preparation of these interim financial statements are consistent with the accounting policies applied in the preparation of the Company's annual financial statements for the year ended 31 December 2021, with the exception of the new standards which entered into force during I qtr. 2022.
Preparing these interim financial statements, the Company did not adopt new standards, amendments and interpretations, the effective date of which is later than 31 March 2022 and early adoption is permitted. The following are new standards and/or amendments to the standards that have been endorsed in European Union (hereinafter – EU) during the reporting period ended as at 31 March 2022:
The objective of the Amendments is to develop guidance and examples to help entities apply materiality judgements to accounting policy disclosures. More specifically, the Amendments require entities to disclose their material accounting policy information rather than their significant accounting policies. The Amendments shall be applied prospectively for annual periods beginning on or after 1 January 2023 with earlier application permitted.
The management of the Company has assessed that these amendments have no significant impact on these interim financial statements.
The objective of the Amendments is to help entities distinguish accounting policies from accounting estimates introducing a definition of accounting estimates and provide other clarifications to help entities distinguish accounting policies from accounting estimates. The Amendments shall be applied for annual reporting periods beginning on or after 1 January 2023 with earlier application permitted. An entity shall apply the amendments to changes in accounting estimates and policies that occur on or after the beginning of the first annual reporting period in which it applies the Amendments.
The management of the Company has assessed that these amendments have no significant impact on these interim financial statements.
Preparing these interim financial statements the significant management judgements regarding the application of the accounting policies and accounting estimates were the same as used in preparing the annual financial statements for the year ended 31 December 2021 except the following:
Total amount of the investment to Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB increased for an amount EUR 3,825 thousand during the I qtr. of 2022.
The fair value gain of Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB recognised for an amount EUR 2,408 thousand and is presented as "Finance income" in SPLOCI for the I qtr. of 2022. The fair value of this financial asset is determined by reference to new investment rounds or other recent events and data (Note 19).
Remaining change is related to new investments made during I qtr. of 2022 for an amount EUR 1,417 thousand.
Fair value corresponds to Level 3 in the fair value hierarchy. Fair value of this financial asset will change depending on future investment rounds or other significant events
Information on the Company's investments in subsidiaries as at 31 March 2022 provided below:
| Acquisition | cost Impairment | Carrying amount |
Company's ownership interest, % |
Group's effective ownership interest, % |
|
|---|---|---|---|---|---|
| Energijos skirstymo operatorius AB | 750,422 | - | 750,422 | 100.00 | 100.00 |
| Ignitis gamyba AB | 321,202 | - | 321,202 | 100.00 | 100,00 |
| Ignitis renewables UAB | 54,156 | - | 54,156 | 100.00 | 100.00 |
| Vilniaus kogeneracinė jėgainė UAB | 52,300 | - | 52,300 | 100.00 | 100.00 |
| Ignitis UAB | 47,138 | - | 47,138 | 100.00 | 100.00 |
| Kauno kogeneracinė jėgainė UAB | 20,400 | - | 20,400 | 51.00 | 51.00 |
| Ignitis grupės paslaugų centras UAB | 5,975 | - | 5,975 | 50.47 | 100.00 |
| Transporto valdymas UAB | 2,359 | - | 2,359 | 100.00 | 100.00 |
| Elektroninių mokėjimų agentūra UAB | 1,428 | - | 1,428 | 100.00 | 100.00 |
| Gamybos optimizavimas UAB | 350 | - | 350 | 100.00 | 100.00 |
| NT Valdos UAB | 3,961 | (3,833) | 128 | 100.00 | 100.00 |
| Energetikos paslaugų ir rangos organizacija UAB |
22,961 | (22,961) | - | 100.00 | 100.00 |
| 1,282,652 | (26,794) | 1,255,858 |
The Company's investments in subsidiaries during the I qtr. of 2022 remained the same as at 31 December 2021.
The Company carried out an analysis to determine existence of indications of impairment for investments into subsidiaries as at 31 March 2022. During the I qtr. of 2022 there have been no significant adverse changes in the technological, market, economic and legal environment in which subsidiaries operate, and such changes are unlikely to occur soon. The Company considered other information from external and internal sources. Thus, no impairment indications were identified as at 31 March 2022.
Amounts receivable after one year comprised as follows:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Non-current receivables | ||
| Loans granted | 1,163,179 | 1,088,254 |
| Other non-current amounts receivable | 143 | 143 |
| Total | 1,163,322 | 1,088,397 |
| Less: impairment | - | - |
| Carrying amount | 1,163,322 | 1,088,397 |
As at 31 March 2022, the Company assessed whether credit risk of recipients of non-current and current loans has increased significantly and did not establish any indications and has no information indicating that credit risk of loan recipients on an individual basis has increased significantly. Therefore, no lifetime expected credit loss was recognised neither for non-current nor for current loans granted (Note 5.2).
The Company's loans granted as at 31 March 2022 comprised loans granted to the following subsidiaries:
| Interest rate type |
Within one year |
After one year |
Total | |
|---|---|---|---|---|
| Non-current loans | ||||
| Energijos skirstymo operatorius AB (green bonds) | Fixed interest | - | 616,288 | 616,288 |
| Energijos skirstymo operatorius AB (loans taken over) Variable interest | 7,901 | 31,567 | 39,468 | |
| Ignitis UAB | Fixed interest | - | 275,000 | 275,000 |
| Ignitis UAB | Variable interest | - | 27,000 | 27,000 |
| Ignitis UAB | Fixed interest | - | 11,800 | 11,800 |
| Ignitis renewables UAB | Fixed interest | - | 46,950 | 46,950 |
| Ignitis renewables UAB | Fixed interest | - | 109,000 | 109,000 |
| Tuuleenergia OÜ | Fixed interest | - | 19,119 | 19,119 |
| Eurakras UAB | Fixed interest | - | 16,555 | 16,555 |
| Current loans | ||||
| Transporto valdymas UAB | Variable interest | - | 9,900 | 9,900 |
| Ignitis grupės paslaugų centras UAB (cash-pool) | Fixed interest | 3,513 | - | 3,513 |
| Ignitis UAB (cash-pool) | Fixed interest | 119,603 | - | 119,603 |
| Energijos skirstymo operatorius AB (cash-pool) | Fixed interest | 69,294 | - | 69,294 |
| Total loans | 200,311 | 1,163,179 | 1,363,490 |
Loan granted to subsidiary Transporto valdymas UAB was reclassified to non-current loans as on 2 February 2022 loan amendment was signed and the final repayment date changed to 30 June 2025.
Fair values of loans granted are presented in Note 19.
Loans after one year by maturity:
| 31 March 2021 31 December 2021 | ||
|---|---|---|
| From 1 to 2 years | 7,901 | 6,708 |
| From 2 to 5 years | 60,566 | 47,125 |
| After 5 years | 1,094,712 | 1,034,421 |
| Carrying amount | 1,163,179 | 1,088,254 |
The Company's other receivables comprised as follows:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Dividends receivable | 185 | 100,440 |
| Other receivables Amount receivable on disposal of LitGrid AB |
29 - |
29 84,128 |
| Total | 211 | 184 597 |
| Less: impairment | - | - |
| Carrying amount | 211 | 184,597 |
In 2012, the shares of LitGrid AB held by the Company were transferred to a newly established private limited liability company EPSO-G UAB in return for a certain consideration based on the market value of the shares established by independent valuers. According to the shares sale-purchase agreement EPSO-G UAB had to repay debt to the Company for the shares of AB LitGrid acquired in 30 September 2012 until 30 September 2022. During the I qtr. of 2022 EPSO-G UAB has repaid total debt of EUR 84,128 thousand to the Company.
The Company's current loans comprised as follows:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Cash-pool loans | 192,410 | 106,155 |
| Interest receivable on loans and issued guarantees | 18,456 | 11,396 |
| Current loans | - | 11,000 |
| Current portion of non-current loans | 7,901 | 7,901 |
| Total | 218,767 | 136,452 |
| Less: impairment | - | - |
| Carrying amount | 218,767 | 136,452 |
As at 31 March 2022, the Company assessed whether credit risk of recipients of non-current and current loans has increased significantly and did not establish any indications and has no information indicating that credit risk of loan recipients on an individual basis has increased significantly. Therefore, no lifetime expected credit loss (from here on further - ECL) was recognized.
The Company's other financial assets comprised as follows:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB | ||
| (Note 3.1) | 28,919 | 25,094 25,094 |
| Carrying amount | 28,919 |
Issued capital of the Company consisted of:
| 31 March 2022 | 31 December 2021 | |
|---|---|---|
| Authorised shares | ||
| Ordinary shares, EUR | 1,658,756,294 | 1,658,756,294 |
| Ordinary shares issued and fully paid, EUR | 1,658,756,294 | 1,658,756,294 |
As at 31 March 2022 and 31 December 2021 the Company's issued capital comprised EUR 1,658,756,294 and was divided into 74,283,757 ordinary registered shares with EUR 22.33 nominal value for a share.
At the ordinary general meeting of shareholders held on 29 March 2022 it was decided to form additional reserve of EUR 14.660 thousand for the acquisition of treasury shares in 2022. As at 31 March 2022 reserve for treasury shares amounted to EUR 37,660 thousand (31 December 2021: EUR 23,000 thousand). The Company anticipates to carry out second round of acquisition of ordinary registered shares of the Group in 2022 (Note 20).
As at 29 March 2022 the Company transferred EUR 11,578 thousand to the legal reserve. The Company's legal reserve as at 31 March 2022 and 31 December 2021 was not fully formed.
The Company's earnings per share and diluted earnings per share were as follows:
| I qtr. 2022 | I qtr. 2021 | |
|---|---|---|
| Net profit (loss) | 2,478 | 113,611 |
| Attributable to: | ||
| Equity holders of the parent | 2,478 | 113,611 |
| Non-controlling interests | - | - |
| Weighted average number of nominal shares | 73,040,514 | 74,283,757 |
| Basic earnings/(loss) per share attributable to shareholders of the Parent | ||
| Company | 0.03 | 1.53 |
| Diluted earnings/(loss) per share attributable to shareholders of the Parent | ||
| Company | 0.03 | 1.53 |
Basic and diluted earnings per share indicators have been calculated based on 73,040,514 weighted average number of ordinary shares for I qtr. 2022 as Ignitis grupė AB reacquired its own ordinary shares (treasury shares) as at 16 December 2021. Treasury shares are not regarded as outstanding, thus were excluded from the outstanding shares count at the period for which they are held by Ignitis grupė AB.
Loans and bonds of the Company consisted of:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Non-current Bonds issued Bank borrowings |
888,955 73,000 |
888,524 - |
| Current Accrued interest |
13,587 | 9,143 |
| Total loans and bonds | 975,533 | 897,667 |
For I qtr. of 2022 expenses related to interest on the issued bonds totalled EUR 4,777 thousand (I qtr. of 2021: EUR 4,768 thousand).
Bonds by maturity:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| From 1 to 2 years From 2 to 5 years |
- - |
- - |
| After 5 years | 888,955 | 888,524 |
| In total | 888,955 | 888,524 |
Loans and bonds are denominated in euros.
During the I qtr. of 2022 the Company borrowed EUR 73,000 thousand according to the long-term loan contract with European Investment bank signed on 21 September 2020. The balance of loan as at 31 March 2022 is EUR 73,000 thousand.
During I qtr. of 2022 The Company didn't have any breaches of financial and non-financial covenants due to which the classification of current and non-current liabilities could be changed.
As at 31 March 2022, the Company's unwithdrawn balance of loans and bank overdrafts amounted to EUR 37,000 thousand (31 December 2021: EUR 110,000 thousand).
Net debt is a non-IFRS liquidity measure used to determine the value of debt against highly liquid assets owned by the Company. Management is monitoring net debt metric as a part of risk-management strategy.
For the purpose of net debt calculation, borrowings comprise only debts to financial institutions and other related interest payables.
This note sets out an analysis of net debt, a non-IFRS measure for the purposes of these financial statements presentation defined by management as presented below.
Net debt balances:
| 31 March 2022 31 December 2021 | ||
|---|---|---|
| Cash and cash equivalents | (229,569) | (125,323) |
| Non-current borrowings payable after one year | 961,955 | 888,524 |
| Current borrowings payable within one year (including overdraft and accrued interest) | 13,578 | 9,143 |
| Lease liabilities | 17,314 | 17,749 |
| Net debt | 763,278 | 790,093 |
Reconciliation of the Company's net debt balances cash flows from financing activities:
| Assets | Lease liabilities | Borrowings | ||||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | Non-current | Current | Non-current | Current | Total | |
| Net debt at 1 January 2022 | (125,323) | 15,994 | 1,755 | 888,524 | 9,143 | 790,093 |
| Cash changes | ||||||
| (Increase) decrease in cash and cash equivalents | (104,246) | - | - | - | - | (104,246) |
| Proceeds from borrowings | - | - | - | 73,000 | - | 73,000 |
| Lease payments | - | - | (435) | - | - | (435) |
| Interest paid | - | - | (61) | - | (140) | (201) |
| Non-cash changes | ||||||
| Accrual of interest payable | - | - | 61 | 431 | 4,575 | 5,067 |
| Reclassifications between items | - | (440) | 440 | - | - | - |
| Net debt at 31 March 2022 | (229,569) | 15,554 | 1,760 | 961,955 | 13,578 | 763,278 |
The Company's revenue from contracts with customers are as follows:
| I qtr. 2022 | I qtr. 2021 | |
|---|---|---|
| Management fee income | 790 | 828 |
| Other revenue from contracts with customers Total |
13 803 |
- 828 |
The Company's revenue from contracts with customers during I qtr. of 2022 and 2021 mainly comprised the revenue from advisory and management services provided to subsidiaries.
Also, the Company did not present any segment information as there is only one segment.
The Company's balances under the contracts with customers:
| 31 December 2022 | 31 December 2021 | |
|---|---|---|
| Trade receivables | 479 | 494 |
Dividends declared by the Company:
| I qtr. 2022 | I qtr. 2021 | |
|---|---|---|
| Ignitis grupė AB | 43,824 | 43,010 |
EUR 43,824 thousand dividends for the second half of 2021 was approved at the Ordinary General Meeting of shareholders on 29 March 2022.
Dividends received by the Company from Group companies during the I qtr. of 2022 are the following:
| Declared at | Dividends declared by | Period for which dividends are allocated |
Dividends per share, in EUR |
Amount of dividends declared |
Dividend income attributable to the Company |
Non controlling interest dividends |
|---|---|---|---|---|---|---|
| 31/03/2022 | Elektroninių mokėjimų agentūra UAB |
2021 | 0.1931 | 185 | 185 | - |
| Total | 185 | 185 | - |
The Company's finance income are as follows:
| I qtr. 2022 | I qtr. 2021 | |
|---|---|---|
| Interest income at the effective interest rate The fair value of Innovation Fund Smart Energy Fund powered by |
7,392 | 5,347 |
| Ignitis Group KŪB (Note 8) | 2,408 | 1 |
| In total | 9,800 | 5,348 |
The Company earns interest income from long-term and short-term loans, the majority of which is granted to the Group companies (Note 5.2 and 7). During the I qtr. of 2022, the Company received EUR 1,473 thousand (I qtr. of 2021: EUR 1,581 thousand) interest income in cash, which is presented in the cash flow statement under 'Interest received'.
The Company's finance expenses are as follows:
| I qtr. 2022 | I qtr. 2021 | |
|---|---|---|
| Interest expenses | 5,006 | 5,216 |
| Interest and discount expense on lease liabilities | 61 | - |
| Negative effect of changes in exchange rates | 2 | 6 |
| Other expenses of financing activities | 695 | 679 |
| In total | 5,764 | 5,901 |
The Company's guarantees issued in respect of loans received by subsidiaries were as follows:
| Name of the subsidiary | Beneficiary of the guarantee |
Issue at | Maturity | Maximum amount of the guarantee |
31 March 2022 |
31 December 2021 |
|---|---|---|---|---|---|---|
| Vilniaus kogeneracinė | European | |||||
| jėgainė UAB | Investment Bank | 30/12/2016 07/04/2037 | 190,000 | 139,298 | 139,649 | |
| Kauno kogeneracinė | ||||||
| jėgainė UAB | Swedbank AB | 18/10/2017 18/10/2022 | 59,000 | 56,100 | 56,100 | |
| Pomerania Wind Farm sp. | European | |||||
| z o. o. | Investment Bank | 09/03/2020 31/12/2035 | 66,325 | 53,641 | 55,311 | |
| Pomerania Wind Farm sp. | Nordic Investment | |||||
| z o. o. | Bank | 14/10/2020 31/12/2035 | 31,186 | 31,186 | 32,157 | |
| Group companies | Group companies 25/05/2021 24/05/2022 | - | 10,180 | 67,973 | ||
| Swedbank lizingas, | ||||||
| Vėjo gūsis UAB | UAB | 29/01/2019 28/02/2022 | 9,258 | - | 258 | |
| 365,456 | 290,405 | 351,448 |
The Company has provided the following other guarantees:
| Name of the subsidiary Beneficiary of the | guarantee | Issue at | Maturity | Maximum amount of the guarantee |
31 March 2022 |
31 December 2021 |
|---|---|---|---|---|---|---|
| Ignitis UAB | NASDAQ Clearing AB |
24/05/2021 termless | 110,000 | 3,827 | 3,494 | |
| Pomerania Wind Farm sp. z o. o. |
Nordex Polska sp. z o.o. |
31/05/2019 termless | 83,354 | - | 874 | |
| VVP Investments UAB Nordex Polska sp.z | o.o. | 17/02/2021 termless | 55,097 | - | - | |
| Gamybos optimizavimas UAB |
Ignitis gamyba AB | 01/01/2020 30/06/2023 | 5,000 | - | - | |
| Moray Offshore Windfarm (West) |
Engie UK Markets Limited |
|||||
| Limited Moray Offshore |
Siemens Gamesa | 21/04/2021 termless | 1,270 | - | - | |
| Windfarm (West) Limited |
Renewables Energy Limited |
08/09/2021 31/12/2025 | 2,079 | - | - | |
| VVP Investments UAB Swedbank AB Altiplano Elektrownie |
Nordex Polska | 11/10/2019 01/08/2023 | 945 | 945 | 945 | |
| Wiatrowe B1 Sp. z o. o. | Sp.z.o.o. | 31/01/2022 termless | 50,211 257,745 |
- 4,772 |
- 5,313 |
During I qtr. 2022 the Company has issued guarantee for its subsidiary Altiplano Elektrownie Wiatrowe B1 Sp. z o. o. as Altiplano Elektrownie Wiatrowe B1 Sp. z o. o. entered into supply and installation agreement with Nordex Polska sp.z o.o. for the supply and installation of wind turbine equipment for a wind farm. The Company undertakes and guarantees the performance of all payment obligations under the agreement concluded.
On 20 January 2022, the Company issued a confirmation letter for Kauno kogeneracinė jėgainė UAB (hereinafter – KKJ) which states that it will continue providing financial support for at least 12 months following the issue date of the letter to enable KKJ to continue trading activities and meet its liabilities. As at December 2021 KKJ's current liabilities exceeded current assets by EUR 95,167 thousand. The Company does not expect that there will be need of material support to KKJ or that loss will be incurred by the Company due to activities of KKJ. More information on additional confirmation letter issued in 2022 is provided in Note 20.
During the I qtr. of 2022 there were no significant changes in litigations reported in annual financial statements for 2021 or new significant litigations.
The Company's transactions with related parties during the I qtr. of 2022 and period-end balances arising on these transactions as at 31 March 2022 are presented below:
| Related parties | Accounts Receivable |
Loans receivable |
Accounts Payable |
Sales Purchases | Finance income / (cost) |
|
|---|---|---|---|---|---|---|
| Subsidiaries | 678 | 1,381,922 | 638 | 791 | 173 | 7,322 |
| EPSO-G UAB | - | - | - | - | - | 64 |
| Total | 678 | 1,381,922 | 638 | 791 | 173 | 7,386 |
The Company's transactions with related parties during the I qtr. of 2021 and period-end balances arising on these transactions as at 31 March 2021 are presented below:
| Related parties | Accounts Receivable |
Loans receivable |
Accounts Payable |
Sales Purchases | Finance income / (cost) |
|
|---|---|---|---|---|---|---|
| Subsidiaries | 113,893 | 855,161 | 332 | 829 | 183 | 5,204 |
| EPSO-G UAB | 150,982 | - | - | - | - | 143 |
| Total | 264,875 | 855,161 | 332 | 829 | 183 | 5,347 |
The Company's dividend income received from subsidiaries during the I qtr. of 2022 is disclosed in Note 14.
As at 31 March 2022 the Company has issued guarantees for financial loans to its subsidiaries (Note 17.1)
| I qtr. 2022 | I qtr. 2021 | |
|---|---|---|
| Wages and salaries and other short-term benefits to key | ||
| management personnel | 330 | 231 |
| Whereof: | - | - |
| Short-term benefits | 235 | 218 |
| Termination benefits | 95 | - |
| Share-based payment expenses | - | 13 |
| Number of key management personnel | 12 | 12 |
The Company's investment into "Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB" (Level 3) is measured at fair value.
As at 31 March 2022 and 31 December 2021, the Company has accounted for investment into "Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB". The fair value measurement of this financial asset is based on investment rounds. Fair value of this financial asset will change depending on future investment rounds or other significant events.
The carrying amount of the Company's short-term financial assets and financial liabilities measured at amortised cost approximated their fair value, except for bond issue debts and loans granted. The measurement of financial instruments related to the loans and bonds issued is attributed to Level 2, of the fair value hierarchy.
As at 31 March 2022 and 31 December 2021, the fair value of the Company's amounts receivable related to loans receivable from the subsidiary Energijos skirstymo operatorius AB is estimated by discounting cash flows with market interest rate increased by EUR interest rate swap for tenors that is similar to period left until redemption of issued bonds. The cash flows were discounted using an average discount rate of 4.39% (31 December 2021: 2.90%). The fair value of amounts receivables is attributed to Level 2 of the fair value hierarchy.
The Company's fair value of loans granted is calculated by discounting future cash flows with reference to the interest rate observable in the market. The cash flows were discounted using a weighted average discount rate of 3,19% as at 31 March 2022 (31 December 2021 – 2,76%). The measurement of financial liabilities related to the debts is attributed to Level 2 of the fair value hierarchy.
The Company's bond issue debt (Note 11) fair value was calculated by discounting future cash flows related to the coupon payments with reference to the interest rate observable in the market and the regular future payments related to issued bonds. The cash flows were discounted using a weighted average discount rate of 4.39% as at 31 March 2022 (31 December 2021 – 2.90%). Discount rates for certain bond issues are determined as market interest rate increased by EUR interest rate swap for tenors that is similar to period left until redemption of issued bonds. The bond issue debt is attributed to Level 2 of the fair value hierarchy.
The table below presents allocation between the fair value hierarchy levels of the Company's financial instruments as at 31 March 2022:
| Level 1 | Level 2 | Level 3 | ||||
|---|---|---|---|---|---|---|
| Note | Carrying amount |
Quoted prices in active markets |
Other directly or indirectly observable inputs |
Unobser vable inputs |
In total | |
| Financial instruments measured at fair value through profit (loss) | ||||||
| Assets Innovation Fund Smart Energy Fund powered by Ignitis Group KŪB |
8 | 28,919 | - | - | 28,919 | 28,919 |
| Financial instruments for which fair value is disclosed Assets |
||||||
| Bond receivables from subsidiary Energijos skirstymo operatorius AB |
5 | 628,608 | - | 549,784 | - | 549,784 |
| Loans granted | 5, 7 | 752,825 | - | 724,388 | - | 724,388 |
| Liabilities Bonds issued |
11 | 902,444 | - | 791,814 | - | 791,814 |
On 21 April 2022, the Company issued a confirmation letter for Ignitis grupės paslaugų centras UAB (hereinafter – GSC) which states that it will continue providing financial support for at least 12 months following the issue date of the letter to enable GSC to continue its operations and meet its liabilities. As at December 2021 GSC's current liabilities exceeded current assets by EUR 1,883 thousand. The Company does not expect that there will be need of material support to GSC or that loss will be incurred by the Company due to activities of GSC.
On 20 April 2022 the Company signed loan agreement for issuing EUR 73 million loan to Energijos skirstymo operatorius AB.
The loan will be financed using the funds received from the European Investment Bank. Loan maturity date – 14 February 2038. The agreement does not include additional measures ensuring the fulfilment of obligations.
The Company on 19–27 April 2022 has conducted an acquisition of the Company's ordinary registered shares (hereinafter – ORS or treasury shares) through the auction for tender offers of AB "Nasdaq Vilnius" stock exchange, with AB SEB bankas acting as an intermediary. Treasury shares acquired by the Company on 29 April 2022, when the right of ownership transferred to the Company. Shares purchase price EUR 15.30 per share, number of shares acquired 651,554 and total value of treasury shares acquired EUR 9,967 thousand.
The purpose of the ORS acquisition is the reduction of share capital by annulling the ORS acquired by the Company in relation to the stabilisation that occurred after the initial public offering of 5 October 2020.The Company acquired the majority of the stabilised securities and does not intend to initiate further acquisitions of own ORS in relation to the stabilisation.
On 29 April 2022 the Company provided a guarantee in favour of NASDAQ Clearing AB for EUR 70 million. The guarantee is provided to guarantee performance obligations of subsidiary Ignitis UAB related with clearing services provided by NASDAQ Clearing AB.
There were no significant events after the reporting period till the issue of these financial statements.
*****
| 7.1 Material events of the parent company | 124 |
|---|---|
| 7.2 Other statutory information | 126 |
| Date | Event |
|---|---|
| 30 March | The Court ruled that the price paid for ESO's shares during the mandatory buyout is correct |
| 29 March | Resolutions of Ordinary General Meeting of AB "Ignitis grupė" shareholders |
| 23 March | Regarding the intention of AB "Ignitis grupė" subsidiary UAB Kauno kogeneracinė jėgainė to take a loan of EUR 110 million |
| 18 March | Regarding the resolutions of AB "Ignitis grupė" Supervisory Board for General Meeting |
| 14 March | Update: Regarding the supplementation of the agenda of the Ordinary General Meeting of Shareholders of AB Ignitis grupė and draft resolutions on the issues provided for in the agenda |
| 14 March | Regarding the intention of AB "Ignitis grupė" subsidiary UAB "Ignitis" to take a loan up to EUR 150 million |
| 8 March | Notice on convening the Ordinary General Meeting of Shareholders of AB "Ignitis grupė" |
| 3 March | Notice on the contract concluded by the person discharging managerial responsibilities regarding AB "Ignitis grupė" financial instruments |
| 28 February | Correction: Regarding the intention of AB "Ignitis grupė" subsidiary UAB "Ignitis" to take a loan up to EUR 150 million |
| 28 February | Regarding the intention of AB "Ignitis grupė" subsidiary UAB "Ignitis" to loan up to EUR 150 million |
| 28 February | Strategic Plan 2022–2025 of AB "Ignitis grupė" has been approved |
| 28 February | 2021 m. metinis pranešimas: dvigubas Žaliosios gamybos augimas ir ASV iniciatyvų įvertinimas |
| 28 February | Annual report 2021: twofold Green Generation increase, recognition of ESG excellence |
| 28 February | Interim report for the twelve months of 2021 |
| 22 February | Chief Executive Officer of Ignitis Renewables has been appointed |
| 21 February | Ignitis renewables terminated agreement to acquire portfolio of solar PV projects under development in Poland |
| 21 February | Ignitis Group to present full-year 2021 results and 2022–2025 Strategic Plan on 28 February |
| 18 February | The Management Board, its Chair and CEO of the Group have been elected |
| 9 February | Correction: On the supplementary agreement to the isolated regime services contract of Flexible Generation segment |
| 8 February | On the supplementary agreement to the isolated regime services contract of Flexible Generation segment |
| 1 February | The Supervisory Board of AB "Ignitis grupė" approved the candidates for the new term of the Management Board and the CEO |
| 25 January | On the intent to establish a subsidiary of UAB "Ignitis renewables" in Latvia |
| 21 January | On the intention of AB "Ignitis grupė" to amend key conditions of the internal loan agreement with UAB "Ignitis renewables" |
| Date | Event |
|---|---|
| 13 May | On the compensation for consumers due to increasing energy prices |
| 12 May | Ignitis Group to present Q1 2022 results on 19 May |
| 3 May | Notice on convening the Extraordinary General Meeting of Shareholders of AB "Ignitis grupė" |
| 27 April | AB "Ignitis grupė" completed an acquisition of its own ordinary registered shares |
| 22 April | Vilnius District Court dismissed the case on the incentive share options programme for employees of AB "Ignitis grupė" |
| 13 April | On the decision of AB "Ignitis grupė" Management Board regarding the acquisition of own ordinary registered own shares |
| 5 April | Regarding the intention of AB "Ignitis grupė" to conclude internal loan agreement of EUR 73 million with AB "Energijos skirstymo operatorius" |
| 4 April | Regarding the plan of the government of the Republic of Lithuania to compensate consumers for the increase in energy commodity prices |
The interim report provides information to the shareholders, creditors and other stakeholders of AB "Ignitis grupė" (hereinafter – the parent company) about the parent company's and its controlled companies', which together are called group of companies (hereinafter – the "Group" or "Ignitis Group"), operations for the period of January–March 2022.
The interim report has been prepared by the parent company's administration in accordance with the Law on Companies of the Republic of Lithuania (link in Lithuanian) and the Law on Consolidated Financial Reporting of the Republic of Lithuania (link in Lithuanian).
The parent company's management is responsible for the information contained in the interim report. The report and the documents, on the basis of which it was prepared, are available at the head office of the parent company (Laisvės Ave. 10, Vilnius) on working days from Mondays through Thursdays from 7.30 am to 4.30 pm, and on Fridays from 7.30 am to 3.15 pm (by prior arrangement through [email protected]).
All public announcements, which are required to be published by the parent company according to the effective legal acts of the Republic of Lithuania, are published on our website and the websites of Nasdaq Vilnius, London and Luxembourg stock exchanges.
The parent company was not a party to any significant arrangements that would take effect, be amended or terminated in the event of changes in the parent company's control situation.
During the reporting period, the parent company did not conclude any harmful agreements (which do not correspond to the parent company's objectives, current market conditions, violate the interests of shareholders or other groups of persons, etc.) which had or potentially may have a negative impact on the parent company's performance and/or results of operation nor there were any agreements concluded in the event of a conflict of interests between the obligations of the parent company's managers, the controlling shareholders or other related parties to the parent company and their private interests and/or other duties.
There are no agreements concluded between the parent company and the members of the management bodies or employees that provide for compensation in case of their resignation or dismissal without a reasonable cause or in case of termination of their employment as a result of the change in control of the parent company.
The Group's financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
The employees of the company providing accounting services to the parent company ensure that the financial statements are prepared properly and that all data are collected in a timely and accurate manner. The preparation of the company's financial statements, internal control and financial risk management systems, legal acts governing compilation of the financial statements are monitored and managed.
UAB "KPMG Baltics" on 27 September 2021 has been appointed as the new auditor (previously, audit services were provided by UAB "Ernst & Young Baltic") by the General Meeting of Shareholders of the parent company to provide audit services of financial statements of the parent company and the consolidated financial statements of the Group for the full years of 2021 and 2022.
More information about the auditor, including remuneration for services, is available in our Annual report 2021.
Since September 2021, the parent company owns 100% of shares of ESO (Networks) and Ignitis Gamyba (Flexible Generation). More information about delisted companies, including the guidance of payment for shares, is available on our website.
In the event of any discrepancy between the Lithuanian and the English versions of the document, the English version shall prevail.
| # | Number | EBITDA | Earnings before interest, tax, | Electricity sold in wind farms, solar | ||
|---|---|---|---|---|---|---|
| % | Per cent | depreciation and amortisation | Green electricity | power plants, biofuel plants and CHP plants and hydropower plants (including Kruonis pumped storage |
||
| '000 / k | Thousand | Electricity sold in wind farms, solar power plants, biofuel plants, CHP |
generated (net) | |||
| AB | Joint stock company | Electricity generated | plants, hydropower plants (including | power plant) | ||
| EBITDA after eliminating items, which are non-recurring, and/or non-cash, and/or related to other periods, and/ |
(net) | Kruonis pumped storage power plant) and electricity sold in Elektrėnai Complex |
Green Generation | Wind farms, solar power plants, biofuel plants, CHP plants and hydropower plants (including Kruonis |
||
| Adjusted EBITDA | or non-related to the main activities of the Group, and after adding back items, which better reflect the result |
Electricity sales | Amount of electricity sold in Lithuania (B2C, B2B and guaranteed customers), Poland, Latvia and Estonia |
capacity installed | pumped storage power plant) that have completed and have passed a final test |
|
| of the current period | Energijos Tiekimas | Energijos Tiekimas UAB | Green share of generation shall | |||
| APM | Alternative performance measure (link) |
Enerpro | UAB Energetikos paslaugų ir rangos organizacija |
Green share of generation,% |
be calculated as follows: Green electricity generated (including Kruonis pumped storage power plant) |
|
| Business to consumer | eNPS | Employee Net Promoter Score | divided by total electricity generated | |||
| B2B | Business to business | EPS | Earnings per share | in the Group | ||
| B2C | Business to consumer | Environmental, social and corporate | GRI | Global Reporting Initiative | ||
| BICG | Baltic Institute of Corporate | ESG | governance | Group or Ignitis Group |
AB "Ignitis grupė" and its controlled companies |
|
| Governance | ESO | AB " Energijos skirstymo operatorius " | GW | Gigawatt | ||
| bn | Billion | etc. | et cetera | |||
| CCGT | Combined Cycle Gas Turbine Plant | EURbn | billion EUR | Heat generated (net) | Heat sold in CHP plants, biomass plants |
|
| CDP | Carbon Disclosure Project | EURm | million EUR | Kaunas Algirdo Brazauskas | ||
| CfD | Contract for difference | EU | European Union | Hydro power | hydroelectric power plant and | |
| CHP | Combined heat and power | Eurakras | UAB "EURAKRAS" | Kruonis pumped storage power plant | ||
| Indicative prices giving the difference | FCF | Free Cash Flow | IFRS | International Financial Reporting Standards |
||
| Clean spark | between the combined cost of gas and emissions, and the equivalent |
FFO | Funds from operations | Ignitis UAB (former Lietuvos energijos | ||
| price of electricity | FiT | Feed-in Tariff | Ignitis | tiekimas and Energijos tiekimas) | ||
| CO2 | Carbon dioxide | Taking over certificate obtained | Ignitis Eesti | Ignitis Eesti OÜ | ||
| COD (commercial | The start of energy generation after | Full completion | implying the transfer of operational responsibility of the power plant to |
Ignitis Gamyba | AB "Ignitis gamyba" | |
| operation date) / commissioned |
the test on completion | the Group | Ignitis Latvija | Ignitis Latvija SIA | ||
| CPI | Consumer Price Index | GDP | Gross domestic product | Ignitis Polska | Ignitis Polska sp. z o.o. | |
| E | Electricity | GDR | Global depositary receipt | Ignitis Renewables | UAB "Ignitis renewables" | |
| EBIT | Earnings before interest and tax | GHG | Greenhouse Gas | |||
| Installed capacity | Where all assets have been completed and have passed a final test |
|---|---|
| Investments | Acquisition of property, plant and equipment and intangible assets, acquisition of shareholdings |
| ISIN | International Securities Identification Number |
| YoY | Year over year |
| IPO | Initial Public Offering |
| ISO | International Organization for Standardization |
| Kaunas CHP | UAB Kauno kogeneracinė jėgainė |
| Kaunas HPP | Kaunas Algirdas Brazauskas Hydroelectric Power Plant |
| Kruonis PSHP | Kruonis Pumped Storage Hydroelectric Plant |
| Lietuvos energija | "Lietuvos energija", UAB (current AB "Ignitis grupė") |
| Lietuvos Energijos Tiekimas |
Lietuvos Energijos Tiekimas UAB |
| Litgas | Litgas UAB |
| Litgrid | Litgrid AB |
| LNG | Liquefied natural gas |
| LNGT | Liquefied natural gas terminal |
| LTM | Last twelve months |
| m | Million |
| Mažeikiai | UAB "VVP Investment" |
| min | Minimum |
| MW | Megawatt |
| MWh | Megawatt hour |
| n/a | Not applicable |
| NERC | The National Energy Regulatory Council |
| Net debt/ Adjusted EBITDA |
Leverage ratio, which shows the Group's ability to repay its debt from the profit earned |
|---|---|
| New connection points and upgrades |
Number of new customers connected to the network and capacity upgrades of the existing connection points |
| NPS | Net promoter score |
| NT Valdos | NT Valdos, UAB |
| OECD | Organisation for Economic Co operation and Development |
| OPEX | Operating expenses |
| Parent company | AB "Ignitis grupė" (former "Lietuvos energija", UAB) |
| Pomerania | Pomerania Wind Farm sp. z o. o. |
| pp | Percentage point |
| PPE | Property, plant and equipment |
| Public supply | Electricity supply activity performed in accordance with the procedure and terms established by legal acts by an entity holding a public supply licence |
| Q | Quarter |
| RAB | Regulated asset base |
| ROCE | Return on Capital Employed |
| ROE | Return of Equity |
| ROI | Return on Investment |
| SAIDI | Average duration of unplanned interruptions in electricity or gas transmission |
| SAIFI | Average number of unplanned long interruptions per customer |
| SBTi | Science Based Targets initiative |
| SDG | Sustainable Development Goal |
| SOE | State-owned company |
| Short-Term Incentives |
|---|
| Supply of electricity in order to meet electricity demand of customers who have not selected an independent supplier under the established procedure, or an independent supplier selected by them does not fulfil its obligations, terminates activities or the agreement on the purchase and sale of electricity |
| Vilnius Third Combined Heat and Power Plant |
| Total Recordable Incident Rate |
| "Tuuleenergia osaühing" |
| Terawatt-hour |
| Private Limited Liability Company |
| Units |
| UAB "VĖJO GŪSIS" |
| UAB "VĖJO VATAS" |
| UAB Vilniaus kogeneracinė jėgainė |
| Visagino atominė elektrinė UAB |
| Versus |
| Weighted average cost of capital |
| Wind farm |
| Units |
| UAB "VĖJO GŪSIS" |
| UAB "VĖJO VATAS" |
| UAB Vilniaus kogeneracinė jėgainė |
| Versus |
| Weighted average cost of capital |
| Wind farm |
| Waste-to-energy |
Referring to the provisions of the Article 14 of the Law on Securities of the Republic of Lithuania and the Rules of disclosure of information of the Bank of Lithuania, we, Darius Maikštėnas, Chief Executive Officer at AB "Ignitis grupė", Jonas Rimavičius, Chief Financial Officer at AB "Ignitis grupė", and Giedruolė Guobienė, Head of Accounting at UAB "Ignitis grupės paslaugų centras", acting under Order No IS-22-22 of 4 April 2022, hereby confirm that, to the best of our knowledge, AB "Ignitis grupė" interim condensed consolidated financial statements for the three months
period ended 31 March 2022 prepared according to International accounting standard 34 'Interim financial reporting' as adopted by the European Union, give a true and fair view of AB "Ignitis grupė" consolidated and stand-alone assets, liabilities, financial position, profit or loss and cash flows for the period, the Interim Report includes a fair review of the development and performance of the business as well as the condition of AB "Ignitis grupė" and it's group companies together with the description of the principle risks and uncertainties it faces.
Darius Maikštėnas Chief Executive Officer
Jonas Rimavičius Chief Financial Officer
Giedruolė Guobienė UAB "Ignitis grupės paslaugų centras", Head of Accounting acting under Order No IS-22-22 (signed 4 April 2022)
AB "Ignitis grupė" Laisvės av. 10, LT-04215 Vilnius, Lithuania +370 5 278 2998 [email protected]
www.ignitisgrupe.lt Company code 301844044 VAT payer code LT100004278519
Laisvės av. 10, LT-04215 Vilnius, Lithuania Company code 301844044 Tel. +370 5 278 2998 E-mail [email protected] www.ignitisgrupe.lt/en/
Ainė Riffel-Grinkevičienė Tel. +370 643 14925 E-mail [email protected]
Valentas Neviera Tel. +370 670 25997 E-mail [email protected]
Artūras Ketlerius Tel. +370 620 76076 E-mail [email protected]
19 May 2022
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