Enefit Green AS disclosed a significant 78% year-on-year decline in net profit for the third quarter of 2023. The decline was attributed to a reduction in revenues resulting from lower electricity prices compared to the same period in the prior year.
Despite a substantial 37% increase in electricity generation when compared to the third quarter of the previous year, Enefit Green's revenues totaled EUR 39.3 million (USD 41.8 million), reflecting a 31% decrease. Notably, electricity prices in the company's core markets experienced a substantial 69% year-on-year drop, falling to EUR 97.8 per megawatt-hour (MWh). Implied captured prices, which account for long-term fixed-price power purchase agreements (PPAs), renewable energy support, and purchases of balancing energy, among other factors, saw a decline of 59% to EUR 84.9/MWh.
In conjunction with a 4% increase in operating expenses, earnings before interest, taxes, depreciation, and amortization (EBITDA) plummeted by 51% to EUR 15.9 million. Consequently, net profit for the third quarter amounted to EUR 5 million, a significant decrease from the EUR 22.9 million reported in the same period the previous year.
Enefit Green, a key player in the Baltic region, manages 457 MW of installed capacity, encompassing hydroelectric plants, wind farms, and solar facilities in Estonia, Lithuania, and Poland. Additionally, the company boasts 81 MW of heat production capacity.
Despite an uptick in electricity production to 259 gigawatt-hours (GWh) during the third quarter, up from 189 GWh the prior year, Aavo Karmas, Chairman of the Board, expressed discontent with the three-month output. Karmas attributed this primarily to the non-operation of the Akmene wind farm in Lithuania, which had to be deactivated following a turbine tower collapse in May 2023, coupled with availability challenges at Enefit Green's power plants.
Karmas emphasized the significance of the last quarter of the year, given seasonality, and outlined the company's focus on maintaining high production asset availability to achieve robust production results. Enefit Green's strategy includes concentrating on hybrid solutions and ensuring promised returns on capital when making new investment decisions.