Statkraft SF Second Quarter 2006

17.08.2006 08:01 | stock exchange information

The Statkraft SF Group made a profit in the second quarter of NOK 2.1 bn before tax, an improvement of NOK 0.5 bn compared with the second quarter last year. Net profit amounted to NOK 1.3 bn, an improvement of NOK 0.2 bn. For the first half year as a whole, profit before tax totalled NOK 6.2 bn, while profit after tax came to NOK 4.2 bn, a increase of NOK 2.1 bn and NOK 1.3 bn respectively compared with last year.
Statkraft posted strong results both in the second quarter and in the first half of 2006. The second quarter resulted in a profit before tax of NOK 2.1 billion, NOK 0.5 billion more than in the same quarter last year. Profit after tax totalled NOK 1.3 billion, a increase of NOK 0.2 billion. For the first half year as a whole, profit before tax totalled NOK 6.2 billion, while profit after tax came to NOK 4.2 billion, a increase of NOK 2.1 billion and NOK 1.3 billion respectively compared with last year. Profit after tax increased by 45 per cent.
The power plants have, with few exceptions, had stable operations in the first half. Output levels have been high, and the electricity generated sold at high prices. Furthermore, net financial costs fell and the contribution to group profits from associated companies rose significantly. In short, the group's financial results in the first half have never been better.
A high level of electricity consumption, in addition to lower than normal levels of precipitation and snow reserves, helped push the average spot price to NOK 356/MWh, 58 per cent up on the same period last year. High fuel costs for thermal power production and high carbon prices also helped drive electricity prices up. Despite lower reservoir water levels in the first half, Statkraft's electricity output remained high. The group generated a total of 26.7 TWh during the period, a rise of 5 per cent compared with last year.
In July Statkraft signed a long-term agreement to supply Eramet Norway AS with electricity from 2011 to 2020 inclusive. The agreement, which will cover the bulk of the power needed by Eramet's smelting works at Sauda and Porsgrunn, replaces existing statutory-priced contracts with Eramet and also provides Eramet with greater volumes.
The construction of two gas-fired power plants in Germany and one in Norway continues on schedule and within budget. Construction is also underway at the Kjøllefjord Wind Farm, the Heimdal district heating facility, and the new Leirfossene power plant in Nidelven. Licence applications for the construction of additional wind and hydropower facilities in Norway are currently being considered by the appropriate authorities.
Statkraft's business development efforts outside Norway continue as planned. In the second quarter Statkraft entered into a cooperation agreement with the Serbian state-owned company Elektroprivreda Serbia (EPS), with the focus on power plant modernisation and power trading.
Statkraft SF's business
Statkraft SF's object is to own all the shares in Statkraft AS and provide that company with loans. In addition, Statkraft SF owns certain assets which may not formally be transferred to Statkraft AS. This applies to power plants which have reverted to state ownership and which have been leased out to third parties, and plants which will become the property of Statkraft SF upon their reversion to state ownership. It also applies to certain international investments (Asian Power Invest AB and Nordic Hydropower AB).
During the first quarter 2006 Statkraft SF's shareholding in Himal Power Limited was transferred as a contribution in kind to Statkraft Norfund Power Invest (SN Power) as part of a shareholders' agreement. Statkraft SF received shares in SN Power as compensation for the contribution in kind. These shares were transferred to Statkraft AS during the second quarter. The co-owner, Norfund, contributed the same amount in cash, such that Statkraft's relative shareholding in SN Power remains unchanged.
Statkraft SF's consolidated financial statements will, with the exception of the retained assets, be identical to the consolidated financial statements for its subsidiary the Statkraft AS Group.
The closing balance for the first six months of 2006 showed the total assets of the Statkraft SF Group to be worth NOK 1,077 million more than those of the Statkraft AS Group. Half of this sum corresponds, in large part, to the book value of the power plants that have been leased to third parties and the above-mentioned international investments, while the remainder is made up of current items, cash and cash equivalents.
The Statkraft SF Group had NOK 3 billion more in long-term interest-bearing debt than the Statkraft AS Group since Statkraft SF has borrowed NOK 3 billion from an established line of credit in order to finance the payment of dividend for the 2004 financial year.
Eli Skrøvset, Executive Vice President/CFO, tel.: +47-24067914 /+47-909 86 495
Lisbeth Lindberg, S.V.P., Finance and IR, tel.: +47-24067286/ +47-995 23 150
The full report with tables can be downloaded from the following link:


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Report 2nd quarter 2006 .PDF