Statkraft recorded a strong EBIT in 3Q2021. The solid result strengthens its financial capacity and ability to deliver on the company’s growth strategy.
The underlying EBIT was NOK4.6 billion in 3Q2021, an increase of NOK3.5 billion compared with 3Q2020. The increase was driven by substantially higher Nordic power prices and very high Norwegian hydropower generation. The EBIT was negatively influenced by losses from market operations as a result of record-high volatility for power and other energy related commodities.
“The high Nordic power prices and a very high Norwegian hydropower generation led to a strong EBIT in 3Q2021. The strong results have a positive impact on our investment capacity and provides us with a solid financial foundation to continue our growth path and reinvest in renewables, contributing to the energy transition,” says Chief Executive Officer, Christian Rynning-Tønnesen.
The average Nordic system price was €68.5/MWh compared with €9/MWh in 3Q2020. Total power generation was 15.3 TWh, 0.7 TWh higher than the generation in 3Q2020.
The market turbulence in the energy markets led to a negative result from market operations of NOK4 billion due to losses and negative effects from forward sales.
Changes in the market outlook led to a reversal of impairments for Nordic wind power assets and German gas-fired power plants. In total, the reversals amounted to NOK3.1 billion.
Net profit was NOK5 billion, an increase of NOK3.7 billion from 3Q2020.
Cash flow from operating activities in 3Q2021 was solid at NOK9.9 billion. The net interest-bearing debt was NOK12.3 billion, giving room for significant new investments within renewable energy.
Statkraft has a business model where onshore wind and solar power plants are developed and constructed with the intention to divest the plants either before, at the time of, or shortly after completion. The proceeds from such divestments strengthen Statkraft’s financial capacity and ability to deliver on the growth strategy.
During 3Q2021, Statkraft entered into an agreement to sell a portfolio of four co-located solar farms in Cádiz, Spain. The company will retain the responsibility for the construction of the solar farms which are expected to be finalised by 4Q2022 with a total peak capacity of 234 MW. Statkraft also signed an agreement to divest the Andershaw wind farm in Scotland. It will maintain operation and maintenance responsibilities until 2037.
In October 2021, the Norwegian Supreme Court ruled that the concessions and expropriation permits for two of the wind farms at Fosen in Norway violated the Sami reindeer herders right to cultural practice and are therefore invalid. Fosen Vind and Roan Vind have initiated dialogues with the Ministry of Petroleum and Energy and with the Sami groups following the decision. The Ministry has confirmed that no immediate measures will be taken in relation to the concession. An application for a renewed concession and expropriation permit will be submitted, including updated impact assessments related to the reindeer husbandry and new measures ensuring that the human rights of the Sami groups are respected. The final implications of the Supreme Court decision are at this stage highly uncertain.
Early in 4Q2021, Statkraft acquired 43 operating wind farms in Germany and France with a total installed capacity of 346 MW.
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