Strong operations but impairments led to a negative result
(Oslo, 28 October 2016) Statkraft AS recorded an underlying operating profit (EBITDA) of NOK 2001 million in the third quarter of 2016. This is an increase of NOK 702 million compared with the corresponding period in 2015. The quarter showed a net loss of NOK 1417 million, due to impairment of assets mainly caused by lower long term price expectations.
The increase in EBITDA was primarily driven by higher Nordic power prices and higher production due to successful energy management. The average Nordic power price in the third quarter was 25.2 EUR/MWh. This is a small increase from the second quarter, and an increase of 89% compared with the low prices experienced in the same period in 2015. Statkraft's total production increased with 2.2 TWh from the third quarter last year to a total of 13.3 TWh in this quarter.
Statkraft's long term price expectations have been negatively influenced by lower fuel price expectations. This is the main reason for impairments of hydro- and wind power assets in several countries. It was recognized 2384 million of impairments in consolidated operations and 172 million in associated companies.
- Statkraft's core operations are fundamentally strong with a solid cash flow. The impairments reflect a decline in our long term price expectations. In order to adapt to the market development, we are running an extensive improvement programme in all parts of the organisation, says CEO Christian Rynning-Tønnesen.
Statkraft's Performance Improvement Programme is progressing according to plan. The aim of the programme is to strengthen performance and reduce controllable costs with 15 percent equalling 800 million by the end of 2018, measured against the actual costs for 2015.
Statkraft decided last year not to invest in new offshore wind projects and subsequently to optimize the existing offshore wind portfolio in the UK. Statkraft has now started preparations for the divestment of offshore wind assets.
The 73 MW Banja hydropower plant in Albania came into operation. Annual production will be around 255 GWh.
Furthermore, Statkraft commissioned Nedre Røssåga power station. It is one of the largest hydropower projects in Norway in 15 years. Installed capacity has been increased from 250 to 350 MW and total production increases by approximately 200 to 2150 GWh annually. The power station is now ready for another 50 years of operations.
The new capacity will reinforce Statkraft's position as Europe's largest generator of renewable energy.For further information, please contact:
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.