Oslo, 22 August 2006
Press release 8/2006
In the early half of the year, the power market was influenced by high fossil fuel prices, volatility and, from time to time, exceptionally high prices for CO2 permits in the EU, as well as by the uncertainty attached to the hydrological situation in Scandinavia. This led to extremely high power prices, historically speaking. The prices peaked in March-April when they exceeded 0.40 NOK/kWh. The trend declined slightly when the price of CO2 permits dropped sharply in late April, then showed a rising tendency once again towards the end of the period as people became concerned about power plants? access to water as well as a rise in oil price.
Consolidated operating revenues were substantially higher at mid-year 2006 than at the same date last year. Higher prices and increased production both contributed to income growth. At 30 June, operating revenues came to MNOK 1 439, as against MNOK 1 165 at mid-year 2005. This translates into an increase of 23 per cent. However, the Group's price hedging strategy and the rapid increase in spot prices meant that the actual selling price was lower than the spot price. The opposite was the case at mid-year last year.
Operating expenses aggregated MNOK 406 at 30 June 2006, up MNOK 16 compared with last year. The increase is primarily attributable to higher feed-in charges to the central grid due to more production as well as an increase in the variable component of the tariff as a result of higher spot prices.
The operating profit came to MNOK 1 033 at mid-year. The comparable figure for mid-year 2005 was MNOK 776. This marks a 33 per cent increase in the operating profit.
Net financial expenses showed a reduction of MNOK 25 compared with last year due to lower debt and to some extent lower interest on loans. Average net interest-bearing debt was roughly MNOK 450 less in the early half of 2006 than in the same period last year.
The profit before taxes came to MNOK 855, compared with MNOK 566 at mid-year last year, i.e. an improvement of some 50 percent. However, taxes were considerably higher than last year. This applies to the resource rent tax in particular, since it is contingent on the spot price. The profit after taxes came to MNOK 410, up MNOK 103 from last year. This translates into an increase of 34 per cent.
The average system price was NOK 0.356/kWh in the early half of 2006. By comparison, the average system price was 0.235 NOK/kWh during the same months of last year. The Group obtained a selling price of about NOK 0.29/kWh, compared with roughly NOK 0.24/kWh at mid-year 2005.
The Group's power production aggregated 4 958 GWh in the early half of 2006, compared with 4 535 GWh during the same months of 2005.
At mid-year 2006, the Group's equity ratio was 34.2 per cent, compared with 31.1 per cent at the beginning of the year and 32.0 per cent at mid-year last year.
E-CO's reservoirs are below normal for the time of year, so relatively low production is expected during the latter half of the year. A significant share of estimated production is hedged at prices lower than the forward prices that can be observed. A lower production volume will have an adverse impact on the profit during the latter half of the year but, assuming normal inflow conditions, the result for 2006 as a whole is expected to be in line with last year.
Key figures - E-CO Energi (MNOK):
|
|
Mid-year 2006 |
Mid-year 2006 |
2005 |
|
Operating revenues |
1 439 |
1 166 |
2 310 |
|
Operating expenses |
(406) |
(390) |
(807) |
|
Earnings before tax |
1 033 |
776 |
1 503 |
|
Profit/(loss) before tax |
855 |
566 |
1 098 |
|
Net profit |
410 |
307 |
647 |
|
Equity |
5 942 |
5 643 |
5 532 |
|
Liabilities and equity |
17 384 |
17 635 |
17 798 |
Contacts:
|
President and CEO, |
+47 241 16910 |
|
|
Per-Arne Torbjørnsdal |
Vice President, Corporate Communications, E-CO Energi |
+47 241 16920 |
