Statkraft AS: Robust underlying results, record-strong energy management

(Oslo, Norway, 7 November 2024) - Statkraft delivered robust underlying results and record-strong energy management in the third quarter of 2024, despite lower power prices in the Nordics. Reported results were impacted by net financial items of NOK -3.4 billion, mostly due to a weaker NOK.

• Net operating revenues were NOK 9.8 billion in the third quarter 2024 compared to NOK 10.7 billion in the comparable quarter last year, while underlying EBIT decreased to NOK 3.0 billion (NOK 4.9 billion).
• Reported EBIT of NOK 4.6 billion (NOK 3.2 billion) included unrealised value changes from embedded EUR derivatives of NOK 1.7 billion in the quarter (NOK -1.6 billion).
• Net financial items were NOK -3.4 billion in the third quarter (NOK 2.1 billion), including currency effects of NOK -2.6 billion primarily due to a weakening of NOK vs. EUR.
• Profit before tax was NOK 1.5 billion (NOK 6.0 billion) in the quarter, while net profit was NOK -0.2 billion (NOK 4.5 billion).
• Power prices fell by 28 per cent in the Nordic region in the third quarter and 16 percent in Germany compared to the same quarter last year.
• Statkraft decided to undertake upgrades and maintenance work of NOK 0.9 billion in the tunnel system between hydropower reservoir Blåsjø and Saurdal power station in Norway.
• Statkraft made investment decisions for two grid stabiliser projects in Europe.
• Statkraft announced that investments in Norway, Europe, and South America will be prioritised going forward.

"Statkraft continues to deliver robust underlying results, despite lower prices and lower hydropower production in Norway. Solid energy management has led to a record-high price margin in our Nordic hydropower fleet, reflecting the increased value of these assets. Due to high inflow and long-term energy management, Statkraft is well prepared to meet increased demand and expected higher prices during the winter season," says Statkraft President and CEO, Birgitte Ringstad Vartdal.

She adds:

"In Europe and International, results reflected a continued high level of business development activities, increased generation, and the associated higher costs related to new capacity as we continue investing in renewable energy production. I am pleased to see that we are expanding and refining our development portfolio and completing assets under construction across our regions. As we continue to invest in these projects and bring more capacity into operation, this portfolio will set us up for continued profitable growth and value creation."

Prices, market development, and generation

The average system price in the Nordic region was 19.9 EUR/MWh, down 15.4 EUR/MWh from the second quarter 2024 and down 7.8 EUR/MWh from the third quarter last year. The fall in prices was due to high inflow, higher wind power production and high reservoir levels in southern Norway, and lower continental prices.

Average German base price was 76.0 EUR/MWh, down 14.9 EUR/MWh from the same quarter last year, while up 4.2 EUR/MWh since the second quarter 2024. Power prices dropped compared to last year due to lower carbon prices and despite higher gas prices. Low prices in France driven by higher nuclear production contributed to the fall.

Statkraft's generation was 13.3 TWh in the third quarter of 2024, 0.2 TWh higher than the third quarter last year. The increase was primarily related to wind power generation from new assets in Brazil and Spain, partly offset by lower generation from Norwegian hydropower. Total wind power production was 2.5 TWh in the third quarter (0.8 TWh), while hydropower production was 10.0 TWh (11.6 TWh).

Financial development

Operating expenses rose from the third quarter last year and were also slightly higher than in the second quarter on an underlying basis mainly due to recently added capacity. Salaries and payroll costs increased due to a higher number of employees and salary adjustments, partly offset by lower performance related remuneration in Markets.

Underlying EBIT was NOK 3.0 billion compared to NOK 4.9 billion in the same quarter last year, primarily due to lower power prices, lower Norwegian hydropower generation and hedging effects.

Nordics was the main contributor to the results with an underlying EBIT of NOK 2.1 billion (NOK 3.8 billion) despite lower power prices compared to last year. Markets delivered a strong underlying EBIT of NOK 1.4 billion in the quarter (NOK 0.9 billion), primarily related to the origination activities.

Europe had an underlying EBIT of NOK -0.5 billion (NOK 0.6 billion). Less positive results from hedging activities as well as added wind power capacity were the main reasons for the lower results from this segment.

International's underlying EBIT increased significantly in the quarter, mainly due to termination of long-term power sales agreements, and recently added capacity in Chile and Brazil starting commercial operation.

As of the third quarter 2024, Statkraft reports return on average capital employed (ROACE) for assets in operation separately. These numbers do not include items such as business development costs and assets under construction. In Nordics, with mostly old hydropower plants, low book values due to depreciation resulted in a high ROACE for assets in operation at 32.6 percent.

Assets in operation in Europe and International mostly constitutes recently built and completed wind, solar and hydropower plants, with high book values, resulting in a ROACE for assets in operation in Europe and International of 9.6 percent and 6.7 percent respectively in the last twelve months.

Focusing on fewer countries

Statkraft recently decided to divest the onshore wind, solar and battery business in the Netherlands and Croatia. Over time, the hydropower and solar assets in India will also be divested, as the company will focus its investments on fewer markets to build scale and strengthen competitiveness and value creation.

In Norway, Statkraft is progressing plans for the replacement of Svean power plant in Central Norway for NOK 1.2 billion. The company also made the decision to undertake upgrades and maintenance work for NOK 0.9 billion in the tunnel system between Blåsjø reservoir and Saurdal power station. Statkraft continues to develop five capacity projects in hydropower, and several new wind power projects. In addition, Statkraft is developing plans for repowering of some older wind farms in Norway, extending the lifetime of the assets by replacing old turbines with new and more powerful ones.

Effective 1 January 2025, Statkraft will introduce an updated organisation and a new corporate management to further support its sharpened strategy. A new business area, named Technology and Project Delivery, will be responsible for developing best-practise safety, and operations and maintenance standards, as well as cost-effective delivery of construction projects, procurement services and IT deliveries. The current Corporate Staff area will be restructured into two new units, Corporate Development and the new People, Organisation and Sustainability area, that will comprise the group functions corporate HR, governance, compliance and sustainability.

For further information, please contact:

Debt Capital Markets:
Vice President Stephan Skaane, tel: [phone], e-mail: [e-mail]
Senior Financial Advisor Arild Ratikainen, tel: [phone], e-mail: [e-mail]

Media:
Media Spokesperson Lars Magnus Günther, tel: [phone], e-mail: [e-mail] Vice President Torbjørn Steen, tel: [phone], e-mail: [e-mail]

or www.statkraft.com

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

About Statkraft
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 around 7,000 employees in more than 20 countries.

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

Attachments

• 2024-Q3 Interim Report (https://ml-eu.globenewswire.com/Resource/Download/78360d3e-5959-472c-a5ca-512a84c1afcf)
• 2024-Q3 Presentation (https://ml-eu.globenewswire.com/Resource/Download/dee76eff-83e4-4a0c-9385-e0620ee0f5f6)