Statkraft board recommends strengthened equity

04.02.2009 08.00 | pressrelease

The board of Statkraft today submitted a recommendation to Sylvia Brustad, the Norwegian Minister of Trade and Industry, to strengthen the company’s equity by NOK 8 billion and amend the current dividend policy. These measures will enable implementation of Statkraft’s strategy for continued profitable growth in the field of environmentally friendly and flexible power production.

“Statkraft has identified good opportunities for continued profitable growth and we are planning to invest NOK 90 billion in the period up to 2015 in renewable and environmentally friendly power generation. The board’s recommendation for NOK 8 billion in new equity and an adjustment to dividend policy is intended to ensure that Statkraft can continue to develop its position as a leading player in the field of renewable energy in Europe,” says Arvid Grundekjøn, Chairman of the board of directors.

Statkraft’s board today submitted a proposal to the company’s owner, the Norwegian State, represented by the Norwegian Ministry of Trade and Industry, for it to strengthen Statkraft’s equity with the injection of NOK 8 billion during the first six months of 2009. The board estimates that the company’s total requirement for equity can be met through a combination of new equity and through setting average dividend levels in the period up to 2015 at around 70 per cent of ordinary profits.

Statkraft is currently a robust organisation, and the company’s debt ratio has improved, largely as a result of the value-creating transactions completed in 2008. The Statkraft Group currently has a credit rating of BBB+. While the board has a long-term goal of achieving an A rating, it considers BBB+ satisfactory for the present, provided there is a sufficient margin. The board recommends changing the current dividend policy so that payments, instead of normally lying in the top quartile (75–100 per cent) of ordinary profits, would generally lie in the third quartile (50–75 per cent).

The Group’s new strategy involves investments in the region of NOK 90 billion in the period up to 2015. Eighty-five per cent of these investments are expected to be devoted to renewable energy, while a little less than half the total sum has been earmarked for projects in Norway. Areas covered include:

  • focus on hydropower, wind power and district heating in Norway
  • industrial development of activities and shareholdings in Norway
  • onshore and offshore wind power around the North Sea basin
  • more flexible and environmentally friendly power in Europe
  • focus on hydropower in Southeast Europe
  • focus on hydropower in selected growth markets internationally via SN Power

Moreover, Statkraft is gearing up for a comprehensive programme of research and innovation aimed at identifying energy solutions for tomorrow, and focusing on new sources of energy such as solar, wave, tidal and osmotic power. In all, Statkraft’s strategy predicts a rate of growth in the period up to 2015 on a par with the average growth achieved by the Group during the past five years.

Statkraft is Europe’s largest generator of renewable energy. The Group develops and generates hydropower, wind power, gas power and district heating, and is a major player on the European energy exchanges. Statkraft also develops solar power, marine energy, osmotic power and other innovative energy solutions. In 2007 Statkraft posted gross operating revenues of EUR 2.2 billion and a profit after tax of EUR 827 million. The group employs close to 3,000 staff in more than 20 countries.