The Latvian transmission system operator AST has made a profit in the amount of 10 million EUR
The revenue of the Latvian transmission system operator JSC “Augstsprieguma tīkls” (AST) in 2020 was 147 million EUR (in 2019 - 185 mln. EUR), but the profit - 10 mln. EUR (in 2019 - 7 mln. EUR), while the Augstsprieguma tīkls Group (AST Group) had revenues of 145 million EUR, but the profit for the reporting year - 65 mln. EUR, according to the AST Group's annual report for 2020 approved by the AST shareholders' general meeting. The increase in profit of AST is mainly due to the takeover of transmission system assets by AST and 8 mln. EUR from the profit will be paid to the State in dividends, while the consolidated profit of the AST Group will not be distributed in dividends.
"The high profit of the Group in relation to revenue can be explained by the fact that last year AST gained a decisive influence in the gas transmission system operator JSC "Conexus Baltic Grid"(Conexus) by acquiring 68.46% of the company's shares at a favourable price for the state. The majority of the group's profits consist of the difference between the purchase price of the shares and the book value of the assets, which had to be reflected in the bookkeeping of AST Group. The Group's performance was also affected by the fact that in June 2020 AST took over the assets of the transmission system by incorporating its owner, JSC “Latvijas elektriskie tīkli” (LET). This will allow AST to pay 8 million EUR in dividends to the state for the last year, which is almost three times more than originally planned to be paid into the state budget. Revenues from electricity transmission, which are regulated by the approved transmission tariff, have not changed significantly in 2020 and are in line with the rate of return on capital set by the Public Utilities Commission," says Imants Zviedris, Board Member of AST.
On 31 December 2020, the AST Group is made up of a group of companies in which the parent company AST has a decisive influence and which includes the subsidiary Conexus, in which AST holds 68.46% of the shares. The principal activity of the AST Group is the provision of the functions of the electricity transmission system operator, effective management and lease of assets of the transmission system, as well as the transmission and storage of natural gas. In 2020, the AST Group also included the AST subsidiary LET, which has ceased operations due to incorporation as a result of reorganization.
The consolidated financial statements of the AST Group include the financial results of the subsidiary LET from 1 June to 30 September 2020, when the companies merged due to reorganization, and the financial results of Conexus from 1 August to 31 December last year. AST’s profit from participation in Conexus in amount of 5.6 mln. EUR corresponds to dividends received from Conexus in 2020.
The revenue of AST in 2020 is 147 mln. EUR, including income from electric power transmission network services in amount of 73 mln. EUR, representing 50% of AST 's revenue. The profit of AST for the reporting period is 10 mln. EUR. 5961 GWh were transmitted to users in 2020, which is 1% less than in the corresponding period of 2019 (6012 GWh). The impact of the reduction in the amount of electricity transmitted to consumers on the revenues from the provision of transmission services is insignificant.
When evaluating the financial performance indicators and operating results of AST, it should be taken into account that according to Article 5 of the Energy Law, electricity transmission is a regulated sector; for which a rate of return on capital has been determined when approving electricity transmission system service tariffs. The profitability of AST from the provision of electricity transmission services in 2020 is appropriate to the one set in the Electricity transmission system services tariff methodology.
The revenue of the natural gas transmission and storage segment of the AST Group from August 2020 to the end of the year was 21 mln. EUR, profit - 4 mln. EUR.
The financial statements of the AST Group are available on the AST website https://www.ast.lv/en/content/financial-statements, section "Annual reports".