Annual result 2016: Improved earnings for E-CO Energi

29.03.17

Press release 01/17

E-CO Energi earned a net profit of MNOK 590 in 2016, compared with MNOK 533 the year before. The improvement in performance is mainly ascribable to higher power prices. The Board of Directors proposes a dividend of MNOK 610.

"E-CO Energi turned in a strong performance in 2016. The Group managed its production resources well, with high production when prices were good", reports Tore Olaf Rimmereid, president and CEO of E-CO Energi.

E-CO Energi earned higher operating revenues and a stronger profit in 2016, compared with the year before. The improvement is mainly due to higher spot prices. Contributions from financial power and currency hedging were significantly lower than in 2015, but successful production management helped the Group to nevertheless obtain a higher selling price than the weighted hourly spot price for 2016.

Operating revenues aggregated MNOK 2 723, up MNOK 212 from 2015. The main explanation for the increase is higher spot prices, which climbed by an average of 33 per cent in the price areas in which E-CO has its power production (NO5 and NO1). The Group's selling price was 8 per cent higher than the average area price. In 2015, the sales price was 34 per cent higher as a result of contributions from price hedging. The boost in revenues was also fuelled by higher production. The Group's power production was 10 737 GWh, which was 176 GWh higher than in 2015.

Operating expenses were at the same level as the year before, so that the operating earnings of MNOK 1 559 were MNOK 212 higher than in 2015. Earnings before tax came to MNOK 1 340, up MNOK 224 year-on-year from 2015. Taxes increased from MNOK 583 in 2015 to MNOK 750 in 2016. Higher resource rent tax accounts for most of the increase.

The net profit for the year was MNOK 590 in 2016, an increase of MNOK 56.

Investments came to MNOK 335. In 2016, investments consisted of maintenance, as well as ongoing work at the new power plants at Rosten and Nedre Otta. Work on Rosten began in 2014 and completion is planned for 2018. Total production is estimated at 195 GWh, and E-CO Energi owns a 44 per cent stake. In Nedre Otta, construction began in 2016, and completion is planned for 2020. The power plant will have an estimated normal annual production of 315 GWh. E-CO Energi owns a 27 per cent stake.

E-CO's Board of Directors Energy proposes that a dividend of MNOK 610 be paid to the owner, Oslo Municipality.

The transition to IFRS and change in interim reporting:

As from the 2017 fiscal year, the Group will be converting to reporting routines pursuant to IFRS, the International Financial Reporting Standard, and switch from quarterly reporting to semi-annual reporting. 

KEY FIGURES      
(Amounts in MNOK)  2016            2015            2014
Performance      
Operating revenues 2 723 2 511 2 863
Operating profit 1 559 1 347 1 698
Profit before taxes 1 340 1 116 1 491
Net profit for the year 590 533 713
Capital structure      
Total assets 16 373 15 636 16 064
Subord. loan, Oslo Municipality 3 347 3 347 3 347
Equity 5 891 5 911 6 063
Cash and cash equivalents 1 069 349 608
Equity ratio 36 % 38 % 38 %
Net interest-bearing debt 7 081 7 268 6 924
Dividends 610 685 740
Return on equity   1 10 % 9 % 12 %
Return on total assets   2 10 % 9 % 11 %
Cash flow      
Cash flow from operating activities 1 213 689 694
EBITDA 1 837 1 621 1 971
EBITDA-margin 3 67 % 65 % 69 %
Other      
Number of employees 172 177 174
Power production (GWh) 4 10 737 10 561 10 579
       
1 Net profit/average equity    
2 Ordinary earnings before taxes +
  financial expenses/average total assets
 
3  EBIT + amortisation/operating revenues  
4  Production less share of production by associates

Contacts: 

Tore Olaf Rimmereid

President and CEO

+47 241 16910 
+47 909 92515

Stine Rolstad Brenna

CFO

+47 928 03456

Torill Berdal

Vice President, HR and Communications

+47 241 16590
+47 952 24373