Statkraft SF - Result first quarter 2005

11.05.2005 14.42 | stock exchange information

The Statkraft SF Group had a pre-tax income of NOK 2,523 million and a net income of NOK 1,786 million in the first quarter 2005. This is an improvement of NOK 329 million and 234 million (15 per cent), respectively, compared with the first quarter 2004.
The improvement in income during the quarter is largely due to the fact that the group generated significantly more electricity than during the same quarter last year, which more than compensated for the drop in prices. Revenues from financial power hedging remained substantial. Reduced financial costs also contributed to the improvement in income. However, the major repair costs incurred by Sydkraft following a hurricane in January, which did severe damage to the company's distribution grid in southern Sweden, did pull down the group's overall financial result.
Statkraft has entered into a long-term contract with Fesil to supply electrical power to Fesil's smelting works in Mo i Rana until the end of 2020. The agreement is part of Statkraft's efforts to replace existing statutory-priced contracts with contracts based on commercial terms and conditions.
Statkraft SF has offered to redeem the bulk of its outstanding bond debt in the Norwegian market that was issued prior to 31 December 2002. The debt redemption, which could amount to NOK 14.2 billion if all loans are repaid, will be financed by Statkraft AS repaying loans to Statkraft SF in an amount corresponding to the amount redeemed by Statkraft SF.
Statkraft SF's business
In connection with the reorganisation of Statkraft into a limited company with effect from 1 October 2004, most of Statkraft SF's business activities were transferred to the subsidiary Statkraft AS (limited company) and its underlying companies. The transfer covered over 96 per cent of the assets held by Statkraft SF. However, certain assets which may not formally be transferred have been retained by Statkraft SF. This applies to power plants which have reverted to state ownership and which have been leased out to third parties (Sauda I, II, III, IV, Tysso II, Svelgen I, II and Mågeli) or which will come into Statkraft SF's possession upon reversion. Furthermore, certain investments in foreign enterprises have been retained (Himal Power Limited, Asian Power Invest AB, Nordic Hydropower AB and Empresa de Generación Eléctrica Cheves SA).
Following the reorganisation, Statkraft SF's financial statements will, with the exception of the retained assets, be identical to the financial statements for its subsidiary the Statkraft AS Group. The financial impact, which is relatively modest, is described below.
The value of all Statkraft SF's assets as recorded on the balance sheet is NOK 2.2 billion higher than the value of Statkraft AS's assets. This largely corresponds with the book value of the power plants that have been leased out to third parties and the foreign investments which have not been transferred, in addition to short-term items which could not be transferred and cash reserves to meet its obligations.
On the balance sheet the item "Other interest-free debt" is almost NOK 3.5 billion higher for Statkraft SF than for Statkraft AS. This is because the NOK 3.4 billion dividend payable to the Norwegian state for 2004 is recorded as a debt in Statkraft SF's accounts. No dividend for 2004 will be paid by Statkraft AS, and this company therefore has no such corresponding liability. There will be a difference in the two companies' equities as a result of the difference in dividend provisions.
At the close of the first quarter Statkraft SF had a cash reserve of NOK 700 million. However, only a small share of this sum will be available to cover dividend payments. A committed credit line will be established to finance dividend payments.
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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Result first quarter 2005 .PDF