Q2 AND HALF YEAR 2010

Transcription

1 FINANCIAL RESULTS Q2 AND HALF YEAR 2010 CEO CHRISTIAN RYNNING-TØNNESEN CFO STEIN DALE 19 AUGUST 2010

2 HIGHLIGHTS Strong half year earnings All-time high Q1 earnings following high power prices and good energy management Reduced Q2 earnings due to lower power prices, hydropower generation and gas power spark-spreads Revised strategy and changes in corporate management team New industrial power contracts signed in Norway Contract with Elkem 1.5 TWh/year (transferred from Norske Skog) Energy service management agreement with Celsa Armeringsstål Currently 23 industrial plants in energy service management portfolio First Turkish hydropower plant (Cakit) in operation Page 2

3 1H 2010 HEALTH, SAFETY AND ENVIRONMENT LOST-TIME INJURIES (H1) AND ABSENCE DUE Absence TO ILLNESS Long-term 12-month target rolling is zero period 5 % injuries 4 % 3 % 2 % 1 % 0 % Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Absence due to illness % (12-month rolling period) H1 - lost-time injuries per million hours (12-month rolling period) Q2 H HEALTH AND SAFETY Two fatalities in associated activities Sub-contractor employee at the Allain Duhangan construction site 1 (India) killed by fall from a mast Expanded safety training for work at heights, and regular safety meetings Child drowned at outlet connected to Theun Hinboun power station 2 (Laos) after entering closed area Enhanced security of area and communication with local community H1-value: 3.0 (3.8) Total of 11 lost-time injuries Illness absence: 3.4% (2.9%) ENVIRONMENT No environmental non-compliances during 1H 2010 Page 3 1: 43% owned by SN Power 2: 20% owned by Statkraft SF

4 FINANCIAL HIGHLIGHTS SECOND QUARTER Underlying EBITDA 1 Underlying Net Profit FIRST HALF Underlying EBITDA 1 Underlying Net Profit Page 4 1:Underlying figures adjusted for material non-recurring items and unrealised changes in value

5 STATKRAFT TRANSACTIONS Shares in: Finnmark 100% E-CO 20% Heas 49% BKK 49.9% Agder 45.5% Skagerak 66.6% Trondheim 100% Sydkraft 44.6% Baltic Cable 33.3% Baltic cable +33.3% 24 Graninge power plants 100% Acquisitions Totalling NOK 94 bn. Assets from E.ON (2500 MW) 100% Arise Wind 12% SCA Wind 60% SN Power +10% Yesil Enerji 95% Scira 50% Sødra Wind 90.1% Yesil Enerji +5% Engineering 100% Construction 100% Svartisen 30% E-CO 20% KØN 100% Kvænangen 100% Shares in E.ON Sverige 44,6% Trondheim Energi Nett 100% Heas 49% Rana (lease) 65% Divestments Totalling NOK 57 bn. Page 5

6 STATKRAFT FINANCIAL TRACK RECORD 16 % 14 % 12 % 10 % 8 % 6 % 4 % 2 % 0 % 8.7 % Oslo Børs' OBX index Average annual return (IRR) 3.7 % 3.6 % Dow jones utility index SPU * Q Q % 13.7 % Statkraft Statkraft Increased internationalization 37% of total asset outside Norway by end % of 2009 net profit outside Norway More than 50% of net profit outside Norway last five years, incl. value added from transactions Calculations re Statkraft are based on external valuations commissioned by the owner Equity value in 1992: NOK 12.4 bn (opening balance) Equity value in 2000: NOK bn (Ernst & Young). NOK 47.5 bn used in present calculations. Equity value in 2010: A conservative 2010-projection is assumed (NOK125 bn). Comparables are based on public reports from the respective entity covering the last 10 years. The rates of return are adjusted for distributed dividend. Page 6 ** Government Pension Fund Global

7 REVISED STRATEGY Flexible generation and energy markets Hydropower and gas-fired power in North West Europe (incl. France), and small-scale hydro in Norway Energy management and market operations International hydropower Hydropower development in Turkey and Albania SN Power in South America and Asia Wind power Onshore wind power in Norway and Sweden, consolidate UK portfolio Offshore wind power in UK, incl. Dogger Bank to concession District heating Regional companies

8 NEW CORPORATE MANAGEMENT TEAM Corporate Strategy and M&A Finance Treasury Legal CFO Stein Dale CEO Christian Rynning-Tønnesen Chief of Staff Hilde Bakken Health, Safety & Environment Corporate Responsibility HR Employee Relations Communication & Brand Media Public Affairs Corporate Audit * EVP Market Operations and IT Asbjørn Grundt EVP Generation and Industrial Ownership Steinar Bysveen EVP International Hydropower Øistein Andresen EVP Wind Power and Technologies Jon Brandsar Trading and Origination Continental and Nordic Energy IT Power Generation Industrial Ownership Skagerak Energi (66.6%) Agder Energi (45.5%) BKK (49.9%) Fjordkraft Istad (49%) Energy Utilization SN Power (60%) Southeast Europe Hydro International (Laos) Wind Power Innovation District Heating Small Scale Hydro Solar Power ** * Work on assignments provided directly by BoD and CEO. ** To be divested

9 MAIN PROJECTS UNDER CONSTRUCTION Projects (Figures in million) Remaining capex 1 (million) Total capex 1 (million) New capacity 2 Statkraft s ownership share Planned completion Flexible generation Svartisen NORWAY NOK 80 NOK MW 70% 2010 Eiriksdal and Makkoren NORWAY NOK 700 NOK MW 100% 2013 Nedre Røssåga NORWAY NOK 385 NOK % 2018 Allain Duhangan INDIA USD 10 USD MW 43% International Hydropower (SN Power) Wind power Ambuklao & Binga PHIL. USD 110 USD MW 50% La Higuera CHILE USD 2 USD MW 45% La Confluencia CHILE USD 115 USD MW 50% /11 Sheringham Shoal UK GBP 300 GBP MW 50% 2012 Total (projects above NOKm 80) NOK NOK MW Page 9 1: Ownership share 2: Total for project, incl. partners share 3: SN Power s share (60 % owned by Statkraft)

10 COMMITTED CAPEX NOK million Maintenance Committed new capacity* Potential new capacity Page 10 *Committed investments excluding Norfund s option to sell remaining 40% stake in SN Power in 2010, 2013,2014 or 2015

11 FINANCIAL REVIEW

12 ELECTRICITY MARKET EUR/MWh ELECTRICITY, AVERAGE MONTHLY PRICE Nord Pool, system price EEX, spot price Average Nord Pool system price of 52.3 EUR/MWh (36.1) Average EEX spot price of 41.5 EUR/MWh (39.9) Forward prices reduced during Q1, partly recovered in Q2 Nordic reservoir levels 15.7% below of normal levels at the end of the period ELECTRICITY, FORWARD PRICE EUR/MWh Nordic 2011 Nordic 2012 Germany 2011 Germany 2012 % NORDIC RESERVOIR WATER LEVELS Week Median Page 12

13 STATKRAFT S POWER GENERATION 0.9 TWh (0.9) 3.3 TWh (1.4) 0.3 TWh (0.3) 3.9 TWh (1.8) Norway Nordic ex. Norway Europe ex. Nordic Outside Europe 2.7 TWh (2.6) Total generation 29.0 TWh (27.3) Hydro Wind Gas 22.0 TWh (22.3) 24.7 TWh (25.2) Monthly power generation TWh Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg All-time high generation in January and February Reduced power generation in Q2 due to higher temperatures, lower price levels and inflow below normal Full year power generation expected to be lower than in 2009 due to a hydro resource situation below normal Page 13

14 INCOME STATEMENT - ACTUAL 2nd quarter Year NOK million 6m2010 6m Gross operating revenues Energy purchase and transmission costs Unrealised changes in value energy contracts Net operating revenues Operating expenses before depreciation EBITDA Depreciations and write-downs Operating profit (EBIT) Share of profit from associates and joint ventures Net financial expenses Unrealised changes in financial items Net financial items Profit before tax Taxes Net profit Page 14

15 ADJUSTMENTS TO INCOME STATEMENT NOK million Reported net profit -446 Energy contracts Currency Associated and interest companies rates Unrealised changes in value (pre-tax) +148 Nonrecurring items Taxes on Underlying adjustments net profit Energy contracts Changes are related to changes in commodity prices, currencies and indices linked to contracts and energy derivatives FX and interest rate contracts Agio on EUR and SEK debt (NOKm +59) Agio on currency derivatives (NOKm+ 542) Disagio on interest and inflation derivatives (NOKm 16) Agio on internal debt (NOKm +2161) Disagio on E.ON shareholding (NOKm -790) Other financial instruments (NOKm -500) Non-recurring items Gain on sale of Trondheim Energi Nett (NOKm +393) Write-down Emden IV (NOKm -199) Write-down SN Power assets (NOKm -341) Page 15

16 UNDERLYING OPERATIONS NOK million 6m2010 6m /- Gross operating revenues % Adjusted EBITDA % Adjusted EBIT % Adjusted net profit % Cash flow from operating activities % Gross investments % Interest-bearing debt % Adjusted ROACE before tax % % Page 16 1: Adjusted for material non-recurring items and unrealised changes in value 2: As of 31 December : 12 month rolling period 4: Full-year 2009

17 REVENUE BREAKDOWN Year NOK million 6m2010 6m Net physical spot sales, incl. green certificates Concessionary sales at statutory prices Sales to industry at statutory prices Long-term commercial contracts Dynamic hedging Trading and origination Distribution grid Retail sales District heating Other / eliminations Sales revenues Other operating revenues Gross operating revenues Energy purchases Transmission costs Net operating revenues Page 17

18 OPERATING EXPENSES 1 NOK million 6m m 2009 Year 2009 Salaries and payroll costs Property tax and licence fees Other operating expenses Operating expenses before depreciation Depreciation, amortisation and impairment Page 18 1: Adjusted for material non-recurring items and unrealised changes in value

19 SEGMENTS BREAKDOWN (I) NOK million GENERATION & MARKETS NOK million SKAGERAK ENERGI NOK million INDUSTRIAL OWNERSHIP Gross operating revenues 6m Profit before financial items and tax 6m Gross operating revenues 6m Profit before financial items and tax 6m Gross operating revenues 6m Profit before financial items and tax 6m2010 Earnings driven by high Nordic power prices Negative contribution from gas power plants due to low spark spread and take-or-pay gaspurchase agreements Generation of 25.1 TWh (23.3) Profit positively affected by high power prices Investment decision made on district heating plant in Tønsberg (NOK 300 million) Generation of 2.6 TWh (2.6) Higher revenues due to the takeover of Trondheim Energi s retail sales operations Fjordkraft with high customer growth following cold winter Lower generation and profit in BKK due to low precipitation Page 19 Underlying operations: Adjusted for material non-recurring items and unrealised changes in value

20 SEGMENTS BREAKDOWN (II) NOK million WIND POWER NOK million EMERGING MARKETS NOK million CUSTOMERS Gross operating revenues 6m2009 Profit before financial items and tax 6m Gross operating revenues 6m2009 Profit before financial items and tax 6m Gross operating revenues 3m2009 Profit before financial items and tax 3m2010 Page 20 Several new licenses awarded Investment decision for Swedish wind farm (9.2MW) Project and development costs impact profits Generation of 256 GWh (294) Revenues affected by currency effects on USD and lower revenues in Peru Profit down due to expensing project development costs Delays and cost overrun on Allain Duhangan, India, and La Confluencia, Chile Generation of 1.2 TWh (0.9) Underlying operations: Adjusted for material non-recurring items and unrealised changes in value Revenues down due to sale of retail sales activities to Fjordkraft at end 2009 Sale of Trondheim Energi Nett (grid operations) with effect end June Generation of 513 GWh

21 CASH FLOW NOK million Cash reserves From operations Change in short and long term items * Dividend etc. received Net investments Net borrowings incl private placement Currency effects Cash reserves Cash flow from operations up 84% to NOKm (3 336) Gross investments of NOKm (2 903) New capacity (53%), shareholdings/loans (7%) and maintenance (40%) Net investment reduced by proceeds from sales of assets of NOKm (mainly Trondheim Energi Nett) * Includes changes in short-term items of NOKm -303: Change in cash collateral: NOKm 368 Other changes in working capital: NOKm 312 Currency effects: NOKm -573 Changes in financial instruments etc.: NOKm -410 Page 21

22 FINANCIAL STRENGTH AND RATING 40 % FFO/debt 35.8 % 9.0 FFO interest coverage 30 % 20 % 10 % 18.9 % 18.7 % 27.8 % % m m2010 FFO 1 of NOKm Increased cash flow from operations Debt reduced by NOK 3.5 bn. from year-end 2009 Interest costs reduced Short-term rating target of minimum BBB+/Baa1 maintained Long-term target to achieve single A ratings with both Moody s and S&P Page 22 1: 12 month rolling period ending at 30 June 2010 FFO = cash flow from operations + changes in short term items FFO interest coverage = (FFO + interest expenses) / interest expenses FFO/debt = FFO / interest bearing debt

23 LIABILITIES AND INTEREST EXPENSES NOK million Long-term liabilities, debt redemption profile >2020 Loans in subsidiaries Loans in Statkraft AS Loans from Statkraft SF (back to back) Average interest rates 8 % 7 % 6.7 % 6 % 5.1 % 5.3 % 4.7 % 4.9 % 4.8 % 5 % 4 % 3.7 % 4.1 % 3.9 % 4.2 % 4.2 % 3.4 % 3 % 2.3 % 2 % 1.1 % 1 % Funding 6m 2010: New loans NOKm Repayment NOKm Interest-bearing liabilities of NOK 42.2 bn NOK 52%, EUR 37%, SEK 6%, USD 4% Undrawn credit facilities of NOK 8 bn 66% exposed to floating interest rates 0 % m2010 NOK SEK EUR USD Page 23

24 OUTLOOK Lower hydro generation expected compared to 2009 following low hydro reservoir levels Forward prices indicate increased price level compared to 2009 Uncertainty linked to the hydrological situation and industry demand Improvement program in progress with focus on cost reductions within IT, procurements and staff & support functions Focused growth strategy decided and investment plans reduced to maintain credit strength Page 24

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26 APPENDIX

27 FINANCIAL DEVELOPMENT NOK million Underlying operations % % % % % % % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % m 08 6m 09 6m 10 EBITDA Net profit EBITDA-margin (%) 0 % Underlying operations: Adjusted for material non-recurring items and unrealised changes in value Page 27

28 FULL FINANCIAL STATEMENT (UNADJUSTED) 2nd Quarter Year to date The year Figures in NOK million Sales revenues Other operating revenues Gross operating revenues Energy purchase Transmission costs Unrealised changes in the value of energy contracts Net operating revenues Salaries and payroll costs Depreciation, amortisation and impairments Property tax and licence fees Other operating expenses Operating expenses Operating profit Share of profit from associates and joint ventures Financial income Financial expenses Unrealised changes in the value of currency and interest contracts Net financial items Profit before tax Tax expense Net profit Of which minority interest Of which majority interest Page 28

29 BALANCE SHEET Figures in NOK million ASSETS Intangible assets Property, plant and equipment Investments in associates and joint ventures Other non-current financial assets Derivatives Non-current assets Inventories Receivables Short-term financial investments Derivatives Cash and cash equivalents Current assets Assets EQUITY AND LIABILITIES Paid-in capital Retained earnings Minority interests Equity Provisions Long-term interest-bearing liabilities Derivatives Long-term liabilities Short-term interest-bearing liabilities Taxes payable Other interest-free liabilities Derivatives Current liabilities Equity and liabilities Page 29

30 CASH FLOW STATEMENT Year to date The Year Figures in NOK million CASH FLOW FROM OPERATING ACTIVITIES Profit before tax Profit/loss on sales of non-current assets Depreciation, amortisation and impairments Profit from sale of business Share of profit from associates and joint ventures Unrealised changes in value Taxes Cash flow from operating activitites Changes in long-term items Changes in short-term items * Dividend from associates Net cash flow from operating activities CASH FLOW FROM INVESTING ACTIVITIES Investments in property, plant and equipment - maintenance Investments in property, plant and equipment - new capacity Proceeds from sales of non-current assets Capital reduction in associates and joint ventures Sale of business, net liquidity accruing to the group Business combinations, net liquidity accruing to the Group Loans to third parties Repayment of loans Investments in other companies Net cash flow from investing activities CASH FLOW FROM FINANCING ACTIVITIES New debt Repayment of debt Dividend and Group contribution paid Share issue to minority Net cash flow from financing activities Net change in cash and cash equivalents Currency effect on cash flows Cash and cash equivalents Cash and cash equivalents / Unused committed credit lines Unused overdraft facilities *Changes in short term items are mainly related to changes in working capital (NOK 312 million), changes in receivables and liabilities regarding cash collateral (NOK 368 million) in addition to currency effects (NOK million). Page 30

31 DISTRIBUTION OF LOANS External loans in subsidiaries 7,9 % Loans from Statkraft SF (back-to-back agreements) 3,8 % Other loans raised in non-norwegian markets 45,9 % Loans issued in the Norwegian market 42,4 % Per 30 June 2010 Page 31

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