Goal and strategy

Strategy

To ensure the security of energy supply of Latvia, to provide a continuous, high-quality and affordable energy transmission service, also to implement sustainable management of energy supply assets of strategic importance to the country and to facilitate their integration in the internal energy market of the European Union .

strategija_vienlapis_en.png

Documents: AST Group medium-term operating strategy for 2021 - 2025 (In Latvian, pdf file)

+Strategic goals

Industry policy planning documents

Sustainable Development Strategy of Latvia until 2030

National Energy and Climate Plan of Latvia 2021–2030

National Development Plan of Latvia for 2021-2027

Energy Development Guidelines

Industry objectives/priorities

To ensure National energy security by fully connecting electricity infrastructure to the European continental grid, integration of energy markets and modernisation of infrastructure, sustainable development of the energy sector and improvement of energy efficiency

The overall strategic goal of the Company

To ensure the security of energy supply of Latvia, to provide a continuous, high-quality and affordable energy transmission service, also to implement sustainable management of energy supply assets of strategic importance to the country and to facilitate their integration in the internal energy market of the European Union

The long-term strategic goals of the Company

Strengthening the energy security of Latvia by synchronising the electricity transmission network of Latvia with the continental European network; Sustainable development of the electricity transmission system of Latvia

To ensure safe operation of the Latvian electricity system and quality electricity supply to customers

To ensure the sustainable and efficient management of national strategically important energy supply assets

To certify the Company as a socially responsible company

+Financial and non-financial goals

Upon evaluating the performance results of the Company, considering the influencing objective, it is to be concluded that the Company operates in accordance with the proposed objectives, achieving the set performance results.

 

The target for 2021

Results 2021 

The target for 2022

The target for 2023

The target for 2024

The target for 2025

Ensure optimal capital structure, financial risk management

An investment grade credit rating assigned by an international credit rating agency

A-/Stable

An investment grade credit rating assigned by an international credit rating agency

An investment grade credit rating assigned by an international credit rating agency

An investment grade credit rating assigned by an international credit rating agency

An investment grade credit rating assigned by an international credit rating agency

Dividend policy

≥ 2 715 775 €

7 999 514 €

≥ 29 143 118 €

64%

64%

64%

Targets and their achievement in 2020

Profitability

Ensure efficient management of transmission assets, preventing their balance sheet value from decreasing.

Target reached, value of transmission assets 31.12.2020. - 563 350 thousand. EUR, 31.12.2019 - 559 199 thousand. EUR.

Capital structure

An investment grade credit rating issued by an international credit rating agency

An agreement was signed with the credit rating agency S&P Global Ratings on October 9, 2020, and an investment grade rating of BBB + was assigned on January 28, 2021.

Dividends

To ensure dividends to be paid to the state budget in 2020 (for the reporting year 2019) ≥1,735,352 EUR.

The target has been achieved, dividends were paid to the state budget on June 10, 2020.

Targets and their achievement by 2020
Fulfilment of key financial objectives
Results 2016
Results 2017
Results 2018
Objective 2019
Results 2019
Profitability
In accordance with the provisions of the Service Tariff Calculation Methodology of the Electricity Transmission System (Methodology), to ensure the profitability of own capital ≥2.0% 4.1% 3.6% 6.6% ≥2.0%* 10.1%
To ensure the profit permitted in the Service Tariff Calculation Methodology of the Electricity Transmission System, thous.EUR 352 309 4 677 in accordance with that which is permitted 7 067
Turnover
To ensure revenues from the transmission system at the level planned in the current annual budget for the provision of services, thous. EUR 73 764 72 451 72 576 73 232 (+/-5%)  72 787
Liquidity

To ensure a current liquidity ratio ≥1, taking into account the accrued unused congestion charge revenue in the calculations

1.0 1.0 1.0 ≥1 1.0

*Excluding from the calculation, the increase of equity capital related to the acquisition of shares of JSC “Conexus Baltic Grid”.

+Dividend policy

The amount of profit to be paid by AST in dividends to the state is determined in accordance with the Cabinet Regulation of the Republic of Latvia “Regulation According to Which the Capital Companies and Public Private Capital Companies, Where the State is a Shareholder (Stockholder), Estimates and Determines a Part of Profit to be Paid in Dividends, and Makes Payments to the State Budget for the Use of State Capital” (Regulation).

In accordance with the Regulation, the minimum part of profit of state capital companies, which is to be paid in dividends, and a part of profit to be paid in dividends is 80% of the profit of the reporting year of the capital company. A part of the profit to be paid in dividends includes a payment for the use of state capital and enterprise income tax. In addition, the part of the profit to be paid by AST in dividends from the profit of the reporting year in 2018 - 2021 is determined by the Law on State Budget. Actual amount of dividends is determined in the Meeting of Shareholders of AST after approval of the annual report.

  2017 2018 2019 2020 2121
Profit, thous.EUR 309 4 677 7 067 9 999 54 846
The amount of profit to be paid in dividends, thous.EUR 247 3 598 1 736 7 800 29 143
Dividends / profit, % 80% 77% 25% 80% 53%