Annual report 2021: doubling of the Green Generation,
AB “Ignitis grupė” (hereinafter – the Group) publishes its 2021 annual report, which is attached to this notice, and announces that the Group’s adjusted EBITDA increased by 35.3% compared to 2020, reaching 332 .7 million euros. We exceeded our target of 300 to 310 million euros by 7.3%, mainly thanks to Green Generation, whose result more than doubled and now represents a third of our total result. In 2022, we expect an adjusted EBITDA between 290 and 335 million euros.
Group Adjusted EBITDA increased across all business segments, with Green Generation installed capacity expansion being the main driver, given higher green power generation due to the launch of Pomerania WF (94 MW) and Vilnius CHP WtE unit (19 MWe, 60 MWth), and a full-year effect of Kaunas CHP (24 MWe, 70 MWth) launched in August 2020. Increased results from Kruonis PSHP, thanks to better business result exploiting a favorable spread between peak and off-peak market prices, and from Kaunas HPP, mainly due to higher electricity market price, were also supporting factors, contributing to EBITDA Group adjusted. Additionally, Clients & Solutions also grew due to a temporary positive effect on natural gas performance resulting from changes in natural gas market prices, which is expected to partially reverse in 2022 following the settlement of hedging contracts. .
In 2021, the Group’s investments amounted to €234.9 million and decreased by 32.3% compared to 2020. This is mainly due to lower investments in the Green Generation segment, as the main investments large projects were completed in 2020 or early 2021 (Pomerania WF, Kaunas CHP and Vilnius CHP WtE unit) and new projects have not yet reached the heavy investment phase. The decline was partly offset by higher investments in the Networks segment.
Back to shareholders
In accordance with the dividend policy, we intend to distribute for 2021 a dividend of EUR 1.19 per share, corresponding to EUR 87.6 million and a yield of 5.7% for ordinary registered shareholders, and – 5.8% for GDR holders (taking into account the closing price). It should be noted that a dividend of EUR 0.600 per share (out of EUR 1.19) for the second half of 2021 is subject to the approval of the Ordinary General Meeting of Shareholders, which will be held on March 29, 2022.
Outlook for 2022
For 2022, we expect an adjusted EBITDA between 290 and 335 million euros. We expect an increase in results from our two main segments – Green Generation and Networks. Green Generation is expected to grow due to the full year effect of Pomerania WF as well as the implementation of the asset rotation program. The better result of the Networks segment is mainly related to the additional tariff component established in the updated regulatory methodology. However, in the Customers & Solutions segment, the biased result of the natural gas business between 2021 and 2022 (positive effect falling until 2021 and negative until 2022) will have a negative impact.
In 2021, we increased the installed capacity of Green Generation by 113 MW after the CODs of the WtE unit of Vilnius CHP (19 MWe, 60 MWth) and Pomerania WF (94 MW). Our pipeline further increased to 460MW following the acquisition of wind farm projects in Latvia and Poland, a solar portfolio in Poland and the start of new land development by securing land for onshore wind and solar projects in Lithuania and Poland. To further accelerate growth and capture the yield premium, we aim to launch an asset rotation program in 2022.
All Green Generation projects are on track, except for the Vilnius CHP biomass unit (73 MWe, 169 MWth) and the Polish solar portfolio I (up to 170 MW). Regarding the Vilnius CHP biomass unit (73 MWe, 169 MWth), we still plan to start producing first energy by the end of 2022. However, due to the delay in the procurement initiated after Rafako (former prime contractor) announced restructuring process, we have rescheduled COD to Q2 2023 (from Q4 2022). In the Polish Solar Portfolio I (up to 170 MW), in the last six months we renegotiated the agreement with the developer (Sun Investment Group) because no project obtained the CfD tariff in the last auctions. As no agreement regarding the acceptable level of performance that would be within our target range has been reached, SPA’s conditional agreement has been terminated. The Group will not incur any loss in connection with this transaction, the installments paid to the promoter (approximately 3.8 million euros) being fully returned to the Group.
On the network side, the network methodology has been updated maintaining the sustainable regulatory framework. Additionally, we have entered into an agreement with the vendor who will be responsible for implementing Networks’ smart metering infrastructure. The vendor has defined a framework to comply with all high market standards, including those related to cybersecurity, which resulted in the postponement of the end date of the project to 2025 (from 2023). Finally, the ten-year network investment plan for 2021-2030 has been updated with planned investments of 1.9 billion euros.
During the year, we made good progress on the ESG front, receiving rating upgrades from MSCI (from “A” to “AA”) and Sustainalytics (from 26.5 to 20.4), which places the Group as a leader among its global peers and significantly above the average for the utility group. In addition, a globally recognized environmental disclosure body, the CDP, has assessed the Group’s climate change mitigation and adaptation efforts for the first time. In the fourth quarter of 2021, CDP assigned the Group a rating of “B”, which is in line with the average for public services. All of these recognitions are largely due to the recognition of the Group’s continued commitment to reducing carbon dioxide emissions to combat climate change, expanding the renewable energy portfolio and strengthening social and governance practices. keys. Finally, our targets for reducing GHG emissions in all areas have also been validated by the Science-based Targets Initiative (SBTi). By 2030, we aim to reduce our greenhouse gas emissions by 47% compared to the 2020 baseline.
Significant changes have taken place on the corporate governance front of the Group. New members of the Supervisory Board have been elected by the General Meeting of Shareholders for a term of four years on October 26, 2021. The majority of them, including the Chairman, are independent and 5 out of 7 members are international. In addition, 4 members worked during the previous term of the Board or Supervisory Committees, thus ensuring continuity. Subsequently, in the fourth quarter of 2021, the committees (Audit, Nomination and Remuneration, and Risk Management and Business Ethics Oversight) were fully constituted. After the reference period, the new members of the Management Committee, its Chairman and the Chief Executive Officer were elected. 3 out of 5 are members of the previous term of the Management Board, including the Chairman and Chief Executive Officer, thus enabling the Group to comfortably pursue its development. In terms of diversity, the Supervisory Board has four women and three men, and the Management Board has one woman and four men.
Key Financial Indicators (KPIs) for 20211,2
|millions of euros||2021||2020||Change|
|Customers & Solutions||40.6||26.7||52.1%|
|Adjusted EBITDA margin||17.6%||21.7%||(4.1pp)|
|Adjusted net profit||163.1||95.5||70.8%|
|Adjusted ROE||8.9%||6.0%||2.9 points|
|Net debt/LTM adjusted EBITDA, times||2.88||2.44||18.0%|
|FFO LTM/Net Debt||30.5%||51.5%||(21.0pp)|
1 All except net profit are alternative measures of performance. The financial indicator formulas are available in our 2021 annual report.
2 Due to the updating of the networks’ methodology, the change in accounting method and reclassifications as well as the reduction of management adjustments, all financial indicators have been recalculated retrospectively for the year 2020 (for more information , see section ‘3.1 Annual results’ of the 2021 annual report ‘Significant changes in the 2021 reporting period’).
3 Other – other activities and eliminations (consolidation adjustments and related party transactions), including parent company financial results. Further information on this is provided in the 2021 annual report, section ‘6.2 Financial statements of the parent company’.
4 For the calculation of the DPS 2020 measures, the number of shares after the IPO (number of nominal shares – 74,283,757) was used in order to have comparable measures. EPS for 2020 would be EUR 2.89, DPS EUR 1.44, if the number of shares of 2020 (weighted average number of nominal shares before and after IPO – 59,037,855) were used .
Call for results
Regarding the announcement of the 2021 annual report, an earnings conference call will be held on February 28, 2022 at 11:00 a.m. to 1:00 p.m. Vilnius / 11:00 a.m. London time.
To participate in the earnings call, please register at: https://edge.media-server.com/mmc/p/mxmysdqv
You can also participate in the earnings call via the call-in numbers below:
UK, London: +44 20 7192 8338
Lithuania, Vilnius: +370 5 214 0081
USA, New York: +1 (646) 7413-167
Access code to the event: 7228658
Questions can be directed to the Group IR in advance, after registering for the results call or live during the call.
Presentation slides will be available before the call:
The annual report, including the version in XHTML format, using the Inline XHBRL specifications set out in Annex III of Regulation 2018/815, is also available for download at:
The information sheet (in Excel) is available for download at:
For more information, please contact:
+370 620 76076
+370 643 14925
Annual report 2021