Eesti Energia Q2 2026 results: EBITDA falls 28%, but guidance holds

Eesti Energia AS has reported a weaker set of unaudited second-quarter results, with lower group profitability and a swing from profit to loss.

However, the headline decline needs some context. Last year's comparison benefited from exceptional frequency services earnings, while several of the group's main operating businesses improved during Q2 2026. Management has also reaffirmed its full-year guidance.

For investors, the important question is whether the current improvement in renewable energy, electricity sales, distribution and reserve capacity income can outweigh weaker comparatives, elevated debt and volatile commodity markets.

Eesti Energia's key Q2 figures

Metric	Q2 2026	Q2 2025	Change
Sales revenue	€373.6 million	€379.7 million	Down 2%
EBITDA	€55.7 million	€76.9 million	Down 28%
Net profit or loss	€8.6 million loss	€27.3 million profit	Weaker
Capital expenditure	€66 million	Not disclosed in the results table	Down 45%

EBITDA means earnings before interest, tax, depreciation and amortisation. It is commonly used to assess underlying operating performance before financing costs and non-cash accounting charges.

The group recorded a net loss of €8.6 million, rounded to €9 million in its commentary, compared with a €27.3 million profit a year earlier. Alongside lower EBITDA, depreciation increased by €5 million as new assets entered service.

The first-half picture was more resilient. Revenue rose 4% to €940 million, EBITDA declined 8% to €175 million and net profit reached €41 million.

Why did quarterly profit fall?

The biggest year-on-year drag came from the other products and services division, where Q2 2025 included an exceptionally strong contribution from frequency services.

Frequency services help maintain the electricity grid at a stable 50-hertz frequency. They remain profitable, but Eesti Energia had already warned that the exceptional returns recorded in 2025 would normalise.

In Q2 2026, the segment's revenue fell by €24.9 million to €39 million, while EBITDA dropped by €40.5 million to a €9 million loss. Frequency services accounted for €29.9 million of the EBITDA movement.

Seasonality also played a part. Eesti Energia says its second and third quarters are structurally weaker because warmer weather reduces electricity consumption and summer prices tend to be lower.

The average electricity price in Estonia fell 2% to €59.7 per MWh, its lowest quarterly average for five years. Around 29% of hours cleared at or below €20 per MWh, illustrating the pressure that low-price periods can place on generators.

Renewable energy and electricity sales improved sharply

The strongest operational feature was the renewable energy and electricity sales segment.

Revenue increased 5% to €178 million even though renewable generation fell 14% to 472 GWh. Weaker wind conditions and wind farm curtailments reduced production, while retail electricity sales volumes declined 3% to 2.1 TWh.

Despite this, segment EBITDA increased 90% to €24 million. A €7.6 million gain on derivatives was the largest individual contributor, while fixed costs fell by €1.5 million.

Management described this as the first clearly positive contribution from its integrated electricity portfolio. The group has brought renewable generation, retail customers and energy trading together in one business unit, aiming to manage production, pricing and risk more efficiently.

That is encouraging, although investors should note that derivatives played a meaningful role in the quarterly improvement.

Distribution remains the dependable earnings source

Distribution continued to provide the group's most resilient earnings.

Revenue rose 5% to €77.5 million, supported by a 1% increase in distribution volumes and a higher average sales price of €51.9 per MWh, up from €50.0 per MWh.

Segment EBITDA increased 21% to €34 million. Higher prices added €3.4 million, increased volumes contributed €0.7 million and lower fixed costs provided a further €1.8 million benefit.

Eesti Energia is carrying out more maintenance work internally rather than relying on outsourced providers. Management expects the segment's stable profitability trend to continue.

Reserve payments support conventional generation

Non-renewable electricity production remained loss-making, but its result improved significantly.

Revenue increased 8% to €31.5 million, while EBITDA improved from a €12.7 million loss to a €3.8 million loss. The main support came from a €14.9 million strategic reserve capacity fee.

This mechanism compensates Eesti Energia for keeping conventional power plants available to support Estonia's security of electricity supply, even when market prices make generation uneconomic.

The reserve mechanism contributed €29 million during the first half and is running in line with previous guidance of approximately €60 million annually.

Shale oil volumes rise, but old hedges hurt

Shale oil revenue increased 10% to €47 million as sales volumes rose 17%. Production grew 18% to 120,400 tonnes, with higher output across every plant.

However, segment EBITDA fell 40% to €10.1 million. The reported average sales price, including realised hedges, declined 6% to €379.8 per tonne. Excluding derivatives, the price increased 23% to €441.9 per tonne.

Realised hedging reduced the quarterly price by €62.1 per tonne, equivalent to a €7.7 million drag. These hedges were arranged before tensions in the Middle East pushed oil prices higher.

Management expects this pressure to ease from Q3 as lower-priced hedges roll off. Around 45% of planned production for the next 12 months is hedged, almost entirely at the higher prices established following the escalation in the Middle East.

The new Enefit 280-2 facility produced approximately 5,000 tonnes during Q2. Full production capacity is expected during Q3 2026, although successful commissioning remains an important operational milestone.

Investment falls as attention turns to debt

Capital expenditure fell 45% to €66 million during the quarter and declined 46% to €117 million for the first half.

Management says the heavy investment cycle is now behind the group. Its focus is shifting towards generating better returns from assets already constructed, while completing major projects and essential distribution network upgrades.

At 30 June, Eesti Energia had total available liquidity of €861 million. This comprised €441 million of liquid assets and €420 million of undrawn loans.

Net debt stood at €1.224 billion, up €112 million year-on-year. The net debt-to-EBITDA ratio increased from 3.98 times at the end of Q1 to 4.07 times at the end of Q2.

That leverage figure is a clear area to monitor. The group remains committed to moving it back towards 3.5 times, supported by lower investment, reserve capacity income, increased shale oil production and further efficiency measures.

In May, Eesti Energia issued a €300 million five-year senior green bond. The offer was nearly 6.3 times oversubscribed and priced at 170 basis points above mid-swaps. Its Fitch rating remains BBB- with a stable outlook, while Moody's rating is Baa3 with a stable outlook.

Guidance is unchanged despite the Q2 loss

Eesti Energia continues to expect full-year revenue and EBITDA to increase compared with 2025. Capital expenditure is expected to fall by approximately 50%.

The main anticipated drivers are a full-year contribution from Lithuanian wind assets, approximately €60 million of annual reserve capacity fees, stronger oil prices feeding through as old hedges expire, the ramp-up of Enefit 280-2 and efficiencies from the integrated electricity business.

The positives are improving profitability in several core divisions, predictable distribution earnings, lower capital expenditure and new assets approaching full operation.

The negatives are the quarterly loss, a net debt-to-EBITDA ratio above four times, continued exposure to commodity prices and the importance of derivatives and reserve payments to recent segment results.

Overall, this was a mixed quarter rather than a straightforward deterioration. The group now needs to demonstrate that lower spending and better asset utilisation can translate into stronger cash generation and a sustained reduction in leverage.

Figures and management commentary are taken from the original company announcement.