1. Quarterly Accounts

Transcription

1 1. Quarterly Accounts at. 31. March 2007 Statnett Quarterly Accounts as of 31 th March

2 CONTENT 3 Quarterly Accounts 6 Profit & loss 7 Balance sheet 9 Change in equity 10 Cash flow statement

3 1. Quarterly Accounts 2007 The Statnett Group posted a net profit of NOK 174 million after tax for the first quarter ending 31 March By comparison, the net profit for the first quarter 2006 was NOK 163 million. This interim report for the first quarter 2007 has been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board (IASB). This is Statnett s first interim report under IFRS and complies with IFRS1 and IAS34. From the start of 2007, the Norwegian Water Resources and Energy Directorate (NVE) introduced new guidelines for setting the grid companies revenues. The new guidelines take much greater account of the fact that the grid companies, including Statnett, are currently in a phase of high investment activity. For Statnett, the most important change in the revenue regulation is that the cost base will now be updated annually, as opposed to every five years. CHANGE OF FINANCIAL REPORTING STANDARD With effect from 1 January 2007, Statnett commenced financial reporting under IFRS (International Financial Reporting Standards). A separate IFRS Transition Report has been prepared, describing all the effects of the transition to the new reporting standards. The implementation effect on the balance sheet of the transition to IFRS is an increase of NOK 78 million. The most significant effects that have taken place are an increase in the pension liabilities of NOK 236 million and a reversal of higher revenue capitalised on the balance sheet totalling NOK 204 million. The effect of the IFRS implementation is carried directly against equity. The increase in the pension liabilities is related mainly to previous estimate variances not recognised in the profit and loss account. The reversal of higher/lower revenues is owing to the fact that, under IFRS, assets/liabilities cannot be capitalised on the balance sheet as they are regarded as contingent assets/liabilities. To enable comparison of the financial statements for the first quarter 2007 with those of the first quarter 2006, the previously reported accounting figures for 2006 have been restated in accordance with the new reporting standards. The most important change is that the higher/lower revenues for the period are to be put through the profit and loss account and not as debt/receivables on the balance sheet. The effect on the profit and loss account for comparative figures for first-quarter 2006 is an increase in operating revenues of NOK 224 million and an increase in pre-tax profit of NOK 236 million. Independently of the transition to IFRS, Statnett has changed the form of presentation in the profit and loss account as regards power trading, grid operations and jointly controlled companies. As of 2007, Statnett will report the revenues relating to power trading and grid operations net, as against gross which applied previously. The effect on the profit and loss account for comparative figures for first-quarter 2006 is a reduction in both the operating revenues and the operating costs of NOK 840 million. Jointly controlled companies were formerly reported using the proportional consolidation method, but are now reported using the equity method of accounting. In total, IFRS implementation in the consolidated accounts and the changed form of presentation have resulted in a change in the operating profit in the first-quarter 2006 comparative figures from NOK 35 million to NOK 255 million, and a change in equity from NOK million to NOK million. Reconciliation of equity from NGAAP to IFRS PARENT COMPANY GROUP (Amounts in NOK million) Equity NGAAP IFRS effects Total IFRS effects Financial instruments excl. cash flow hedges Cash flow hedges Pension assets/liabilities Higher/lower revenue Prepaid rents Proposed dividend/dividend paid Other liabilities Shares in group companies under equity method Total IFRS effects Equity IFRS Statnett Quarterly Accounts as of 31 th March

4 QUALITY AND SECURITY OF SUPPLY Reservoir levels at 31 March 2007 averaged 39.1 %, in line with the most frequently occurring levels since At the same time, the trend from the fourth quarter 2006 has continued with what under the conditions must be characterised as a good rate of inflow into watercourses, even in mid-winter. The first quarter saw inflow of 14 TWh into the hydropower system, 5 TWh more than usual for the time of year. The power situation was satisfactory at the end of the first quarter. The plentiful snowfall in South Norway, Troms and Finnmark has made a good starting point for the power situation in the second quarter. Aggregate power consumption in the first quarter was approximately 36 TWh and aggregate power generation was approximately 36 TWh. This resulted in no net import of electricity in the first quarter. 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 for the quarter. INVESTMENTS Operations are currently dominated by Statnett s involvement in a number of substantial investment projects, at both the planning and implementation stage. Among other things, these investments are owing to a sharp rise in electricity consumption, particularly in some parts of Norway, but without any corresponding increase in generation capacity in the areas in question. Statnett is consequently investing in transmission capacity both within and into the areas concerned. Investment projects in progress NorNed The North Sea cable between Norway and The Netherlands (NorNed) will be 580 km long and thus the world s longest high-voltage direct current (HVDC) subsea cable. The cable will considerably boost the potential for two-way trade in electricity between the Nordic region and the Continent. To date, the project is on budget and on schedule. Statnett s share of the total investment cost will be approximately NOK 2.3 billion. NorNed is expected to be completed by the end of New vessel Statnett is replacing the existing M/S Elektron with a new vessel. The vessel is being built in order to better perform Statnett s preparedness obligation to transport heavy equipment for the electricity industry. The new preparedness vessel will be completed in autumn 2007 and will cost approximately NOK 180 million. Trøndelag Sweden A new 420 kv power line is being built between Nea in the county of Trøndelag and the border with Sweden. The line will be 25 km long and replace the existing 300 kv power line. The investment, which includes two substations, will cost approximately NOK 400 million. Svenska Kraftnät will be responsible for extending the power line 75 km from the Swedish border to Järpstrømmen transformer station. The entire project is scheduled for completion in The licence was awarded in the first quarter of Investment projects decided for which licence applications are pending Reserve power generation Under the Regulations relating to the system responsibility in the power system, Statnett is responsible for managing tight and very tight power situations. In that connection, it has been decided to invest NOK 1.5 billion in reserve power generation plants. The reserve power plants will be located at Tjeldbergodden and Nyhamna and have a capacity of 150MW each. The plant at Tjeldbergodden is scheduled for completion no later than 1 January 2008, while the plant at Nyhamna will become operational later the same winter. The plants will remain on standby for contingency purposes, and will only be used in very tight power situations. The reserve power plants will be run on natural gas. Statnett is also considering the future possibilities of running these plants on biodiesel fuel. In the first quarter, Statnett applied for a licence for the reserve power plant at Tjeldbergodden. Skåreheia Holen in Setesdal The decision was taken in the fourth quarter of 2006 to build a new 420 kv power line running through the valley of Setesdal from Skåreheia in Birkenes municipality to Holen power station in Bykle municipality. The power line is estimated to cost approximately NOK 900 million and will be 100 km long. This project is important in order to maintain security of the electricity supply in South Norway by transmitting electricity to and from the subsea cables linking Norway and the Continent, while also accommodating the needs relating to regional energy development plans. An appeal against the decision to grant an earlier application by Statnett to build this power line is presently being considered by the Ministry of Petroleum and Energy (OED). In the event the appeal does not succeed and the licence is awarded, the power line is expected to be completed during 2008 at the earliest. Licence applications under consideration Eidfjord-Samnanger in Hordaland Statnett has applied for a licence to build a new 420 kv power line between Eidfjord and Samnanger in the county of Hordaland, as well as the necessary connection in the Sima power plant and expansion of the Samnanger transformer station. The power line will cost approximately NOK 500 million and have a length of 90 km. The new line will be important for ensuring a continued secure supply of electricity to the area between Sunnhordland and Sogn. Ørskog in Møre Fardal in Sogn Statnett has applied for a licence to build a new 420kV power line between Ørskog municipality in Sunnmøre and Fardal in Sogn. The 300 km power line and the necessary transformer stations will cost approximately NOK 2 billion. The new power line is necessitated by an increasing shortfall of electricity in the county of Møre og Romsdal combined with plans for new power generation facilities in the county of Sogn og Fjordane. The power line can help improve security of supply to industry and households in both Møre og Romsdal and Sogn og Fjordane, while also enabling the development of planned wind farms and small hydropower plants in Sogn og Fjordane. FINANCIAL RESULTS Operating revenues, Q1 The Statnett Group recorded operating revenues totalling NOK 837 million for the first quarter 2007, which is NOK 183 million down on the first quarter Of operating revenues, power transmission accounted for NOK 824 million, which is NOK 98 million higher than the same period of Power transmission revenues consist mainly of Statnett s Main Grid revenues, which are set by the Norwegian Water Re- 4 Statnett Quarterly Accounts as of 31 th March 2007

5 sources and Energy Directorate (NVE). The increase on the first quarter 2006 is largely owing to the effect of the new revenue regulation system from Statnett operates the entire Main Grid and bills its Main Grid customers through the transmission tariff. Total revenues billed for the first quarter are lower than the regulated revenue ceiling, which gives lower revenue of NOK 18 million. Higher revenue for the first quarter totalled NOK 225 million, a difference of NOK 243 million. Accumulated lower revenue for the first quarter totalled NOK 76 million and will be added to future tariffs. The accumulated lower revenue has not been capitalised on the balance sheet as under IFRS this is regarded as a contingent asset. Other operating revenues for the first quarter amounted to NOK 31 million, which is NOK 38 million down on the first quarter The decrease is largely owing to revenues earned from the construction of the Fræna-Nyhamna transmission line on behalf of Norsk Hydro ASA in Operating costs, Q1 The Statnett Group recorded operating costs totalling NOK 556 million for the first quarter, compared with NOK 765 million for the first quarter The decrease from last year is largely due to lower power transmission costs of NOK 95 million and lower systemwide services costs of NOK 39 million. In addition, Statnett has assessed the estimated useful economic life of the operating equipment. The result is that the estimated useful economic life has increased, thus reducing annual depreciation. This will have an estimated effect annually of approximately NOK 250 million. First-quarter depreciation will be reduced by NOK 61 million compared with the year before. Results, Q1 The Statnett Group s operating profit for the first quarter was NOK 281 million, compared with NOK 255 million for first-quarter Net financial costs for the first quarter totalled NOK 53 million, compared with NOK 44 million for first-quarter The increase in net financial costs is owing to a decrease in financial income ascribed to a lower level of liquid assets and securities through the quarter. The Group recorded a net profit after tax of NOK 174 million for the first quarter, which is NOK 11 million up on the first quarter The Parent Company, Statnett SF, posted a net profit after tax of NOK 171 million for the first quarter, compared with NOK 148 million for the same period the year before. Investments Statnett SF invested a total of NOK 530 million in the first quarter, compared with NOK 243 million in the first quarter NOK 375 million was invested in new power lines and transformer stations. Reinvestment in the existing Main Grid totalled NOK 56 million and other investments NOK 99 million. Cash flow and balance sheet Operating activities in the Statnett Group produced a cash flow of NOK 133 million in the first quarter The Group carried out investments totalling NOK 530 million. In total, loans were repaid for NOK 615 million, and new borrowings totalled NOK million. At the end of the quarter, the Group s liquid assets and securities totalled NOK 793 million, which is NOK 556 million down on the first quarter At 31 March, the Group s total assets amounted to NOK million, compared with NOK million at 31 March Statnett has a credit facility of NOK 2.0 billion which runs until The limit on the credit facility is to enable Statnett to have sufficient financial flexibility to carry out its programme of investment over the next few years. The credit facility was unutilised at 31 March Transport operations and preparedness Operating revenues for Statnett s subsidiary Statnett Transport AS were NOK 11 million for the first quarter, as against NOK 9 million for the first quarter The company had a net result after tax of NOK 0 million, compared with a net profit of NOK 1 million for the same quarter The Nordic power exchange, Nord Pool For the first quarter, the Nord Pool Group contributed a net profit after tax of NOK 10 million to Statnett s earnings, including the share of profits from Nord Pool Spot. The comparative figure for first-quarter 2006 was NOK 11 million. HEALTH, SAFETY AND ENVIRONMENT The lost time injury rate (H value) for the first quarter was 10.2 for Statnett SF (2006: 0) and 9.8 for the Group overall (2006: 0). One injury was sustained during maintenance work and two injuries arose in a road traffic accident. The sickness absence rate in the Parent Company was 3.9 per cent for the first quarter, compared with 5.1 per cent for the first quarter In the first quarter Statnett accepted a fine of NOK imposed as a result of two minor accidental oil spills of 800 litres in total during 2006 at the Hasle transformer on the Glomma river. Statnett has taken action to ensure that incidents of this kind do not recur. SUPREME COURT ACTION According to a recent judgement in Norway s Supreme Court there is no basis for any claim for compensation in connection with electromagnetic fields and power lines. The Court gave judgment in favour of Statnett that if residential properties were exposed to electromagnetic fields above 0.4 microtesla, it would not exceed the nuisance limit under the Neighbouring Properties Act. The Supreme Court stated that there is «no basis for setting a general limit for when the nuisance limit under the Neighbouring Properties Act is exceeded in relation to the impact of electromagnetic fields on residential properties.» MISCELLANEOUS In 2006, the Central Tax Office for Large Enterprises issued a notice of changed taxation stating that there was no authority for tax deductions for the income years 2004 and 2005 in the insurance subsidiary Statnett Forsikring. Based on Statnett s reply, we have received a response that the case will be closed without any tax-related consequences for the company. OUTLOOK The results for 2007, adjusted for accounting for higher and lower revenues, are expected to be better than for The reason for this is mainly higher revenues as a result of new guidelines for setting the grid companies revenues. Oslo 10 May 2007 The Board Statnett Quarterly Accounts as of 31 th March

6 Profit & loss PARENT COMPANY GROUP (Amounts in NOK million) OPERATING REVENUES Power transmission Higher/lower revenue for the period Other operating revenues Total operating revenues OPERATING COSTS System services Transmission losses Wage costs Deprec. & write-downs of tang. fixed assts Other operating costs Total operating costs Operating profit/loss Income from joint ventures and associates Financial income Financial costs Profit/loss before tax Tax charge Net profit/loss for the period Statnett Quarterly Accounts as of 31 th March 2007

7 Balance sheet PARENT COMPANY GROUP (Amounts in NOK million) ASSETS FIXED ASSETS Deferred tax asset Tangible fixed assets Plant under construction Investment in subsidiaries Investment in other group companies Financial assets Total fixed assets CURRENT ASSETS Trade accounts & other short-term receivables Investment in market-based securities Liquid assets Total current assets Total assets Statnett Quarterly Accounts as of 31 th March

8 Balance Sheet PARENT COMPANY GROUP (Amounts in NOK million) EQUITY AND LIABILITIES EQUITY Contributed capital Retained earnings & other equity Total equity LONG-TERM LIABILITIES Pension liabilities Other liabilities Long-term interest-bearing liabilities Total long-term liabilities CURRENT LIABILITIES Short-term interest-bearing liabilities Trade accts payable & other current liab Tax payable Total current liabilities Total equity and liabilities Statnett Quarterly Accounts as of 31 th March 2007

9 Change in equity PARENT COMPANY GROUP (Amounts in NOK million) Contributed capital Retained earnings Equity, opening balance Profit/loss for the period Cash flow hedges carried directly against equity Changes in value carried directly against equity Dividend Equity, closing balance Statnett Quarterly Accounts as of 31 th March

10 Cash flow statement PARENT COMPANY GROUP (Amounts in NOK million) CASH FLOWS FROM OPERATING ACTIVITIES Profit/loss before tax Loss/ gain(-) on sale of fixed assets Ordinary depreciation and write-downs Interest recognised on income statement for the period Interest received for the period Interest paid for the period Change in trade accounts receivable/trade accounts payable Change in other accruals Net cash flow from operating activities CASH FLOW FROM INVESTING ACTIVITIES Proceeds from sale of tangible fixed assets Purchase of tangible fixed assets and intangible assets Change in stocks, plant under construction Change in long-term loans receivable Change in short-term loans receivable Change in investment under equity method Net cash flow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from new interest-bearing borrowings Repayment of interest-bearing debt Proceeds from sale of market-based securities Purchase of market-based securities Payment of dividend 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 33 million for the Group are included in cash and cash equivalents at 31 March Unutilised credit facilities totalling NOK 2,000 million are not included in cash and cash equivalents above. 10 Statnett Quarterly Accounts as of 31 th March 2007

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12 Design Kolonien Statnett SF Husebybakken 28B P.o.Box 5192 Majorstuen N-0302 Oslo Phone: Telefax: Statnett Konsern Kvartalsrapport pr. 30. april 2007