Interim report. as of 31 st March 2006

Transcription

1 Interim report as of 31 st March 2006

2 Contents 3 Board of directors report 5 Profi t and loss account 6 Balance sheet 8 Cash fl ow statement

3 Q The Statnett Group is for the fi rst time posting quarterly accounts with a negative result. For the fi rst quarter to 31 March 2006, Statnett recorded a loss after tax of NOK 7 million. The underlying causes of the poor result are the recent heavy investments and large power transmissions with high transmission losses, combined with the revenue regulation system for Statnett applied by the Norwegian Water Resources and Energy Directorate (NVE) which takes too little account of these factors. It is therefore positive that NVE has signalled that the regulator will be adjusting this system from 2007, among other things so as to give a better accounting result for companies that are in an investment phase, as is the case for Statnett. The Board of Directors will for its part continue to focus strongly on the work Statnett itself is doing with regard to maintaining a high level of effi ciency in both operations and investments. It is important to maintain the positive position Statnett enjoys in benchmarking with other similar companies, where new surveys have shown that Statnett is one of the most effi cient transmission system operators (TSOs) internationally. Quality and security of supply Statnett s target to ensure that no end-user is without electricity for more than two hours owing to a fault in Statnett s transmission facilities, was achieved during the quarter. Owing to plentiful precipitation in 2005 reservoir levels were high at the start of 2006, although at the end of the fi rst quarter they are now reduced and below the median for the last 15 years. Aggregate power consumption in the fi rst quarter totalled 39 TWh, an approximately 4.9 per cent increase on the fi rst quarter of Aggregate power generation in the fi rst quarter was as high as 41.8 TWh. This gave a net export of approximately 2.8 TWh. Investment in the transmission grid Operations are currently dominated by Statnett s involvement in a number of substantial investment projects, at both the planning and implementation stage. The need for investment is due in part to a high increase in electricity consumption, particularly in some parts of Norway, but without generation capacity having been increased correspondingly in the areas in question. Recently, most of the focus has been on the situation in Central Norway, which Statnett regards as giving great cause for concern. In the fi rst quarter, Statnett applied for a concession to build a 420 kv power line from Nea in Tydal to the Norwegian border with Sweden. The Swedish system operator Svenska Kraftnät will continue construction of the line between the border and Järpstrømmen in Sweden. The line is planned to come into operation in the autumn of In March 2006, Statnett notifi ed plans to build a new power line between Ørskog in Sunnmøre and Fardal in Sogn. The line is necessitated by an increasing electricity shortfall in the county of Møre og Romsdal and plans for new power generation in the county of Sogn og Fjordane. The new line will contribute to better security of supply for industry and households both in Møre og Romsdal and in Sogn og Fjordane, while at the same time facilitating the development of planned wind power and small hydropower plants in Sogn og Fjordane. The line is expected to be operational at the end of In January, Statnett requested the Ministry of Petroleum and Energy to resume considering the application for a planned power line in Setesdal between Skåreheia in Birkenes municipality and Holen power station in Bykle municipality. A concession for the line was granted by the Norwegian Water Resources and Energy Directorate (NVE) in 1999, but the decision was appealed to the Ministry. The Ministry did not complete its consideration of the appeal, however, owing to uncertainty as to whether the power line would be required. Updated calculations now show that there is a need to strengthen the transmission grid from Southern Norway and in a northerly direction. Under construction NorNed The North Sea cable between Norway and The Netherlands (NorNed) will be 580 km long and thus the world s longest subsea cable. Thus far, the project is on budget and on schedule. Statnett s share of the total investment costs will be approximately NOK 2.3 billion. NorNed is expected to be completed by the end of Viklandet - Fræna - Nyhamna The construction of the new 420 kv power line from Viklandet in Sunndal to Fræna is on schedule and will be completed during It is estimated to cost almost NOK 600 million. Statnett will also build a new 420 kv power line from Fræna to Nyhamna for Norsk Hydro. This will strengthen security of the electricity supply in outlying areas of the county of Møre og Romsdal and also facilitate the supply of electricity to the new gas treatment facility for Ormen Lange in Aukra. New vessel Statnett signed a contract in March 2006 for a new vessel to be built to replace the existing M/S Elektron. The new preparedness vessel will be fi nished in autumn 2007 and will cost approximately NOK 180 million. FINANCIAL RESULTS Operating revenues, Q1 The Statnett Group recorded total operating revenues amounting to NOK million for the fi rst quarter, which is NOK 406 million up on the fi rst quarter of Of operating revenues, power transmission accounted for Statnett Konsern Intrim report as of 31 th March

4 NOK 794 million, which is at a level with the same period last year. Power transmission revenues consist mainly of the Main Grid s revenues, which are set by the Norwegian Water Resources and Energy Directorate (NVE). Statnett operates the entire Main Grid and bills its Main Grid customers through the transmission tariff. Total revenues billed from the Main Grid and shared regional grids amounted to NOK 1,006 million, which gives higher revenues of NOK 228 million. The higher revenue will be credited to coming years tariffs, and is therefore booked as a liability on Statnett s balance sheet. First-quarter power sales totalled NOK 772 million, an increase of NOK 345 million compared with the same period in Most power sales consist of power sold by Statnett in connection with the balance settlement. Corresponding sums are booked under operating costs so that the effect on results of the power purchases/power sales in the balance settlement is zero. Other operating revenues amounted to NOK 109 million for the fi rst quarter, an increase of NOK 35 million on the fi rst quarter of The increase is largely made up of revenues earned from the construction of the Fræna-Nyhamna transmission line on behalf of Norsk Hydro ASA. Operating costs, Q1 The Statnett Group recorded operating costs totalling NOK million for the fi rst quarter, compared with NOK million for the same period in The rise in costs is largely due to increased costs of transmission losses, amounting to NOK 117 million, and an increase in costs, by NOK 336 million, relating to the purchase of power through the regulating power market. Materials and subcontractors increased by NOK 29 million and must be seen in connection with increased revenues from the sale of external services. Other items increased overall by a total of NOK 32 million compared with the fi rst quarter the year before. Results, Q1 The Statnett Group had an operating profi t of NOK 35 million for the fi rst quarter compared with NOK 143 million in fi rst-quarter Net fi nancial costs totalled NOK 46 million in the fi rst quarter, as against NOK 54 million in the fi rst quarter of The Statnett Group recorded a net loss after tax of NOK 7 million for the fi rst quarter, compared with a net profi t of NOK 63 million for the same period in The Parent Company, Statnett SF, recorded a net loss after tax of NOK 22 million for the fi rst quarter, compared with a net profi t of NOK 46 million for the same period in The cause of the poor result is the revenue regulation system to which Statnett is subject, as well as an increase in operating costs resulting from increased power transmission in the grid. Investments Statnett invested a total of NOK 243 million in the fi rst quarter, compared with NOK 44 million in fi rst-quarter NOK 160 million was invested in new power lines and transformer stations. Investments in maintenance of the existing Main Grid (reinvestment) amounted to NOK 24 million and other investments to NOK 59 million. Cash flow and balance sheet Operating activities in the Statnett Group produced a cash fl ow of NOK 299 million in the fi rst quarter. Investments totalling NOK 245 million were carried out in the Group during the quarter. In total, loans were repaid for NOK million, and new loans were raised for NOK million. At the end of the fi rst quarter the Group s liquid assets totalled NOK million, an increase of NOK 170 million on the year before. At 31 March 2006, the Group had total assets amounting to NOK million, compared with NOK million the year before. Transport operations and preparedness Operating revenues for the subsidiary Statnett Transport AS were NOK 9 million for the fi rst quarter, compared with NOK 5 million the year before. The company recorded a net profi t for the fi rst quarter of NOK 1 million, an improvement from the net loss of NOK 1 million for the fi rst quarter of The improvement in results is owing to a higher level of activity. The Nordic Power Exchange, Nord Pool The Nord Pool Group contributed a net fi rst-quarter profi t of NOK 11 million after tax to Statnett s earnings, including Statnett s share of Nord Pool Spot s earnings. The corresponding fi gure for the fi rst quarter of 2005 was NOK 12 million. WORKING ENVIRONMENT Sickness absence in the Parent Company was 5.1 per cent in the fi rst quarter, compared with 4.1 per cent the year before. The injury-absentee frequency rate (H value) for Statnett SF was 0 (compared with 7.6 in 2005), the same as for the Group in total. OUTLOOK Statnett has identifi ed a need for investments totalling NOK billion for the period A volume of investment of this magnitude will have a signifi cant impact on Statnett s fi nancial situation. Consequently, the Board of Statnett applied in 2005 for an injection of equity capital totalling NOK 2.0 billion. The application is still being considered by the Ministry of Petroleum and Energy. The results in 2006 are expected to be slightly weaker than in The reason for this is primarily that Statnett will receive lower revenues as a result of a lower revenue ceiling, as well as increased operating costs deriving from increased power transmission in the grid. A new model for regulating the revenues of grid companies will be introduced from The proposed system will produce a better accounting result for companies that are in an investment phase, like Statnett. It is important not least in the current situation that the regulation model should provide incentives for socio-economically effective investment in the power grid. As of 1 January 2007, Statnett will begin reporting under IFRS (International Financial Reporting Standard). Oslo, 11 May 2006 The Board of Directors 4 Statnett Konsern Intrim report as of 31 th March 2006

5 Profit and loss account Including the main grid commercial agreement PARENT COMPANY GROUP (Amounts in NOK million) Operating revenues Power transmission Power sales Other operating revenues Total operating revenues Operating costs Power purchases System services Transmission losses Leasing of transmission facilities Materials and subcontractors Wage costs Depreciation of tangible fi xed assets Write-downs of tangible fi xed assets Other operating costs Total operating costs Operating profit/loss Financial income Financial costs Net financial items Profit/loss before tax Tax Net profit/loss for the period Statnett Konsern Intrim report as of 31 th March

6 Balance sheet Including The Main Grid Commercial Agreement PARENT COMPANY GROUP (Amounts in NOK million) ASSETS Intangible Assets Computerised trading systems Deferred tax assets Total intangible assets Tangible Fixed Assets Tangible fi xed assets Plant under construction Total tangible fixed assets Financial Fixed Assets Investment in Group companies Investment in other shares and holdings Loans to companies in the same Group Pension assets Total financial fixed assets Current Assets Trade accounts receivable Intercompany accounts receivable Other short-term receivables Pre-payments to contractors Short-term loans Investment in market-based securities Liquid assets Total current assets Total assets Statnett Konsern Intrim report as of 31 th March 2006

7 PARENT COMPANY GROUP (Amounts in NOK million) EQUITY AND LIABILITIES Equity Contributed capital Other equity Total equity Provisions For Liabilities Pension liabilities Provision, Nat. Fund for Natural Disaster Assistance Fund Provision for periodic maintenance Total provisions for liabilities Long-term Liabilities Bond loans Government loans Loans from fi nancial institutions Other long-term liabilities Total long-term liabilities Current Liabilities Short-term interest-bearing debt Trade accounts payable Group liabilities Tax payable Tax payable and deductions Provisions for dividends Other current liabilities Total current liabilities Total equity and liabilities Statnett Konsern Intrim report as of 31 th March

8 Cash flow statement PARENT COMPANY GROUP (Amounts in NOK million) Cash flows from operating activities Profi t/loss(-) before tax Loss/gain(-) on sale of fi xed assets Ordinary depreciation and write-downs Change in trade accounts receivable/ trade accounts payable Change in other accruals Net cash flow from operating activities Cash flow from investing activities Receipts from sale of tangible fi xed assets Payments on purchase of tangible fi xed assets and intangible assets Change in stocks, plant under construction Change in short-term loans receivable Net cash flow from investing activities Cash flows from financing activities Receipts on new long-term borrowing Repayments of long-term debt Dividends paid Net cash flows from financing activities Net cash flow for the period Cash and cash equivalents at start of period Cash and cash equivalents at close of period Restricted tax deductions payable amounting to NOK 32 million for the Parent Company and NOK 35 million for the Group are included in cash and cash equivalents at 31 March Unutilised overdraft facilities totalling NOK 1,500 million are not included in cash and cash equivalents above. Statnett SF Husebybakken 28 B, Oslo. PO Box 5192 Majorstuen, NO-0302 Oslo, Norway Tel: Fax: fi rmapost@statnett.no Design Kolonien