In 2017, AB Amber Grid showed stable performance while being engaged in preparatory works for a number of strategic projects, ensuring decrease in service prices for consumers, transparency, efficiency and social responsibility of its operations. Last year gas quantities transported via the Company's gas transmission system showed an increase.
'Year 2017 has been another successful year for the company. Last year's developments consisting in the opening of Latvia's natural gas market and the facilitated access to Latvian transmission and gas storage infrastructure facilities as long as the implicit capacity allocation model that was implemented together with other Baltic TSOs gave incentive to increase cross-border gas flows and to engage in a closer cooperation in the Eastern Baltic Region and development of a regional natural gas market. Last year we made all the preparatory work so that this year we could sign the necessary contracts and continue with the implementation of the projects. In 2017 we started the implementation of projects aimed at the Company's operational improvement, increased efficiency and transparency, and also we created preconditions for the reduction of the Company's service prices both this year and in the new regulation period effective from 2019', said Saulius Bilys, CEO of AB Amber Grid.
IFRS prescribe mandatory procedures for companies in order to ensure that their assets are carried at fair value. Amber Grid makes periodical evaluations of any internal and external indications of any possible impairment loss. In case where any such indications emerge, the Company must reassess the fair value of the assets in question. The Company, having regard to the principles of accounting non-current assets applicable within UAB EPSO-G Group of Companies, has converted from the cost basis method of asset accounting to the asset accounting by revalued amount method. The asset valuation that was carried out showed an impairment loss of EUR 35.5 million, which was accordingly recognised in the profit / loss statement by deducting the corresponding amount from the asset value in the balance sheet as of end of the year 2017. The decrease in the value of the non-current assets was mainly determined by the changes in the regulatory environment projected as from 2019, with the start of a new regulatory period for natural gas transmission services.
This development has had a direct impact on the Company's pre-tax profit and net profit (i.e. depreciated them), which was followed by respective adjustments in the Company's balance sheet equity value, which from now on reflects the fair value. This way the discrepancy between the results of the Company's financial accounting and the regulatory accounting was reduced.
The Company's revenue of 2017 amounted to EUR 64.3 million, which represents a 4 pct decline year-on-year. Revenues from natural gas transmission services accounted for 89 percent of the total revenue amount. Revenue from natural gas transmission services decreased due to 7.8 pct lower 2017 average natural gas transportation prices and the lower long-term capacities booked by customers. Amber Grid average natural gas transportation price dropped by 36.5 pct to 1.13 Eur/Mwh since January 1, 2018.
The Company's expenses of 2017 (after the elimination of the EUR 35.5 million of the non-current assets impairment loss) amounted to EUR 40.5 million, and, as compared to the respective indicator of 2016, decreased by 3 pct. The change in expenses was determined by the decrease in amortisation and depreciation expenses and other expenses.
As a result of the Company's asset revaluation carried out at the end of 2017, the Company's bottom line showed a loss. Net loss amounted to EUR 9.9 million (in 2016: net profit was 20.9 million). Should the effect of the asset impairment loss be disregarded, the Company's net profit of the year 2017 would reach EUR 20.3 million.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 38.3 million and, as compared to the respective indicator for the year 2016, which stood at EUR 14.5 million, declined by 8 pct. In 2017 AB Amber Grid's investments amounted to EUR 12.4 million (in 2016: EUR 13.1 million).
In 2017, of the total gas quantities intended for consumers of Lithuania and other Baltic States that entered AB Amber Grid's gas transmission system, 14.7 TWh came from Belarus and 12.4 TWh came from Klaipėda Liquefied Natural Gas (LNG) Terminal. The LNG Terminal supplied 45 pct of the gas quantities demanded by the aforesaid consumers. In 2017, natural gas transportation from Latvia to Lithuania amounted to 0.3 TWh.
Last year, gas transportation for Lithuanian consumers up to the internal exit point amounted to 24.3 TWh. Compared to 2016, when the natural gas transmission figure stood at 23.3 TWh, the transmission quantities increased by 4 percent. Gas transmission to system users from the gas transmission system to Latvia via Kiemėnai Border Gas Metering Station, compared to 2016, increased 5.5 times and amounted to 2.6 TWh (in 2016: 0.5 TWh). During the reviewed period natural gas transportation to the Kaliningrad Region of the Russian Federation amounted to 25.7 TWh (in 2016: 23.5 TWh).
OTHER KEY INFORMATION
In 2017, AB Amber Grid was engaged in the implementation of two strategic gas transmission infrastructure projects, the Gas Interconnection Poland - Lithuania (GIPL) and enhancement of capacity of the gas transmission pipeline link between Latvia and Lithuania. Last year a lot of attention was devoted to the development of the Baltic natural gas market and to the continuation of the ongoing projects. The natural gas operators of the Baltic States concluded a cooperation agreement on the implementation of an implicit cross-border capacity allocation scheme, and, since July of 2017, this scheme has been successfully implemented at the natural gas trading hubs of Lithuania, Latvia and Estonia.
Audited consolidated financial statements of AB Amber Grid are planned to be posted on 23th March of this year.
Background information on AB Amber Grid:
AB Amber Grid, a gas transmission system operator, ensures a reliable and secure transmission of natural gas through high-pressure pipe-systems to system users, as well as operation, maintenance, and development of the natural gas infrastructure. AB Amber Grid is listed on the supplementary trading list of the Baltics at NASDAQ Vilnius Stock Exchange. Controlling interest of AB Amber Grid is with UAB EPSO-G, a holding company which further holds controlling interests at AB Litgrid, electricity transmission system operator, and UAB BALTPOOL, energy resources exchange operator. UAB EPSO-G, which is 100-percent controlled by the Ministry of Energy of the Republic of Lithuania, is in charge of the implementation of strategic tasks of the development of Lithuania's gas and electricity infrastructure, it also manages projects dedicated to the integration into the EU energy markets, and seeks implementation of goals of the EU energy union.
For more information please contact:
Mindaugas Linkaitis, Press Officer, AB Amber Grid
Phone +370 5 2327750, Mobile +370 699 61246,