The company states that the increase in turnover of “Latvijas gas” is related to higher sales prices of natural gas.
Last year, “Latvijas gāze” sold 6,993 gigawatt hours (GWh) of natural gas to customers in Latvia and abroad. Compared to 2021, the sales volume is 53% lower.
The decrease in sales volumes is due to the fact that market participants chose not to purchase gas of Russian origin before January 1, 2023, when the ban on natural gas deliveries from Russia came into force, and also customers have revised their natural gas utilization capacity due to high natural gas prices, including choosing to switch to alternative energy resources.
The household segment generated losses in the first half of 2022, as the tariff was lower than the cost of natural gas and sales expenses. Despite the fact that the household tariff was increased on July 1, 2022 for the next tariff period, the purchase price of natural gas in the third and fourth quarters was significantly higher than the selling price specified in the tariff, as a result of which the household customer segment continued to generate losses. In connection with the changes in the “Law on measures to reduce the extraordinary increase in energy resource prices” by December 31, 2022, the Ministry of Economy had to make a compensation payment for the difference between the regulated tariff and the actual price of natural gas for the second half of 2022, thus compensating the previously incurred losses from the household segment.
The management report explains that on August 10 of last year, the regulations of the Cabinet of Ministers on the supply of energy users during the early warning and alarm level announcement came into force, which obliged “Latvijas gāze” to maintain stocks in the Inčukalna underground gas storage in the amount of 1150 GWh for the supply of related users or households in the period from From August 10 to April 30, the monthly reserved balance of 1150 GWh is reduced by the amount of natural gas actually delivered to households in the previous month. Due to these regulations, the balance sheet of “Latvijas gas” on December 31 contained 755 GWh of natural gas, which was reserved only for the supply of households, and in the conditions of high market demand, it might not be resold to other customers at prices corresponding to the market level, despite the actual reduction of the volume required for the gas supply needs of related users. by 20% in 2022.
Last year, the shareholders of “Latvijas gas” made a decision to start the reorganization process or to reduce the share capital. The board started and continued work on the evaluation of several management scenarios of the subsidiary AS “Gaso”. As a result, a decision has been made on the sale of “Gaso”, which is planned to be implemented within the framework of 2023. In the 2022 consolidated and “Latvijas gas” report, the investment in the subsidiary company and, accordingly, the assets and liabilities of the subsidiary company are presented as assets and liabilities of investments held for sale. The discontinued operation of the natural gas distribution services segment is shown in the income statement separately from the continuing operation of the trading segment. In order to reflect investment assets and liabilities held for sale in the net sales value, “Latvijas gas” and the consolidated statement of profit or loss included a reduction in value in the amount of 72 million euros.
In 2021, “Latvijas gāze” worked with a turnover of 525.431 million euros and a profit of 3.23 million euros.
The largest shareholders of “Latvijas gas” are the Russian “Gazprom” (34%), the fund “Marguerite Gas II.Sarl” (28.97%), the German company “Uniper Ruhrgas International GmbH” (18.26%) and SIA “Itera Latvija” (16%).
