Statkraft SF Fourth Quarter 2005

16.02.2006 08.10 | stock exchange information

In total for the year the group profit amounted to NOK 8,582 million before tax, an improvement of NOK 3,731 million compared with 2004. Net profit totalled NOK 6,030 million, an improvement of NOK 1,430 million.

In the fourth quarter 2005 the Statkraft SF Group made a profit of NOK 3,150 million before tax and a net profit of NOK 2,109 million. This was an increase of NOK 1,356 million and a decrease of NOK 133 million respectively compared with the fourth quarter 2004. In 2004 tax expenses were unusually low on account of large tax-free gains and a considerable correction to previously deferred tax positions after changes to the tax system.
The increase in profits was due primarily to the fact that production rose from 34.3 TWh in 2004 to 48.5 TWh in 2005, and that electricity prices remained stable throughout the year. A substantial resource supply combined with smooth operations and good power optimisation laid the foundation for the significant increase in profits. Furthermore, net financial expenses were reduced, and non-recurring items were allocated to net income which in total gave a positive contribution to profits.
In 2005 the total taxes, licence fees and compensation payments entered in the accounts amounted to NOK 3,405 million, NOK 2,420 million more than in 2004.
In the state budget for 2006 the dividend from Statkraft to the State for 2005 was set at NOK 4,720 million. This dividend is equivalent to 81 per cent of the group's net profit. In 2005 Statkraft demonstrated a great ability to further develop the group in line with its approved strategies and objectives. In order to continue these efforts, Statkraft is dependent on a solid financial platform. In connection with this, the Board is concerned about setting a dividend level that will enable Statkraft to reinvest a good portion of its profits in the business. If Statkraft continues to have much higher level of dividend than its competitors, the group's possibilities for investing in environment-friendly power generation will become limited over time. For the group to have a regulatory framework in line with its competitors, the Norwegian Companies Act's standard rules for establishing the level of dividend must also be made valid for Statkraft.
On 1 October Statkraft acquired 20 hydropower plants in Sweden and four in Finland, with a total average annual output of 1.6 TWh, for NOK 4.1 billion.
In 2005 Statkraft made an effort to sell off Trondheim Energiverk (TEV) to comply with the Norwegian Competition Authority's directive to sell the company. The directive was reversed in November, and Statkraft decided to terminate the sales process. Statkraft no longer has any outstanding directives issued by the Competition Authority.
The construction of the three gas-fired power plants in which Statkraft has decided to participate is well underway. Two of these gas-fired power plants are in Germany and one is in Norway. Phase 2 of the Smøla Wind Farm, which was opened in September, is now fully operational.
In December Statkraft and the Dutch company Nuon decided to terminate the agreements relating to the sale of green certificates from wind power generation at Smøla and Hitra. Statkraft has received a one-off compensation payment from Nuon. The wind farms have been written down due to the termination of the agreements. Taken as a whole, the result was positive, with revenues of NOK 645 million before tax and NOK 464 million after tax.
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 and its underlying companies. The transfer covered some 96 per cent of the assets held by Statkraft SF. However, certain assets, which may not be formally transferred, have been retained by Statkraft SF. This applies to power plants which have reverted to state ownership and which have been leased out 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 and Nordic Hydropower AB).
Following the reorganisation, the Statkraft SF Group's consolidated financial statements will, with the exception of the retained assets, be identical to the consolidated financial statements for the Statkraft AS Group. The financial impact, which is relatively modest, is described below.
The value of the Statkraft SF Group's total assets as recorded on its consolidated balance sheet for 2005 is NOK 1.5 billion higher than the value of the Statkraft AS Group's assets. This largely corresponds with the book value of the power plants that have been leased to third parties and the foreign investments which have not been transferred, in addition to smaller, short-term items and cash reserves.
Interest-bearing long-term liabilities in the Statkraft SF Group amounted to NOK 3.4 billion more than in the Statkraft AS Group as a consequence of Statkraft SF raising NOK 3 billion in new debt in 2005 under previously established credit lines. This was done to help finance the dividend to the State of NOK 3.4 billion for the 2004 financial year.
Interest-bearing liabilities in the Statkraft SF Group amounted to NOK 34.6 billion at the end of 2005, a reduction of NOK 5.6 billion compared with the end of 2004. In 2005 considerable redemptions and buybacks of bond loans took place. Statkraft AS has repaid internal loans to Statkraft SF corresponding to the redemption and buyback of external loans in Statkraft SF.
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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