Underlying results remain robust as markets continue to normalise
(Oslo, Norway, 23 July 2024) – Statkraft reported robust underlying results in the second quarter 2024 with solid contributions from power generation, and market operations as power prices continued to fall. Net profit was negative, impacted by impairments mainly due to local changes in hydrology and lower price expectations.
- Net operating revenues was NOK 11.2 billion in Q2 2024 compared to 12.9 billion in the comparable quarter last year, while underlying EBIT decreased to NOK 4.9 billion (NOK 7.4 billion)
- Net profit was NOK -1.0 billion (NOK 5.5 billion), including impairments of NOK 3.1 billion in hydropower assets in Albania and Turkey due to lower expected generation, as well as NOK 841 million in German wind power assets explained by lower future power prices, and NOK 348 million in hydropower in India.
- Power prices fell by 38 per cent in the Nordic region in the second quarter and 46 percent in Germany compared to the same quarter last year.
- Statkraft completed the acquisition of Spanish-based renewable energy company Enerfin for a total consideration of NOK 18 billion, adding a portfolio of operating wind farms and wind and solar projects. As announced earlier, Statkraft plans to divest the Enerfin portfolio in Canada, the US, Colombia, Australia, and Chile.
- Statkraft signed several long-term power contracts, including power purchase agreements both in Europe and South America. In July, a new PPA contract with Alcoa Norway was signed, delivering a volume of 876 GWh per year from 2025 to 2027 to their facilities in Lista (NO2).
- Statkraft announced plans to find new owners for its district heating business in Norway and Sweden.
- In June, Statkraft announced its updated strategy, including revised strategic targets.
“I am pleased that we continue to deliver strong underlying results, despite lower prices. Higher power production, good energy management and solid results from market activities contributed positively to the results. While our underlying results are robust, continued high business development costs as we are investing in more renewable energy production for the future, reduced financial hedging effects and impairments explains the negative net result,” says Statkraft President and CEO, Birgitte Ringstad Vartdal.
The average system price in the Nordic region was 35.3 EUR/MWh, down 20.7 EUR/MWh from the second quarter of 2023 and down 23.0 EUR/MWh from the first quarter of 2024, mainly due to high temperatures causing rapid snow melting, high inflow and low consumption, as well as lower continental prices. The price area differences in Norway continued to decrease, with prices in the southern price areas (NO1 and NO2) still higher than the rest of the country.
Average German base price was 71.8 EUR/MWh, down 20.6 EUR/MWh from the same quarter last year, while up 4.2 EUR/MWh since the first quarter 2024. Power prices were down compared to last year mainly due to lower gas and carbon prices, as well as higher nuclear production in France.
Statkraft’s generation was 14.4 TWh in the second quarter 2024, 1.3 TWh higher than the second quarter last year. The increase was driven by Norwegian hydropower and increased generation capacity in Brazil and Germany.
Operating expenses rose from the second quarter last year and were slightly higher than in the first quarter. The increase was driven by a higher number of FTEs, salary adjustments and currency effects, partly offset by lower performance related remuneration, as well as increased activity level and increased depreciations and amortisations from new assets.
Underlying EBIT was NOK 4.9 billion, compared to NOK 7.4 billion in the same quarter last year, driven by the significantly lower power prices and hedging effects both in Nordics and Europe, partly offset by higher revenues from new capacity and gas-fired power plants.
The Nordics segment was the main contributor to the results with an underlying EBIT of NOK 4.4 billion despite significantly lower power prices compared to last year. The Markets segment delivered a strong underlying EBIT of NOK 1.1 billion in the quarter, primarily related to origination activities.
Net financial items in the second quarter included positive currency effects of NOK 1.7 billion due to a strengthening of NOK vs. EUR.
Profit before tax was NOK 1.1 billion (NOK 12.3 billion) in the quarter, including total impairments of NOK 4.5 billion. The second quarter 2023 results included reversals of impairments of NOK 2.2 billion.
After the completion of the acquisition of Enerfin in June, Statkraft’s total portfolio of power plants in operation now exceeds 21 GW. It confirms the company’s position as Europe’s largest producer of renewable energy and places Statkraft among the top ten wind power producers both in Spain and Brazil. The acquisition added not only a portfolio of 1.5 GW of wind and solar farms in operation and under construction, but also a pipeline of projects under development. This has brought Statkraft’s flexible portfolio of projects under development to a probability-weighted total of 21 GW.
“Coming from a period of extensive project- and business development, it is now time to consolidate and sharpen our focus on delivering and capitalising on the strong pipeline we have developed. I am confident that the revised strategy plays to our competitive strengths and helps us manoeuvre the changes in our industry, while also setting us up for continued healthy growth. In doing so, we will continue to renew the way the world is powered,” says Birgitte Ringstad Vartdal.
For further information, please contact:
Debt Capital Markets:
Vice President Stephan Skaane, tel: +47 905 13 652, e-mail: stephan.skaane@statkraft.com
Senior Financial Advisor Arild Ratikainen, tel: +47 971 74 132, e-mail: arild.ratikainen@statkraft.com
Media:
Media Spokesperson Lars Magnus Günther, tel: +47 912 41 636, e-mail: lars.gunther@statkraft.com
Vice President Torbjørn Steen, tel: +47 911 66 888, e-mail: torbjorn.steen@statkraft.com
or www.statkraft.com
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
About Statkraft
Statkraft is a leading company in hydropower internationally and Europe’s largest generator of renewable energy. The Group produces hydropower, wind power, solar power, gas-fired power and supplies district heating. Statkraft is a global company in energy market operations. Statkraft has over 6,000 employees in more than 20 countries.
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
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