Performance in Q1 2014: E-CO Energi's profit down from last year

13.05.14

Press release 05/14

E-CO reported a profit after tax of MNOK 285 in Q1 2014, as against MNOK 401 a year ago. The decline is ascribable to lower prices and lower production. Hedging entailed that the actual selling price was 18 per cent higher than the system price.

"Combined with lower prices and less production, the substantially increased feeding tariffs from Statnett have reduced our profit year-on-year", reports Tore Olaf Rimmereid, President and CEO of E-CO Energi.

E-CO Energi's revenues and profit in Q1 this year were lower than during the comparable months of last year. Revenues declined due to lower selling prices and less power production. At the same time, the cost of feeding power into the central grid increased substantially as a result of higher tariffs.

The decline in production is related to the very mild winter which had a negative impact on power consumption, combined with good access to water resources in the Nordic market. Continental power prices were also low due to high renewable production and low prices for coal and CO2 quotas. The average system price was 0.252 NOK/kWh in Q1 2014, compared with 0.313 NOK/kWh in Q1 2013. Forward prices for the rest of 2014 and for the years ahead dropped during the quarter, and are now significantly lower than the power prices we have seen in recent years.

Q1 2014 revenues aggregated MNOK 925, down MNOK 195 relative to the corresponding reporting period last year. Lower selling prices are the most important cause of the decline in revenues. The average actual selling price during the quarter was about 0.30 NOK/kWh, down 0.04 NOK/kWh from last year. Hedging entailed that the Group obtained a selling price that was 18 per cent higher than the system price. Lower production also contributed to the decline in revenues.

Operating expenses added up to MNOK 299, an increase of MNOK 47. Feed-in costs to Statnett accounted for MNOK 27 of the increase, owing to higher rates for both the regular and the variable part of the tariff.

Q1 earnings after tax came to MNOK 285 this year, compared with MNOK 401 last year, leading to a 29 per cent decline in profits.

The Group's power production totalled 3 105 GWh in Q1 this year, as against 3 295 GWh of power in Q1 2013.

E-CO Energi's water and snow reserves were above normal at end quarter.

"We expect power production for the rest of the year to be comparable to last year, but based on the low forward prices, we expect a lower result for 2014 than for last year", comments Rimmereid.

Key figures* - E-CO Energi (MNOK):

 

Q1 2014

Q1 2013

2013

Operating revenues

925

1 120

3 228

Operating expenses (299) (252) (1 075)
EBITA 626 868 2 153
Earnings before taxes 557 810 1 914
Net profit 285 401 876
Equity 6 375 6 365 6 090
Equity and liabilities 17 027 17 326 16 269

*E-CO's accounts are NGAAP-compliant.

Contacts:

Tore Olaf Rimmereid

President and CEO

+47 241 16910
+47 909 92515

Stine Rolstad Brenna

CFO

+47 241 16915
+47 928 03456

Torill Berdal

Vice President, HR and Communications

+47 241 16590
+47 952 24373