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HomeLatviaLatvenergo's profits already being used for benefit of residents - politicians

Latvenergo’s profits already being used for benefit of residents – politicians

A part of Latvenergo’s profit, which is transferred to the state budget, goes back to the benefit of residents and entrepreneurs, Minister of Economy Viktors Valainis (Greens/Farmers) told members of the press after Monday’s coalition meeting.

Both Prime Minister Evika Silina (New Unity) and the Economy Minister reminded that last year the government decided to allocate part of Latvenergo’s profits to compensate for the increase in distribution tariffs.

Therefore, Latvenergo’s profits are already being used to reduce electricity prices, Silina stressed.

The politicians said this after a meeting of the parties forming the government, when asked whether the increase in Latvenergo’s profits in the first quarter of 2024 could be used to reduce the price of electricity for residents.

Valainis also pointed out that Latvenergo’s funds also support socially vulnerable people.

The politician also explained that a third of the profit “goes back into ensuring the efficiency of the Latvenergo system”. The rest of the money goes directly to the state budget to support the population in various ways, the Economy Minister stressed.

Valainis also explained that Latvenergo earns income not only from electricity sales, but also from natural gas sales, where the number of customers has doubled.

The number of Latvenergo’s customers outside Latvia has increased to almost 250,000, and the company has sold about half of its electricity production outside Latvia. Efforts are underway to maintain this share and to expand Latvenergo’s operations beyond the Baltic States to Poland and beyond to achieve a larger market share.

In this way, Latvenergo’s profits would increase even more, the distribution of which is decided by the members of the Latvian Parliament, Valainis said.

As reported, Latvenergo Group’s turnover in the first quarter of this year was EUR 599.316 million, which is 17.9 percent less than in the corresponding period of 2023, while the Group’s profit increased by 59.1 percent and reached EUR 172.449 million, according to information provided by Latvenergo to the Nasdaq Riga stock exchange.

At the same time, the parent company’s turnover in the first quarter of 2024 decreased by 23.4 percent to EUR 412.04 million, while the parent company’s profit was EUR 160.57 million, an increase of 51.6 percent.

The management attributes the drop in turnover to the impact of lower energy prices. On the other hand, the higher volume of electricity sold as well as the increase in revenues of the distribution segment with the new tariffs of Sadales Tikls distribution network coming into force as of July 1, 2023 had a positive impact.

Despite generating 11 percent less electricity than in the same period last year, this year still recorded one of the highest quarterly electricity generation volumes in history – 1,401 GWh. Due to the decrease in the price of natural gas, the amount of electricity generated by CHPPs of Latvenergo increased by 52 percent to 911 GWh. The total electricity production of the Group in the first quarter increased by 6 percent year-on-year, reaching 2,319 GWh. Thus, Latvenergo Group accounts for 41 percent of the total electricity generated in the Baltic states.

Source: BNS

(Reproduction of BNS information in mass media and other websites without written consent of BNS is prohibited.)

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