Q2 2026 AB KN Energies Earnings Call

August 20, 2026

Speaker #1: You have joined the meeting as an attendee and will be muted throughout the meeting. This meeting is being recorded.

Moderator: Ladies and gentlemen, welcome to KN Energies Investor Conference of the company's unaudited financial results for the 6 months of the year 2026. My name is Olga, and I will be moderating today's event. As usual, we will start our conference with the company's presentation, which will be followed by a live Q&A session. You are kindly invited to submit your questions in writing by using the Q&A window below the presentation, or you can raise your hand and be unmuted after the presentation is over. Please be informed that this session is being recorded, and a replay will be available soon after the call. Without further delay, I would like to give the floor to our today's host, Tomas Tumėnas, Chief Financial Officer of KN Energies. Please, Tomas, the stage is yours.

Moderator: Ladies and gentlemen, welcome to KN Energies Investor Conference of the company's unaudited financial results for the six months of the year 2026. My name is Olga, and I will be moderating today's event. As usual, we will start our conference with the company's presentation, which will be followed by a live Q&A session. You are kindly invited to submit your questions in writing by using the Q&A window below the presentation, or you can raise your hand and be unmuted after the presentation is over. Please be informed that this session is being recorded, and a replay will be available soon after the call. Without further delay, I would like to give the floor to our today's host, Tomas Tumėnas, Chief Financial Officer of KN Energies. Please, Tomas, the stage is yours.

Speaker #3: Ladies and gentlemen, welcome to Kion Energy's investor conference on the company's unaudited financial results for the first six months of the year 2026. My name is Olga, and I will be moderating today's event.

Speaker #3: As usual, we will start our conference with the company's presentation, which will be followed by a live Q&A session. You are kindly invited to submit your questions in writing by using the Q&A window below the presentation, or you can raise your hand and be unmuted after the presentation is over.

Speaker #3: Please be informed that this session is being recorded, and a replay will be available soon after the call. Without further delay, I would like to give the floor to today’s host, Tomas Tumėnas, Chief Financial Officer of KN Energies.

Speaker #3: Please, Tomas, the stage is yours.

Speaker #4: Thank you, Olga. Hello to everyone. On this quite rainy afternoon in Vilnius, I would like to share and describe our situation during the first half—what we did, what happened within the company, within the group—and I'm really happy to share all financial information and major events.

Tomas Tumėnas: Thank you, Olga. Hello to everyone in this quite rainy afternoon in Vilnius. I would like to share and describe our situation during the H1, what we did, what happens within the company, within the group, and I am really happy to share all financial information and major events. Let us start. As usually, I would like to give some information about the overall market situation worldwide in oil industry and in gas industry, also in our region. Then we will touch completely market and business situation of the KN Group, and then we will touch financial results, which actually have been released or was released in the stock exchange. Let us start. Major highlights we pointed out here, but I would like maybe to emphasize on the especially more commercial business-oriented KPIs like methanol cargo.

Speaker #4: So let's start. And as usual, I would like to give some information about the overall market situation worldwide, in the oil industry and in the gas industry, also in our region.

Speaker #4: Then we will touch completely on the market and business situation of the Kion Group, and then at the end, we will cover the financial results, which actually have been released, or were released, on the stock exchange.

Speaker #4: So let's start. Major highlights: we pointed out here, but I would like maybe to emphasize especially the more commercial or business-oriented KPIs, like methanol cargo for us.

Tomas Tumėnas: For us, it is a really important milestone because we handled almost 5,000 cubic meters, and also we managed to make the first commercial methanol cargo within our port, every industry, and every in our infrastructure. It required additional investments, preparation, and we look forward to increase that loading of such kinds of products in the future because they are really in demand in the market. KN allocated almost 70%, 71% of future gas, the commissioning regasification or let us say all our capacities during period, for the future period as of 2033 till 2044. Also, our key project in new energy business segment, CO2 emission CCS project got Project of National Importance. As a result of very active activity in our LNG business unit, the FSRU average utilization so far during the first 6 months was 86%, so it was really huge.

Speaker #4: It's a really important milestone because we handled almost 5,000 cubic meters, and also we managed to make the first commercial methanol cargo within our port, our industry, and our infrastructure.

Speaker #4: It required additional investments, preparation, and we look forward to increasing the loading of such kinds of products in the future because they are really demanded in the market.

Speaker #4: Kion, allocated almost 70–71 percent of future gas, the commissioning regasification or, let's say, all our capacities during periods for the future period as of 2033 till 2044.

Speaker #4: Also, our key project in the new energy business segment, the CO2 emission CCS project, was designated a project of national importance. And as a result of the very active activity in our LNG business unit, the FSRU average utilization so far during the first six months was 86%, so it was really huge.

Speaker #4: So let's go on and also discuss some major KPIs regarding our revenues. As you see, on the top line, we managed to increase our revenues per group by 14% versus the first half of last year, reaching €58 million.

Tomas Tumėnas: So let's go on, and also some major KPIs regarding our revenues. As you see, our revenues on the top line, we managed to increase our revenues per group by 14% versus the H1 of the last year, reaching EUR 58 million. EBITDA increased by almost 15%, reaching EUR 31 million. And the net profit, the official net profit, we increased almost 60% and reaching almost EUR 14 million. So I would say as in overall, really good results, really strong results, despite the total overall vulnerability in the energy market, let's put it this way. So really, I think we are performing pretty well in basically all our business segments are doing better versus the last year. And also in our daily life, we are monitoring regarding the budget. So also we are over-performing the budget.

Speaker #4: EBITDA increased by almost 15%, reaching €31 million. And net profit, official net profit, increased by almost 60%, reaching almost €14 million.

Speaker #4: So I would say, as in overall, really good results, really strong results. Despite the total overall vulnerability in the energy market, let's put it this way, so really I think we are performing pretty well.

Speaker #4: In basically all our business segments, we are doing better versus last year. And also in our daily life, we are monitoring regarding the budget.

Speaker #4: So, also, we're performing over-performing the budget. And as we see accordingly, the market definitely reacted to some information we released during the 6 months, also including first quarter results.

Tomas Tumėnas: And as we see, accordingly, the market definitely reacted to some information we released during the six months, also including Q1 results. And by that, our capitalization grew by almost EUR 29 million, and share price since the beginning of this year increased 13.6%, and are performing overall stock exchanges in Baltic countries. So market and business overview. As you know, and also I guess you are watching the energy business and situation in the energy markets. If we take as a start, the beginning of this year, and especially at the end of March when, let's say, United States started campaign against Iran in Hormuz, the prices for all energy products, meaning oil products, petrol and gas, increased a lot. The fluctuation in the market is very high. The prices went up since the Hormuz, let's say, case surged by almost 50%.

Speaker #4: And by that, our capitalization grew by almost €29 million in share price since the beginning of this year, increased 13.6%, and are performing overall stock exchanges in Baltic countries.

Speaker #4: So, market and business overview. As you know, and also I guess you are watching the energy business and the situation in the energy markets, and if we take as a start the beginning of this year—and especially the end of March, when the, let's say, campaign, United States started campaign against Iran in Hormuz—the prices for all energy products, meaning oil products, petrol, and gas, increased a lot.

Speaker #4: So, the fluctuation in the market is very high. The prices went up since the Hormuz, let's say, case surge, by almost 50%.

Speaker #4: And currently, if we take the gas prices, they are trading at around 61 to 63 euros per megawatt hour, and crude oil, as you see, also fluctuates around 80 to 90 euros.

Tomas Tumėnas: And currently, if we take the gas prices, they are trading at around EUR 61, EUR 63 megawatt hour. And crude oil, as you see, also fluctuates around 80, €90. Dollar, sorry. Meaning that all these high prices, from one hand, puts in a good situation oil refineries, meaning that the crushing margins are quite high for the H1 of this year worldwide. And definitely the performance of the oil refineries are very good as well, and they are announcing very good results. What it means for us? For us, it means that one of our major clients, Orlen, also enjoying quite high margins and the volumes and the production capacity utilization at oil refineries are quite high. So this is like secure supply, and we are happy to provide as much service as we can to all our oil partners, meaning our clients.

Speaker #4: Dollar, sorry. Meaning that all these high prices, on one hand, put oil refineries in a quite good situation. Meaning that the cracking margins are quite high for the first half of this year worldwide.

Speaker #4: And definitely, the performance of the oil refineries is very good as well, and they are announcing very good results. What it means for us— for us, it means that one of our major clients, Orlen, is also enjoying quite high margins, and the volumes and the production capacity utilization at all oil refineries are quite high.

Speaker #4: So this is like secure as supply, and we are happy to provide as much service as we can to all our oil partners, meaning our clients.

Speaker #4: But from another hand, the the fluctuations definitely put some set and uncertainty and additional pressure on the costs side, on the OPEX, and also I'm not showing there is the the fluctuation of our emission carbon emission prices.

Tomas Tumėnas: But from another hand, the fluctuations definitely put some uncertainty and additional pressure on the costs side, on the OpEx. Also, I am not showing the fluctuation of our emission, carbon emission prices. They also fluctuated a lot. For us, for KN Group, emission prices impacts a lot on overall OpEx, because the prices, how much we are spending for emission certificates is quite high, amounting to almost EUR 6 million. So meaning that, also from risk perspective, from the pressure on OpEx, it is a negative impact. Okay. If we just go more deeply in LNG market, what happens in the 2026, in the H1. As you see, via our terminal, have been imported basically, only from two origins, from two countries, the LNG. So it comes primarily from Norway, 58%, and then the rest from United States.

Speaker #4: They also fluctuated a lot, and for us, for Kion Group, emission prices impact a lot on overall OPEX because the prices, how much we're spending for emission certificates, is quite high—amounting to almost €6 million.

Speaker #4: So, meaning that also from a risk perspective, from the pressure on OPEX, it's a negative impact. And okay, so if we just go more deeply into the LNG market, what happens in 2026 in the first half?

Speaker #4: So as you see, this is why our terminal has been imported basically only from two origins, from two countries, the LNG. So it comes primarily from Norway, 58%, and then the rest from the United States.

Speaker #4: If we look on the Europe level, the distribution supply is slightly different, and depending on each country, they have a slightly different situation. But overall, the major sources of LNG import come from Norway and the United States, followed by Trinidad and Tobago, and also from Qatar.

Tomas Tumėnas: If we look on the Europe level, the distribution supply is slightly different. Depending on each country, they have a slightly different situation. In overall, the major sources of LNG import come from Norway and United States, followed by Trinidad and Tobago, and also from Qatar. Also some quantities, unfortunately, still are imported from Russia. One of the biggest countries importing from Russia LNG is Belgium. As I mentioned, the client of this, our FSRU Independence utilization rate is very high, as you see, reaching 86%. It is higher than we had last year in the same period of the last year, and also definitely much more higher compared with the European average, which is 53%. Actually, I would say that this is a very good utilization ratio.

Speaker #4: Also, some quantities are still imported—fortunately, still imported from Russia—and one of the biggest countries importing oil, sorry, LNG from Russia is Belgium.

Speaker #4: The as I mentioned, the the the Klaipedas our FSRU independence utilization rate is very high. As you see, reaching 80, 86%. So it's higher than we had last year in the same period of the last year.

Speaker #4: And also, definitely, much higher compared with the European average, which is 53%. So actually, I would say that this is a very, very good utilization ratio.

Speaker #4: And of course, it's very important for us, meaning that we have quite steady, stable LNG import flow, and our FSRU works as a factory, manufacturing facility, and works at almost 100% of the capacity.

Tomas Tumėnas: It is very important for us, meaning that we have quite a steady, stable LNG import flow. Our FSRU works as a factory, as a manufacturing facility, and works at almost 100% of the capacity. We are enjoying that utilization. Also our commercial people are doing everything in order to sell our capacity to our clients. What is the situation with, let's say, gas storage? Because it is a very important indicator. If we are discussing at the end of June, taking the end of June, the reporting period, the storage in Europe was approximately 48% of, let's say, total needed capacity, and it is almost 10% below historical levels. I have looked in the morning what is the situation, taking into account the most recent data, taking into account the beginning of August.

Speaker #4: And we are enjoying that utilization, and also our commercial people are doing everything in order to sell our capacity to our clients.

Speaker #4: What is the situation with, let's say, gas storage? Because it's very important, also as an indicator. So if we are discussing at the end of June, taking the end of June as the reporting period, storage in Europe was approximately 48% of the total needed capacity.

Speaker #4: And it's almost 10% below historical levels. I have looked in the morning to see what the situation is, taking into account the most recent data.

Speaker #4: So, taking into account the beginning of August—the storage level increased to almost 58%. But still, again, this is below the normal level, below by almost the same 10% as the normal level.

Tomas Tumėnas: The storage level increased to almost 58%, but still, again, this is below the normal level by almost the same 10% of the normal level. Also, as you see Latvia, meaning that this is here, Baltics are storaging the LNG also is quite below the historical level. That definitely puts, I would say, some risks, some additional pressure in the future, depending on the situation in the Hormuz, if they will open or not, and what will be the case, because Europe, as I said, primarily imports gas from not only Norway and United States, but also from, let's say, the same Qatar or Hormuz countries. Maybe majority of that gas goes into the South European countries like Italy, Spain, maybe less than in Northern part, but nevertheless, taking into account overall situation.

Speaker #4: And also, as you see, Latvia—meaning that this is here, the Baltics are storing the LNG—also, it's quite below the historical level. And that definitely puts, I would say, some risks, some additional pressure in the future.

Speaker #4: Depending on the situation in Hormuz, if they will open or not, and what will be the case, because Europe, as I said, primarily imports gas not only from Norway and the United States, but also from, let's say, the same Qatar or Hormuz countries.

Speaker #4: And maybe the majority of that gas goes into the South European countries like Italy, Spain—maybe less than in the northern part—but nevertheless, taking into account the overall situation.

Speaker #4: So I would say, you know, it's difficult to predict, but it could mean that there may be some problems or challenges in having sufficient gas before the winter.

Tomas Tumėnas: I would say, difficult to predict, but meaning that it could be some problems or some challenges in having sufficient gas before the winter if the Hormuz Strait will not be opened. Accordingly, that impacts directly the prices for the gas, which, during the past two weeks, went up again by 15%. The traders and the investors are taking into account that risk. Of course, nobody knows what will be the winter, a cold or mild one. We have some uncertainties in the future regarding the, let's say, our demand for gas in Europe. I would like just to go through our business segments and the biggest one in terms of the revenues, in terms of the profitability, the regulated activity. As I already mentioned, we are really enjoying the very high performance indicators. Utilization ratio, as I said, it is very high.

Speaker #4: If the Hormuz Strait will not be opened, and accordingly, that impacts directly the prices for the gas, which during the past two weeks went up again by 15%.

Speaker #4: So the traders and the investors are taking into account that risk. And of course, nobody knows what the winter will be—cold or mild.

Speaker #4: So we have some uncertainties in the future regarding the, let's say, our our demand for demand for for gas. In in Europe. And then I would like you know, just to go through our business segments.

Speaker #4: And the biggest one in terms of the revenues, in terms of the profit, profitabilities related activity. And as I already mentioned, we are really enjoying the very high, high-performing indicators.

Speaker #4: Utilization ratio, as I said, it's very high. A very important thing that we managed to do during the past, I guess, in the past two months was that we opened a tender auction for our future capacities.

Tomas Tumėnas: Very important thing that we managed to do during the past, I guess in past two months, was that we opened a tender auction for our future capacities and for the period of 2033 till 2044. As you know, currently, we have everything booked till 2033. We managed and we planned to make additional, a new one tender, a new one auction for the future, for the next 10 years. I would say our auction was really successful, very successful actually. We sold almost 70%, concretely 71% of our future utilization of the capacity of the FSRU. Meaning that it gives us a lot of stability, predictability in the future cash flows, in future inflows. Also it shows that the importance of the Klaipėda terminal is very, very, let's say, demanded in the market.

Speaker #4: And for the period of 2033 till 2044, as you know, currently, we have everything booked till 2033. So we managed, and we planned to make an additional new tender, a new auction, for the future—for the next ten years.

Speaker #4: And I would say our auction was really successful—very, very successful, actually. We sold almost 70%, specifically 71%, of our future utilization, of the capacity of the FSRU.

Speaker #4: Meaning that it gives us a lot of stability and predictability in the future cash flows, in future inflows. And also, it shows that the importance of the Klaipėda terminal is very, very, let's say, demanded in the market.

Speaker #4: Even taking into account that, you know, our neighbors, especially in Poland, they are building the the second one FSRU vessel in order to supply and fulfill their demand for for the gas because the Poland is one of the biggest gas importers and consumers in the Europe.

Tomas Tumėnas: Even taking into account that our neighbors, especially in Poland, they are building the second one FSRU vessel in order to supply and fulfill their demand for the gas, because Poland is one of the biggest gas importers and consumers in the Europe. Actually, we're really happy and proud, I would say, regarding those results, and a lot of efforts has been made by commercial people. Even it is important that we managed to put in our list as a new client, a Ukraine company, Naftogaz, and Gasum from Finland. Actually, this is also very important. Even taking into account that still we have not bidded some capacity from our existing clients because for one or another reason, maybe for them it's too early to make, let's say, obligations or to write regarding the obligations for the future, let's say, bookings of our capacity.

Speaker #4: So actually, we're really happy and proud, I would say, regarding those results, and a lot of effort has been made by commercial people. And even, it is important that we managed to put in our list as new clients the Ukrainian company Naftogaz and Gazum from Finland.

Speaker #4: So actually, this is also very important. Even taking into account that still we have not bidded some capacity from our existing clients. Because no, for one or another reason, maybe for them, it's too early to make a, let's say, let's say, obligations or to write regarding the obligations for the future future, let's say, bookings of our capacity.

Speaker #4: I hope that time will come, and I'm pretty sure that we will sell the rest of, let's say, 20% easily. Meaning that our utilization ratio starting from 2033 and beyond will not be 71, but almost close to the current levels.

Tomas Tumėnas: I hope that time will come, and I am pretty sure that we will sell the rest of, let's say, 20% easily. Meaning that our utilization ratio, starting from 2033 and beyond, will be not 71%, but almost close to the current levels. Just wanted to remind you that full terminal, according to the, let's say, accounting rules and depreciation, it is operated till 2044. Basically, it means the value on 2044 will be balance sheet value zero, which is actually, of course, not will be the true, but this is it showing that we're really in a good position, in very strong position in our, let's say, regulated activity. Also, some information, financial information, because every year, and regulator recalculates the WACC, in other words, our return on the assets, which is allow it to keep it within the company.

Speaker #4: Just wanted to remind you that the full terminal, according to the, let's say, accounting rules and depreciation, is operated till 2044. So basically, it means the value in 2044 will be balance sheet value zero, which actually, of course, will not be true, but this is showing that, you know, we are really in a good position, a very, very strong position in our, let's say, regulated activity.

Speaker #4: Also, some financial information, because every year a regulator recalculates the VAC—in other words, our return on the assets—which is allowed to be kept within the company.

Speaker #4: And as you see, we got for the next year a slightly lower amount of the VAC versus the current one. And it means it's almost €0.2 million less revenues we will get in the next year versus the current one.

Tomas Tumėnas: As you see, we got for the next year, slightly less amount of the WACC versus current one, and it means it's almost EUR 0.2 million less revenues we will get in the next year versus the current one. This is really profound and very strong results for the regulated activity, and accordingly in the figures it reflected, as you see, and revenues increased, and EBITDA increased. Also important to note that within our revenues, we have also some commercial revenues, as we call it, which is within our terminal and extra activities. So beyond our obligations that we have from the clients. We managed also to sell several cargoes during the H1 of this year and get extra revenues for the company and also for the consumers. If we go into the second, in terms of the volumes and then size, our business segment, liquid energy.

Speaker #4: So this is really, really profound and very strong results for the regulated activity. And accordingly, in the figures, it is reflected as you see, and revenues increased and EBITDA increased. And it's also important to note that within our revenues, we have also some commercial revenues, as we're calling them, which are within our terminal and extra activities.

Speaker #4: So, beyond our obligations that we have from the clients, we managed also to sell several cargos during the first half of this year, and get extra revenues for the company and also for the consumers.

Speaker #4: If we look at the second place in terms of volumes and size, our business segment is liquid energy. In liquid energy, if we take the overall market and compare it to our performance, this is slightly different.

Tomas Tumėnas: So in the liquid energy, if we take the overall market and we take our performance, this is slightly different, meaning that the company is going above, if we take the overall market growth. Because it's not even in whole Baltic region, whereas Klaipėda is performing quite okay. As you see in our figures and presentation, Klaipėda port handled almost 2.3 million tons of oil products, and this is 12% increase, while Latvian and Estonian ports declined quarterly if we compare it with the period a year ago. Our share in oil market remains almost the same. It means stable. We are serving around 30% of whole Baltic oil terminal, liquid energy markets throughput within Baltic ports, and of course, up to 100% via Klaipėda port. If we take some highlights and financial figures on liquid energy, we transshipped 2 million tons of various oil products.

Speaker #4: Meaning that the company is going above, if we take the overall market growth, because it's not even in the whole Baltic region.

Speaker #4: Whereas Klaipeda is performing quite well, as you can see in our figures and presentation, Klaipeda port handled almost 2.3 million tons of oil products.

Speaker #4: And this is a 12% increase, while Latvian and Estonian ports declined accordingly, compared with the same period a year ago. So, our share in the oil market remains almost the same.

Speaker #4: It means stable, stable. And we are serving around 30% of all Baltic oil terminal liquid energy. I'm sorry, liquid energy market throughput within Baltic ports.

Speaker #4: And of course, almost up to 90–100% via Klaipeda port. If we take some highlights and financial figures on liquid energy, we transshipped 2 million tons of various oil products.

Speaker #4: It's 9% growth. I already mentioned we managed to sell 4,000 cubic meters of methanol cargo—transshipped, sorry, methanol cargo—and revenues increased by 7% to €16 million.

Tomas Tumėnas: It's 9% growth. I already mentioned, we managed to sell 4,000 cubic meters methanol cargo. Revenues increased by 7% to €16 million, and EBITDA remained almost the same. We are very happy, of course, with the good relations with Orlen, as Mai discussed, one of our biggest clients. The throughput of their products, especially diesel, increased a lot. Thanks to the diesel, thanks to the blended gasoline and methanol, we managed to grow by 7% in revenues, while if we take the total consumption, for example, of gasoline in Lithuania, it increased only 1.4%, and diesel increased only by 0.8%. Meaning we are outperforming the markets in our terminal utilization. That's good, also puts a quite stable cash flow in our second, in terms of the revenues and size business segment. Already I mentioned the liquid oil products. We're going to commercial LNG.

Speaker #4: And EBD remained almost the same. And we are very happy, of course, with the good relations with Orlen, as I discussed, one of our biggest clients, and the throughput of their products.

Speaker #4: Especially diesel increased a lot, and thanks to the diesel and the blended gasoline and methanol, we managed to grow by 7% in revenues.

Speaker #4: While, if we take the total consumption, for example, of gasoline in Lithuania, it increased only 1.4%, and diesel increased only by 0.8%. So, meaning we are, like, you know, outperforming the market in our terminal utilization.

Speaker #4: And that's good. It also provides quite stable cash flow in our second, in terms of revenues and size, business segment. Already, I mentioned the liquid oil products.

Speaker #4: Then we're going to commercial energy. And commercial energy is also growing a lot. So basically, this means that we are importing LNG, various cargos, and then we're loading it into the trucks. In the first half of the year, we reloaded up to almost 1,300 trucks.

Tomas Tumėnas: Commercial LNG also growing a lot. Basically, this just means that we are importing LNG, various cargoes, and then we're loading into the trucks. We, in the H1 of the year, reloaded up to almost 1,300 trucks. That represents to a 40% increase versus the last year. That also supported our growth of whole liquid product market. If we're separating it separately into commercial LNG, it contributed to almost €2.7 million in EBITDA to the total performance of the company. Also very important to note, I almost forgot, that our team managed to sign an O&M contract for some services to the Gasum, the monopoly operate in the Poland. As I mentioned, they are building the second terminal, and also we are trying to sell our services of managing those FSRU vessels and the inshore terminal.

Speaker #4: And this represents a 40% increase versus last year. That also supported our growth of the whole liquid products market. If we separate it further into commercial, that's almost €2.7 million in EBITDA, contributing to the total performance of the company.

Speaker #4: And also very important to note, I'm just almost forgot that our our team managed to sign O&M contract for some commercial some services to the gas system the the monopoly operate in the Poland.

Speaker #4: As I mentioned, they are building the second terminal, and we are also trying to sell our services of managing those FSRU vessels and the inshore terminal.

Speaker #4: So, actually, we signed that contract. So far, it's one of the steps we believe is important for the future goal and future cooperation with the Polish LNG.

Tomas Tumėnas: Actually, we signed that contract. So far, it's one of the steps, we believe, for the future goal and future cooperation with the Polish LNG business and terminal operators. If we are talking about new energy. New energy, basically, this is the future of our business, so-called new energy businesses. Here, it's a really important milestone was achieved regarding the status of CCS project. We got national important status, and that allows us to move much more smoother, much more quicker with all decisions in order to implement, to start constructions, let's say, after feasibility studies, to got all permissions needed from the various government institutions. That it's really lengthy process, and of course, it costs the time, costs the money. Therefore, we really managed together with all support from the state authorities, especially from the Ministry of Energy.

Speaker #4: Business and terminal operators. If we are talking about new energy, new energy is basically the future of our business—so-called new energy businesses.

Speaker #4: And here it's really important milestone was achieved regarding the the status of CCS project. We got national importance status and that allows us you know to move much more smoother much more quicker with all decisions in order to implement to start constructions let's say after feasibility studies to got all permissions needed from the various government institutions as and that it's really you know lengthy process and of course it costs time costs the money and therefore we really manage together with all support from the from the state authorities especially from the Ministry of Energy they supported company a lot in that movement and we are we are thanks to them meaning that we are putting more solid playground more solid ground actually for for CCS project to be valid.

Tomas Tumėnas: They supported company a lot in that movement, and we are thanks to them. We are putting more solid playground, more solid ground, actually, for CCS project to be valid. Currently, we are very heavily involved in launching Front-End Engineering Design study and also into the process of getting the grant. We are applying for the grant from European Commission regarding building that terminal. We are in the process of submitting the documents, and we will inform about the results of that process in the forthcoming months. Summarizing, wrapping up everything, as you see, taking into account what I already mentioned in different business segments, we really enjoyed the growth in the revenues. Since the revenues are growing, definitely our other financial KPI, EBITDA, net profit, is growing as well.

Speaker #4: Currently, we're very heavily involved in launching the front-end engineering design study and also in the process of getting the grant. We're applying for the grant from the European Commission regarding building that terminal.

Speaker #4: So, we are in the process of submitting the documents, and we will inform you about the results of that process in the forthcoming months. To summarize and wrap up everything—as you see, taking into account what I already mentioned in different business segments.

Speaker #4: So we really enjoyed the growth in the revenues and since revenues are growing so definitely our other financial KPIs EBDA net profit is growing as well despite that also our PEX is is not staying at the same level that it used to be last year and of course we I would like to to see it stable but definitely taking into account energy prices taking still account the pressure on the salaries and other OPEX lines we need to cover by grow those by by revenues by growth in the revenue size.

Tomas Tumėnas: Despite that, also our OpEx is not staying at the same level that it used to be last year. Of course, I would like to see it stable, but definitely taking into account energy prices, taking still account the pressure on the salaries and other OpEx lines, we need to cover those by revenues, by growth in the revenue side. Always I am presenting and explaining the normalized financial results, meaning those results that are excluding impact of various regulated differences or inputs or impacts or inflows or outflows regarding regulated activity. Here you see we have our, if we take official, let's say, business performance of LNG business segment, regulated business segment, and let's say, performance of normalized activities.

Speaker #4: I am always presenting and explaining the normalized financial results, meaning those results that are excluding the impact of various regulator differences, inputs, impacts, or inflows or outflows regarding regulated activity.

Speaker #4: So here you see, we have our, if we take official, let's say, business performance of the LNG business segment, regulated business segment, and let's say, performance of normalized activities.

Speaker #4: So the figures are slightly less versus the official. Because all extra income that we are managing to get, we will need to return to the regulator in the future, and that will have an impact on our official results in the forthcoming years.

Tomas Tumėnas: The figures are slightly less versus the official, because all extra income that we managing to get, we are in the future, we will need to return to the regulator, and that will have an impact on our official results in the forthcoming years. Despite of that, as you see, the H1 of this year was really good, very strong, and net profit, even taking out all that impact, we managed to receive almost 9.5 million EUR. It is really good growth, especially comparing to the last year, and looking forward to see the same results almost, let's say, or close to them in the H1 of this year. I will not touch maybe the profitability market value figures. Closing my presentation, always I wanted to show you our financial situation and cash flow situation and financial strength.

Speaker #4: But despite of that so as you see our the first half of this year was really good very strong and net profit even taking out all that impact we managed to receive almost 9.5 million euros.

Speaker #4: So it's really good growth, especially compared to last year, and I'm looking forward to seeing the same results—almost, let's say, close to them—in the first half of this year.

Speaker #4: And I will not touch, maybe, the profitability or market value figures. And, closing my presentation, I always want to show you our financial situation, cash flow situation, and financial, let’s say, strengths.

Speaker #4: So, net debt, as you see, is €239 million. It amortizes the loans. I just wanted to remind you that we are the only company in Lithuania having the government guarantee—the state guarantee.

Tomas Tumėnas: Net debt, as you see, is 239 million EUR. It amortizes the loans. I just wanted to remind that we are the only one company in Lithuania having the government guarantee, the state guarantee. It is like secured loan from company's perspective. Looking from net debt to EBITDA level and DSCR level, we are really okay. Also taking our free cash flow situation, as you see, we are in the H1 of the year, we are in a good position, having almost 25 million EUR of free cash flow, taking into account quite big amount of dividends, which we have paid for the 2025 year results. Our cash flow from operating activities as usually are very strong. Regarding investment activity, CapEx, looking forward, taking into account our future investment plans, we will have additional spendings in that cash flow line.

Speaker #4: So it's like secured loan from companies perspective. And looking from net debt to EBDA level and the SRS level we are really okay. And also taking our free cash flow situation.

Speaker #4: So, as you see, we are in the first half of the year. We are in a good position, having almost €25 million of free cash flow, taking into account a quite big amount of dividends.

Speaker #4: We, which we have paid for the 2025-year results. And our cash flow from operating activities, as usual, is very strong. Regarding investment activity, capex looking forward, taking into account our future investment plans.

Speaker #4: So we will have additional spending in that cash flow line. And financing activity, of course, is negative, because every year we are paying the loans for our FSRU.

Tomas Tumėnas: Financing activity, of course, it is a negative because every year we are paying the loans for our FSRU. I will not see any dramatic changes here, but from operation cash flow perspective, the company and the group is really very good and strong position. Thank you for your attention and happy to answer questions if those audience will have.

Speaker #4: I will not see any dramatic changes here, but from an operating cash flow perspective, the company and the group are really in a very good and strong position.

Speaker #4: So, thank you for your attention, and I am happy to answer questions if those in the audience will have any.

Speaker #1: Thank you, Tommy, for the presentation. And yes, indeed, we are now moving to the questions. Just to remind you, you can submit them either in writing in the Q&A window below, or you can raise your hand to be unmuted.

Moderator: Thank you, Tomas, for the presentation. Yes, indeed, we are now moving to the questions. Just to remind you that you can submit them either in writing in the Q&A window below, or you can raise your hand to be unmuted. First, let us start with the question that we have received in advance of the call, which is the following: allocate next year's gasification capacity. Will the capacity be expanded because there are free spaces?

Speaker #1: So first, let's start with the question that we have received in advance of the call, which is the following: Allocate next year's classification capacity.

Speaker #1: Will the capacity be expanded because there are free spaces?

Speaker #2: The capacity—capacity, fortunately, we can’t expand of our FSRU, because it's, like I said, a big manufacturing facility, and expansion only could, you know, take place if we would acquire additional FSRU vessels.

Tomas Tumėnas: The capacity, fortunately, we cannot expand of our FSRU because it is like, as I said, manufacturing, big manufacturing facility and expansion only could take place if we acquire additional FSRU vessels. Basically, our, let us say, as we calling real capacity, amounts to almost 34.8 terawatt-hours. As already we have mentioned, everything is booked. Specifically, if we are talking about the next year, 2027, also we managed to sell 3 out of 5 cargoes for the 2027. For the 2027, if we are looking from, let us say, how much is booked out of the capacity, so already is booked 36 terawatt-hours.

Speaker #2: So basically our let's say as we're calling real capacity amounts to almost 34.8 terawatt hours. And as as already we have mentioned everything is booked and if specifically if we're talking about the next year 2027 also we are managed to sell three out of five cargos for the 2027 and for the 2027 if we're looking from let's say how much is booked out of the capacity.

Speaker #2: So already is booked 36 terawatt hours. So meaning even more than our let's say this sort of like a limit but this is really good sign meaning that definitely during the year many things could happen and it happens and the clients sometimes cancel not sometimes but yeah they cancel the cargo depending on the situation the prices and and and import possibilities but of course as you know again that we have all our capacity all the cargos are take or pay nature meaning that for the company for the group this is no harm if the certain cargos which are which are booked are canceled.

Tomas Tumėnas: Meaning even more than, well, let us say this sort of like a limit, but this is a really good sign, meaning that definitely during the year, many things could happen, and it happens, and the clients sometimes cancel, not sometimes, but yeah, they cancel the cargo depending on the situation of the prices and import possibilities. But of course, as you know, again, that we have all our capacity, all the cargoes are take-or-pay in nature, meaning that for the company, for the group, this is no harm if the certain cargoes which are booked are canceled. So we already booked 36 terawatt-hours despite that our capacity is around 35 terawatt-hours.

Speaker #2: So, we already booked 36 terawatt-hours, despite that our capacity is around 35 terawatt-hours.

Speaker #1: Thank you. And we have received one more question: What would be your predictions for this whole year?

Moderator: Thank you. We have received one more question. What would be your predictions for this whole year?

Tomas Tumėnas: I think that I would say, if we take the growth, if we take the total growth or the growth per business segment, comparing the H1 versus the same period in the last year, I would say that in the H2, the growth will be versus the last year, but slightly less than we had in the H1 because of the various reasons. For example, one of those, in August, we have reconstructions, let's say, works in the gas pipelines, meaning that even because of this, we cannot send the gas. Of course, we will need to stop for a while, for a couple weeks with a review regarding this. As an example, this is like a technical reason, which is actually happening during the summer. There is nothing wrong about that, but this is like, I would say, normal business activities.

Speaker #2: I I think that I would say if we take the growth if we take like the growth total growth or the growth business segment and comparing the first half versus the the same the same period in the last year so I would say that in the second half the growth will be versus the last year but slightly less than we had in the first half.

Speaker #2: Because of the various reasons and for example one of those in August we have we have reconstructions let's say works in in in in their pipelines gas pipelines meaning that because of even because of this you know we can't we can't send the gas and of course we will need to stop for a while for the couple weeks our FSRU regarding this.

Speaker #2: So as an example this is like a technical reasons which is actually happening during the summer. This is nothing wrong about that but this is but this is like I would say a normal business activities.

Speaker #2: But then again what it will be the situation in for example November or December and what it will be the the the weather conditions also you know is a question mark nobody knows.

Tomas Tumėnas: What it will be, the situation in, for example, November or December, and what it will be, the weather conditions also is a question mark. Nobody knows. Answering to the question, I would say, I would predict slightly less growth in the H2 versus the H2 of 2025 than we had in the H1 of this year.

Speaker #2: So, answering to the question, I would say I would predict slightly less growth in the second half versus the second half of 2025 than we had in the first half of this year.

Speaker #1: Thank you. Moving to the next question. Is the EU methane regulation a risk factor for 2027? How is KN planning to comply?

Moderator: Thank you. Moving to the next question. Is the EU methane regulation a risk factor for 2027? How is KN Energies planning to comply?

Tomas Tumėnas: Regarding methanol? I am sorry.

Speaker #2: Regarding methane methanol I'm sorry.

Speaker #1: Yes, it's written as 'methane regulation'—EU methane regulation.

Moderator: Yes, it is written methane regulation, EU methane regulation.

Tomas Tumėnas: Well, basically, I would not separately exclude or take it out, methane regulation versus other, let us say, CO2 regulation requirements. We have our activity plan regarding firstly diminishing CO2 and methanol, also taking into account all the events that according to these regulations could change. One thing is regarding our own situation, our own terminal, and the second is regarding our clients, which also they are following those regulations. But so far, what I am trying to say, we are just following our action plan, and here I would not predict so far anything wrong or negative impacts in the future regarding the businesses and the regulations, if nothing extraordinary out of the blue would happen.

Speaker #2: No basically if we are I would not like separately exclude or take it out methane regulation versus other let's say CO2 regulation requirements. We have we have our activity plan regarding first first firstly diminishing CO2 and methanol also take taking taking into account all the events that according this regulations could change and of course one thing is regarding our own situation our own terminal and the second is regarding our clients which also they are following those regulations.

Speaker #2: But so far what I'm trying to say we are in we are just you know following our our action plan and here I would not predict no so far anything wrong or negative in the future negative impacts in the future regarding the businesses and and and regulations.

Speaker #2: If nothing extraordinary, out of the blue, would happen.

Speaker #1: Thank you. I don't see any new questions coming in, but let's wait maybe a couple of seconds to ensure there are no additional questions.

Moderator: Thank you. I do not see any new questions coming in, but let us wait maybe a couple of seconds to ensure there are no additional questions. Yes, I see one more question. Could you please elaborate your plans in Vietnam?

Speaker #1: Yes, I see one more question. Could you please elaborate on your plans in Vietnam?

Speaker #2: Thank you. Thank you. Also, it's a good question. And, no, okay—the Vietnam as well also announced, and in our last announcement regarding, let's say, Asian activities and also, in the previous, half a year ago, Vietnam is one of our, let's say, key markets for our commercial activity, as we're calling this new energy activities.

Tomas Tumėnas: Thank you. It's a good question. Vietnam, as we also announced in our last announcement regarding, let's say, Asian activities and also in the previous half a year ago, Vietnam is one of our, let's say, key markets for our commercial activity, as we're calling this new energy activities. So here it's our key market, and we are working, let's say, step by step in that market. It's a big market. Of course, it's dominated by the big international players, with a very heavy presence of China energy companies, LNG companies, gas companies from Japan and United States. So really competitive market, but also very growing market.

Speaker #2: So here it's like our key market, and we are working, let's say, step by step in that market. It's a big market. Of course, it's dominated by the big international players, with a very heavy presence of Chinese energy companies, LNG companies, gas companies from Japan, and the United States.

Speaker #2: So, really competitive market, but also very growing market. And they need a lot—a lot—of imported LNG because they are very, you know, as you know, Vietnam is a manufacturing, let's say, country.

Tomas Tumėnas: They need a lot imported LNG, because they are very, as you know, Vietnam is a manufacturing, let's say, country, so they need a lot of also gas for their manufacturing businesses and also for the consumers, for the simply citizens. So it's a demanded market worldwide and growing, but very competitive. In order to enter, to have the market share for us from quite small country and quite small company, it's not easy. Therefore, we need to be patient. But I really believe that our investments in terms of the, not money, let's say, but also in terms of the people, of the human resources, in order to maintain those connections will pay us out. I hope very much, I hope that in forthcoming future, I really would hope that we will be able to announce some concrete business cases.

Speaker #2: Yes. So they need a lot of also gas for their manufacturing businesses and also for for the for the consumers for the simple simplic citizens.

Speaker #2: So it's a demanded, demanded market worldwide and growing, but very, very competitive. And then, in order to enter—to have the market share—for us, coming from quite a small country and quite a small company, it's not easy.

Speaker #2: Therefore we need to be patient but I really believe that our let's say investments in terms of the not money let's say but also in terms of of let's say the people of the human resources of of in order to maintain those connections will pay us out.

Speaker #2: And I hope very much I hope that in the in forthcoming future I really would like hope that we will be able to announce some concrete business cases so of course this is no one no no you can't give I can't give a guarantee a we as a company can't can't give guarantee at the moment but this is why we're working.

Tomas Tumėnas: Of course, I can't give a guarantee, or we as a company can't give guarantee at the moment, but this is why we're working. So really, I'm looking forward, and I hope that we will be able to deliver in the next, let's say, six or eight months, something new regarding the Vietnam.

Speaker #2: So really, I'm looking forward, and I hope that we will be able to deliver, in the next, let's say, six or eight months, something new regarding Vietnam.

Speaker #1: Thank you. And then the next question: what will be the deal with idle petrol gas specifically, and also, how much would KN Energies invest in Vietnam, if you have any calculations?

Moderator: Thank you. The next question. What will be the deal with IDO Petro gives specifically, and also how much would KN Energies invest in Vietnam, if you have any calculations?

Speaker #2: No here really I don't wanted to speculate regarding the figures. So for investments into Vietnam only I can say you know it could be from 1 million euros to let's say 20 million euros but really it's too early to make any any let's say any concrete figures because it it won't be wise and and professional from my side.

Tomas Tumėnas: No, here, really, I don't want to speculate regarding the figures of investments into Vietnam. Only I can say, it could be from EUR 1 million to, let's say, EUR 20 million. But really, it's too early to make any concrete figures because it won't be wise and professional from my side. Again, it's not only the growing market, but also where is the business, there is a risks. Accordingly, we need to mitigate those risks as much as we can. And I would say that can, taking into account the role and our status that we are state-owned company, so for us, the risks is very on high level, on priority level. So for us, maybe sometimes it's more, I would say even more difficult to make some commercial decisions versus the totally private company.

Speaker #2: So of course again it's known it's not only the growing market but also where is the business there is a risks. So accordingly we need to to be you know to mitigate those risks as much as we can and I would say that can taking into account the role and as a our status that we are state-owned company.

Speaker #2: So for us a risks it's very very let's say very very on high level on priority level. So for us maybe sometimes it's more no I would say even more difficult to make some commercial decisions versus the totally private company.

Speaker #2: Therefore again I wanted I don't wanted to give any predictions regarding the sizes and and and and amounts. So only one message be patient and believe in us and and we will deliver the results.

Tomas Tumėnas: Therefore, again, I don't want to give any predictions regarding the sizes and amounts. Only one message, be patient and believe in us, and we will deliver the results.

Speaker #1: Thank you, Tommy. And now the question on dividends. In 2021, profit from financial activity for 2020. In 2026, there is also profit from financial activity.

Moderator: Thank you, Tomy. Now the question on dividends. In 2021, profit from financial activity for 2020 was eliminated when it came to calculate dividend base. In 2026, there is also profit from financial activity. Can it be eliminated next spring when it will come to calculate dividend base for 2026? Or will 60% all profit be allocated?

Speaker #1: Can it be eliminated next spring when it comes time to calculate the dividend base for 2026, or will 60% of all profit be allocated?

Speaker #2: If we are talking about 2020 so basically that sorry that financial activity came from you know forex fluctuation meaning this is not like a you know cash flow item currently what we have we have in financial income we have basically two components of course the amount is slightly less than 2020 so basically this is income from our investment activities meaning deposit etc stuff we are not investing in any any other type of financial products.

Tomas Tumėnas: If we are talking about 2020, so basically that financial activity came from forex fluctuation, meaning this is not like a cash flow item. Currently, what we have in financial income, we have basically two components. Of course, the amount is slightly less than 2020, so basically, this is income from our investment activities, meaning deposits, et cetera stuff. We are not investing in any other type of financial products. And also from our hedge activities. And the hedge activities, we're hedging not for speculations, for the risk management. As I said, the biggest hedge comes on EU carbon emission and then on the gas. Also, we are consumption gas internally. So we are currently in our case situation. We managed to get the momentum and turned into hedge a good time. And that will have direct impact on our financial results, and those figures will not be eliminated.

Speaker #2: And also from our hedge activities. And the hedge activities—we're hedging not for speculation, it's for risk management. As I said, the biggest hedge comes on EU carbon emission, and then on the gas. Also, we are consuming gas internally, so we are currently, in our case, in a situation where we managed to get momentum and to enter into hedge at a good time, and that will have a direct impact on our financial results. And those figures will not be eliminated.

Speaker #2: So, so this is my answer.

Tomas Tumėnas: This is my answer.

Speaker #1: Thank you, Tommy. And it looks like we have successfully addressed all the questions that we've got for today. So thank you once again for your presentation and for answering the questions.

Moderator: Thank you, Tomy. It looks like we have successfully addressed all the questions that we have got for today. Thank you once again for your presentation and for answering the questions. I would like also to thank all the participants for your time and interest. We will be looking forward to seeing you in our future events.

Speaker #1: And I would also like to thank all the participants for your time and interest. We look forward to seeing you at our future events.

Speaker #2: Thank you. Thank you to everyone and wish you a good half of the day and yeah have a good day. Thank you. Bye.

Tomas Tumėnas: Thank you. Thank you to everyone, and wish you a good half of the day, and have a good day. Thank you.

Moderator: Thank you. Goodbye.

Tomas Tumėnas: Bye.

Operator: Goodbye

Q2 2026 AB KN Energies Earnings Call

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