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Investments in improving operational efficiency produced good results

The year 2014 was the second warmest in Finland since 1938 which is the year when comparable statistics began to be made. Despite these challenging conditions, we managed to achieve good overall results. Our total sales were 1.1 TWh (2013: 1.1 TWh), and our net sales were EUR 74 million (EUR 73 million).

One of the positive aspects in 2014 was that the general price level of fuels was more stable than in the previous years, keeping fuel costs down. The good availability of peat balanced the price level of domestic fuels. The world market price of oil began to fall in the autumn and the fall in the price accelerated towards the end of 2014, but as we use very little oil, this development did not have a significant impact on our fuel costs.

Due to the difficult economic situation, the overall construction activity remained low in 2014. Nevertheless, we were fairly successful in acquiring new customers and achieved the target set for the year with regard to the number of new customers. The single most significant increase in our heating sales was due to a shopping centre which was built in Hämeenlinna. The construction site consumed heat since early 2014 and until its completion in the autumn.

The share of domestic fuels in production continued to increase

Our most significant investment in 2014 was the solid fuel boiler in Turenki. The boiler was commissioned in the autumn and it uses completely domestic fuels. Other production investments included a flue gas scrubber at the Toijala solid fuel plant considerably improving the plant’s efficiency, the new pellet boiler built in the Jyväskylä area and improvements to fuel reception arrangements in Laukaa. These investments further increased the share of domestic fuels in our district heating production and correspondingly decreased the use of oil and natural gas which had a positive impact on fuel costs.

During the year, we also introduced wireless remote monitoring of the wells in our heating network. The system facilitates real time monitoring of the network’s condition as well as proactive maintenance, thereby significantly improving reliability in the supply of heating. We also deployed a new maintenance information system that enhances the planning and implementation of our maintenance operations and improves the usability and efficiency of our plants.

We continued to focus in employee well-being. Our success in this activity was reflected in the IC Insight Oy’s global HUPO Index job satisfaction survey in which we participated for the second time. The job satisfaction of our personnel placed us to the top 20% of companies participating in the study. As employee well-being is a top priority for us, we will continue to take measures to support it in the coming years as well.

Strong focus on providing information that serves customers

In late 2014, we launched Elenia Lämpöluotsi, a new comprehensive service solution for our customers. In addition to consumption monitoring and heating tips, Lämpöluotsi includes a broad range of information and customer support for our various customer groups. We can now provide information on our existing comprehensive service solution as well as our new products and services in a clearer and more centralised manner.

We also introduced an online map for our customers which displays the scheduled interruptions to the distribution of heating, information on faults and estimated repair times. During the year, we also arranged several events for facility managers and board members of housing companies which focused on providing information on and discussing current heating related matters.

Efforts to improve operational efficiency set to continue

With respect to domestic fuels, the availability of wood and peat is good at the moment. In order to secure the competitiveness of peat, peat taxes were reduced for 2015 and further tax reductions are being planned. We consider peat to be an excellent domestic alternative to imported fossil fuels. Therefore, we hope that the political decision-making will not complicate possibilities for peat production in the coming years.

In 2014, we were able to improve efficiency of both the production operations and the network. We will continue our efforts to improve operational efficiency and maintain a high rate of efficiency at our production plants in 2015. Instead of making substantial new investments in 2015, we will prioritise the effective implementation of our new equipment and systems as well as the efficient utilisation of our previous investments.

When choosing heating solutions, customers are increasingly seeking detailed information on the alternatives and their costs. In order to be successful, we must continuously maintain customer interest in district heating and develop our operations in order to provide an increasingly comprehensive service to customers.

Although our sales targets for the financial year of 2014 fell slightly short due to the warm weather and weak economic situation, our total revenue increased mainly due to an increase in the heat sales price. The operating profit was clearly higher compared to the previous year, as the production efficiency increased due to internal development activities.

We achieved excellent success in developing the quality of our production and services, which creates a strong foundation for the coming years. I would like to take this opportunity to thank our customers, employees, board of directors and business partners for their valuable and development-oriented cooperation in 2014.

Matti Tynjälä
CEO

Elenia Lämpö Oy