Eesti Energia Group Unaudited Results for Q2 2026

Sales Revenues and Profitability

The Q2 of 2026 followed its usual seasonal pattern, with the second and third quarters structurally weaker for the Group than the first and fourth. Price formation in the Baltic electricity market during the quarter reflected a combination of weather conditions, battery storage now actively shaping the intraday price curve, and cross-border transmission capacity constraints. The average price in the Nord Pool Estonia price area fell to EUR 59.7 per MWh, a 2% decrease year-on-year and the lowest quarterly average recorded in Estonia in five years, while prices moved in the opposite direction in Latvia (+23%) and Lithuania (+26%). Low and near-zero price hours expanded materially, with approximately 29% of hours in Estonia clearing at or below EUR 20 per MWh.

Liquid fuel markets moved in the opposite direction. Continued disruption to crude oil and petroleum product flows through the Strait of Hormuz sustained an elevated risk premium and increased price volatility throughout the quarter.

Eesti Energia Group’s sales revenue in Q2 2026 totalled EUR 374 million, a 2% decrease year-on-year. Group EBITDA declined by 28% to EUR 56 million. The Group recorded a net loss of EUR 9 million for the quarter, compared with a net profit of EUR 27 million in Q2 2025, reflecting the lower EBITDA together with EUR 5 million of higher depreciation as new assets entered service. For the first half of 2026, sales revenue increased by 4% to EUR 940 million, EBITDA decreased by 8% to EUR 175 million, and net profit amounted to EUR 41 million.

Four of the Group’s five segments increased sales revenue and three of five increased EBITDA year-on-year. The majority of Group’s EBITDA decline is attributable to the other products and services segment, where the comparative period of 2025Q2 contained an exceptionally positive result from frequency services. Renewable energy and electricity sales, non-renewable electricity production and distribution all improved, supported respectively by the integrated electricity portfolio, the strategic reserve capacity fee and higher distribution margins.

CFO Marlen Tamm commentary:

“The results of the first half of the year confirm the strength of our integrated business model – all of the group’s main business lines grew their sales revenue. The advantage of the integrated electricity business came through especially clearly in the second quarter: the profitability of the renewable energy and electricity sales business grew strongly thanks to improved margins, more efficient risk management, and lower fixed costs. The second and third quarter results have traditionally been seasonally weaker in our business, as warmer weather reduces electricity consumption and summer electricity prices are lower. This year, a one-off effect was added to that – last year’s exceptionally high comparison base for system services normalized, as the corresponding market has stabilized over the year. The strong investor interest in the green bond issued in May, which was oversubscribed by nearly 6.3 times, also confirms confidence in Eesti Energia’s long-term strategy.”

Renewable Energy and Electricity Sales Segment

Sales revenue from the renewable energy and electricity sales segment amounted to EUR 178 million in Q2 2026, a 5% increase year-on-year, achieved despite lower generation volumes. Renewable electricity generation was 472 GWh, a 14% decrease year-on-year. The decline was driven primarily by milder wind conditions during the quarter, together with curtailments of the wind farms. Retail electricity sales volume was 2.1 TWh, a 3% decrease year-on-year, and broke down between markets as follows: Estonia 689 GWh (+17 GWh), Latvia 344 GWh (-41 GWh), Lithuania 629 GWh (+25 GWh) and Poland 404 GWh (-65 GWh).

Segment EBITDA increased by 90% to EUR 24 million, an improvement of EUR 11 million year-on-year. The total margin impact was a positive EUR 1.3 million, as both average sales prices and average variable costs changed very little year-on-year and average margins remained flat. Volume reduced EBITDA by EUR 0.5 million as sales volumes decreased slightly, while fixed costs decreased by EUR 1.5 million. The largest single item was gain on derivatives, which contributed a positive EUR 7.6 million, and mainly reflecting purchase hedges executed over the counter and on exchanges. Other changes added EUR 1.5 million, mainly related to the change in value of derivative instruments and power purchase agreements for renewable energy.

The result marks the first clearly positive contribution from the integrated electricity portfolio, which brings renewable generation, the retail client portfolio and energy trading into a single unit. This is the outcome the Group anticipated when planning the reorganisation.

Non-Renewable Electricity Production Segment

Sales revenue from non-renewable electricity production increased by 8% to EUR 31.5 million in Q2 2026, driven mainly by the strategic reserve capacity fee, which contributed EUR 14.9 million during the quarter. Electricity generation from non-renewable sources amounted to 165 GWh, a 49% decrease year-on-year, as strong renewable output, especially plentiful and comparatively cheap solar generation, reduced the need for oil shale-fired generation. The Group’s oil shale-based assets consequently had very limited market access during the quarter.

Segment EBITDA improved by EUR 9 million to EUR -3.8 million (Q2 2025: EUR -12.7 million). Proceeds from the reserve capacity fee scheme contributed a positive EUR 14.9 million. Variable profit declined by EUR 3.3 million, as sales volumes halved year-on-year and average margins remained negative before derivatives and reserve capacity fees. Fixed costs increased by EUR 1.1 million, and gain on derivatives had a negative year-on-year impact of EUR 1.7 million, reflecting a gain of EUR 1.7 million in Q2 2025 against none in Q2 2026.

Taken together with the first quarter, the reserve capacity mechanism has delivered EUR 29 million in the first half of 2026, consistent with the approximately EUR 60 million per annum previously guided. Estonia continues to depend on oil shale power plants to ensure security of supply and cannot rely solely on cross-border transmission capacity. While keeping older plants operational is expensive, it is essential – and the mechanism now provides appropriate compensation for that service.

Distribution Segment

Distribution sales revenue increased by 5% to EUR 77.5 million in Q2 2026, driven by both higher sales volume and a higher average sales price. Distribution volume was 1.49 TWh, an increase of approximately 1% year-on-year, and the average distribution sales price rose to EUR 51.9 per MWh (Q2 2025: EUR 50.0 per MWh).

Segment EBITDA increased by 21% to EUR 34 million, an improvement of EUR 6 million year-on-year. The total margin impact was a positive EUR 3.4 million, mainly reflecting the increase in the average sales price. Higher distribution volume added EUR 0.7 million, and fixed costs improved EBITDA by EUR 1.8 million as outsourced maintenance costs decreased. This is a deliberate efficiency gain, with more maintenance work performed by the Group’s own staff and less reliance on outsourcing.

The distribution segment remains the most resilient and predictable contributor to Group earnings, and these stable profitability trends are expected to continue.

Shale Oil Segment

Shale oil sales revenue increased by 10% to EUR 47 million in Q2 2026, driven by higher volumes. Shale oil sales volume increased by 17% year-on-year, and production amounted to 120.4 thousand tonnes, an increase of 18.0 thousand tonnes or 18% year-on-year, with output growing at every plant.

Headline and underlying prices moved in opposite directions during the quarter. The average shale oil sales price, including the effect of realised hedging transactions, decreased by 6% to EUR 379.8 per tonne (Q2 2025: EUR 405.5 per tonne). Excluding derivatives, the average sales price increased by 23% to EUR 441.9 per tonne (+EUR 82.5 per tonne), which reflects the market environment into which the Group is actually selling. The bridge between the two is primarily realised hedging, which amounted to EUR -62.1 per tonne in the quarter, or EUR -7.7 million in absolute terms. This includes the settlement of zero-cost collars entered into in previous quarters, well before the escalation of tensions in the Middle East, with the intention of protecting the Group against the low oil market prices prevailing at that time.

Segment EBITDA decreased by 40% to EUR 10.1 million. Higher sales volumes added EUR 4.6 million. This gain was offset by a negative margin impact of EUR 3.3 million, as the positive effect of higher market prices was outweighed by realised derivatives. Other changes reduced EBITDA by EUR 5.4 million, relating to the change in value of unrealised derivatives, where a gain of EUR 5.4 million had been recorded in Q2 2025. Fixed costs increased by EUR 2.8 million, reflecting one-off costs related to the closure of the Narva quarry, which is expected to lower the Group’s cost base over the longer term.

Approximately 45% of the next twelve months of planned production is hedged, almost all at the elevated price levels established after the escalation in the Middle East. From Q3 2026 onwards, the drag from hedges struck at low prices will be smaller and the increase in global oil prices since March will be reflected far more directly in EBITDA. The new Enefit 280-2 oil facility contributed approximately five thousand tonnes during the quarter; construction is complete and the plant is in its final testing and start-up phase, with full production capacity expected within Q3 2026.

Other Products and Services Segment

Sales revenue from other products and services decreased by EUR 24.9 million to EUR 39 million in Q2 2026. The segment comprises sales of gas, heat, frequency services, materials, industrial equipment and other items. The impacts of one-off transactions, research and development costs and a portion of the Group’s overhead costs are also recognised in this segment.

Segment EBITDA decreased by EUR 40.5 million to EUR -9 million. Frequency services accounted for the bulk of the movement, with revenue down EUR 25.8 million and EBITDA down EUR 29.9 million year-on-year, as H1 2025 delivered an exceptional one-off positive result from this business line.

We indicated during the period of exceptional returns that frequency services profitability would normalise within a few quarters, and this quarter reflects that normalisation. Frequency services, which are essential for maintaining 50-hertz grid stability, remain profitable and an integral part of both the electricity system and the Group’s income, albeit at more moderate levels than the exceptional returns recorded in 2025.

Investments

Group capital expenditure in Q2 2026 totalled EUR 66 million, a 45% decrease year-on-year, in line with the Group’s plans and previous commitments. Investments in the first half of 2026 amounted to EUR 117 million, a 46% decrease year-on-year.

Investments in the renewable energy and electricity sales segment amounted to EUR 10.7 million, including EUR 5.7 million in the battery energy storage system, EUR 0.8 million at the Kelmė wind farm and EUR 0.6 million at the Strzałkowo solar farm. The battery energy storage investment relates to the Group’s Lithuanian project, for which EUR 2.4 million of grant support has already been received. Investments in non-renewable electricity production amounted to EUR 6.1 million, of which approximately EUR 4 million related to the new hydrogen-capable gas plant. Distribution network investments were EUR 38.5 million, focused on network maintenance and new network connections. Shale oil investments amounted to EUR 6.5 million, including EUR 5.6 million on the construction of the new Enefit 280-2 shale oil plant.

The heavy capital expenditure cycle of recent years is now behind the Group. The strategic focus has shifted to unlocking greater returns from the asset base already built.

Financing and Liquidity

As of 30 June 2026, Eesti Energia had EUR 861 million in total available liquidity, comprising EUR 441 million in liquid assets and EUR 420 million in undrawn loans, the latter consisting of liquidity loans of EUR 320 million and long-term loans of EUR 100 million.

Total debt excluding accrued interest amounted to EUR 1,666 million at the end of Q2 2026, and net debt stood at EUR 1,224 million, an increase of EUR 112 million year-on-year.

Key financing events during Q2 2026 were related to the Eurobond issuance. In May 2026, Eesti Energia priced a EUR 300 million five-year senior green bond, listed on the Luxembourg Stock Exchange. It was nearly 6.3 times oversubscribed and priced at 170 basis points over mid-swaps. The European Investment Bank and the European Bank for Reconstruction and Development each participated with EUR 20 million as anchor investors.

The Group’s net debt-to-EBITDA ratio stood at 4.07x at the end of Q2 2026, compared with 3.98x at the end of Q1 2026. The increase was driven largely by the EBITDA component, as last twelve-month EBITDA has fallen, reflecting a particularly weak Q3 2025 and the normalisation in frequency services. Eesti Energia’s commitment to bringing this ratio back towards 3.5x is unchanged, supported by capital expenditure already down 45%, the reserve capacity fee running at approximately EUR 60 million annualised, the new oil plant reaching full production capacity during Q3 2026, and continued cost and efficiency work following the reorganisation implemented in January 2026. The Group’s financing policy remains aimed at maintaining investment-grade credit ratings, and the debt maturity profile contains no near-term maturities that create refinancing pressure.

Current credit ratings (as of 31 July 2026):

Fitch: BBB–, Outlook: Stable

Moody’s: Baa3, Outlook: Stable

Outlook

Eesti Energia reaffirms its full-year 2026 guidance. Sales revenue and EBITDA are expected to increase compared with 2025 levels, while capital expenditure is planned to decrease by approximately 50% compared with 2025.

The primary drivers of the expected improvement are: a) the full operational contribution of the new Lithuanian wind assets throughout 2026; b) the strategic reserve power capacity fee of approximately EUR 60 million per annum; c) somewhat higher fuel prices driven by developments in the Middle East, which will feed through to EBITDA far more directly from Q3 2026 onwards as low-priced hedges roll off; d) the ramp-up of the new Enefit 280-2 shale oil facility, which will increase production volumes; and e) additional efficiencies from integrating the retail client portfolio, renewable electricity assets and energy trading into one unit, enabling the Group to produce and sell more at lower cost.

On the investment side, the Group will continue to prioritise the completion of major ongoing projects and essential network upgrades, rather than initiating new discretionary investments. The discretionary portion of the capital expenditure plan has been reviewed and adjusted where possible. The Group’s strategic emphasis remains firmly on maximising returns from the existing asset base.

Key Financial Information

Condensed Consolidated Interim Income Statement

Condensed Consolidated Interim Statement of Financial Position

Eesti Energia will publish its unaudited Q2 2026 results on 31 July 2026. The Q2 2026 interim report and investor presentation are available on Eesti Energia’s website. An investor call discussing the Q2 2026 financial results will take place on 31 July 2026 at 11:00 London time, 12:00 Frankfurt time, and 13:00 Tallinn time. Please join the conference call using the following link.

Further Information:

Danel Freiberg
Head of Treasury and Financial Risk Management
Eesti Energia AS
Tel: +372 5594 3838
Email: danel.freiberg@enefit.com

Attachment

• Q2 2026 aruanne_ENG final