Statnett Quarterly Financial Results Drop (Norway)

The Statnett Group reports a loss after tax of NOK 20 million in the first quarter of 2013, compared to a profit after tax of NOK 187 million for the same period in 2012. Profit after tax for the first half of 2013 was NOK 64 million, compared to NOK 452 million for the first half of 2012. The reduction in the first half of 2013 was mainly due to planned tariff reductions for 2013, lower congestion revenues and somewhat higher operating costs.

The Group’s operating revenue in the second quarter of 2013 was NOK 1 124 million, compared to NOK 1 238 million for the same period in 2012. The Group’s operating revenues for the first half of 2013 amounted to NOK 2 385 million. The corresponding figure for 2012 was NOK 2 633 million. The reduction in operating revenues for the first half of 2013 was mainly due to planned tariff reductions for 2013 and lower congestion revenues.

Statnett’s revenues are regulated by the Norwegian water resources and energy directorate (NVE) which each year calculates the revenue cap of the enterprise based on firm predefined criteria. Revenues exceeding the revenue cap will be returned to customers over time through tariff reductions. The lower revenue for the first half of 2013 was NOK 402 million, compared to higher revenue of NOK 390 million for the same period in 2012. Accumulated higher revenue was NOK 2 940 million at the end of the first half of 2013.

The Group’s operating costs totaled NOK 1 103 million in the second quarter of 2013 (NOK 895 million). The Group’s operating costs for the first half of 2013 totaled NOK 2 192 million, compared to NOK 1 854 million for the first half of 2012. There are several reasons for the increased costs for the first half of 2013, of which the most important are increased system services costs and increased depreciation.

In the first half of 2013, the Group’s profit after tax adjusted for changes in higher/lower revenue after tax and calculated interest on higher revenue was NOK 434 million.

The Statnett Group invested NOK 2 812 million in the first half of 2013, compared to NOK 1 257 million for the same period in 2012.

Outlook

Statnett’s Grid Development Plan 2011 and updated investment plan 2012 form the basis for the next generation central grid, which will be completed by 2030. Statnett will invest considerably in new capacity in the main grid during the next decade. Extensive construction activity is ongoing, and several projects will be completed in 2013 and the following years. Furthermore, Statnett is working to realize the construction of interconnectors to Germany and the UK, which are scheduled for completion in 2018 and 2020 respectively. The investment program aims to maintain the future security of supply, contribute to value creation and pave the way for better environmental solutions in Norway.

The increased investments will result in higher tariffs in the years to come. Statnett has a higher revenue balance which will be partly returned to Statnett’s customers through reduced tariffs in 2013. This will also curb the increase in tariffs somewhat in the coming years.

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Press Release, August 22, 2013