Lower earnings from hedging contracts are the main reason that the H1 profit was lower year-on-year.
“After seeing a downward trend in power prices for several years, it must be expected that the positive contribution to income from hedging power prices will now be lower”, reports President and CEO Tore Olaf Rimmereid.
He adds that he is well satisfied with the good, stable operations and high production at the Group’s power plants in the early half of the year.
The average system price was 0.226 NOK/kWh in H1 2016, compared with 0.211 NOK/kWh a year earlier. The weighted area price for E-CO Energi’s production (about 1/3 in NO1 and 2/3 in NO5) was 0.215 NOK/kWh, compared with 0.204 NOK/kWh. E-CO Energi obtained an average selling price of 0.238 NOK/kWh, which is some 0.02 NOK lower than at mid-year last year and 11 per cent higher than the area price.
The Group’s power production aggregated 5 531 GWh in H1 2016. The Group produced 5 235 GWh of power in the same months of 2015.
Operating revenues came to MNOK 1 310 (MNOK 1 379) in H1, equivalent to a reduction of 5 per cent. The decline is ascribable to lower actual selling prices due to substantially lower contributions to income from hedging contracts. Higher production offset roughly half of the decline in the actual selling price.
The profit after tax came to MNOK 293, marking a decline of MNOK 57 year-on-year.
Investments came to MNOK 120 in H1. The largest investment project is the construction of the Rosten Power Plant in Gudbrandsdalen, which is scheduled for completion in 2018. E-CO Energi owns a 44 per cent stake.
Based on today’s forward prices for the rest of 2016 and provided precipitation is normal for the rest of the year, it is likely that E-CO Energi’s profits in 2016 will be lower than in 2015.
Key figures*- E-CO Energi (MNOK):
|H1 2016||H1 2015||2015|
|Operating revenues||1 310||1 379||2 511|
|Operating expenses||(557)||(578)||(1 164)|
|Operating profit||753||801||1 698|
|Profit before taxes||638||687||1 116|
|Profit after taxes||293||350||533|
|Equity||6 204||6 413||5 911|
|Equity and liabilities||15 654||15 615||15 636|
*E-CO Energi’s accounts are NGAAP-compliant.
|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 24 373
E-CO Energi is one of Norway’s leading energy groups. E-CO owns and operates power plants throughout southern Norway and is the country’s second largest power producer.The Group owns stakes in Oppland Energi AS, Opplandskraft DA, Vinstra Kraftselskap DA, Embretsfosskraftverkene DA and NGK Utbygging AS.