Solid result
(Oslo, 6 November 2008) Statkraft posted a profit after tax of NOK 4,599 million (NOK 4,103 million)[1] for the first three quarters of the year, and an underlying profit[2] after tax of NOK 5,205 million (NOK 4,044 million). The profit after tax for the third quarter was NOK 1,381 million (NOK 1,047 million), while the underlying profit after tax for same period was NOK 693 million (NOK 734 million). The result is strongly impacted by higher prices and production compared with in 2007.
"Statkraft posted an excellent result in the first three quarters of the year. This is attributable to higher electricity prices, increased production and excellent results from hedging activities, and a considerable effort from the company's employees," explained President and CEO Bård Mikkelsen.
"The company also entered into its largest industrial power agreement in ten years. This shows that Statkraft is in a position to offer industry contracts on predictable, long-term and commercial terms," remarked Mikkelsen.
The Group posted gross sales of NOK 4,778 million in the third quarter of the year (NOK 3,117 million). Gross operating revenues for the first nine months of the year amounted to NOK 16,723 million (NOK 10,975 million). This represents an increase of 52%, and is primarily attributable to significantly higher electricity prices and production than in the corresponding prior-year period.
The price of electricity in the Nordic market was significantly higher during the first three quarters of this year compared with the same period in 2007. The average system price rose from 23.0 EUR/MWh to 42.7 EUR/MWh, and was thus up by 86%, while total power generated by the Group amounted to 38.0 TWh (30.0 TWh), which represents an increase of 27%.
The underlying operating profit in the third quarter of the year was NOK 2,065 million (NOK 1,304 million), while the underlying operating profit for the first three quarters of the year amounted to NOK 7,957 million (NOK 4,839 million). The above figures represent respective improvements of 58% and 64%.
Important events in the quarter and outlook
On 24 July E.ON AG and Statkraft signed an agreement which will see Statkraft exchange its shareholding in E.ON Sverige for assets and shares in E.ON AG. The transaction is expected to be implemented at the end of 2008.
On 23 October Statkraft and Boliden Odda signed two long-term, commercial industrial power contracts for the period 2009 to 2030. The agreement for the supply of around 20 TWh is the largest industrial agreement Statkraft has entered into since 1998, and confirms the company's status as the largest and most important supplier of power to power-intensive industry in Norway. As part of the agreement Statkraft will acquire the shares in AS Tyssefaldene held by Boliden Odda.
On 15 August Statkraft and Agder Energi entered into an agreement to establish the company Statkraft Agder Energi Vind DA. The two parties will use the newly established company to implement a joint initiative on onshore wind power in Norway.
High reservoir levels at the start of the year and higher than normal precipitation levels have resulted in a robust resource situation. The system price was significantly higher during the first three quarters of the year than in the corresponding period the previous year, and forward prices also indicate that prices will remain higher during the remainder of the year than during 2007. Together with the increase in generating capacity facilitated by the new gas-fired power plants, this will form the basis for a relatively high level of power production during 2008 along with increases in revenues from ongoing power sales. However, uncertainty attaches to the further development of power prices and the hydrological resource situation. The financial crisis has now reached global proportions and is affecting the market economy. There have been significant effects on commodity prices such as coal, oil and gas, and it is expected that prices and demand for power will fall in the short and medium-term. The long-term consequences are more uncertain as a result of uncertainties regarding the actual long-term effects on the market economy.
Statkraft is a leading player in Europe within renewable energy. The Group develops and generates hydropower, wind power, gas power, solar power and district heating and is a major player on the European energy exchanges. In Norway the company supplies electricity and heat to around 600,000 customers through its shareholdings in other companies. In 2007 Statkraft posted a profit after tax of NOK 6.6 billion, and employed around 2,300 employees in ten countries. The world needs pure energy. This is what Statkraft delivers - every day.
For further information, please contact:
EVP/CFO Stein Dale, tel.: +47 24 06 72 11 / +47 450 02 111
IR contact Yngve Frøshaug, tel.: +47 24 06 78 76 / +47 900 23 021
EVP Ragnvald Nærø, tel.: +47 24 06 71 00 / +47 900 80 303
or visit www.statkraft.com