Solid results, despite considerably lower prices
Statkraft delivered solid results in the third quarter even though power prices were significantly down. Value creation was particularly strong from energy management and market activities. Statkraft continues to deliver on its ambitious growth strategy.
- Net operating revenues was NOK 10.6 billion in Q3 2023 compared to 13.2 billion in the comparable quarter last year, when the European energy crises caused extraordinary market conditions. Underlying EBIT decreased to NOK 4.9 billion (NOK 9.0 billion), while profit after tax was NOK 4.4 billion (NOK 3.8 billion).
- Energy markets continued to normalise and weather conditions were wetter, resulting in a fall in European power prices in the third quarter by 84 per cent in the Nordic region and 76 percent in Germany compared to the extraordinary high prices in the same quarter last year.
- Statkraft signed several long-term power contracts, including a power sales agreement with AstraZeneca in Sweden.
- Statkraft continues to ramp up project activities to reach its ambition to build 2500-3000 MW renewable energy capacity per year from 2025, increasing to around 4000 MW by 2030. Current run rate is at 1000 MW per year.
“The market conditions have changed significantly compared to the extreme prices in the third quarter last year, fuelled by the energy crises and the war in Ukraine. However, Statkraft delivered stable operations, value-creating energy management and profitable market activities, all contributing to maintaining solid results despite much lower prices," says Statkraft CEO, Christian Rynning-Tønnesen.
The average system price in the Nordic region was 28 EUR/MWh, down 149 EUR/MWh from extraordinary prices in the third quarter of 2022 and down 28 EUR/MWh from the second quarter of 2023. The price area differences in Norway have decreased in 2023 but the south-west price area (NO2) was still facing higher prices than the rest of the country.
Markets were primarily influenced by a significantly improved energy balance in Europe, as gas storage levels increased, new renewable energy capacity came online, and wet weather conditions filled Nordic hydropower reservoirs. Nordic reservoir levels were at 100% of median by the end of September and is currently at 99.3% of median, equivalent to 81.2% of full capacity.
Underlying EBIT decreased to NOK 4.9 billion, including negative value changes from embedded derivatives of NOK 0.9 billion. This was partly offset by significantly improved hedging effects from Nordic Assets and higher generation from Norwegian hydropower.
Operating expenses increased, mostly due to more business development in Europe, International and New Technologies, higher IT expenses, as well as the effects of a weakening NOK and a higher number of employees as Statkraft is scaling up the organisation to support growth.
The Nordics segment was the main contributor to the results despite significantly lower power prices compared to last year. The Markets segment delivered strong results in the quarter, primarily related to origination activities.
Statkraft reported profit before tax of NOK 5.9 billion, including net financial items of NOK 2.1 billion. Net financial items in the quarter included positive currency effects, primarily driven by a stronger NOK vs. EUR, GBP and USD. Profit after tax was NOK 4.4 billion.
Statkraft continues to develop a broad portfolio of hydro, wind, solar, and battery projects, mainly in the Nordics and Europe. In Ireland, Statkraft acquired a solar and wind project development portfolio of 758 MW and made investment decisions for Clonfad solar project (176 MW) in Ireland and Swansea grid stabiliser project (69 MW) in the UK. In Germany and France, Statkraft acquired 39 operational wind farms with a total installed capacity of 337 MW and a significant potential for life-time prolongation and repowering.
“The world urgently needs more renewable energy, and we are working hard to maintain and develop our flexible hydropower assets as well as ramping -up our renewable generation capabilities within offshore and onshore wind, solar, and batteries. This way we renew the way the world is powered”, says Rynning-Tønnesen.
Statkraft also continues to work on our ambitious plans to increase installed capacity in existing hydropower plants in Norway. The company plans to double investments and maintenance in the plants to NOK 4 billion annually towards 2030 and initiate five large capacity upgrades. The ambition is to increase installed hydropower capacity with 1500-2500 MW. Mauranger, Aura and Alta are three of the projects that the company is considering.
In October, Statkraft acquired two Swedish wind power developers. Most of the portfolio consists of early-phase projects with a total potential of 16-17,000 MW onshore wind and up to 21,000 MW offshore wind in Sweden. Also, Statkraft acquired Södra's shares in Silva Green Fuel, and is looking for a new partner to further develop the technology for advanced biofuels.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
Statkraft is a leading company in hydropower internationally and Europe’s largest generator of renewable energy. The Group produces hydropower, wind power, solar power, gas-fired power and supplies district heating. Statkraft is a global company in energy market operations. Statkraft has 5.700 employees in 21 countries.
For further information, please contact:
Stephan SkaaneVice President Group Treasury
Arild RatikainenSenior Financial Advisor
Lars Magnus GüntherMedia Relations
Torbjørn SteenVice President External Communications