Statkraft – Q2 2009 - Acceptable results in a turbulent market

18.08.2009 08:00 | pressrelease

The Statkraft Group’s gross operating revenues rose by 8 per cent in the six months to 30 June. The increase is primarily attributable to earnings from the power plants acquired from E.ON AG at the turn of the year. The rise in revenues was, however, less than expected owing to the sharp fall in German electricity prices compared with first-half 2008. Lower gas power production in Germany coincided with a fall in earnings from Norwegian hydropower, bringing about a weaker underlying result.

Statkraft’s EBITDA, adjusted for unrealised changes in value and material non-recurring items, was NOK 6 654 million for the first half of the year (NOK 6 794 million)1, which is 2% down year-on-year. In the second quarter underlying EBITDA was NOK 2 047 million (NOK 2 503 million). Profit after tax for the first half of the year was NOK 3 293 million (NOK 3 218 million), and for the second quarter NOK 570 million (loss of NOK 585 million). Adjusted for unrealised changes in value and material non-recurring items, the profit after tax for the first half was NOK 3 326 million (NOK 4 513 million), and for the second quarter NOK 1 540 million (NOK 1 570 million).

“In the first six months, Statkraft strengthened its position as Europe’s largest generator of renewable energy and laid the foundation for further growth. We have entered into a number of major agreements, including offshore wind power in the United Kingdom and hydropower in Southeast Europe,” says Bård Mikkelsen, Statkraft’s President and CEO.

Electricity prices in the Nordic market in the first half-year were on a par with prices in the corresponding prior-year period, while prices in the German market were significantly lower. The average Nordic system price ended at 36.1 EUR/MWh (36.4 EUR/MWh) and the average German spot price was 39.9 EUR/MWh (61.0 EUR/MWh) for the first six months of the year.

The Group’s output in the second quarter was 10.2 TWh (12.1 TWh), and in the first half-year 27.3 TWh (27.7 TWh). Hydropower production rose in the first half as a result of the consolidation of SN Power as a subsidiary from 13 January and the takeover of new power plants from the swap deal with E.ON AG. Norwegian hydropower production was, however, down as a result of lower inflow into water courses. Gas power production in Germany was also lower owing to the fact that there have been several periods this year when it has been unprofitable to generate energy because of a fall in demand for electricity on the back of the global financial crisis.

The Group’s gross operating revenues for the second quarter totalled NOK 4 898 million (NOK 4 781 million). Accumulated for the first half, gross operating revenues were NOK 12 929 million (NOK 11 945 million), which represents an increase of 8%. The increase is primarily due to the new assets from the swap deal with E.ON AG.

The underlying operating profit for the second quarter was NOK 1 420 million (NOK 2 054 million), and for the first half-year NOK 5 363 million (NOK 5 892 million), a decrease of 31% and 9% respectively.

Highlights in the quarter

Statkraft and Boliden Odda have entered into a large-scale agreement that was finalised in the second quarter and became effective as of 1 July. As part of this agreement, Statkraft and Boliden Odda signed two long-term industrial power agreements for the period 2009-2030. The agreement for delivery of around 20 TWh is the largest industrial power agreement Statkraft has entered into since 1998. Statkraft SF owns the power facilities in Tyssedal, but the waterfall rights and power plants are leased out to AS Tyssefaldene on terms set by the authorities. In line with the agreement, Statkraft acquired Boliden’s 39.88% shareholding in Tyssefaldene, and now owns 60.17% of the shares in Tyssefaldene. The remaining shares are owned by Eramet through the company DNN Industrier AS.

Power delivery to Ortviken Pappersbruk began on 1 June as a result of the agreement between Statkraft and the Swedish paper manufacturer SCA. The agreement with SCA was signed in the third quarter 2007 and included a ten-year contract to deliver 500 GWh annually to Ortviken Pappersbruk.

On 23 June, Statkraft acquired 95% of the shares in Yesil Enerji from the Turkish company Global Investment Holdings. This acquisition has given Statkraft the rights to six hydropower projects in Turkey with the potential to generate a total of approximately 2 TWh annually.

Statkraft has commenced construction of the Group’s first solar park. The solar power plant is being built in the Latina region of Italy, 60 kilometres south of Rome, and will be completed during 2009. Installed capacity will be 3.3 MW, at an investment cost of about NOK 120 million.

In response to a large proportion of French hydropower licences being put out to tender in the years up until 2030, Statkraft set up an office in Lyon in France during the second quarter.

At the annual general meeting on 30 June, Hilde M. Tonne and Bertil Tiusanen were elected to serve as new members of the board of directors of Statkraft AS. The board now consists of Arvid Grundekjøn (chair), Ellen Stensrud (deputy chair), and board members Halvor Stenstadvold, Berit Rødseth, Hilde M. Tonne, Bertil Tiusanen, Thorbjørn Holøs, Astri Botten Larsen and Odd Vanvik.

1) Comparative figures for 2008 are shown in brackets.

Statkraft is Europe’s largest generator of renewable energy. The Group develops and generates hydropower, wind power, gas power and district heating, and is a major player on the European energy exchanges. Statkraft also develops solar power, marine energy, osmotic power and other innovative energy solutions. Through owner participation in other companies, Statkraft delivers electricity and heating to about 600 000 customers in Norway. For 2008 the Group posted operating revenues of NOK 25.1 billion and an underlying profit after tax of NOK 8.1 billion. The Group employs more than 3 200 staff in over 20 countries.