Norway: Statkraft Achieves Acceptable Results in Challenging Power Market

In the third quarter of 2012, Statkraft achieved an underlying operating profit before depreciation (EBITDA) of NOK 1185 million, compared with NOK 1751 million in the corresponding quarter in 2011. The profit after tax was NOK 638 million, compared with a loss of NOK 1583 million in the third quarter of 2011.

“Power prices in July and August were lower than they have been in the Nordic region for several years. In spite of this, Statkraft achieved an acceptable result due to high contract coverage and somewhat higher power production than in the same period last year,” says President and CEO Christian Rynning-Tønnesen.

The profit after tax in the quarter is influenced by unrealised loss of value for energy contracts, but this is more than offset by unrealised currency gains. In 2011, the profit after tax was strongly influenced by unrealised write-downs.

Overall for the first nine months of the year, the underlying EBITDA amounted to NOK 7644 million compared with NOK 7823 million in the corresponding period in 2011. The profit after tax was NOK 6511 million, compared with NOK 712 million during the corresponding period last year.

Market conditions in the third quarter continued to be influenced by heavy precipitation and high reservoir water levels in the Nordic region. Combined with increasing production of renewable energy and lower financial activity in Europe, this resulted in lower power prices. The Nordic system price was on average 42 per cent lower than in the corresponding quarter in 2011 and ended at 20.9 EUR/MWh, against 36.0 EUR/MWh in 2011. The average price for the first nine months was 29.3 EUR/MWh, compared with 51.5 EUR/MWh last year. The average spot price in the German market fell 11 per cent in the quarter, ending at 43.7 EUR/MWh, compared with 49.2 EUR/MWh in 2011.

The Group’s power production was 11.4 TWh in the third quarter, an increase of 4 per cent compared with the third quarter last year. The increase was largest in hydropower production, up 10 per cent from 2011. Wind power production was also higher, while gas power production was very low. For the first nine months of the year, the production totalled 43.7 TWh, compared with 35.7 TWh in 2011.

“Statkraft has strengthened its work to promote wind power development in Europe. In September, the Sheringham Shoal offshore wind farm with a capacity of 317 MW opened off Norfolk in England. Together with Statoil, Statkraft recently acquired the UK offshore wind power project Dudgeon with a licence to develop up to 560 MW. Statkraft’s shareholding is 50 per cent in Sheringham Shoal and 30 per cent in Dudgeon. A decision was also made in the third quarter to build the wind farms Björkhöjden and Ögonfägnaden in Central Sweden, totalling 369 MW, in cooperation with SCA,” says Christian Rynning-Tønnesen. 

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Press release, November 9, 2012; Image: Scira