Satisfactory operations and extraordinary write-downs
18.08.2011 08:00 | pressrelease
(Oslo, 18 August 2011) In the second quarter, Statkraft achieved good results in the underlying operations. Through lower production, but higher prices, the underlying* operating profit before depreciation (EBITDA) amounted to NOK 1822 million, compared with NOK 1733 million in the corresponding quarter last year. As a result of unrealised changes in value on energy contracts and write-down of the shares in E.ON AG, the posted loss after tax was NOK 929 million, compared with a profit of NOK 1063 million in the second quarter of 2010.
"The result from the operations is satisfactory, but the posted result is negative due to unrealised changes in value and write-down of the shares in E.ON. During the quarter, the resource situation in the Nordic region improved substantially as a result of high precipitation," says President and CEO Christian Rynning-Tønnesen.
Overall for the first half of the year, the underlying EBITDA ended at NOK 6072 million, compared with NOK 7645 million in the corresponding period in 2010. The profit after tax was NOK 1880 million, compared with NOK 5596 million during the same period last year.
Over the course of the second quarter, Statkraft has entered into five new, long-term power agreements with Norwegian industrial companies. The new power contracts, with deliveries starting in 2011, amount to 6 TWh. A considerable part of this volume replaces the expired contracts with statutory prices. Statkraft now delivers a total volume of 20.8 TWh per year to the Nordic power-intensive industry.
"In the second quarter, Statkraft took important steps in the implementation of our new strategy. The company entered into many new power agreements with Norwegian industrial companies, took investment decisions in wind power projects in Sweden and Scotland, and acquired shareholdings in Brazil through SN Power," says Rynning-Tønnesen.
The Group's consolidated power production for the second quarter was 10.1 TWh, compared with 10.5 TWh during the same period last year. For the first six months of the year, the production amounted to 24.8 TWh, compared with 28.8 TWh in 2010. The lower production is mainly due to a decline in hydropower production. The resource situation improved considerably over the spring and summer, and the total reservoir water level in the Nordic region was 96.5 per cent of normal at the end of the second quarter, corresponding to 82.7 TWh. At the beginning of the quarter, the reservoir water level in the Nordic region was 45 per cent of normal.
Overall, power prices have been higher in 2011 so far than in 2010. In the second quarter, the average system price in the Nordic market was 52.2 EUR/MWh (44.9), while it was 59.2 EUR/MWh (52.3) for the first six months. The average spot price on the German energy exchange EEX was 53.6 EUR/MWh (41.9) for the second quarter and 52.7 EUR/MWh (41.5) for the first six months. Forward prices in the second half of the year are lower than spot prices during the same period in 2010.
*Adjusted for unrealised changes in value and material non-recurring items
Statkraft is a European leader within renewable energy. The Group develops and produces hydropower, wind power, gas power and district heating, and is a major player on the European energy exchanges. Statkraft has more than 3300 employees in more than 20 countries.