JSC “Latvijas Gāze”Webinar

Riga, 26 August 2021

1. GAS MARKET

2. JSC “LATVIJAS GĀZE” GROUP RESULTS 2.1. Distribution segment results

2.2. Sales and trading segment results

2

AGENDA

3

1GAS MARKET

3

Global gas market

4

BUST AND BOOM CYCLE

0

5

10

15

20

25

30

35

EU

R/M

Wh

TTF month index

— Cold and prolonged winter in Europe

— Harsh weather in Asia

— Unplanned supply constraints – US LNG

exports impacted by polar blast

— Natural gas inventories in Europe

commenced the summer season below five-

year average level

— Post pandemic gas demand continues to

outstrip supply

Global gas market

EUROPEAN STORAGE LEVELS REMAIN BELOW THREE YEARS LEVEL— LNG deliveries to Europe fell during first half of injection season as Asia provides better netback for LNG

sales compared to Europe

— In 2021 European gas traders have less incentive to inject gas as winter-summer spread diminished

— Groningen gas field production in Netherlands continue to decline in line with Dutch government planto end gas production at the field

5

ALTHOUGH WINTER PRICE 2021/2022 IS STILL SUBJECT MAINLY TO:— Weather

— Monetary policy tightening

— If such high price can be passed to consumer on long term basis

Pushed winter price forwards 2021/2022 above 40 EUR/MWh during Q3

Regional gas market

6

— Bigger regional market comes with bigger competition

— Gas sales margins are depressed amid severe competition andcontinuously rising gas price

— Gas prices for market clients will be higher despite smallertrader’s margin

In the medium term gas sales industry will be consolidatedaround big trading companies with strong balance sheet

High gas prices

Increased gas pricevolatility

Thin margins

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2JSC “Latvijas Gāze” GROUP RESULTS

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Group`s key financial figures

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— Net profit is negatively impacted bymarked-to-market loss of derivativesthat are related to future periods

— Higher sales price— Higher sales volumes— Higher utilization of distribution network

1 Gross profit= Revenue from contracts with customers - Raw materials and consumables used2 JSC “Latvijas Gāze” measures derivatives at fair value and doesn’t implement hedge accounting

98 904

154 255

6M 2020 6M 2021

tho

sus.

EU

R

Net turnover

41 052

50 740

6M 2020 6M 2021

tho

sus.

EU

R

Gross profit1

16 625

5 445

6M 2020 6M 2021

tho

sus.

EU

R

Net profit2

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2.1.DISTRIBUTION SEGMENT RESULTS

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Distribution segment key financial figures

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— Distribution segment is regulated by the Public Utilities Commission

— Harsh and prolonged winter increased utilization of distribution network

— Continued to develop a safe and available natural gas distribution infrastructure, with major investmentsmade in construction and reconstruction of gas pipelines

5 937

6 974

2020 6M 2021 6M

GW

h

Distribution system utilization

12 167

16 946

2020 6M 2021 6M

tho

us.

EU

R

EBITDA

5 309 5 356

2020 6M 2021 6M

km

Distribution system pipe length

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2.2.SALES AND TRADING SEGMENT RESULTS

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Sales and trading segment key figures

— EBITDA is impacted by marked-to-market loss of derivatives that are relatedto index-linked gas sales contracts in future periods

— JSC “Latvijas Gāze” measures derivatives at fair value and doesn’t implementhedge accounting

— Negative impact from derivatives will be compensated by higher gross profitin future periods once underlying assets are sold.

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— Cold and prolonged winter increased gas consumption in the region

5 392

7 437

2020 6M 2021 6M

GW

h

Natural gas sales12 998

-3945

2020 6M 2021 6M

tho

us.

EU

R

EBITDA

SALES AND TRADING SALES

JSC “Latvijas Gāze” successfully increased its share in sales abroad

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Sales in Latvia; 4692; 63%

Sales abroad;

2745; 37%

Sales, GWh (2021)

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lg.lv

latvijasgaze.ee

latvijasgaze.fi

Aristida Briāna iela 6, Rīga, LV-1001

+371 67 869 866