Results remain strong as power prices continue to drop
(Oslo, Norway, 7 May 2024) – Statkraft
reported strong results in the first quarter 2024 as power prices
continued to drop following two extraordinary years in the energy
markets. Statkraft’s power generation, energy management, and
trading and origination activities delivered solid
performance.
- Net operating revenues was NOK 19.6
billion in Q1 2024 compared to 23.5 billion in the comparable
quarter last year when the European energy crises caused
extraordinary market conditions. Underlying EBIT decreased to NOK
13.5 billion (NOK 17.5 billion), while profit after tax was NOK 6.8
billion (NOK 10.2 billion).
- Energy markets continued to
normalise and power prices dropped sharply, driven by lower gas
prices, a mild winter and reduced demand. European power prices in
the first quarter fell by 31 per cent in the Nordic region and 42
percent in Europe/Germany compared to the extraordinary high prices
in the same quarter last year.
- Statkraft signed several long-term
power contracts, including power purchase agreements with Alcoa
Norway and Hydro Energi in Norway, as well as Bürgerwindpark
Jevenstedt in Germany.
- Statkraft divested the Ballymacarney
solar project (199 MW) in Ireland for NOK 1.8 billion.
- On 18 March Statkraft announced the
appointment of Birgitte Ringstad Vartdal as President and CEO of
Statkraft with effect from 1 April.
“I am satisfied with the strong results despite much lower power
prices in the first quarter. We continue to deliver strong
performance in power generation and energy management, and high
value-creation in trading and origination. We are well positioned
with a solid and scalable business model that provides us with the
flexibility needed to quickly adapt to changing market conditions,"
says Statkraft CEO, Birgitte Ringstad Vartdal.
The average system price in the Nordic region was 58.3 EUR/MWh,
down 26.8 EUR/MWh from extraordinary prices in the first quarter of
2023 and about the same level as the fourth quarter of 2023. The
price area differences in Norway continued to decrease, with prices
in the southern price areas (NO1 and NO2) still facing higher
prices than the rest of the country.
Higher nuclear availability, slightly higher wind power
generation and lower total export contributed to continued decline
in Nordic power prices. Temperatures in Norway were slightly higher
than normal. Nordic reservoir levels decreased during the first
quarter to 76% of median by the end of March and is currently at
81.4% of median, equivalent to 23.7% of full capacity.
Statkraft’s generation was higher than the same quarter last
year and above normal for the period, mainly driven by Norwegian
and Brazilian hydropower.
Operating expenses fell sequentially from the fourth quarter but
were slightly higher than the same quarter last year. The increase
was driven by a higher activity level, mostly related to business
development activities, a higher number of FTEs, salary adjustments
and currency effects, partly offset by lower performance related
remuneration.
Underlying EBIT was NOK 13.5 billion, compared to NOK 17.5
billion in the same quarter last year, driven by the significantly
lower power prices and hedging gains both in Nordics and Europe,
partly offset by reversal of a NOK 2.6 billion provision related to
Baltic Cable, the abolishment of high-price contribution on Norway,
and higher Norwegian power generation.
The Nordics segment was the main contributor to the results with
an underlying EBIT of NOK 12.0 billion despite significantly lower
power prices compared to last year. The Markets segment delivered a
strong underlying EBIT of NOK 1.4 billion in the quarter, primarily
related to origination activities.
Statkraft reported profit before tax of NOK 14.0 billion,
including negative net financial items of NOK 1.9 billion. Net
financial items in the quarter included negative currency effects,
primarily driven by a weaker NOK vs. EUR, GBP and USD. Profit after
tax was NOK 6.8 billion.
Statkraft continues to develop a broad portfolio of hydro, wind,
solar, and battery energy storage projects, mainly in the business
areas Nordics and Europe. In addition, the company announced plans
to double investments and maintenance in the Norwegian hydropower
plants to NOK 4 billion annually towards 2030 and to initiate five
large capacity upgrades.
Investments in the quarter were NOK 4 billion, of which NOK 2.6
billion was related to new power generation capacity, grid service
and battery projects, and 0.6 billion was maintenance investments,
mainly in Nordic hydropower assets.
Statkraft has a record-high committed investment activity for
2024 of NOK 32 billion, including Enerfin.
The geopolitical situation and market conditions are changing,
power prices in Europe have dropped sharply and technology costs
have increased substantially. Also, the cost of capital has
increased, affecting project profitability, valuations and access
to capital, and development in market regulations and support
policies is delayed.
“Even as costs are higher and the situation has become more
challenging, the energy transition is moving faster driven by
continued growth in demand for more renewable energy capacity. The
opportunities to deliver profitable projects continues. Statkraft
has built a significant ability to scale pipeline and execute
projects. The flexible business model, strong projects portfolio,
and an organisation fit to execute on the opportunities in the
energy transition, means Statkraft is well positioned for further
growth,” says Ringstad Vartdal.
Statkraft has developed a strong portfolio of new renewables
projects, including bringing greenfield projects to investment
decisions and executing several value-creating M&As, most
notably the acquisition of Enerfin which is expected to close in
the second quarter. This transaction will further strengthen the
company’s position in two of its core markets, Spain and
Brazil.
“Our investments and development activities strengthen Statkraft
for the future, but in the shorter term tie up capital and require
more prioritisation going forward. We will therefore look to free
up available investment capacity, including divesting the Enerfin
portfolio in Canada, USA, Colombia, Chile and Australia, exploring
divestment of our district heating business and bringing a new
co-owner into Silva Green Fuel and invite new shareholders into
Statkraft's EV Charging company Mer. Through our on-going annual
strategic review process, we will sharpen our strategy, review our
targets and prioritise the projects with the best fit and
profitability for Statkraft. Our strategic direction stands, and we
will continue our efforts every day to renew the way the world is
powered,” Ringstad Vartdal says.
For further information, please contact:
Debt Capital Markets: Vice President Stephan Skaane, tel: +47
905 13 652, e-mail: stephan.skaane@statkraft.comSenior 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 StatkraftStatkraft 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.
- Interim Report Q1 2024
- Presentation Q1 2024