Ignitis Group, a renewables-focused integrated utility, has surpassed its 2023 earnings guidance, achieved an all-time investment record, and secured the largest renewable energy projects in the Baltics.
AB "Ignitis grupė" (hereinafter - the Group) publishes its Integrated Annual Report 2023, which is attached to this notice, and announces that the Group's Adjusted EBITDA amounted to EUR 484.7 million (3.3% YoY) and exceeded the full-year guidance range (EUR 430-480 million). Adjusted EBITDA growth was recorded across all business segments except the Green Generation. Despite this, the Green Generation segment remains the largest contributor to Adjusted EBITDA (45.9% of the Group's Adjusted EBITDA).
"We are strongly committed to our purpose to create a 100% green and secure energy ecosystem for current and future generations in our region. This is why we are investing more than ever in offshore wind and other renewable energy projects in the Baltics and Poland," says Darius Maikštėnas, CEO of Ignitis Group.
The Group's Investments increased by 79.6% YoY and reached a record high level of EUR 937.1 million, out of which 73.3% were directed to Lithuania. Overall growth was driven by Investments in new Green Generation segment's projects, mainly onshore wind farms, and higher Investments in the Networks segment.
The Group's leverage metrics remained strong. Our FFO/Net Debt ratio remained at a solid level of 29.4% (compared to 49.1% as of 31 December 2022). The balance sheet strength was also supported by the affirmation of BBB+' (stable outlook) credit rating by S&P Global Ratings.
Business development
Since the beginning of 2023, the Group's Green Generation Portfolio increased to 7.1 GW (from 5.1 GW), Secured Capacity to 2.9 GW (from 1.6 GW), and Installed Capacity to 1.3 GW (from 1.2 GW).
We achieved a number of significant milestones in the expansion and development of our Green Generation Portfolio, including:
- the Group, together with its partner Ocean Winds, were confirmed as the winners of the 700 MW Lithuanian offshore wind tender;
- the Group, together with its partner Copenhagen Infrastructure Partners, secured the seabed sites (Liivi 1 & 2) for the expected capacity of 1-1.5 GW in the Estonian offshore wind tenders;
- Mazeikiai WF (63 MW) has reached COD in August 2023;
- Vilnius CHP biomass unit reached partial COD for the capacity of 50 MWe and 149 MWth (out of 73 MWe, 169 MWth) in December 2023;
- Silesia WF I (50 MW) in Poland supplied the first power to the grid;
- the Group made Final Investment Decisions on the Latvian solar portfolio I (239 MW) and Kruonis PSHP expansion project (110 MW);
- the Group signed the largest external 10-year corporate PPA with Umicore Poland Sp. Z o. o. It covers a substantial part of the expected electricity production of Silesia WF II (137 MW);
- Moray West offshore wind project (882 MW) has reached the financial close.
On the Networks front, the WACC methodology was updated in July 2023, which entered into force from 2024. For 2024, this update has resulted in an electricity WACC increase to 5.09% (from 4.17% in 2023) and a natural gas WACC increase to 5.03% (from 3.99% in 2023). In addition, we successfully continued network maintenance and expansion works, including the smart meter roll-out with the total number of installed smart meters exceeding 700 thousand (out of 1.1-1.2 million smart meters to be installed).
In Customers & Solutions, we approved a plan to invest up to EUR 115 million in the development of an EV charging network in the Baltics over 3-5 years.
Sustainability
The Group continues decarbonisation initiatives to minimise its environmental impact. In turn, our Green Share of Generation (electricity) amounted to 85.0% and Taxonomy-aligned share of Adjusted EBITDA to 61.4%.
In 2023, the Group's Scope 1 and Scope 2 GHG emissions decreased by 1.8% and 15.6% respectively, while total emissions amounted to 5.29 million t CO2-eq and increased by 2.5% YoY.
The GHG emissions intensity from power generation, it increased by 27 g CO2-eq/kWh YoY to 228 g CO2-eq/kWh due to the start of operations of Vilnius CHP biomass unit and higher generation in Reserve Capacities segment.
Occupational health and safety (OHS) of our employees and contractors is one of our top priorities this year. Accordingly, at the beginning of 2023 we launched an OHS education programme, "Is it safe?". In 2023, our total recordable injury rate for employee was 0.79, for contractors - 0.93, both well below the targeted level. eNPS remained high at 57.5%.
Shareholder returns and 2024 outlook
In line with the Dividend Policy, we intend to distribute a dividend of EUR 1.286 per share for 2023, corresponding to EUR 93.0 million and a yield of 6.8-6.9% for ordinary registered shareholders and global depositary receipt holders (based on year-end closing prices). A total dividend per share for 2023 comprises of a dividend of EUR 0.643 paid for H1 2023 and a proposed dividend of EUR 0.643 for H2 2023, which is subject to the decision of our Annual General Meeting of Shareholders to be held on 27 March 2024.
For 2024, we expect Adjusted EBITDA to be in the range of EUR 440-470 million and Investments in the range of EUR 850-1,000 million.
