Statkraft AS: Result for the third quarter
Satisfactory result despite low Nordic power prices
(Oslo, 29 October 2020) Statkraft recorded an underlying EBIT of NOK 1.1 billion in the third quarter of 2020. This was a decrease of NOK 0.9 billion from the corresponding quarter last year. The decrease was driven by substantially lower Nordic power prices, partly offset by hedging activities.
“Successful price hedging secured satisfactory third-quarter earnings, despite very low Nordic spot prices”, says CEO Christian Rynning-Tønnesen.
In the third quarter, the average Nordic system price was 9 EUR/MWh, a decrease of 74 per cent compared with the same quarter in 2019. Total power generation was 14.5 TWh in the quarter, a decrease of 0.4 TWh. The decrease in generation was related to Nordic hydropower, while gas and wind power generation increased.
Changes in the market outlook led to both impairments and reversal of previous year’s impairments with a net positive effect of NOK 1.3 billion. A weakening of NOK against EUR led to net financial items of NOK -744 million. Net profit ended at NOK 1.9 billion, an increase of NOK 1.3 billion compared with the third quarter in 2019.
Statkraft continues to enter into hedging agreements that contribute to stabilise earnings and has signed a new 15-year financial contract in the quarter. As a result, Statkraft has received NOK 2.4 billion in prepayment contributing to a solid cash flow from operations in the quarter.
“The world needs more renewable energy and Statkraft’s target is to develop 9GW by 2025. We have ongoing construction projects in renewable energy in Norway, UK, Netherlands, Albania, Brazil, Chile and India, and the project portfolio is constantly growing in our core markets,” says Rynning-Tønnesen.
Statkraft has recently secured 15-year contracts for two wind and two solar farms in Ireland's first auction for renewable energy. The combined capacity is 330MW and Statkraft will now develop the projects towards final investment decision.
After closing the contract for turbine supply, Statkraft decided to move forward with the construction of the 519MW Ventos de Santa Eugenia wind project in Brazil. This is Statkraft’s largest wind project in South America and will more than double our renewable energy capacity in Brazil. The total investment cost is estimated to NOK 4.2 billion and the project is expected to be completed in June 2023.
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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, solar power, gas-fired power and supplies district heating. Statkraft is a global company in energy market operations. Statkraft has 4000 employees in 17 countries.