Quarterly Report • Aug 4, 2022
Quarterly Report
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By 2026 we will be the largest renewable energy producer in the Baltics and a rapidly growing renewable energy company in Poland.
| 2 | Enefit Green at a glance |
|---|---|
| 4 | Letter from the Chairman of the Management Board |
| 5 | Strategy and development portfolio |
| 10 | 2Q key highlights |
| 11 | Operating environment |
| 13 | Significant events |
| 14 | Financial results of the group |
| 17 | Wind energy segment |
| 19 | Cogeneration segment |
| 21 | Solar energy segment |
| 22 | Investments |
| 23 | Financing |
| 24 | Risk management |
| 25 | Condensed consolidated interim financial statements |
| 31 | Notes to the condensed consolidated interim financial statements |
| 48 | Legal structure |
Dear reader
Energy prices, which broke new records in Q2, continue to keep consumers and industries across Europe under strong pressure. Russia's aggression against Ukraine is forcing European countries to move away from Russian gas and oil. Rapid reorganisation of the supplies of energy carriers is creating significant market uncertainty and fuelling inflation, which is undoubtedly negative. On the other hand, the situation is making us look for new and alternative solutions.
The only viable long-term solution for both the energy crisis and the green transition is electrification through renewable sources. Renewable electricity can replace fossil energy sources such as motor fuels in transport or natural gas in heat production. The more we can produce green electricity, the less we will depend on uncertain and expensive fossil fuel supplies.
Words alone are not enough – energy production requires actual production capacities. Every day we lose by not creating those capacities will have a cumulative negative effect.
Enefit Green is actively involved in developing and building new energy production capacities throughout the region from Finland to Poland. Every new wind and solar farm that comes online increases the availability of affordable electricity, helps ensure energy security and reduces energy dependence.
In Q2, we updated our action plan for the next five years. The previous goal was to increase our wind and solar power production capacities by 600 MW to 1,100 MW by 2025. The new growth plan is even more ambitious: to increase our current renewable power production capacity (457 MW) more than four times to around 1,900 MW by 2026.
We are going to invest around €1.5bn in new development projects in the near term. When our current growth plan until 2026 has been implemented, Enefit Green's annual electricity output will extend to 4.5 TWh compared with 1.2 TWh in 2021. The quantity would cover half of Estonia's current annual electricity consumption.
The most recent step in the implementation of our growth plan was the acquisition of the Tootsi wind farm. We are planning to build the Tootsi and Sopi wind farms simultaneously and thus create in the northern part of Pärnu county the largest-capacity and most modern wind energy production area in Estonia. The two wind farms, which will have a total of 38 turbines, will almost double Estonia's current wind energy production capacity.
In May, we made an investment decision on building the Purtse solar farm (32 MW) in Lüganuse rural municipality in north-east Estonia. Together with the Purtse wind farm (21 MW) that is being built nearby it will become Estonia's first large-scale hybrid electricity production facility. The unique hybrid solution which will use two energy sources will help us save on the farms' construction costs and use the limited network resource more effectively.
I am pleased to report that we are on schedule with all projects that are in the construction phase. We are currently building four wind farms and three solar farms with a combined capacity 258 MW. For comparison, the figure accounts for over half of our existing production capacity. The new farms will be coming online and starting to supply green energy step by step from this year already. After the completion of those farms, our annual green electricity production capacity will increase by 700 GWh, which is sufficient to cover the annual electricity consumption of more than 200,000 households.
In June, we made the first dividend payment to our 60,000 investors. To make sure that our renewable energy production capacities and thus our financial results and dividend distributions will continue to grow, we are planning to make in the second half of the year additional investment decisions on the construction of new wind and solar farms with the total capacity of 358 MW.
In the light of the above, I am pleased to state that Enefit Green's consolidated financial results for Q2 improved significantly compared with the same period last year.
In Q2, we produced 270 GWh of electricity (+6% year on year) and 152 GWh of heat (+4%). Supported by strong production figures and high electricity prices, the group's total revenues grew to €47.3m (+30%), EBITDA increased to €30.7m (+51%) and net profit grew to €16.9m (+80%).
We will continue to work hard to successfully implement our updated and more ambitious growth plan.
Aavo Kärmas Chairman of the Management Board of Enefit Green
Enefit Green is one of the leading and most diverse growth-oriented renewable energy companies in the Baltic Sea region. We operate in Finland, Estonia, Latvia, Lithuania and Poland. Enefit Green's shares are listed on the Nasdaq Tallinn Stock Exchange and more than 60,000 investors are contributing to the green transition and benefiting from Enefit Green's growth.
We are confident that electrification through renewable electricity holds the key to delivering the green transition. Accelerated implementation of green energy is the path to a carbon neutral way of life.
We produce renewable energy in our power and cogeneration plants as efficiently as possible, drawing on our long-term production asset operation experience and digitalised asset management. In developing and building new wind and solar farms, we are supported by experience and the unique synergy of our production and development teams. One of our key strengths is the capacity to sign long-term power purchase agreements (PPAs) with customers and thus sell our electricity in advance, an area where we can exploit the synergy with our controlling shareholder, the Eesti Energia group.
By 2026, we will increase our green electricity production capacity four times to 1,900 MW. To that end, we will invest €1.5bn in new development projects. We will build onshore wind farms of around 800 MW in total in Estonia, Lithuania and Finland and solar farms of around 600 MW in total in Estonia, Latvia, Lithuania and Poland. We will also continue to invest in solar solutions (up to 100 MW) through different business models (including solutions with storage) whereby we retain ownership of the production assets.
After the implementation of the current five-year action plan, our annual renewable electricity production will increase to 4.5 TWh compared with 1.2 TWh in 2021. That quantity of electricity would cover half of Estonia's current annual electricity consumption. The use of such an amount of wind and solar power would prevent 2.9m tonnes of CO2 emissions (compared with electricity produced from fossil energy sources). Our heat production will remain at the level of 2021 (around 600 GWh).
We achieve our goals by applying a vertically integrated business model, which is based on the planning, development, construction and operation of projects. In every market, we have a professional and dedicated development team that can develop the project from the earliest stage and add value to predeveloped projects. 30% of early-stage projects reach an investment decision. Accordingly, new development projects are initiated annually to ensure the company's long-term growth.
The main basis for the strategy period's investment decisions is sales locked at the highest possible price. Close cooperation with Eesti Energia's customer service and energy trading units as well as external partners gives us an edge in signing long-term PPAs. Additionally, we cover the electricity price risk of our development projects by participating in renewable energy reverse auctions in the markets where we operate (e.g. Estonia and Poland).
High productivity of our assets is underpinned by our innovative, professional and multiskilled production and asset management teams. We prevent production interruptions and large-scale repairs and ensure high availability of our power plants by systematically digitalising data and developing machine learning. We use the experience gained to operate wind farms after the expiry of the turnkey contracts, to extend the technical life of our wind farms and to carry out repowering.
Our strategy is executed by committed and experienced professionals. The most important focus areas in the near term include the attraction of new talent, the retention of existing experts (including the assurance of future competencies) and the development of a strong leadership culture. By 2026, our current headcount will increase by around 25% to 220 people.
We produce renewable energy to implement the green transition through electrification.
By 2026 we will be the largest renewable energy producer in the Baltics and a rapidly growing renewable energy company in Poland.
Operating capacity Under construction
Targeting renewable capacity growth to ~1900MW by the end of 2026
Enefit Green Q2 2022 interim report
6
7
8
Targeted investment decisions until end of 2023
NB! Development projects are in continuous change.
The presented information is management team's best assessment of the current status of the near term development portfolio as of 31 July 2022
NB! Development projects are in continuous change.
9
Updated strategy
€39.9m Dividend (€0.151 / share)
Enefit Green's operations are strongly influenced by seasonality, weather conditions and electricity prices as well as regulations governing the energy industry and political decisions. Factors which affect the group's development projects also include the competitive situation in the market, the development and cost of renewable energy technologies, customers' willingness to enter into long-term green energy PPAs, and renewable energy support schemes.
Enefit Green's production assets that are exposed to fluctuations in the market price of electricity include the Iru and Paide cogeneration (combined heat and power, CHP) plants, partially wind farms and solar farms located in Estonia, the Keila-Joa hydroelectric facility, and wind farms located in Lithuania whose eligibility for support has expired (only the Sudenai wind farm in the reporting period). Estonian production assets whose eligibility for support has not expired also receive renewable energy support. From the beginning of April 2022, the Tooma I wind farm (16 MW) no longer receives renewable energy support.
Estonian average wind speeds, m/s
Due to seasonal factors, wind conditions in the second and the third quarter are less favourable for wind power production in our region. Average wind speeds measured in our wind farms in Estonia and Lithuania in Q2 2022 were relatively similar to a year earlier (0.1 m/s higher in Estonia and 0.1 m/s lower in Lithuania) and thus has a relatively neutral effect on production growth compared with a year earlier. The graph below provides an overview of average quarterly wind speeds in Estonia and Lithuania since the beginning of 2020.
Nord Pool's intraday electricity prices have been highly volatile in recent years. Usually, the peak load electricity price is determined by the more expensive carbon-intensive power and the baseload electricity price is determined by renewable power.
The electricity markets of the region where Enefit Green operates are well connected by means of interconnectors. Therefore, electricity generation and prices are affected by various factors in both our core markets and beyond.
Average electricity prices in markets relevant to our business continue to be high due to soaring natural gas prices, which inflate the cost prices of gas-fired power plants. The high market price of natural gas (Q2 average: 113.8 €/MWh, +310% year on year) is attributable to supply disruptions and the Russia-Ukraine war, which has increased uncertainty about gas supplies. Surging natural gas prices have created a situation where the cost price of electricity produced by gas-fired power plants is higher than the cost price of electricity produced by oil shaleand coal-fired power plants.
Contributing factors include low water levels in the Nordic hydro reservoirs (12% lower than a year earlier) and the high price of CO2 emission allowances (83.8 €/t, +67%).
Estonian weekly average electricity price, €/MWh
| Nord Pool (NP) electricity price (€/MWh) |
2Q 2022 |
2Q 2021 |
Change |
|---|---|---|---|
| Estonia | 142.1 | 54.5 | 160.6% |
| Latvia | 164.0 | 56.0 | 192.8% |
| Lithuania | 168.1 | 57.5 | 192.1% |
| Poland | 150.9 | 67.3 | 124.3% |
| Finland | 117.5 | 46.3 | 154.0% |
| Norway | 93.9 | 39.1 | 139.8% |
| Denmark | 179.6 | 58.7 | 205.9% |
| Sweden | 85.6 | 39.8 | 114.9% |
In July, the parliament adopted regulatory amendments concerning community benefits, which should support the development of wind energy. From July 2023, the owners of new wind farms will have to pay local authorities and residents directly affected by their offshore or onshore wind farms compensation for tolerating the turbines.
The results of a national reverse auction for the production of 450 GWh of renewable energy were announced.
The new coalition set the goal that by 2030 Estonia should produce at least as much renewable energy as it consumes (the previous goal was 50% of consumption). To facilitate achievement of the goal, the requirements for renewable electricity production will be simplified. The time periods for processing planning documents and permits will be shortened. The Planning Act will be amended with the requirement that local authorities will have to identify areas suitable for the construction of renewable energy production facilities and include them in the comprehensive plan. Green energy reverse auctions will be held: at least two reverse auctions in 2023 and reverse auctions for the production of at least 1 TWh in both 2024 and 2025.
The parliament continued to discuss amendments to laws that should create preconditions for the construction of onshore wind farms of around 1 GW (including the obligation to pay compensation to local authorities for tolerating the turbines and simplification of the planning process).
In June, the court of first instance ruled against Enefit Green's Latvian subsidiary SIA Technological Solutions in the latter's dispute with BVKB (the State Construction Control Bureau of Latvia) over the fixed electricity price. We filed an appeal against the ruling in July. From November 2021 until the final ruling on the matter is made, the Broceni CHP facility will sell electricity at the price of the NP Latvia price area.
The parliament passed a package of energy law amendments widely known as the Breakthrough Package: to reduce network reservation, the connection deposit payable by the developer to the power network was significantly increased; renewable energy producers were imposed the obligation to pay local authorities compensation for tolerating the production facilities; the procedure for planning new solar and wind farms was simplified; opportunities were created for the construction of hybrid wind and solar farms.
Approval of the so-called "Offshore wind package": laws has been adopted, allowing to conduct auction for offshore wind project in Lithuania. Secondary laws will be drafted and coordinated with stakeholders during the year 2022. Auctions are planned to take place during the second half of 2023.
At the end of July, we applied for the exit of the Šilale and Mockiai wind farms from the Lithuanian FiT support scheme, which will influence Enefit Green's financial results starting from September.
The government submitted a proposal to Parliament to remove the restriction that significantly hinders the construction of onshore wind farms, which prohibits the construction of a wind farm closer than 10 times the height of the wind turbine to residential buildings. If the new proposal enters into force, the permissible distance of the wind turbine from the residential building will be decided during the environmental impact assessment of the specific wind farm. The proposal would somewhat simplify the construction of onshore wind farms.
Consultations are ongoing on the possible introduction of additional restrictions on the planning of solar parks with a capacity of more than 1MW. Conditions are being discussed under which a full environmental impact assessment should be carried out before the construction of large solar parks.
Rules for the certification and supervision of offshore wind farms were adopted.
The supervisory board of Enefit Green approved the company's updated strategy until the end of 2026. Our action plan for the next five years is even more ambitious than the previous one in order to accelerate the implementation of renewable energy and the reduction of the carbon footprint in the region.
After the execution of the updated growth plan, our electricity production capacity will increase to 1,900 MW and annual electricity output will grow to 4.5 TWh, which is 3.7 times more than the 1.2 TWh produced in 2021. We expect our heat production to remain at the level of 2021 throughout the strategy period.
We made an investment decision and started construction of Enefit Green's largest solar farm to date. The 32 MW Purtse solar farm, located in Ida-Viru county in Purtse, is scheduled to come online in 2023 and should produce around 32 GWh electricity per year. Total investments in the project will amount up to €19.5m.
The farm is part of Estonia' first large-scale hybrid wind and solar solution, which will use the same network connection point as Enefit Green's 21 MW Purtse wind farm on which an investment decision was made at the end of January.
In July, we acquired the 74 MW Tootsi wind farm development for €26.9m. We will continue to develop the Tootsi wind farm and are preparing investment decisions for the development of the 161 MW Sopi wind farm located nearby. After completion, the two wind farms in the northern part of Pärnu county will form Estonia's largest and most modern wind energy production area that can produce up to 700 GWh of wind power per year, an amount equal to Estonia's total wind energy production in 2021.
We sold our 10% non-controlling stake in Wind Controller JV OY to the Finnish company Caverion Corporation. The purpose of the transaction was to focus on our core business lines, which comprise the development of wind and solar farms, knowledge-based asset management and renewable energy production. Wind Controller will continue to provide Enefit Green with wind turbine monitoring and control services as a contractual partner.
Enefit Green's first annual general meeting (AGM) as a listed company took place on 18 May. The AGM approved the annual report for 2021 and the profit allocation proposal on the basis of which investors were distributed a total dividend of €39.9m, i.e. €0.151 per share. The AGM also approved some changes to the articles of association, which clarified the powers of the supervisory board and simplified the procedure for the adoption of certain business decisions.
Member of the management board of Enefit Green and the group's head of development Linas Sabaliauskas has decided to step down from the management board, effective from 1 August 2022. We have started the process for finding a new member of the management board.
Enefit Green's consolidated financial results for Q2 improved significantly year on year: rapid growth (+30%) in total revenues (revenue plus renewable energy support and other income) and slower growth (+4%) in operating expenses excluding depreciation and amortisation delivered 51% EBITDA growth. Net profit for the period grew by €7.5m, i.e. by 80%, rising to €16.9m. The key factors which influenced the group's financial performance are described below.
| Unit | Q2 2022 | Q2 2021 | Change | Change,% | |
|---|---|---|---|---|---|
| Electricity production | GWh | 270 | 256 | 15 | 6% |
| Heat energy production | GWh | 152 | 146 | 6 | 4% |
| Pellet production | thousand tonnes | 36 | 26 | 9 | 35% |
The group's electricity production in Q2 2022 was 270 GWh (+6% compared with 256 GWh in Q2 2021). The group's average implied captured electricity price including support was 126.7 €/MWh (Q2 2021: 86.7 €/MWh).
The most important revenue driver was growth in electricity prices in the Estonia price area of the Nord Pool (NP) power exchange, which increased the group's revenue by around €11.5m. The average market price in the NP Estonia price area in Q2 2022 was 142.0 €/MWh compared with 54.6 €/MWh in Q2 2021. The implied captured electricity prices of the group's Estonian production entities in the two periods were 115.9 €/MWh and 45.0 €/MWh. The implied captured electricity price differs from the average NP price because wind farms do not produce the same amount of electricity in each hour and the figure also includes the effects of longterm fixed-price power purchase agreements (PPAs). The share of production covered with PPAs and the prices per year are presented in the risk management chapter.
Another factor that had a strong effect on revenue was pellet sales, which decreased by €5.7m. Pellet sales volume in Q2 2022 was 7 thousand tonnes compared with 55 thousand tonnes in Q2 2021. The sharp fall is attributable to the change in the timing of a previously agreed pellet supply transaction from June to July this year.
Heat production grew by 4% and the sales price of heat increased by 8% compared with a year earlier.
The rest of revenue growth resulted mainly from growth in solar services and slight growth in waste reception.
Renewable energy support and other income for Q2 2022 were strongly affected by a decrease in the renewable energy support received by the group's Estonian wind farms, which dropped by €0.9m year on year. The eligibility period of the Tooma 1 wind farm expired in April 2022 and that of the earliest completed part of the Aulepa wind farm (39 MW) expired in July 2021.
Expenses on raw materials, consumables and services grew by €6.9m, i.e. 72%. The biggest rise was in electricity expenses (€2.9m), which increased due to a higher electricity price and an accounting policy change according to which the quantities of electricity purchased from the NP intraday market to balance the electricity portfolio are no longer offset against the quantities of electricity sold. There was also an increase in expenses on technological fuel (€2.4m) and materials used for production (€1.9m).
| € million | Q2 2022 | Q2 2021 | Change Change, % | |
|---|---|---|---|---|
| TOTAL REVENUES | 47.3 | 36.2 | 11.0 | 30% |
| Sales revenue | 41.5 | 29.4 | 12.1 | 41% |
| Renewable energy support and other income | 5.8 | 6.8 | (1.1) | (16%) |
| OPERATING EXPENSES (excluding D&A) | 16.5 | 15.9 | 0.6 | 4% |
| Raw materials, consumables and services used | 16.4 | 9.5 | 6.9 | 72% |
| Payroll expenses | 2.2 | 1.5 | 0.7 | 47% |
| Other operating expenses | 2.6 | 1.8 | 0.9 | 49% |
| Change in inventories of finished goods | (4.6) | 3.2 | (7.8) | (247%) |
| EBITDA** | 30.7 | 20.3 | 10.4 | 51% |
| Depreciation, amortisation and impairment (D&A) | 9.6 | 9.5 | 0.1 | 1% |
| OPERATING PROFIT | 21.1 | 10.8 | 10.3 | 96% |
| Net finance expenses | 0.5 | (1.0) | 1.5 | (151%) |
| Loss from associates underthe equity method | (0.1) | (0.1) | (0.0) | 32% |
| Corporate income tax expense | 4.6 | 0.3 | 4.3 | 1299% |
| NET PROFIT | 16.9 | 9.4 | 7.5 | 80% |
| OPERATING EXPENSES (excluding D&A) | 16.5 | 15.9 | 0.6 | 4% |
| Variable expenses | 12.4 | 5.4 | 7.0 | 130% |
| Fixed expenses | 8.8 | 7.3 | 1.4 | 19% |
| Change in inventories of finished goods | (4.6) | 3.2 | (7.8) | (247%) |
* Implied captured electricity price = (electricity sales revenue + renewable energy support and efficient cogeneration support – balancing energy purchases) / production
** EBITDA – earnings before net finance costs, profit or loss from equity-accounted investees, taxes, depreciation , amortisation and impairment losses
The group's payroll expenses grew by 47%, i.e. €0.7m year on year, due to an increase in the average number of full-time employees from 159 to 177 compared with Q2 2021 as well as growth in existing employees' payroll expenses. New people were mostly hired to the development team to support the group's growth plan in all its core markets.
Other operating expenses grew by €0.9m. Several items increased slightly, including research and consulting expenses (mostly in connection with development activities), IT expenses, expenses on equipment and structures, etc.
Change in inventories reflects the change in pellet stocks, summarising the quantities of pellets produced and sold in the period under review. Pellet production exceeded sales in Q2 2022 because a major previously agreed pellet supply transaction will take place in July, not June this year. The change in inventories reduced expenses by €4.6m (Q2 2021: increased expenses by €3.2m). The period's pellet output was 36 thousand tonnes (Q2 2021: 26 thousand tonnes) and pellet sales were 7 thousand tonnes (Q2 2021: 55 thousand tonnes).
Group's EBITDA development by drivers, €m
D&A expense remained stable compared with a year earlier, amounting to €9.6m. Although the volume of investments made in Q2 2022 was €4.8m larger than in the comparative period, this did not affect D&A expense because most investments were made in wind and solar farm development projects.
Variable costs comprise operating expenses that depend on the production volume, including purchases of balancing energy.
Variable costs have increased by €7.0m, which is largely due to the increase in the price of balancing energy transactions due to the increased price of electricity and the change in the financial accounting of intraday Nord Pool transactions (€2.9m). In addition, the cost of technological fuel (€2.4m) and other direct production costs (€1.8m) have also increased.
Fixed costs comprise costs not directly dependent on the production volume. Fixed costs grew by €1.4m, i.e. 19% year on year. In absolute terms, the biggest increases were recorded for payroll expenses (€0.7m), expenses on equipment and structures used in operating activities (€0.3m) and research and consulting expenses (€0.1m).
*Calculated based on Estonian wind parks, Iru CHP and Paide CHP implied electricity prices in 2021 and 2022 and respective electricity quantities **Impact of balancing energy purchases is included in NP Estonia price and Estonian electricity quantity. Therefore, it is not part of Variable expenses impact nor Remaining income impact.
Financial expenses decreased by €0.4m compared to the same quarter of last year. The decrease was mainly due to the decrease in the average interest rate due to revised bank loan margins in the second half of 2021. In addition, loan principal repayments, the EUR/PLN Exchange rate and the capitalisation of interest on loans have also affected financial costs.
Financial income increased by €1.1m compared to the same quarter last year. Higher financial income was mainly due to the sale of minority stake in Wind Controller, but was also affected by interest income and changes in FX rates.
Income tax expense grew by €4.3m year on year, mainly due to income tax paid in Estonia in connection with the distribution of dividends.
The group's Q2 net profit grew by 79.7%, rising to €16.9m. Net profit growth was mainly underpinned by high electricity prices.
Based on total revenues and EBITDA for Q2 2022, the group's largest segment is Wind energy with 57% of total revenues and 67% of EBITDA for the period. The Cogeneration segment contributed 34% to total revenues and 35% to EBITDA. The smallest reportable segment is Solar energy, which accounted for 8% of the group's total revenues and 4% of the group's EBITDA for Q2.
Among reportable segments, Wind and Cogeneration delivered the strongest EBITDA growth as they benefited the most from higher market prices of electricity (which increased revenue by around €11.5m). A more detailed analysis by segment is presented below.
The EBITDA of the segment Other mainly includes general administrative expenses, which is the largest item for the segment. The segment also includes the network construction services of the Paide facility, the Keila-Joa hydroelectric facility, and the renewable energy solution on the island of Ruhnu. The loss of the segment Other increased by €0.7m, primarily due to growth in the payroll expenses of the group's central management and consulting expenses.
16 Enefit Green Q2 2022 interim report
Enefit Green Q2 2022 interim report 17
The Wind energy segment comprises operating wind farms, wind farm developments and the management expenses of both wind farm developments and operating wind farms.
In Q2 2022, wind conditions in Estonia were more favourable and wind conditions in Lithuania were less favourable for wind power production than in the same period last year. The availability of our Estonian and Lithuanian wind farms of 96.5% and 97.1%, respectively, was quite high and significantly better than in Q1. Compared with Q2 2021, availability improved in Lithuania and remained stable in Estonia.
The electricity production of our Estonian wind farms grew by 8.2% while that of our Lithuanian wind farms decreased by 0.6% year on year. Total wind energy output was 210 GWh, 4.4% higher than in the same period last year.
In addition to the market price of electricity, our Estonian wind farms which are eligible for support receive renewable energy support at the rate of 53.7 €/MWh. Since March 2022, the Estonian wind farms have been selling part of their electricity at fixed prices. As a result, their production is not fully exposed to fluctuations in the market price of electricity. Our Lithuanian wind farms are paid a fixed price for their output, except for the 14 MW Sudenai wind farm, which has been selling its output to the market in the NP Lithuania price area since June 2021.
87 80 80 Estonian wind parks Lithuanian wind parks
* (Total electricity revenues - balancing energy purchase + renewable energy support)/production
At the end of July, we submitted an application for the exit of two more wind farms (Šilale and Mockiai) from the Lithuanian FiT support scheme, which will have an effect on Enefit Green's financial results starting from September. We are considering a similar change for the rest of our wind farms in Lithuania.
The accounting treatment of intraday NP transactions made to balance the electricity portfolio changed from the beginning of 2022: gross amounts are now reported in revenue and expenses. Previously, electricity purchase expenses and sales revenues from intraday NP transactions were offset. Since the change increased both revenue and expenses by the same amount, it had no effect on profit.
Our Estonian wind farms' Q2 average implied captured electricity price including support increased by 66% year on year, rising to 144.0 €/MWh. This includes the effect of fixed-price PPAs. The average Q2 electricity price of our Lithuanian wind farms was stable at 80.0 €/MWh.
Due to the Estonian wind farms' somewhat larger output and high market prices, the total revenues of the Wind energy segment grew by 54% year on year, rising to €27.1m.
The operating expenses of the Wind energy segment (excluding D&A) grew by €2.2m to €6.6m. Growth was attributable to expenses on balancing energy purchases, which increased due to a higher electricity price, and the change in the accounting for intraday NP transactions made to balance the electricity portfolio: the effect on growth in operating expenses was €1.6m. Other operating expenses (excluding growth in expenses on balancing energy, the change in the accounting for intraday NP transactions and D&A) grew by €0.5m year on year. The sharpest decline was in the planned maintenance costs of the Estonian wind farms (a decrease of €0.1m).
In Q2 2022, our wind farm operators' (Enefit Wind OÜ and Enefit Wind UAB) operating expenses (excluding D&A and balancing energy purchases) per installed capacity (MW) decreased by 1.7% year on year to €9k. Cost savings derived from signing of new maintenance contracts counterbalanced natural indexation-related growth in maintenance expenses.
The EBITDA of the Wind energy segment grew by 56% year on year, increasing from €13.2m to €20.5m. Growth was driven by high electricity prices and supported by stable operating expenses.
35% Share of EBITDA Q2 2022
Enefit Green Q2 2022 interim report 19
The Cogeneration segment comprises the Iru, Paide, Valka and Broceni CHP facilities and a pellet factory.
The Cogeneration segment's electricity production in Q2 2022 was 47 GWh, which is 6% higher than a year earlier (Q2 2021: 44 GWh). In addition to the market price of electricity, the Iru and Paide facilities receive renewable energy support of 53.7 €/MWh for electricity produced from renewable sources and efficient cogeneration support of 32 €/MWh for electricity produced from non-renewable sources in efficient cogeneration mode. The Valka CHP facility has been assigned a fixed electricity price of 105.6 €/MWh. The Broceni CHP facility lost its fixed electricity price of 143.6 €/MWh retrospectively from March 2021 due to the decision of the BVKB made in October 2021. Enefit Green's subsidiary SIA Technological Solutions has challenged the BVKB's decision in court. In June the court ruled against SIA Technological Solutions but in July SIA Technological Solutions filed an appeal and the dispute continues. From November 2021 until the final ruling on the matter is made, the Broceni CHP facility will sell electricity at the prices of the NP Latvia price area.
Our cogeneration facilities' availability in Q2 was slightly lower (97.4%) than in Q1 but considerably higher than in Q2 2021 (93.5%).
Supported by high market prices in the NP Estonia price area the segment's Q2 average implied captured electricity price grew by 80% year on year, rising to 175 €/MWh.
* (Total electricity revenues - balancing energy purchase + renewable energy support)/production
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Heat production did not change significantly compared with a year earlier (+4%) because the weather conditions of the two periods were similar.
In Q2 2022, the average sales price of heat energy per MWh increased by 8% year on year, rising to around 12 €/MWh. The price cap for heat produced by the Iru facility was the same in the reporting and the comparative period, i.e. 7.98 €/MWh, whereas the price of heat produced by the Paide and Valka facilities grew slightly due to an increase in the cost of biomass.
The segment's total revenues decreased year on year, declining to €16.3m. Revenue from gate fees increased through growth in waste received by €0.1m to €3.9m, heat sales revenue grew due to larger output by €0.1m to €1.6m and other revenue grew by €0.1m to €0.7m.
The strongest year-on-year growth was in electricity sales revenue, which grew by €4.4m to €7.4m, driven by high market prices and the cessation of the offsetting of intraday NP transactions. Electricity production support remained stable at €1.5m. However, pellet sales revenue for the period decreased by €5.7m to €1.2m because only 7 thousand tonnes of pellets were sold compared with 55 thousand tonnes in the same period last year. The sharp decline is attributable to the shift in timing of a significant previously agreed pellet supply transaction, from June to July.
The change in inventories of finished goods (pellets) reduced operating expenses for the reporting period by €4.6m because pellet output exceeded sales. In the comparative period, pellet sales exceeded output, which increased operating expenses by €3.2m. The segment's variable costs grew by €3.6m, rising from €4.2m to €7.8m. Although electricity production volumes remained more or less at the same level as a year earlier, pellet production grew by 35% (36 thousand tonnes compared with 26 thousand tonnes a year earlier). Also, the prices of raw materials and supplies as well as electricity purchased increased significantly. Fixed costs remained relatively stable, increasing from €2.2m to €2.3m (+5%).
The segment's Q2 EBITDA grew by 44% year on year, rising by €3.3m to €10.8m. Growth was mainly underpinned by an increase in the EBITDA of the Iru and Broceni facilities due to a higher market price of electricity.
The Solar energy segment comprises the group's operating solar farms, solar farm developments and solar services
The Solar energy segment produced 13.1 GWh of solar power in Q2 2022, 2.9 GWh (29%) more than in Q2 2021 (10.1 GWh). Availabilities of the solar farms were stable on a high level (99.9% compared to 99.8% in the comparative period).
Our solar farms in Estonia are partly exposed to movements in the market price of electricity. Our solar farms in Poland sell electricity at fixed prices which are adjusted for inflation on an annual basis – the price for Q2 2022 was 430- 460 zloty/MWh (92-99 €/MWh at the three-month average zloty exchange rate).
The total revenues of operating solar farms grew by €0.6m, supported by larger quantities sold and a higher average sales price. Q2 revenue from solar services grew by 493% year on year to €2.2m. Strong year-on-year growth is attributable to the expansion of the service to Latvia.
The Solar energy segment's EBITDA for Q2 2022 was €1.2m, €0.3m up on a year earlier. EBITDA grew through growth in the production of solar energy and
Solar services have a low EBITDA margin and their effect on the segment's EBITDA is immaterial. Therefore, we have decided that from August we will discontinue the provision of the turnkey solar service. The provision of the service will be taken over by Enefit Connect, a fellow subsidiary of the Eesti Energia group. Enefit Green is going to focus on the development and construction of solar farms that offer higher returns and will continue to provide the Solar-as-a-Service solution whereby it retains ownership of the
EBITDA
higher prices.
production assets.
Share of EBITDA Q2 2022
4%
Operating parks' revenues
The group's Q2 capital expenditures grew by €4.8m year on year, rising to €40.9m. Growth resulted from development investments, which extended to €39.9m. Out of the total, €37.8m was invested in the construction of three wind farms: €24.9m in the Akmene wind farm, €6.9m in the Šilale 2 wind farm and €6.0m in the Tolpanvaara wind farm. The largest investment in solar power was €1.1m, which was invested in the execution phase of the Purtse solar farm. Baseline investments (expenditure on the improvement and maintenance of existing assets) amounted to €1m in Q2 2022 compared with €1.8m in the same period last year and were mainly related to operating turbines. Baseline investments may differ significantly quarter by quarter because they depend on the wind turbines' repair and maintenance needs during the period.
40.9
The group's main sources of debt capital are investment loans and credit facilities (liquidity loans) raised from regional commercial banks, the Nordic Investment Bank (NIB) and the European Bank for Reconstruction and Development (EBRD).
The amortised cost of the group's interest-bearing and debt-like liabilities at 30 June 2022 was €156.3m (€123.5m at 31 December 2021). Bank loans accounted for €150.6m of the total, including a loan of €7.0m received in Polish zloty.
In Q2 2022, Enefit Green drew down a previously raised loan of €40m, which will mature in December 2028. The remaining balance of the group's undrawn investment and liquidity loans at 30 June 2022 was €180m.
Enefit Green has signed three revolving credit facility agreements of €50m in total, which mature in the period 2024–2026 (all credit limits were undrawn at 30 June 2022). The investment loans of €130m which will mature in September 2026 and January 2034 will be drawn down in September 2022. The average interest rate of bank loans drawn down at 30 June 2022 was 1.30% (31 December 2021: 1.17%).
In March and April, Enefit Green signed interest rate swap agreements in respect of investment loans of €170m which were undrawn at the time, fixing their interest rates in the range of 1.049% to 1.125%
The group's loan and credit agreements include covenants which set certain limits to the group's consolidated financial indicators. At 30 June 2022, the group was in compliance with all loan terms and conditions, including the covenants.
The group's management determines the maximum level of debt by reference to financial leverage and the net debt to EBITDA ratio.
| € million | 31 Dec 2021 |
30 June 2022 |
|---|---|---|
| Debt and debt-like items | 123.5 | 155.2 |
| Minus cash and cash equivalents |
(80.5) | (90.8) |
| Net debt | 43.0 | 64.4 |
| Equity | 633.6 | 651.8 |
| Invested capital | 676.6 | 716.2 |
| EBITDA (LTM) | 121.5 | 151.4 |
| Operating profit (LTM) | 83.3 | 113.1 |
| Net profit (LTM) | 79.7 | 106.5 |
| Financial leverage (1) | 6% | 9% |
| Net debt/LTM EBITDA |
0.35 | 0.43 |
| Return on invested capital (2) |
12.3% | 15.8% |
| Return on equity (3) |
12.6% | 16.3% |
(1) Financial leverage = net debt / (net debt + equity)
(2) Return on invested capital = LTM operating profit / (net debt + equity)
(3) Return on equity = LTM net profit / equity
The group has identified two main market and financial risks that require active management:
Price risk of electricity sales, which is mitigated by a combination of:
A more detailed overview of the measures is provided in the group's annual report for 2021. The graph below provides an overview of the next few years' forecast production volumes and their coverage with risk mitigation measures as at 30 June 2022.
| 2022 | 2023 | 2024 | 2025 | 2026 | 2022-2026 total* |
|
|---|---|---|---|---|---|---|
| Share of production covered by FiT/CfD | 37% | 28% | 15% | 9% | 6% | 14% |
| Volume (GWh) | 462 | 421 | 393 | 327 | 286 | 1,888 |
| FiT/CfD weighted average price, EUR/MWh | 83.1 | 81.9 | 81.6 | 80.7 | 78.7 | 81.4 |
| Share of production covered by FiP | 42% | 32% | 19% | 7% | 2% | 14% |
| Volume (GWh) | 523 | 492 | 501 | 268 | 99 | 1,883 |
| FiP weighted average price, EUR/MWh (added to the market price) |
50.4 | 50.1 | 50.2 | 50.6 | 53.7 | 50.5 |
| Share of production covered by PPAs | 4% | 33% | 37% | 30% | 25% | 28% |
| Volume (GWh) |
55 | 510 | 976 | 1,122 | 1,123 | 3,786 |
| PPA weighted average price, EUR/MWh | 77.0 | 54.0 | 48.9 | 48.4 | 48.4 | 49.7 |
* PPAs cover 3039 GWh of electricity produced 2027-2033 with average price of 47.7 EUR/MWh
25
| € thousand | Note | Q2 2022 | Q2 2021 | 1H 2022 | 1H 2021 |
|---|---|---|---|---|---|
| Revenue | 9 | 41,505 | 29,408 | 99,646 | |
| Renewable energy support and other income | 10 | 5,773 | 6,833 | 14,352 | |
| Change in inventories of finished goods and work-in-progress | 4,646 | (3,158) | 2,579 | ||
| Raw materials, consumables and services used | 11 | (16,365) | (9,508) | (30,499) | (19,086) |
| Payroll expenses | (2,169) | (1,477) | (4,612) | ||
| Depreciation, amortisation and impairment | (9,644) | (9,547) | (19,292) | (19,126) | |
| Other operating expenses | (2,645) | (1,772) | (5,150) | ||
| OPERATING PROFIT | 21,101 | 10,778 | 57,025 | ||
| Finance income | 1,117 | 50 | 1,525 | ||
| Finance costs | (626) | (1,022) | (1,188) | ||
| Net finance costs | 491 | (972) | 337 | ||
| Profit (loss) from associates under the equity method | (76) | (58) | (72) | ||
| PROFIT BEFORE TAX | 21,516 | 9,748 | 57,290 | ||
| Corporate income tax expense | (4,592) | (328) | (5,441) | ||
| PROFIT FOR THE PERIOD | 16,924 | 9,420 | 51,849 | ||
| Basic and diluted earnings per share | |||||
| Weighted average number of shares, thousand |
6 | 264,276 | 4,793 | 264,276 | |
| Basic earnings per share, € |
6 | 0.06 | 1.97 | 0.20 | |
| Diluted earnings per share, € |
6 | 0.06 | 1.97 | 0.20 | |
| Basic earnings per share based on post-IPO number of shares |
|||||
| Post-IPO number of shares, thousand |
6 | 264,276 | 264,276 | 264,276 | 264,276 |
| Basic earnings per share, € |
6 | 0.06 | 0.04 | 0.20 |
| € thousand | Note | Q2 2022 | Q2 2021 | 1H 2022 |
|---|---|---|---|---|
| PROFIT FOR THE PERIOD | 16,924 | 9,420 | 51,849 | |
| Other comprehensive income | ||||
| Items that may be reclassified subsequently to profit or loss: | ||||
| Revaluation of hedging instruments in a cash flow hedge | 5,7 | 5,586 | (2,981) | 6,524 |
| Exchange differences on the translation of foreign operations | 7 | (106) | 326 | (244) |
| Other comprehensive income/(loss) for the period | 5,480 | (2,655) | 6,280 | |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 22,404 | 6,765 | 58,129 |
| € thousand | Note | 30 June 2022 | 31 Dec 2021 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | 4 | 647,634 | 612,503 |
| Intangible assets | 68,578 | 68,239 | |
| Right-of-use assets | 4,298 | 2,750 | |
| Prepayments | 4 | 20,030 | 20,710 |
| Deferred tax assets | 734 | 442 | |
| Investments in associates | 427 | 578 | |
| Derivative financial instruments | 5,7 | 6,703 | - |
| Long-term receivables | 40 | 78 | |
| Total non-current assets | 748,444 | 705,300 | |
| Current assets | |||
| Inventories | 16,267 | 9,529 | |
| Trade and other receivables and prepayments | 23,479 | 22,373 | |
| Cash and cash equivalents | 90,845 | 80,454 | |
| Derivative financial instruments | 5 | 12 | - |
| Total current assets | 130,603 | 112,356 | |
| Total assets | 879,047 | 817,656 |
| € thousand | Note | 30 June 2022 | 31 Dec 2021 |
|---|---|---|---|
| EQUITY | |||
| Equity and reserves attributable to equity holder of the parent |
|||
| Share capital | 264,276 | 264,276 | |
| Share premium | 6 | 60,351 | 60,351 |
| Statutory reserve capital | 3,259 | 479 | |
| Other reserves | 5,7 | 158,317 | 151,793 |
| Foreign currency translation reserve | 7 | (1,209) | (965) |
| Retained earnings | 166,836 | 157,673 | |
| Total equity | 651,830 | 633,607 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Borrowings | 8 | 132,297 | 93,884 |
| Goverment grants | 7,344 | 7,458 | |
| Non-derivative contract liability | 5,7 | 23,207 | 23,207 |
| Deferred tax liabilities | 12,384 | 12,568 | |
| Other long-term liabilities | 3,000 | 3,000 | |
| Provisions | 12 | 13 | |
| Total non-current liabilities | 178,244 | 140,130 | |
| Current liabilities | |||
| Borrowings | 8 | 22,936 | 29,572 |
| Trade and other payables | 25,791 | 14,291 | |
| Provisions | 55 | 56 | |
| Derivative financial instruments | 5 | 191 | - |
| Total current liabilities | 48,973 | 43,919 | |
| Total liabilities | 227,217 | 184,049 | |
| Total equity and liabilities | 879,047 | 817,656 |
| € thousand | Note | Q2 2022 | Q2 2021 | 1H 2022 |
|---|---|---|---|---|
| Cash flows from operating activities | ||||
| Cash generated from operations | 12 | 22,898 | 17,516 | 68,915 |
| Interest and loan fees paid | (495) | (852) | (997) | |
| Interest received | 3 | - | 6 | |
| Corporate income tax paid | (1,001) | (391) | (1,501) | |
| Net cash generated from operating activities | 21,405 | 16,273 | 66,423 | |
| Cash flows from investing activities | ||||
| Purchase of property, plant and equipment and intangible assets |
4 | (34,739) | (30,806) | (47,048) |
| Proceeds from sale of property, plant and equipment | - | 23 | 3 | |
| Proceeds from repurchased of shares and liguidation of associate |
718 | - | 718 | |
| Net cash used in investing activities | (34,021) | (30,783) | (46,327) | |
| Cash flows from financing activities | ||||
| Change in overdraft(net) | - | 33,312 | - | |
| Received bank loans | 8 | 40,000 | 10,000 | 40,000 |
| Repayments of bank loans | 8 | (5,027) | (9,676) | (9,670) |
| Repayments of leases | 8 | (47) | (48) | (129) |
| Dividends paid | (39,906) | (27,100) | (39,906) | |
| Net change in an intragroup liablity | - | (55) | - | |
| Net cash used in financing activities | (4,980) | 6,433 | (9,705) | |
| Net cash flows | (17,596) | (8,077) | 10,391 | |
| Cash and cash equivalents at the beginning of the period | 108,441 | 19,217 | 80,454 | |
| Cash and cash equivalents at the end of the period | 90,845 | 11,140 | 90,845 | |
| Net increase / (-) decrease in cash and cash equivalents | (17,596) | (8,077) | 10,391 |
| 1H 2022 | 1H 2021 |
|---|---|
| 68,915 | 43,897 |
| (997) | (1, 577) |
| 6 | 23 |
| (1, 501) | (394) |
| 66,423 | 41,949 |
| (47, 048) | (38, 747) |
| 3 | 23 |
| 718 | |
| (46, 327) | (38, 724) |
| 33,312 | |
| 40,000 | 10,000 |
| (9,670) | (18, 962) |
| (129) | (109) |
| (39,906) | (27, 100) |
| (9,705) | (2,859) |
| 10,391 | 366 |
| 80,454 | 10,774 |
| 90,845 | 11,140 |
| 10.391 | 366 |
| € thousand | Share capital | Share premium |
Statutory capital reserve |
Other reserves |
Foreign currency translation reserve |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|---|
| Equity as at 31 Dec 2020 | 4,794 | - | 479 | 400,000 | (834) | 105,111 | 509,550 |
| Profit for the period | - | - | - | - | - | 25,033 | 25,033 |
| Other comprehensive income for the period | - | - | - | -2 980 | 93 | - | (2,887) |
| Total comprehensive income(loss) for the period | - | - | - | -2 980 | 93 | 25,033 | 22,146 |
| Fair value on initial recognition of derivative financial instrument transactions conducted with the parent entity |
- | - | - | (10,781) | - | - | (10,781) |
| Dividends paid | - | - | - | - | - | (27 100) | (27 100) |
| Equity as at 30 June 2021 | 4,794 | - | 479 | 386,239 | (741) | 103,044 | 493,815 |
| Equity as at 31 Dec 2021 | 264,276 | 60,351 | 479 | 151,793 | (965) | 157,673 | 633,607 |
| Profit for the period | - | - | - | - | - | 51,849 | 51,849 |
| Other comprehensive income for the period | - | - | - | 6,524 | (244) | - | 6,280 |
| Total comprehensive income(loss) for the period | - | - | - | 6,524 | (244) | 51,849 | 58,129 |
| Increasing the statutory capital reserve | - | - | 2,780 | - | - | (2,780) | - |
| Dividends paid | - | - | - | - | - | (39,906) | (39,906) |
| Total comprehensive income(loss) for the period | - | - | 2,780 | - | - | (42,686) | (39,906) |
| Equity as at 30 June 2022 | 264,276 | 60,351 | 3,259 | 158,317 | (1,209) | 166,836 | 651,830 |
31
These condensed consolidated interim financial statements (interim financial statements) have been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting and as they do not include all the notes of the type normally included in an annual financial report they should be read in conjunction with the group's annual financial statements as at and for the year ended 31 December 2021, which have been prepared in accordance with IFRS as adopted by the European Union.
These interim financial statements have been prepared and presented using the same accounting policies as those applied in the preparation of the group's annual financial statements as at and for the year ended 31 December 2021.
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, and income and expenses. Actual results may differ from those estimates. Significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were mainly the same as those described in the group's annual financial statements as at and for the year ended 31 December 2021.
These interim financial statements have not been audited or otherwise checked by auditors.
Through its activities, the group is exposed to various financial risks: market risk (including currency risk, fair value and cash flow interest rate risk and price risk), credit risk and liquidity risk. Condensed interim financial statements do not contain all the information about the group's financial risk management which is required to be disclosed in the annual financial statements. Therefore, these interim financial statements should be read in conjunction with group's annual financial statements as at and for the year ended 31 December 2021.
The group's interest rate risk management has changed compared with the previous financial year-end in connection with the conclusion of interest rate swap (IRS) agreements at the end of March 2022. Interest rate risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market interest rates. Cash flow interest rate risk arises from the group's floating-rate borrowings and is the risk that finance costs will grow when interest rates increase. Interest rate risk is mitigated partly by raising debt at fixed interest rates and partly by hedging: fixing the interest expenses of floating-rate borrowings raised with IRS instruments. Information on IRS transactions is disclosed in note 5.
The group regards equity and borrowings (debt) as capital. In order to maintain or change its capital structure, the group may change the dividend distribution rate, repay capital contributions to owners, issue new shares or sell assets to reduce its financial liabilities, and raise debt capital in the form of loans. On raising loans, management assesses the group's ability to service the principal and interest payments with operating cash flow and, where necessary, starts timely negotiations to refinance existing loans before their maturity. For further information about financing ratios and borrowings, see in the Financing section on page of management report.
Enefit Green's management assesses the group's financial performance and makes management decisions on the basis of segment reporting where the group's reportable operating segments have been identified by reference to the main business lines of its business units. All production units operated by the group have been divided into operating segments based on the way they produce energy. Other internal structural units have been divided between operating segments based on their core activity.
The group has identified three main business lines, which are presented as separate reportable segments, and less significant business activities and functions, which are presented within Other:
The segment Other comprises activities whose individual contribution to the group's revenue and EBITDA is insignificant. None of those activities exceeds the quantitative thresholds for separate disclosure.
Segment revenues include revenues from external customers only, generated by the sale of respective products or services. As the segments are based on externally sellable products and services, there are no intragroup transactions between segments to be eliminated.
Management assesses segment results mainly on the basis of EBITDA, but also monitors operating profit. Finance income and costs, income tax expense and profits and losses on investments in equity-accounted investees are not allocated to operating segments.
The group's non-current assets are allocated to segments based on their purpose of use. Liabilities and current assets are not allocated to segments.
| € thousand | Q2 2022 | Q2 2021 | 1H 2022 | 1H 2021 |
|---|---|---|---|---|
| REVENUE | ||||
| Wind energy | 22,832 | 12,535 | 57,448 | 27,835 |
| Cogeneration | 14,762 | 15,554 | 36,879 | 33,745 |
| Solar energy | 3,782 | 1,041 | 5,060 | 1,500 |
| Total reportable segments | 41,375 | 29,129 | 99,388 | 63,081 |
| Other | 130 | 279 | 258 | 442 |
| Total | 41,505 | 29,408 | 99,646 | 63,522 |
| RENEWABLE ENERGY SUPPORT AND OTHER INCOME | ||||
| Wind energy | 4,280 | 5,064 | 11,118 | 11,587 |
| Cogeneration | 1,530 | 1,545 | 3,221 | 2,854 |
| Solar energy | (45) | 233 | (13) | 280 |
| Total reportable segments | 5,765 | 6,842 | 14,326 | 14,720 |
| Other | 8 | (10) | 26 | 166 |
| Total | 5,773 | 6,833 | 14,352 | 14,886 |
| EBITDA | ||||
| Wind energy | 20,517 | 13,182 | 55,237 | 31,233 |
| Cogeneration | 10,809 | 7,509 | 22,892 | 16,631 |
| Solar energy | 1,206 | 755 | 1,826 | 870 |
| Total reportable segments | 32,532 | 21,447 | 79,955 | 48,734 |
| Other | (1,786) | (1,122) | (3,637) | (2,349) |
| Total | 30,746 | 20,325 | 76,318 | 46,385 |
| Depreciation, amortisation and impairment losses | 9,644 | 9,547 | 19,293 | 19,126 |
| Finance costs | 491 | (972) | 337 | (1,431) |
| Profit (loss) from associates under the equity method | 76 | 58 | 72 | 36 |
| Profit before tax | 21,516 | 9,748 | 57,290 | 25,793 |
| OPERATING PROFIT | ||||
| Wind energy | 13,676 | 6,390 | 41,584 | 17,596 |
| Cogeneration | 8,259 | 4,974 | 17,760 | 11,561 |
| Solar energy | 978 | 580 | 1,371 | 522 |
| Total reportable segments | 22,914 | 11,944 | 60,715 | 29,679 |
| Other | (1,812) | (1,166) | (3,689) | (2,419) |
| Total | 21,101 | 10,778 | 57,025 | 27,259 |
| 1H 2022 | 1H 2021 |
|---|---|
| 57,448 | 27,835 |
| 36,879 | 33,745 |
| 5,060 | 1,500 |
| 99,388 | 63.081 |
| 258 | 442 |
| 99.646 | 63.522 |
| 11,118 | 11,587 |
| 3,221 | 2,854 |
| (13) | 280 |
| 14,326 | 14,720 |
| 26 | 166 |
| 14.352 | 14,886 |
| 55,237 | 31,233 |
| 22,892 | 16,631 |
| 1,826 | 870 |
| 79.955 | 48,734 |
| (3,637) | (2, 349) |
| 76,318 | 46,385 |
| 19,293 | 19,126 |
| 337 | (1, 431) |
| 72 | 36 |
| 57.290 | 25,793 |
| 41,584 | 17,596 |
| 17,760 | 11,561 |
| 1,371 | 522 |
| 60,715 | 29,679 |
| (3,689) | (2, 419) |
| 57 025 | 27 259 |
| € thousand Q2 2022 Q2 2021 |
1H 2022 |
|---|---|
| INVESTMENTS IN NON-CURRENT ASSETS | |
| Wind energy 38,761 34,875 |
50,961 |
| Cogeneration 464 969 |
613 |
| Solar energy 1,290 185 |
2,451 |
| Total reportable segments 40,514 36,029 |
54,024 |
| Other 399 48 |
636 |
| Total 40,914 36,077 |
54,660 |
| 1H 2022 | 1H 2021 |
|---|---|
| 50,961 | 41,610 |
| 613 | 1,609 |
| 2,451 | 670 |
| 54,024 | 43,889 |
| 636 | 86 |
| 54,660 | 43,975 |
| € thousand | 30 June 2022 |
31 Dec 2021 |
|---|---|---|
| NON-CURRENT ASSETS | ||
| Wind energy | 573,833 | 535,000 |
| Cogeneration | 136,790 | 141,264 |
| Solar energy | 27,461 | 25,691 |
| Total reportable segments | 738,084 | 701,955 |
| Other | 3,658 | 3,345 |
| Total | 741,742 | 705,300 |
| € thousand | Land | Buildings | Construction | Plant and equipment |
Construction in progress |
Prepayments | Total |
|---|---|---|---|---|---|---|---|
| Property, plant and equipment as at 31 Dec 2021 |
|||||||
| Cost | 39,944 | 25,415 | 42,067 | 744,494 | 33,883 | 20,710 | 906,513 |
| Accumulated depreciation | - | (9,745) | (23,746) | (239,791) | (18) | - | (273,300) |
| Net book amount | 39,944 | 15,670 | 18,321 | 504,703 | 33,865 | 20,710 | 633,213 |
| Total property, plant and equipment as at 31 Dec 2021 |
39,944 | 15,670 | 18,321 | 504,703 | 33,865 | 20,710 | 633,213 |
| Movements in the reporting period | |||||||
| Purchases of property, plant and equipment | - | - | - | 133 | 52,620 | 555 | 53,308 |
| Exchange differences | - | (3) | (3) | (194) | (3) | - | (203) |
| Transfers | 23 | 135 | 3 | 4,289 | (3,215) | (1,235) | - |
| Depreciation charge and write-downs | - | (326) | (622) | (17,706) | - | - | (18 654) |
| Total movements during 1H 2022 |
23 | (194) | (622) | (13,478) | 49,402 | (680) | 34,451 |
| Property, plant and equipment as at 30 June 2022 |
|||||||
| Cost | 39,967 | 25,547 | 42,067 | 748,722 | 83 285 | 20,030 | 959,618 |
| Accumulated depreciation | - | -10,071 | -24,368 | -257,497 | -18 | - | -291,954 |
| Total property, plant and equipment as at 30 June 2022 |
39,967 | 15,476 | 17,699 | 491,225 | 83,267 | 20,030 | 667,664 |
At 30 June 2022, the the group had committed to capital expenditures of €182,701k (31 December 2021: €194,691k).
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently measured at their fair value. The method for recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if it is, the nature of the item being hedged. As of 30 June 2022, the group used cash flow hedging instruments in order to hedge the hedge the exposure to interest rate risk resulting from floating-rate borrowings.
The group documents at the inception of the transaction the relationship between the hedging instruments and the hedged items, and also its risk management objectives and strategy for undertaking various hedge transactions. The group also documents whether there is an economic relationship between the derivatives that are used in hedging transactions and the changes in the cash flows of the hedged items. At inception of the hedge, the group documents the sources of hedge ineffectiveness. Hedge ineffectiveness is quantified in each reporting period and recognised in profit or loss.
The full fair value of hedging derivatives is classified as a non-current asset or liability when the remaining maturity of the hedging instrument is more than 12 months and as a current asset or liability when the remaining maturity of the hedging instrument is less than 12 months.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss as a net amount within other operating income or operating expenses. The day one fair value of derivative instruments entered into with the parent is recognised directly in equity when its economic substance is a distribution to the parent of resources embodying economic benefits.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for instance, when the forecast sale that is hedged takes place).
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately recognised in other operating income or operating expense in profit or loss.
The different levels for the determination of the fair value of financial instruments have been defined as follows:
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates. An instrument is included in level 3 if one or more significant inputs are not based on observable market data.
During 2021 the group used cash flow hedging instruments in order to hedge the exposure to variability in the price of electricity.
A part of the renewable electricity production assets operated by the group which is not subject to a subsidy scheme under a feed-in-tariff is exposed to the risk of electricity price fluctuations as the electricity is sold on the Nord Pool power exchange. To hedge the risk of electricity price volatility, the group has used base load swap derivative contracts. Under the given derivatives, the group is the payer of the floating price and the counterparty the payer of the fixed price.
Transactions designed to hedge the risk of variability in electricity prices are designated as hedging instruments under cash flow hedges. The underlying hedged item is the market price risk of highly probable forecast renewable electricity sales transactions that are exposed to market price fluctuations. The hedge ratio of the hedging relationships is one to one.
The fair values of the level 3 instruments have been estimated using a combination of market prices, mathematical models, and assumptions based on historical and forward-looking market and other relevant data. The most significant input of the fair value of the derivatives is the long-term electricity price. The group determined the underlying price for the calculation of fair value based on a long-term price curve for the Lithuanian and Estonian electricity markets, which was between €34/MWh and €59/MWh. Derivative financial instruments were remeasured to fair value as at 17 August 2021.
At the trade date the fair value of derivatives designated as hedging instruments was negative at €(10,781)k, which was recognised directly in equity as it reflected a transaction with the parent, Eesti Energia AS. The balance at 30 June 2022 was €(10,781)k.
Enefit Green AS and its parent Eesti Energia AS entered into an EFET General Agreement Concerning the Delivery and Acceptance of Electricity (EFET General Agreement) on 17 August 2021, simultaneously terminating all open derivative contracts existing between them. By signing the agreement, the parties entered into a fixed-price physical electricity sales contract for the period 2023–2027. The contract was entered into for the same quantities of electricity and at the same fixed prices as had been agreed for the originally recognised derivatives.
The group continued to apply hedge accounting to the open derivatives position until 17 August 2021, recognising changes in the fair value of the derivatives until the date of signature of the EFET General Agreement. The negative value of the derivative financial instruments classified as liabilities increased from €(10,781)k at the trade date to €(23,207)k at 31 December 2021 due to the change in the electricity price in the period from the trade date to 17 August 2021. The negative fair value change of €(12,426)k has been recognised in other comprehensive income as no material sources of hedge ineffectiveness were identified in the hedging relationships in the period between trade date and 17 August 2021. Since the derivative financial instruments had been measured to fair value by the date of conclusion of the EFET General Agreement, (measurement date 17 August 2021), their value, which has been classified as a liability, will not change before the arrival of the supply period determined in the EFET General Agreement, which is 2023– 2027. As at 30 June 2022 the balance was €(12,426)k.
The EFET General Agreement meets the own use exemption and, therefore, is not considered to be a financial instrument that is required to be measured at fair value under IFRS 9. Rather, it is to be accounted for as an executory contract under IFRS 15 Revenue from Contracts with Customers with the revenue being recognised at a fixed per-unit value only when the delivery of electricity takes place in the years 2023–2027. No gains or losses were recognised at the date the derivative contracts were replaced with the EFET General Agreement. Upon entering into the EFET General Agreement, the carrying amount of the derivatives classified as a liability at that date, which was €(23,207)k, was reclassified as a non-derivative liability, which will gradually increase recognised revenue until the EFET General Agreement is fulfilled. Such an increase in revenue will be partially offset by the reclassification of the €(12,426)k accumulated in the electricity cash flow hedge reserve to profit or loss due to the discontinuance of hedge accounting. The amount is the difference between the fair value of the derivative financial instruments at 17 August 2021 of €(23,207)k and the trade date fair value of the derivatives of €(10,781)k, which is recognised directly in equity. See note 7 for further information.
At 30 June 2022, the group had three interest rate swap agreements in place to hedge the exposure to the interest rate risk of three loans (no interest rate swaps in the comparative period):
─ An interest rate swap with a notional amount of €80,000k whereby the group receives interest at a rate equal to 6 month EURIBOR and pays a fixed rate of interest of 1.1%. The swap is designed to hedge the exposure to the interest rate risk of a floating-rate loan to be taken into use in the future. The loan linked to the interest rate swap is expected to be paid out on 30 September 2022.
─ An interest rate swap with a notional amount of €50,000k whereby the group receives interest at a rate equal to 3 month EURIBOR and pays a fixed rate of interest of 1.049%. The swap is designed to hedge the exposure to the interest rate risk of a floating-rate loan to be taken into use in the future. The loan linked to the interest rate swap is expected to be paid out on 24 September 2022.
─ An interest rate swap with a notional amount of €40,000k whereby the group receives interest at a rate equal to 6 month EURIBOR and pays a fixed rate of interest of 1.125%. The swap is designed to hedge the exposure to the interest rate risk of a floating-rate loan taken into use on 30 June 2022.
The interest rate swaps have been designated as hedging instruments in cash flow hedges. There is an economic relationship between the hedging instruments (interest rate swaps) and the hedged items (the loan agreements) because at 30 June 2022 the main terms of the interest rate swaps matched the terms of the loans (i.e. their notional amounts, currencies, and maturity, payment and other dates). The forward hedges have a hedge ratio of 1:1. To test the hedge effectiveness, the group uses the hypothetical derivative method and compares the changes in the fair values of the interest rate swaps against the changes in fair values of the loan agreements.
Hedge ineffectiveness can arise from the following sources:
─ A change in the credit risk of the group or the counterparty of the interest rate swap. The effect of credit risk may cause an imbalance in the economic relationship between the hedging instrument and the hedged item so that the values of the hedging instrument and the hedged item no longer move in opposite directions. According to the assessment of the group's management, it is highly unlikely that credit risk will cause significant hedge effectiveness.
At 30 June 2022, the effect of hedging instruments on the group's statement of financial position was as follows:
| € thousand | Notional amount |
Carrying amount (Asset) |
Carrying amount (Liability) |
Line item in the statement of financial position |
Change in fair value* | Hedge ineffectiveness recognised in profit or loss |
Amounts transferred from hedge reserve to profit or loss |
|---|---|---|---|---|---|---|---|
| Interest rate swaps | 170,000 | 6,715 | 191 | Derivatives | 5,586 | - | - |
* Recognised in other comprehensive income
At 30 June 2022, the effect of the hedged items on the group's statement of financial position was as follows:
| € thousand | Change in fair value used to measure ineffectiveness |
Amounts recognised in hedge reserve |
Amounts recognised in hedge reserve to which hedge accounting is no longer applied |
|---|---|---|---|
| Floating rate loans | 6,524 | 6,524 | - |
Fair value has been measured based on a model from a third party, which was supported by the confirmation of the counterparty to the trade.
In its internal calculations, the group determines the fair value of interest rate swaps by estimating the present value of the expected future cash flows based on the interest rate curves of EURIBOR observable in the market. The fair value measurement takes into account the credit risk of the group and the counterparty, which is calculated based on current credit spreads derived from credit default swaps or bond prices. The fair value of interest rate swaps qualifies as a level 2 measurement.
At 30 June 2022, the number of registered shares Enefit Green AS amounted to 264,276,232 (30 June 2021: 4,793,473 shares). During the previous year the number of shares has changed due to bonus issue in August 2021 (225 000 000 shares added) and due to the IPO in October 2021 (34,482,527 shares issued).
Basic earnings per share (EPS) have been calculated by dividing profit for the period attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the period. Since the group has no potential ordinary shares, diluted earnings per share for all periods presented equal basic earnings per share.
The company's number of shares changed significantly during the year due to both a bonus issue and the sale of new shares. Therefore, in addition to presenting EPS consistent with IFRS requirements as described above, it may be informative to analyse EPS calculated based on the number of shares outstanding at the end of the reporting period.
The figure is an alternative performance measure (APM), which is not defined in IFRS and may not be comparable with the APMs of other companies. The group believes that APMs provide the readers of the consolidated financial statements with additional useful information about the group's financial performance. The APMs should be viewed as supplemental to, and not as a substitute for, the measures presented in the consolidated financial statements in accordance with IFRS.
According to the decision of the Group's general meeting of shareholders (held on 17 May 2022), dividends were paid out on June 8, 2022 in the amount of €39,906k (0,151 euros per share).
| Unit | Q2 2022 | Q2 2021 | 1H 2022 | 1H 2021 | |
|---|---|---|---|---|---|
| Profit attributable to owners of the parent |
€ thousand | 16,924 | 9,420 | 51,849 | 25,032 |
| Weighted average number of shares |
thousand | 264,276 | 4,793 | 264,276 | 4,793 |
| Basic earnings per share |
€ | 0.06 | 1.97 | 0.20 | 5.22 |
| Diluted earnings per share |
€ | 0.06 | 1.97 | 0.20 | 5.22 |
| Unit | Q2 2022 | Q2 2021 | 1H 2022 | 1H 2021 | |
|---|---|---|---|---|---|
| Post-IPO number of shares |
thousand | 264,276 | 264,276 | 264,276 | 264,276 |
| Basic earnings per share |
€ | 0.06 | 0.04 | 0.20 | 0.09 |
| € thousand | 30 June 2022 | 31 Dec 2021 |
|---|---|---|
| Other reserves at the beginning of the period | 150,828 | 399,165 |
| of which currency translation reserve at the beginning of the period | (965) | (835) |
| of which electricity cash flow hedge reserve | (12,426) | - |
| of which reserve related to on initial recognition of derivative financial instruments transaction conducted with the parent entity |
(10,781) | - |
| of which other reserves | 175,000 | 400,000 |
| Increas of the share capital through a bonus issue | - | (225,000) |
| Change in fair value of cash flow hedges | - | (12,426) |
| of which electricity cash flow hedges | - | (12,426) |
| Fair value on initial recognition of derivative financial instruments transaction conducted with the parent entity |
- | (10,781) |
| Interest rate swaps | 6,524 | - |
| Currency translation differences attributable to foreign subsidiaries | (244) | (130) |
| Other reserves at the end of the period | 157,108 | 150,828 |
| of which currency translation reserve at the beginning of the period | (1,102) | (965) |
| of which interest rate swaps | 6,524 | - |
| of which electricity cash flow hedge reserve | (12,426) | (12,426) |
| of which reserve related to an initial recognition of derivative financial instruments transaction conducted with the parent entity |
(10,781) | (10,781) |
| of which other reserves | 175,000 | 175,000 |
8. Borrowings at amortised cost
| Short-term borrowings | Long-term borrowings | ||||
|---|---|---|---|---|---|
| € thousand | Bank loans | Lease liabilities | Bank loans | Lease liabilities | Total |
| Borrowings at amortised cost 31 December 2021 | 29,348 | 224 | 91,049 | 2,835 | 123,456 |
| Movements in the reporting period | |||||
| Monetary movements | |||||
| Borrowings received | - | 239 | 40,000 | 1,641 | 41,880 |
| Repayments of borrowings | (9,670) | (225) | - | - | (9,895) |
| Non-monetary movements | |||||
| Transfers | 3,000 | 33 | (3,000) | (87) | (54) |
| Revaluation | (13) | - | (133) | (8) | (154) |
| Amortization of borrowing expenses | - | - | - | - | - |
| Other movements | - | - | - | - | - |
| Total movements during 1H 2022 | (6,683) | 47 | 36,867 | 1,546 | 31,777 |
| Borrowings at amortised cost 30 June 2022 | 22,665 | 271 | 127,916 | 4,381 | 155,233 |
"Transfers" indicates the change in the short-term principal amount of a loan due to the changed repayment schedule.
| € thousand | Q2 2022 | Q2 2021 |
|---|---|---|
| Revenue by activity | ||
| Sale of goods | ||
| Pellets | 1,234 | 6,922 |
| Scrap metal | 349 | 257 |
| Other goods | 53 | 36 |
| Total sale of goods | 1,636 | 7,215 |
| Sale of services | ||
| Heat | 1,567 | 1,426 |
| Electricity | 31,762 | 16,262 |
| Waste reception and resale | 3,947 | 3,835 |
| Rental and maintenance of assets | 2,391 | 575 |
| Other services | 202 | 96 |
| Total sale of services | 39,869 | 22,193 |
| Total revenue | 41,505 | 29,408 |
| 1H 2022 | 1H 2021 |
|---|---|
| 9,408 | 14,497 |
| 640 | 532 |
| 98 | 117 |
| 10,146 | 15,146 |
| 3,922 | 4,028 |
| 73,870 | 35,228 |
| 8,238 | 8,055 |
| 3,244 | 959 |
| 226 | 107 |
| 89,500 | 48,376 |
| 99,646 | 63,522 |
| € thousand | Q2 2022 | Q2 2021 | 1H 2022 |
|---|---|---|---|
| Renewable energy support | 5,614 | 6,711 | 13,896 |
| Government grants | 71 | 136 | 206 |
| Other income | 88 | (14) | 250 |
| Total other operating income | 5,773 | 6,833 | 14,352 |
| 1H 2022 | 1H 2021 |
|---|---|
| 13,896 | 14,451 |
| 206 | 271 |
| 250 | 164 |
| 14,352 | 14,886 |
| € thousand | Q2 2022 | Q2 2021 | 1H 2022 |
|---|---|---|---|
| Maintenance and repairs | 3,816 | 3,984 | 6,801 |
| Technological fuel | 4,704 | 2,281 | 8,983 |
| Electricity | 4,304 | 1,384 | 8,989 |
| Services related to ash treatment | 561 | 717 | 1,356 |
| Transport services for sale of finished products | 350 | 451 | 811 |
| Materials and spare parts for production | 2,291 | 398 | 2,989 |
| Transmission services | 93 | 87 | 120 |
| Waste handling | 105 | 96 | 184 |
| Resource charges for natural resources | 2 | 2 | 4 |
| Other raw materials and consumables used | 66 | 41 | 110 |
| Environmental pollution charges | 73 | 67 | 152 |
| Total raw materials and consumables used | 16,365 | 9,508 | 30,499 |
| 1H 2022 | 1H 2021 |
|---|---|
| 6,801 | 7,239 |
| 8,983 | 5,464 |
| 8,989 | 2,558 |
| 1,356 | 1,363 |
| 811 | 1,001 |
| 2,989 | 857 |
| 120 | 189 |
| 184 | 184 |
| $\overline{4}$ | 3 |
| 110 | 82 |
| 152 | 147 |
| 30,499 | 19,087 |
| € thousand | Q2 2022 | Q2 2021 | 1H 2022 |
|---|---|---|---|
| Profit before tax | 21,516 | 9,748 | 57,290 |
| Adjustments | |||
| Depreciation and impairment of property, plant and equipment | 9,618 | 9,526 | 19,238 |
| Amortisation and impairment of intangible assets | 26 | 21 | 55 |
| Amortisation of government grant received to purchase non current assets |
(71) | (135) | (206) |
| Interest expense on borrowings | 214 | 746 | 532 |
| Gain on disposal of associate | (639) | - | (639) |
| Profit/loss from associates using equity method | 76 | 58 | 72 |
| Gain on disposal of property, plant and equipment | - | 2 | (3) |
| Interest and other financial income | (3) | - | (6) |
| Amortisation of connection and other fees | - | (3) | - |
| Foreign exchange gain/loss on loans granted and taken | (56) | 234 | (148) |
| Adjusted net profit before tax | 30,681 | 20,197 | 76,185 |
| Net change in current assets relating to operating activities | |||
| Change in receivables related to operating activities | 3,052 | 1,573 | 3,131 |
| Change in inventories | (8,478) | 2,267 | (6,738) |
| Net change in other current assets relating to operating activities | (2,252) | (4,998) | (4,097) |
| Total net change in current assets relating to operating activities | (7,678) | (1,158) | (7,704) |
| Net change in current liabilities relating to operating activities | |||
| Change in provisions | (1) | (2) | (2) |
| Change in trade payables | 956 | (1,001) | 2,607 |
| Net change in liabilities relating to other operating activities | (1,060) | (520) | (2,171) |
| Total net change in liabilities relating to operating activities | (105) | (1,523) | 434 |
| Cash generated from operations | 22,898 | 17,516 | 68,915 |
The parent of Enefit Green AS is Eesti Energia AS. At 30 June 2022, the sole shareholder of Eesti Energia AS was the Republic of Estonia.
For the purposes of the condensed consolidated financial statements of Enefit Green, related parties include the owners, other companies belonging to the same group (group companies), members of the executive and higher management, and close family members of the above persons and companies under their control or significant influence. Related parties also include entities under the control or significant influence of the state.
The Group has applied the exemption from disclosure of individually insignificant transactions and balances with the government and other related parties where the state has control or joint control of, or significant influence over, such parties.
Enefit Green AS and its subsidiaries produce renewable energy that is sold directly to third parties (incl. to the Nord Pool power exchange). The parent, Eesti Energia AS, provides Enefit Green AS with back- office services to assist in those sales procedures. The costs related to the service are presented in the table within purchases of services.
| € thousand | Q2 2022 | Q2 2021 | 1H 2022 | 1H 2021 | € thousand | 30 June 2022 |
|---|---|---|---|---|---|---|
| TRANSACTIONS | BALANCES | |||||
| PARENT | ||||||
| Purchase of services | 2,770 | 1,638 | 5,359 | 2,953 | Receivables | 1,641 |
| Sale of goods | - | 3 | - | 3 | Payables | 24,108 |
| Sale of services | 4,265 | 808 | 6,599 | 1,690 | incl. non-derivative contract liability |
23,207 |
| OTHER GROUP COMPANIES | ||||||
| Purchase of goods | 2 | - | 8 | - | Receivables | 864 |
| Purchase of services | 1,046 | 342 | 2,016 | 712 | Payables | 695 |
| Proceeds from sale of goods | - | 2 | - | 52 | ||
| Proceeds from sale of services | 2,025 | 681 | 4,001 | 969 | ||
| OTHER REALTED PARTIES (INCLUDING ASSOCIATES) | ||||||
| Purchase of services | 375 | 389 | 742 | 962 | Receivables | 2 |
| Proceeds from sale of services | 2 | - | 2 | - | Payables | 289 |
| ELERING AS | ||||||
| Purchase of services | 82 | 79 | 113 | 196 | Receivables | 1222 |
| Sale of services | 5 960 | 6 614 | 14 328 | 14 695 | Payables | 15 |
The original negative fair value of the derivative financial liability of €(10,780.1)k has been recognised directly in equity. The subsequent cumulative negative change in the fair value of the derivative financial liability of €(12,426)k has been recognised in other comprehensive income and the cash flow hedge reserve in equity (see also notes 5 and 7).
The group also discloses transactions with companies under the control or significant influence of the state. In the reporting period and the comparative period, the group conducted significant purchase and sales transactions with the Estonian transmission system operator Elering AS, which is wholly owned by the state.
At 30 June 2022, Enefit Green AS had signed long-term physical electricity sales contracts of 6,261 GWh with Eesti Energia AS for the supply of electricity in the Lithuanian, Estonian, Finnish and Polish electricity networks in the period 2023–2033. The contracts are for the supply of both annual and monthly baseload energy. The weighted average price of the physical electricity sales contracts signed with the related party is €45.5/MWh.
| liability | 23,207 | 23,207 |
|---|---|---|
On July 26, 2022, Enefit Green signed an agreement to purchase the development of Tootsi Windpark OÜ (i.e. Tootsi wind farm project) from Eesti Energia. The cost of the transaction on cash- and debt-free basis is 26.9 million euros.
At its meeting on 27 July 2022, the Supervisory Board of Enefit Green decided to accept the resignation of Linas Sabaliauskas, Member of the Management Board and Head of Development, and to recall Mr Sabaliauskas from his position as a Member of the Management Board of Enefit Green from 1 August 2022. Linas Sabaliauskas resigned from the board at his own request.
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