Performance in H1 2017: Improved earnings for E-CO Energi

24.08.17

E-CO Energi earned a consolidated net profit of MNOK 332, up MNOK 39 from H1 2016. Operating revenues climbed by MNOK 59, as higher sales prices more than compensated for lower power production. E-CO Energi concluded an agreement for the acquisition of 90 per cent of the shares in Hafslund once business activities other than hydropower production had been demerged. Such an acquisition will boost E-CO Energi's power production from 10 TWh to approximately 13 TWh.

Higher power prices and lower operating costs are the main reasons for this year-on-year improvement for E-CO Energi.

President and CEO Tore Olaf Rimmereid is satisfied with the H1 results:

"While power production was lower than in H1 last year, higher power prices more than compensated for this. At the end of H1 2016, the forward prices indicated that the market expected a power price of about NOK 0.21 in H1 2017. The system price on Nord Pool turned out to be some 25 per cent higher than this?, says Rimmereid.

"The acquisition of Hafslund's hydropower production strengthens the Group's position as Norway's second largest power producer from a business perspective, as well as strategically and industrially", remarks Rimmereid.

The weighted area price for E-CO Energi's production was 0.266 NOK/kWh, compared with 0.215 NOK/kWh in 2016. E-CO Energi obtained an average selling price of 0.271 NOK/kWh, compared with 0.238 NOK/kWh in H1 last year. The selling price was 2 per cent higher than the area price (11 per cent).

The Group's power production aggregated 5 070 GWh in H1 2017. The Group produced 5 531 GWh of power during the corresponding months of 2016.

In H1 2017, operating revenues came to MNOK 1 369 (MNOK 1 310), i.e. an increase of 5 per cent. The increase is ascribable to higher actual selling prices, while lower production has pulled in the opposite direction. The price hedging contracts made a modest negative contribution to operating revenues in the first six months of the year.

Operating expenses totalled MNOK 532, down MNOK 25 year on year. The cost of feeding into the central grid and the property tax have helped reduce costs. The reduction in feed-in costs is related to the variable part of the tariff (the marginal loss rates). Property tax is lower because the lower power prices of recent years have led to lower valuations of the power plants.

The profit after tax came to MNOK 332, marking an increase of MNOK 39 year on year.

Investments came to MNOK 147 in H1. The largest investment projects are the power plants at Rosten and Nedre Otta, in which E-CO Energi owns stakes of 44 per cent and 27 per cent, respectively.

The effect of the acquisition of Hafslund's hydropower production will first be reported in the company's annual report.

 

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

  H1 2017 H1 2016

2016

Operating revenues

1 369

1 310

2 723

Operating expenses

(532)

(557)

(1 164)

Operating profit/(loss)

837

753

1 559

Profit/(loss) before taxes

740

638

1 340

Profit/(loss) after taxes

332

293

590

Equity

6 223

6 204

5 891

Equity and liabilities

17 029

15 654

16 373

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


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