Satisfactory net profit for 2015 despite low power prices

18.03.16

Press release 01/16

E-CO Energi turned in a satisfactory performance for 2015, given the low power prices that prevail. E-CO Energi's operating revenues totalled MNOK 2 511, compared with MNOK 2 863 in 2014. Successful hedging and good production planning helped ensure the Group's selling price was 34 per cent higher than the spot price. The net profit for the year was MNOK 533, compared with MNOK 713 in 2014. The Board of Directors proposes a dividend of MNOK 685. The Group expects lower profits in future in the light of the forward prices for 2016 and later.

"Power prices in 2015 were the lowest in 15 years. In the light of this, I am pleased to see a profit of more than half a billion NOK. Plant availability and operations have been exceptionally good and we are still benefiting from hedging", reports Tore Olaf Rimmereid, President and CEO of E-CO Energi.

For the fifth consecutive year, we had average annual temperatures above normal, and 2015 will go down in history as one of the hottest and wettest years ever recorded. The winter was abnormally warm, while the melting season from May to July was cold, so the snow melted late. The end of the year was very mild, with rising reservoir levels in December and an unusually high filling ratio in Norway at year end. In addition to temperature and hydrology, significantly lower prices for fossil fuels and a steadily increasing element of renewable production at low prices had an impact on the Nordic market. The spot price in southern Norway dropped by 0.05 NOK/kWh, compared with 2014.

Sound production planning and successful hedging helped ensure that E-CO Energi obtained an average selling price that was 34 per cent higher than the weighted hourly spot price for Oslo and Bergen (NO1 and NO5). The average selling price for 2015 was 0.24 NOK/kWh, as against 0.27 NOK/kWh in 2014. Consolidated annual production in 2015 was 10 561, on a par with the year before. E-CO Energi's reservoir storage was at normal levels at both the beginning and the end of the year.

E-CO Energi's operating revenues came to MNOK 2 511 in 2015, down MNOK 352 from the year before. The decline is due to lower selling prices.

Operating expenses added up to MNOK 1 164, about the same as in 2014. The profit before taxes came to MNOK 1 116, compared with MNOK 1 491 in 2014 that included a gain of MNOK 49 MNOK from the sale of shares in Norsk Gronnkraft. Taxes totalled MNOK 583, compared with MNOK 778 last year. The tax rate on 52 per cent remained unchanged from 2014.

The net profit for the year added up to MNOK 533 in 2015, compared with MNOK 713 in 2014, a decline in profits of MNOK 180.

Investments in 2015 aggregated MNOK 297 and were primarily in maintenance, and in the ongoing work on the new Rosten Power Plant in Sel Municipality (total 195 GWh). E-CO Energi has a 44 per cent stake in the project.

The cash flow from operating activities added up to MNOK 689, compared with MNOK 694 last year. Long-term loans totalling MNOK 200 were raised in the Norwegian bond market. The equity ratio was 38 per cent at year end, which was on a par with year-end 2014.

E-CO's Board of Directors Energy proposes a dividend of MNOK 685 to the owner, Oslo Municipality.

Forward prices in early 2016 indicate that with normal production volumes, the Group must be expected to earn significantly lower profits in the years ahead than in 2015.

 

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