Statkraft AS: Result for the first quarter

Statkraft has upheld reliable and safe operations during the outbreak of the Covid-19 pandemic.  A large hydrological surplus in the Nordics and lower energy demand have led to low power prices during the first quarter and reduced underlying EBIT.

Low fuel prices, a significant hydrological surplus and low demand due to a mild winter combined with  the outbreak of Covid-19 have put pressure on Nordic power prices. In the first quarter, the average Nordic system price was 15.4 EUR/MWh, a decrease of 67 per cent compared with the same quarter in 2019. Total generation was 17.7 TWh in the quarter, an increase of 1.7 TWh. The increase in generation was primarily related to Nordic hydropower and wind power.

Statkraft recorded an underlying EBIT of NOK 4.1 billion in the first quarter of 2020. This was a decrease of NOK 2.7 billion  from the corresponding quarter last year, and mainly the result of  substantially lower power prices. Strong results from market activities during the quarter, partly offset the effects from lower power prices.

“Our market activities continue to deliver strong results. Overall, we are satisfied with the underlying EBIT considering the low Nordic power prices”, says CEO Christian Rynning-Tønnesen.

Changes in the energy market outlook led to impairments of wind power assets in the Nordics of NOK 2.6 billion.

A substantial weakening of the Norwegian krone led to negative currency effects of NOK 5.7 billion, which were mainly unrealised. The quarterly net profit was NOK -1.9 billion, a decrease of NOK 6.6 billion. The negative currency effects were more than offset by positive effects in comprehensive income, leading to a strengthening of total equity by NOK 4.6 billion in the quarter.

As a result of Covid-19, the construction work at Tidong hydropower project in India, Los Lagos hydropower project in Chile and Windy Rig wind power project in the UK are temporarily halted. There is uncertainty as to when the construction work can be restarted. Most other construction, refurbishment and maintenance projects are executed in line with plans.

“Safe operations and delivering a reliable supply of power and heat to society, remains a top priority for Statkraft,” adds Rynning-Tønnesen.

A new long-term power contract was entered into with Glencore Nikkelverk in Norway for the period 2021-2029 with an annual volume of 90 GWh.