REG - Eesti Energia AS - Eesti Energia Group Unaudited Results for Q1 2026

Liquidity ServicesAnnouncement

30/04/2026 08:15

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260430:nRSd4822Ca&default-theme=true

RNS Number : 4822C  Eesti Energia AS  30 April 2026

Sales Revenues and Profitability

In Q1 2026, the Baltic electricity market prices notably increased from the
low-price environment over Q2-Q4 2025. Cold weather across the Nordics and
Baltics in January and February drove higher electricity consumption, which in
combination with modest wind conditions, lifted regional spot prices
materially year-on-year. Furthermore, the introduction of the strategic
reserve capacity fee mechanism on 1 January 2026 provided an additional source
of revenue for Eesti Energia's oil shale-based reserve power fleet. The shale
oil segment experienced a mixed pricing environment during the quarter, as
average fuel oil prices declined year-on-year. Prices were weighed down by
weak global liquid fuel market conditions in January-February, partially
offset by a sharp rally in March driven by the Strait of Hormuz crisis.

Eesti Energia Group's sales revenue in Q1 2026 totalled EUR 566 million, an 8%
increase year-on-year. Group EBITDA rose by 5% to EUR 119 million. Net profit
for the period amounted to EUR 49 million, a decrease of 30% year-on-year,
primarily reflecting one-off higher net financial expenses.

The non-renewable electricity segment and the distribution segment were the
primary drivers of EBITDA growth, underpinned by higher electricity prices,
consumption and the new reserve capacity fee. These gains were partly offset
by lower profitability in renewable energy and shale oil, the latter
reflecting planned maintenance and weaker fuel oil market prices during the
quarter.

CFO Marlen Tamm commentary:

"The dynamics of energy markets have become significantly more complex - price
levels are simultaneously shaped by weather conditions, geopolitical risks,
and a volatile CO₂ price. This market environment makes investment
decision-making very challenging.

Within Eesti Energia Group's integrated portfolio, the combination of
different generation methods helped balance risks and stabilise performance.
Cold weather in January and February, and the resulting high electricity
demand, kept prices elevated. Conversely, in March, demand fell and renewable
electricity generation increased, causing market prices to drop. The lower
price level also reduced the competitiveness of dispatchable generation. Such
price dynamics are not an exception, they are the new normal. The growing
share of renewables makes portfolio management through storage increasingly
important."

Renewable Energy and Electricity Sales Segment

Sales revenue from the renewable energy and electricity sales segment amounted
to EUR 243 million in Q1 2026, a 12% increase year-on-year. The revenue growth
was driven by higher electricity prices across all Baltic markets despite a
slight decline in renewable generation volumes. Retail electricity sales
volume was 2.7 TWh, broadly stable year-on-year. Total renewable electricity
generation amounted to 0.7 TWh, down 4% year-on-year, primarily due to the
divestment of the Tolpanvaara wind farm in Finland at the end of 2025 and
lower than anticipated output at the Sopi-Tootsi wind farm. Offsetting these
headwinds, Kelmė I was already operating at full capacity and Kelmė II
reached full operational capacity during the quarter, marking a significant
milestone in the Group's wind farm portfolio.

Segment EBITDA decreased by 23% to EUR 16 million. The total margin impact was
negative EUR 17 million, as higher sales prices and renewable subsidies were
more than offset by significantly higher electricity purchasing costs,
primarily reflecting the Group's retail portfolio consumption exceeding its
own renewable generation. However, the negative margin impact in this segment
and this quarter is partly offset by the positive non-renewable electricity
margin impact, since fossil-based assets were the main market makers due to
cold and modest wind conditions.

Non-Renewable Electricity Production Segment

Sales revenue from non-renewable electricity production increased by 32% to
EUR 121 million in Q1 2026. The principal drivers were higher realised
electricity prices and the introduction of the strategic reserve capacity fee
mechanism, which generated approximately EUR 14.2 million in the quarter and
is expected to contribute approximately EUR 60 million on an annualised basis.
Electricity generation from non-renewable sources amounted to 0.6 TWh, down
6%, primarily due to year-over-year lower average electricity prices in March.

Segment EBITDA increased by 72% to EUR 39 million. The margin impact
contributed a positive EUR 13 million, reflecting higher electricity prices,
especially during January-February, and above-mentioned favourable interaction
between the non-renewable fleet's dispatch and the Group's retail client
portfolio hedging strategy. Lower generation volumes, higher fixed costs, and
the absence of derivative gains were partial offsets.

Estonia's energy supply security continues to depend on oil shale power plants
as dispatchable backup capacity. The reserve capacity mechanism provides
appropriate compensation for the cost of maintaining this national energy
security role.

Distribution Segment

Distribution sales revenue grew 12% to EUR 99 million in Q1 2026, driven by
higher electricity distribution volumes. Distribution volume increased to 2.1
TWh (+12% year-on-year), reflecting elevated electricity consumption in the
Estonian market during the cold months of January and February. The average
distribution sales price was broadly stable year-on-year.

Segment EBITDA increased by 20% to EUR 44 million, largely driven by cold
weather in January-February, and therefore increased electricity consumption.
Importantly, the distribution segment continues to be the most resilient and
predictable contributor to Group earnings, and stable profitability trends are
expected to continue.

Shale Oil Segment

Shale oil sales revenue decreased by 27% to EUR 40 million in Q1 2026. The
average shale oil sales price, including hedge settlements, fell to EUR 352
per tonne (Q1 2025: EUR 425 per tonne), a 17% decline year-on-year, reflecting
the lower fuel oil market environment that prevailed in the quarter prior to
the escalation of geopolitical tensions in the Middle East. Shale oil sales
volumes declined by 12% year-on-year, and production amounted to 118 thousand
tonnes, down 3%, primarily due to maintenance of the Enefit 280-1 oil plant.

Segment EBITDA decreased by 44% to EUR 11 million. The margin impact was
broadly flat. The 12% fall in sales volumes reduced EBITDA by EUR -4 million.
Gain on derivatives declined by EUR 2 million year-on-year, and other
movements, primarily the revaluation of unrealised derivative instruments,
contributed a negative EUR 3 million.

The Q1 2026 results do not fully reflect the benefit of the heightened fuel
oil price environment that emerged from geopolitical tensions in the Middle
East. We expect the impact of current elevated fuel prices to flow through to
Profit & Loss over the next two to seven quarters. Additionally, the newly
constructed Enefit 280-2 oil facility commenced its first production output in
April 2026 and is expected to reach full production capacity by Q3 2026.
Combined, these factors are expected to support improved shale oil segment
performance in the periods ahead.

Other Products and Services Segment

Sales revenue from other products and services decreased by EUR -7 million to
EUR 64 million in Q1 2026. The segment includes gas, heat, frequency services,
and other items.

Segment EBITDA decreased by EUR -5.5 million to EUR 10 million. Natural gas
and heat combined improved by EUR +5 million in EBITDA, while frequency
services which is essential for maintaining 50-hertz grid stability, declined
by EUR -5.5 million in EBITDA year-on-year. The decline in frequency services
revenue reflects the normalisation of ancillary service prices following an
exceptional base period last year. Frequency markets in Estonia had opened in
early 2025, driving unusually high and volatile prices in the first half of
that year. As the market has since stabilised, frequency services now generate
reliable, recurring additional income from the Group's existing asset base.
This is a sustainable contribution, albeit at more moderate levels than the
exceptional returns recorded in Q1 2025.

Investments

Group capital expenditure in Q1 2026 totalled EUR 51 million, a 47% decrease
year-on-year, reflecting the Group's deliberate transition past the peak of
its heavy investment cycle. The heavy CAPEX cycle of recent years is now over,
and the Group's strategic focus has shifted to unlocking greater returns from
the existing asset base.

Investments in the renewable energy and electricity sales segment amounted to
EUR 13 million (Q1 2025: EUR 39 million, -67%), primarily comprising final
additions to the Kelmė wind farm and the Strzałkowo solar farm. Distribution
network investments were EUR 27 million (Q1 2025: EUR 29 million, -6%),
focused on network maintenance and grid connections. Shale oil investments
amounted to EUR 7 million (Q1 2025: EUR 18 million, -61%), principally
reflecting the final construction costs for the Enefit 280-2 oil facility,
which is now commissioned.

Financing and Liquidity

As of 31 March 2026, Eesti Energia had EUR 170 million in liquid assets and
EUR 520 million in total available liquidity, including EUR 350 million in
undrawn credit facilities. Net debt stood at EUR 1,283 million.

Key financing events during Q1 2026 included the full repayment of the
syndicate loan on 16 February 2026. The Group's Hybrid Bond of EUR 400
million, issued in 2024, remains outstanding with a first call date in 2029.

The Group's net debt-to-EBITDA ratio stood at 3.98x at the end of Q1 2026.
Eesti Energia is fully committed to reducing this ratio towards 3.5x through
strict capital discipline, including the reduction of capital expenditure,
alongside a continued focus on internal efficiencies and cost reduction. The
Group's financing policy remains focused on maintaining investment-grade
credit ratings.

Current credit ratings (as of 30 April 2026):

Fitch: BBB-, Outlook: Stable

Moody's: Baa3, Outlook: Stable (affirmed 8 April 2026)

Outlook

Eesti Energia reaffirms its full-year 2026 guidance. Sales revenue and EBITDA
are expected to increase compared to 2025 levels. Capital expenditure is
planned to decrease by approximately 50% compared with 2025.

The primary drivers of the expected improvement are: a) the full operational
contribution of the new Lithuanian wind assets throughout 2026; b) the
strategic reserve power capacity subsidy of approximately EUR 60 million per
annum; c) somewhat higher fuel prices driven by developments in the Middle
East; d) the ramp-up of the new Enefit 280-2 shale oil facility towards full
production capacity by Q3 2026; and e) additional efficiencies from
integrating the retail client portfolio, renewable electricity assets, and
energy trading into one unit.

On the investment side, the Group will continue to focus on completing major
ongoing projects and making essential network upgrades, rather than initiating
new discretionary investments. The Group's strategic emphasis is firmly on
maximising returns from the already existing asset base.

Key Financial Information

Condensed Consolidated Interim Income Statement

 EUR million                                 Q1 2026  Q1 2025
 Sales revenues                              566.3    522.0
 Other revenues                              62.0     27.3
 Expenses (excl. depreciation)               (509.3)  (435.5)
   - Electricity purchasing costs            (226.6)  (185.3)
   - Environmental fees                      (8.7)    (10.6)
   - CO₂ emission costs                      (36.9)   (41.6)
   - Change in inventories                   (4.4)    (8.0)
   - Other                                   (232.7)  (190.0)
 EBITDA                                      119.0    113.8
 Depreciation                                (45.7)   (40.4)
 EBIT                                        73.2     73.4
 Net financial income / (expenses)           (25.2)   (9.5)
 Net profit from associates (equity method)  1.9      2.0
 Earnings before tax                         49.9     65.9
 Income tax expense                          (0.8)    3.9
 Net profit                                  49.1     69.8

 

Condensed Consolidated Interim Statement of Financial Position

 EUR million                            31 March 2026  31 March 2025
 Assets                                 4,665.9        5,164.4
   Current assets                       717.0          1,072.4
   - Cash and cash equivalents          169.6          477.0
   - Trade receivables                  227.6          246.0
   - Inventories and prepaid expenses   192.8          178.3
   - Other current assets               127.0          171.0
   Non-current assets                   3,949.0        4,092.0
 Liabilities and equity                 4,665.9        5,164.4
   Liabilities                          2,598.3        2,741.4
   - Trade payables                     126.4          146.6
   - Borrowings                         1,460.5        1,641.8
   - Provisions                         189.5          213.1
   - Deferred income                    544.5          484.1
   - Other liabilities                  277.5          255.8
   Equity                               2,067.6        2,423.0

 

Eesti Energia published its unaudited Q1 2026 results on 30 April 2026. The Q1
2026 interim report and investor presentation are available on Eesti Energia's
website (https://www.enefit.com/en/ettevottest/investorile) . An investor call
discussing the Q1 2026 financial results is scheduled for 30 April 2026 at
11:00 London time, 12:00 Frankfurt time, and 13:00 Tallinn time. Please join
the conference call using the following link.
(https://teams.microsoft.com/l/meetup-join/19%3ameeting_NmMwOGE1ODAtYTI2NS00ZTgyLWExZjktNTNmYjU4N2ZiMGI0%40thread.v2/0?context=%7B%22Tid%22%3A%2215cd778b-2b28-4ebc-956c-b5977a36cd28%22%2C%22Oid%22%3A%22775ae01b-e561-4cc9-8790-1290c7b28035%22%2C%22IsBroadcastMeeting%22%3Atrue%2C%22role%22%3A%22a%22%7D&btype=a&role=a)

Further Information:

Danel Freiberg

Head of Treasury and Financial Risk Management

Eesti Energia AS

Tel: +372 5594 3838

Email: danel.freiberg@enefit.com (mailto:danel.freiberg@enefit.com)

Click on, or paste the following link into your web browser, to view the
associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/4822C_1-2026-4-29.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/4822C_1-2026-4-29.pdf)

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  QRFBKLLLQZLLBBQ



            Copyright 2019 Regulatory News Service, all rights reserved