Statkraft AS: Result for the second quarter of 2016
Solid operations - Negative result caused by impairment
(Oslo 21 July 2016) In the second quarter of 2016, Statkraft AS recorded an underlying operating profit (EBITDA) of NOK 2665 million, an increase of NOK 303 million compared with the corresponding period in 2015. The quarter showed a net result of NOK -1899 million which is mainly due to impairments of German assets.
The average Nordic power price in the second quarter was 24.0 EUR/MWh. This is on the same level as the first quarter, but an increase of 16% compared with the corresponding quarter in 2015. Statkraft's total production was in line with the same period last year and amounted to 14.3 TWh. Production in the Nordic's was 13.0 TWh, which was a decrease of 0.3 TWh mainly due to lower hydropower production in Sweden. This was offset by higher production from International Hydropower.
Reduced market expectations have led to impairments related to gas fired power plants and other assets in Germany which in total amounts to NOK 2229 million. The remaining book value of these assets is NOK 1423 million.
- We are pleased with strong underlying operations, but reduced market expectations have led to impairment of German assets, says CEO Christian Rynning-Tønnesen.
The half year's operating result shows solid performance with an underlying EBITDA of NOK 6915 million. The net result was held back by impairments and ended at NOK 490 million.
Both the Continental and Nordic power markets are undergoing changes with reduced technology cost and new renewable capacity coming online combined with low demand growth. This development has contributed to a decline in power prices.
Low power prices and fundamental changes in the power sector make it important for Statkraft to strengthen the competitiveness. Statkraft has therefore launched a performance improvement programme with the aim to reduce controllable cost by 15% or approximately NOK 800 million by 2018.
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Statkraft is a leading company in hydropower internationally and Europe's largest generator of renewable energy. The Group produces hydropower, wind power, gas-fired power and district heating and is a global player in energy market operations. Statkraft has 4200 employees in more than 20 countries.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.