Statkraft SF - Fourth Quarter 2006
15.02.2007 08:14 | stock exchange information
2006 was a very good year for Statkraft. Gross operating revenues rose by 7 per cent to more than NOK 16 billion. Profit before tax rose by NOK 1.2 billion to just over NOK 9.8 billion, while profit after tax totalled almost NOK 6.3 billion, compared with NOK 6 billion in 2005. This represents an improvement of 5 per cent.
In the fourth quarter profit before tax totalled NOK 2,418 million, a drop of NOK 732 million compared with the year before. NOK 381 million of this can be ascribed to net positive non-recurring items in 2005. Adjusted for this, profit before tax fell by NOK 351 million (11 per cent). The weaker performance of underlying operations was due largely to lower production and weaker results from associated companies.
Electricity prices were high through most of the year, but fell sharply towards the end of the fourth quarter. Prices in December were at the same level as in the corresponding month in 2005. The spot price averaged NOK 391/MWh in 2006, 66 per cent higher than the year before. This can largely be ascribed to the fact that the inflow into the company's hydropower reservoirs was lower than normal for most of the year, as well as to temporary shutdowns at several nuclear power plants in Sweden. The increase in spot prices is reflected in the company's revenues from net physical spot sales, which rose by 35 per cent for the year as a whole. However, higher spot sales revenues were offset by a substantial fall in revenues from hedging activities. Compared with 2005, production also fell in the fourth quarter, so that output for the year as a whole fell by 2.9 TWh (6 per cent).
The Norwegian national budget for 2007 requires Statkraft to pay to the Norwegian state a dividend amounting to 98 per cent of group profit after tax and minority shares. This corresponds to NOK 5,857 million.
During the fourth quarter it became clear that the Svartisen power plant would be out of operation until the middle of March 2007 as a result of damage to the generator. It has been decided to invest in an additional 250 MW generator at the power plant, which currently has an installed capacity of 350 MW and a mean annual output of 2.2 TWh.
In 2006 Statkraft's subsidiary Trondheim Energiverk completed the construction of a district heating pipeline from the Heimdal central heating plant to the centre of Trondheim. The associated expansion of the central heating plant is expected to be completed during the fourth quarter 2007. In October 2006 the Kjøllefjord wind farm went into production. Construction of the three gas-fired power plants - two in Germany and one in Norway - is expected to be completed during the second half of 2007, as is the Pålsbu hydropower plant. Construction of the new Leirfossene power plants in Nidelva remains on schedule. The plants are expected to go into operation during the summer of 2008.
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 to plants which will fall to Statkraft SF upon their reversion to state ownership, as well as to certain international investments (Asian Power Invest AB and Nordic Hydropower AB).
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 fourth quarter 2006 showed that the total assets of the Statkraft SF Group were worth NOK 623 million more than those of the Statkraft AS Group. NOK 1,040 million of this sum corresponds to the book value of the power plants that have been leased to third parties and the above-mentioned international investments, while changes in current items and cash and cash equivalents were NOK 417 million lower.
The Statkraft SF Group had almost 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. At the end of the fourth quarter interest-bearing debt totalled NOK 32.7 billion, compared with NOK 32.4 billion at the end of 2005. The interest-bearing debt ratio stood at 49.2 per cent, compared with 47.7 per cent in 2005. Current assets, excluding cash and cash equivalents, totalled NOK 5.0 billion, while short-term interest-free liabilities totalled NOK 13.3 billion.
In the Income Statement, the difference between Statkraft SF and Statkraft AS is largely composed of revenues and expenses linked to the ongoing operation of the retained assets. These differences are relatively modest.
CFO Eli Skrøvset, tel.: +47-24 06 79 14 / +47-909 86 495
VP Investor Relations Yngve Frøshaug, tel.: +47-24 06 78 76 / +47-900 23 021
|Report 4th quarter 2006|