CORRECTION: Audited “Latvijas Gāze” Group consolidated and JSC "Latvijas Gāze" annual report for year 2019, including consolidated Non-financial report

ADJUSTMENT IN THE ANNUAL REPORT: Adjustment made only in the Latvian version of the annual report.

During 2019, “Latvijas Gāze” Group faced a challenging market and operating environment. After a mild winter and an unexpected steep drop in market prices during the first months of the year the Group’s results for the first six months of 2019 were significantly lower than for the same period in the previous year. However, during the second half of the year, the operating environment stabilized.

According to the audited consolidated annual report for the last year, the Group’s net turnover in 2019 amounted to 314.3 million EUR, EBITDA reached 35.6 million EUR. Net profit at the end of 2019 amounted to 20.2 million EUR.

Despite the difficult market environment, the sales & trading segment managed to increase its sales volume by 13% year-on-year. Due to strong deliveries into the Estonian natural gas market and significantly higher gas demand in the power generation segment during the summer months the JSC “Latvijas Gāze” in total sold 14 654 GWh of natural gas to almost 400 thousand customers.

During 2019, JSC “Latvijas Gāze successfully implemented a cost savings program initiated in 2018 and managed to bring down operating costs by 15% year-on-year. Apart from that, after the “go-live” of the first module of the sales & trading segment’s new billing system and customer portal the JSC “Latvijas Gāze” started with the implementation of the second module.

Regarding the situation with corona virus, Latvijas Gāze Group has taken several safety measures to protect the health and well-being of its customers and employees. Besides strict internal rules including travelling and business meetings, the JSC “Latvijas Gāze” as well as the JSC ”Gaso” have closed their client centers for visitors until further notice. Until re-opening of the client centers services for clients will be available only via phone and electronic forms of communication. Despite that, Latvijas Gāze Group ensures business continuity as well as the uninterrupted supply of natural gas to its customers. Nevertheless, depending on the length of the crisis, the Group’s management cannot fully preclude further limitations to the Group’s operations.

As the situation regarding corona virus is developing rapidly, the impact on the regional and European economy as well as the magnitude of potential liquidity issues of the Group’s customers are very hard to estimate at this moment. However, we already assume that the corona virus will have a dampening effect on the initially planned financial results for 2020.  The Group’s management closely monitors the situation and will if necessary implement further policies to protect the health and safety of employees as well as the Group’s economic integrity. Despite the crisis, the Group based on its balance sheet and liquidity situation at the reporting date remains in a solid financial position.

Latvijas Gāze Group’s Unaudited Consolidated Interim Condensed Financial Statement for 3 months of 2020 are due to be published on May 27, 2020.

*More detailed information on the alternative performance measures can be found on page 14 of the annual report.