Statkraft SF - Preliminary results for 2009
(Oslo, 18 February 2010) Lower power prices and reduced production in Norway resulted in the Group's underlying1 profit before tax for 2009 falling to NOK 10 713 million (NOK 11 856 million)2. The underlying profit after tax amounted to NOK 5820 million (NOK 8365 million).
2009 was characterised by a substantial drop in power prices, driven by the turbulence in the world economy. Moreover, Statkraft chose to adapt to the market by producing less in Norway than in 2008, when power prices and results reached record levels.
On an annual basis, the average Nordic system price fell by 22 per cent to 35.0 EUR/MWh (44.7). The average spot price in the German market (EEX) fell by 41 per cent to 38.9 EUR/MWh (65.8). The reduction is mainly due to weaker demand from industry and lower commodity prices on the Continent.
The Group produced 56.9 TWh over the course of the year (53.4). Norwegian hydropower production was significantly lower as a result of lower power prices and reduced demand. However the incorporation of new assets from the asset swap with E.ON AG, as well as the consolidation of SN Power as a subsidiary resulted in an increase in production. Wind power production was on a par with 2008, while the gas-based power production increased somewhat.
In total this generated gross operating revenues of NOK 26 041 million in 2009 (NOK 25 465 million).
The drop in power prices, lower production and an increased cost base due to new assets resulted in a lower underlying operating profit amounting to NOK 10 119 million (NOK 12 176 million).
The reported accounts are impacted by substantial unrealised changes in value as well as non-recurring items, and the unadjusted annual profit for 2009 was NOK 12 546 million before tax (NOK 37 715 million) and NOK 7790 million after tax (NOK 33 529 million).
At the turn of the year 2008/2009 Statkraft took over hydropower, gas power and district heating assets in an asset swap with E.ON AG. In 2009 a large effort has been put into integrating the new assets. In total the Groups generation capacity increased by 2433 MW (approximately 20%) through the transaction.
In January Statkraft increased the ownership share in SN Power from 50% to 60% through a combination of a purchase of shares from Norfund and a private placement in SN Power in the amount of NOK 2 billion. This transaction increased the Group's generation capacity by 621 MW, primarily hydropower.
In March Statkraft purchased a 50% stake in Statoil's project to construct Sheringham Shoal Offshore Wind Farm off the coast of Norfolk in the United Kingdom. The wind farm, which is due to be completed in 2011, will comprise 88 turbines and have a total installed capacity of 315 MW. The project's expected annual output is 1.1 TWh.
Statkraft and Boliden Odda have entered into two long-term industrial power agreements for the period 2009-2030 that was finalised in the second quarter and became effective as of 1 July. The agreement for delivery of around 20 TWh is the largest industrial power agreement Statkraft has entered into since 1998.
In 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 developed a major portfolio of projects which support the Group's strategy where the investment level depends on the Norwegian state's willingness to strengthen Statkraft's equity through supply of capital and reduced dividend levels. On 4 February 2009, the board of directors presented Statkraft's strategic platform with the appurtenant financial plan to the Ministry of Trade and Industry in the form of an application for strengthened equity and reduced dividend levels. The request is still under consideration in the Ministry.
Statkraft SF's business
The purpose of Statkraft SF is to own all the shares in, and provide loans to, Statkraft AS. In addition, Statkraft SF owns certain assets that for technical reasons may not be owned by Statkraft AS. This applies to power plants that have reverted to state ownership and are leased to third parties and to plants that will be owned by Statkraft on reversion to state ownership, together with certain overseas investments (Asian Power Invest AB and Nordic Hydropower AB).
The consolidated financial statements for Statkraft SF will, with the exception of the retained assets and individual items on the liabilities side, be identical with the consolidated financial statements for the Statkraft AS sub-group. See reported fourth quarter and preliminary results for 2009 for Statkraft AS.
In the closing balance sheet for 2009, the value of the total assets of the Statkraft SF Group was NOK 145.0 billion, which is NOK 1 billion greater than that of the total assets of the Statkraft AS Group.
The differences between the respective income statements of Statkraft SF and Statkraft AS primarily relate to revenues and expenses associated with ongoing operation of the retained assets. These differences are relatively modest.
Stein Dale, CFO, tel.: +47 24 06 72 11 / +47 450 02 111
Yngve Frøshaug, VP Investor Relations, tel.: +47 24 06 78 76 / +47 900 23 021
Enclosure: Group income statement and balance sheet for 2009.
1 Adjusted for unrealized changes in value and significant non-recurring items.
2 Figures in parentheses show comparable figures for the corresponding period in 2008.