Financial performance

Higher Nordic power prices and new production capacity within wind power were the most important drivers for the improvement of the underlying operations. Net underlying operating revenues increased by 7% from 2012 to NOK 20 545 million, while the EBITDA increased by 10% to NOK 12 444 million.


Major negative currency effects under financial items impacted the Group's result, and the profit before tax amounted to NOK 2511 million (NOK 8771 million)1), while the net profit was NOK 208 million (NOK 4551 million). Currency effects were caused by weaker NOK, and were mainly unrealised. The effects are fully offset by translation effects in the equity, which strengthened by about NOK 9 billion NOK to NOK 71 billion.

In the following, the emphasis will be the presentation of the result from the underlying operations for items up to and including the operating result. Unrealised changes in value of energy contracts and significant non recurring items in consolidated activities are explained in the section ”Items excluded from the underlying operating result”. Income statement elements after the operating result are analysed in accordance with the recorded result.


ROACE, Underliggende

Measured as ROACE2), the Group achieved a return of 12.5% in 2013, which was 0.5% lower than in 2012. This is due to an increase in capital employed, primarily as a result of the transfer of power plants from Statkraft SF and investments in new capacity. The high level of return in 2010 was due to a particularly high operating profit that year, primarily as a result of high power prices.

Underlying operating revenues

Statkraft's revenues are generated by spot sales, contractual sales to the industry, financial trading, grid activities, district heating and power sales to end users. In addition, the Group delivers concessionary power. The fundamental basis for Statkraft's revenues comprises power prices, energy optimisation and production. The production revenues are optimised through financial power trading, and the Group  engages in trading activities and energy trading.

Net operating revenues totalled NOK 20 545 million in 2013, an increase of 7% from 2012. The segments that contributed the most to the Group's increase was Nordic hydropower, which increased revenues primarily as a result of higher Nordic power prices, and wind power, which increased revenues as a result of higher power prices and new production capacity. The increase in revenues from Industrial Ownership relates to higher Nordic power prices and increased revenues from grid activities. The largest decline was in the Continental Energy and Trading segment, where market activity revenues were lower than in 2012, which was a record year. Other segments had minor changes in net operating revenues.

Underlying operating expenses

In total, the Group's operating expenses increased by 5% compared with 2012. Of the increase of NOK 563 million, NOK 321 million relates to write downs and impairment. This increase primarily relates to the Nordic hydropower and Wind power segments, and is due to increased depreciation basis from Statkraft SF to Statkraft AS in 2013 and new wind power plants. The remaining increase in operating expenses relates primarily to property tax, which increased by NOK 285 million, corresponding to 28%. The increase in property tax primarily relates to the Nordic hydropower segment, and is due to changed framework conditions in Norway and Sweden as well as the transfer of leased hydropower plants from Statkraft SF.

There were minor changes in the Group's other operating expenses compared with 2012.

Underlying EBITDA and underlying operating result 

Historically, Statkraft has had high EBITDA3) margins as a result of low operating expenses for hydropower production. In 2012, Statkraft launched a new business activity offering market access for small scale producers of renewable energy in Germany and the UK. The contracts are recognised gross in the income statement and therefore increase both the sales revenues and the energy purchase costs substantially. This business makes a positive contribution to the Group’s EBITDA, but the margins from this business are low and therefore reduce the overall EBITDA margin.

EBITDA (operating profit before depreciation and amortisation) increased by 10% from 2012 and the operating profit increased by 9%, to NOK 12 444 million and NOK 9589 million, respectively. The Group's EBITDA and operating profit are to a large degree generated by the Nordic hydropower segment, which contributed 81% and 92% of the total, respectively.

The improvement compared with 2012 relates primarily to higher revenues for the segments Nordic hydropower and Wind power. The reduction of the EBITDA for the Continental Energy and Trading segment is due mainly to lower revenues from market activities as well as somewhat higher operating expenses as a result of consolidation of biomass plants in Germany, which are now wholly owned, as well as costs associated with gas power in Germany.

Items excluded from the underlying operating result

Total unrealised changes in value and significant non-recurring items in 2013 amounted to NOK 3413 million (NOK -3254 million).

Unrealised changes in value adjusted for in the underlying operating profit amounted to NOK 3288 million (NOK -1030 million). About half the positive result effect was in relation to built in derivatives which had a positive development as a result of a weaker NOK against EUR. There were also significant positive result effects associated with financial energy derivatives and management portfolios, primarily driven by falling power prices in the Nordic region and on the Continent. Gas contracts also developed positively in 2013, primarily as a result of realisation throughout the year, and this reduced the negative market value in relation to these contracts  

Significant non-recurring items

Non-recurring items excluded from the calculation of the underlying profit amounted to NOK 125 million in 2013 (NOK -2224 million).

The termination of an energy contract resulted in NOK 164 million being recorded as income. In connection with the increase of the shareholding in Devoll Hydropower Sh.A. from 50 per cent to 100 per cent, the acquisition analysis showed a purchase at favourable terms under IFRS, resulting in NOK 162 million being recorded as income. Alingsås Energi exercised its option to buy Statkraft's district heating plant in Alingsås in Sweden, with the sale yielding an accounting gain of NOK 86 million. When Statkraft acquired the remaining shares in the two German biomass plants, a disadvantageous maintenance agreement was terminated. The effect of this termination was classified as a non-recurring item.

Share of profit from associated companies and joint ventures

The Group has major shareholdings in the regional Norwegian power companies BKK and Agder Energi, as well as shareholdings in companies outside Norway, where much of the activity takes place through participation in partly owned companies.

BKK and Agder Energi achieved somewhat lower profit compared with 2012, primarily as a result of lower production for BKK and unrealised changes in value for Agder Energi. The result improvement from other associated companies was due mainly to write downs in India in 2012. The Philippines continue to deliver good results, but at a somewhat lower level than in 2012, while the negative results from Chile have been significantly improved.

Financial items

The decline in other financial income relates primarily to no dividend from E.ON SE in 2013 as a result of the sale of the shareholding. The improvement in other financial items relates mainly to the write down of the shareholding in E.ON SE in 2012.

Net currency effects amounted to NOK -9403 million (NOK 4467 million), mainly as a result of weaker NOK against EUR. The effects mainly stem from internal loans and currency hedging contracts, and were mainly unrealised. These effects are fully offset by translation effects in the equity.


The recorded tax expense was NOK 2303 million (NOK 4220 million). The decline in tax expense was due mainly to a lower profit before tax and the refunding of withholding tax from previous years in connection with the E.ON shareholding. In addition, the tax expense in 2012 was negatively influenced by the downgrading of deferred tax assets.

Cash flow 

The Group's operations generated a cash flow of NOK 9499 million (NOK 6846 million), an improvement of 39%.

The changes in short and long term items had a negative effect of NOK 2444 million, compared with a positive effect of NOK 1485 million in 2012. The change in 2013 was mainly related to cash collateral, which was partly offset by a positive change in working capital.

NOK 1051 million was received in dividend (NOK 1958 million), divided among NOK 399 million from BKK, NOK 285 million from Agder Energi and NOK 367 million from associated companies in SN Power.

Net investments amounted to4) NOK 547 million (NOK -12 484 million). This is mainly settlement for sold E.ON shares totalling NOK 8515 million, payment for sale of the transmission grid for the Sheringham Shoal offshore wind farm of NOK 957 million less investments in property, plant and equipment of NOK 9248 million.

The net liquidity change from financing amounted to NOK -6807 million (NOK -780 million), mainly as a result of net downpayment of debt. New debt was NOK 865 million (NOK 7919 million), primarily associated with SN Power's project financing in Panama and Peru. Repayment of debt amounted to NOK 4714 million (NOK 4573 million). Share issues in subsidiaries to non controlling interests of NOK 135 million relate primarily to the minority share of the capital contribution in SN Power and Småkraft. Dividend and group contributions totalling NOK 3094 million were disbursed (NOK 4293 million), mainly to Statkraft SF.

Translation effects on bank deposits, cash in hand and similar amounted to NOK 400 million.

Statkraft monitors the ability to meet future liabilities through the target figure "Short-term liquidity"5), and this target figure was 2.3 at the end of 2013, within the target range of 1.5 to 4.0.

Financial structure

The main objectives of the Group’s capital structure management are to maintain a reasonable balance between solidity and the ability to expand, and to maintain a strong credit rating. The most important target figure for the Group’s management of capital structure is long term credit rating.

Tools for long term management of capital structure are primarily comprised by the drawdown and repayment of long term liabilities and payments of share capital from/to the owner. The Group is not subject to any external requirements with regard to the management of capital structure other than those relating to the market’s expectations and the owner’s dividend requirements.

The Group endeavours to obtain external financing from different capital markets. When raising loans, Statkraft seeks to ensure an even repayment profile, and the current maturity profile is in line with this goal. Raising of any new loans is planned in accordance with the liquidity forecast, investment decisions and sale of assets.

At the end of 2013, the interest bearing debt amounted to NOK 32 2406) million, compared with NOK 34 960 million at the beginning of the year. The decline relates primarily to the fact that a positive cash flow after net investments, dividend and group contributions have resulted in higher bank deposits and downpayment of debt. The net interest bearing debt-equity ratio was 31.2%, compared with 35.9% at year-end 2012.

Loans from Statkraft SF to Statkraft AS amounted to NOK 400 million at the end of the year.

Current assets, except cash and cash equivalents, amounted to NOK 17 387 million (NOK 16 644 million) and short term interest-free debt was NOK 17 073 million (NOK 16 858 million) at the end of 2013.

At the end of the year, Statkraft’s equity totalled NOK 71 107 million, compared with NOK 62 350 million at the start of the year. This is 46.3% of total assets. The increase in equity relates to a positive comprehensive income of NOK 9361 million, as well as the transfer of NOK 3442 million worth of power plants from Statkraft SF less deducted dividend and group contribution for 2012 of NOK 4198 million, including minority interest.

Financial strength and rating 

It is important to Statkraft to maintain the credit rating with the two major rating agencies Standard & Poor’s and Moody’s. An important key figure monitored by Statkraft in relation to credit rating is the cash flow from operations in relation to net interest-bearing debt. In 2013, this key figure was 31.1%7). Statkraft AS has a current credit rating of A- from Standard & Poor’s and Baa1 from Moody’s.

Investments and projects 

In accordance with the Group's strategy, the project activity level is high, especially as regards wind and hydropower, The Group's investment programme is flexible, and the plans are subject to continuous assessment in relation to market outlook and financial strength.

In total, Statkraft invested NOK 9448 million in 2013, of which 78% in new capacity. In addition, leased power plants worth about NOK 4 billion gross were transferred from Statkraft SF. This transaction had no cash effect. Maintenance investments are primarily in connection with Nordic hydropower. The largest investments in new capacity are in connection with wind power in Sweden and the UK, as well as international hydropower

1) Figures in parentheses show the comparable figures for 2012.

2) ROACE (%): (Operating profit adjusted for unrealised changes in the value of energy contracts and significant non-recurring items x 100)/average capital employed.

3) EBITDA-margin (%): (Operating profit adjusted for unrealised changes in the value of energy contracts and significant non-recurring items x 100)/Gross operating revenues adjusted for unrealised changes in the value of energy contracts and significant non-recurring items

4) Net investments include investments paid at the end of the quarter, payments received from sale of non-current assets, net liquidity out from the Group upon acquisition of activities and repayment and disbursement of loans.

5) Short-term liquidity: (OB liquidity capacity + forecast incoming payments next 6 months) / (Debt due and dividend next 6 months +(Limit x forecast disbursement from operations / Investments next 6 months)).

6) Net interest-bearing debt: Gross interest-bearing liabilities – bank deposits, cash in hand and similar excluding restricted funds – short-term financial investments.

7) Cash flow from operations / Net interest-bearing debt (%): (Net liquidity change from operating activities - Changes in short-term items) x 100 / (Current interest-bearing debt + Interest-bearing long-term debt - Bank deposits, cash in hand and similar less restricted funds - short-term financial investments)