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Second strongest results ever

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Second strongest results ever

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Statkraft delivered its second highest result ever in 2023, even as power prices were significantly lower than the previous year. The value contribution from market activities and energy management continued to be strong.

  • Net operating revenues were NOK 65.3 billion in 2023 compared to 75.3 billion the year before, when the European energy crisis caused extraordinarily high prices and extreme volatility. Underlying EBIT decreased to NOK 41.4 billion from NOK 54.4 billion in 2022 mostly due to significantly lower power prices, while profit after tax was NOK 26.1 billion compared to NOK 28.6 billion.
  • Statkraft signed an agreement to acquire Spanish-based Enerfin for about NOK 21 billion. Enerfin’s renewable energy platform includes 1,500 MW wind power in operation and under construction, and a pipeline of projects at various stages of development. Closing of the transaction is expected in the second quarter 2024. After closing, Statkraft will divest Enerfin’s portfolio in Canada, the US, Colombia and Australia, reducing the acquired portfolio to 1,247 MW of wind and solar in operation or under construction and a pipeline of 565 MW in the core markets Spain and Brazil.
  • Statkraft announced plans for record-high investments of between NOK 44 and 67 billion in Norwegian hydro and wind power.
  • Statkraft signed a record number of long-term agreements with Norwegian industrial companies, totalling 64 TWh. Furthermore, Statkraft signed several power purchase agreements in other markets, including its first long-term power contract in the US.
  • The proposed dividend amounts to NOK 13 billion for 2023.
  • In October 2023 CEO Christian Rynning-Tønnesen informed the Board of Directors that he wishes to resign after almost 14 years. The Board’s process to find a new CEO is progressing as planned.

“Statkraft delivered its second-best annual result in 2023, as markets continued to stabilise after the extraordinary situation and a record 2022. The results are above historical levels, as the market activities continued to show strong performance even though volatility and prices are much lower. We are seeing signs that the forward prices are stabilising on a level closer to the price levels seen before the energy crisis,” says Statkraft CEO Christian Rynning-Tønnesen.

In January Statkraft announced plans to invest up to NOK 67 billion in capacity upgrades, transformations, and rehabilitation of Norwegian hydropower plants. The company expects to add 1,500-2,500 MW in installed hydropower capacity in addition to a minimum of 2.5 TWh wind power generation. All investments are dependent on grid access, permitting, and good solutions with local stakeholders and interests, including reindeer husbandry groups.

Statkraft continues to develop its project pipeline and made investment decisions for 1,300 MW of new projects. The target is to develop 2,500-3,000 MW of renewable energy capacity annually from 2025 and 4,000 MW annually from 2030.

“We are on target to deliver our share of the renewable energy that the world needs, with a steadily increasing pipeline of projects and an organisation fit for the challenge”, says Rynning-Tønnesen.

Revenues came down in segment Nordics, where contribution decreased due to lower Nordic power prices, partly offset by positive effects from hedging and higher generation. Markets’ contribution was very strong but lower than the record results during the extraordinary markets in 2022. The improvement for the Europe segment was driven by hedging gains, while the increase for International was primarily due to higher wind power generation in Brazil.

The Group’s operating expenses were higher, driven by increased business development activity as the organisation continued to develop the growing pipeline of renewable energy projects. The increase was also driven by higher activity level in all segments, as well as salary adjustments, inflation, and a weaker NOK. This was partly offset by a decrease in regulatory fees, primarily related to the end of the high-price contribution in Norway.

The decrease in profit was partly offset by positive hedging effects and higher generation, and positive effects from embedded EUR derivatives driven by weaker forward NOK vs. EUR. The results include reversal of impairments of wind farms in the Nordics due to higher future power prices and reduced resource rent tax in Norway.

Statkraft reported profit before tax of NOK 51.0 billion, including net financial items of NOK -1.0 billion. Net financial items included negative currency effects, primarily driven by a weaker NOK vs. EUR, GBP and USD. Profit after tax was NOK 26.1 billion.

The Board of Directors has proposed a dividend of NOK 13 billion for 2023.

Fourth quarter

The underlying EBIT in the fourth quarter was NOK 11.5 billion, a decrease of NOK 12.2 billion compared with the fourth quarter in 2022. The decrease was mainly driven by lower power prices, partly offset by higher power generation. Hedging gains were lower compared to the same quarter in 2022.

Norwegian markets were influenced by cold climate with high consumption and low wind power generation, and significant price area differences, while European power prices fell mainly due to lower gas and coal prices. Nordic water reservoir levels were at 89% of median by the end of December and is currently at 80.7% of median, equivalent to 38.9% of full capacity.

The average Nordic system price was 57.8 EUR/MWh, down 77.5 EUR/MWh from the same quarter in 2022 and up 30.2 EUR/MWh from the third quarter. Total power generation was 18.2 TWh, 2.9 TWh higher than in the fourth quarter 2022.

Net profit was NOK 5.9 billion, a decrease of NOK 8.6 billion from the same quarter in 2022.

Cash flow from operating activities was NOK 2.4 billion, after taxes paid of NOK 8.9 billion in the quarter.

Important events in the quarter:

  • Majority-owned Fosen Vind signed an agreement with Sør-Fosen sitje ensuring continuation of both reindeer husbandry and wind power in Southern Fosen. The parties agreed that this resolves the human rights issue.
  • Statkraft acquired the Red John pumped hydropower storage development project (450 MW) in the UK, and started pre-feasibility study for a 1,200 MW pump storage plant in Albania.
  • The company closed the acquisition of two wind farms (260 MW) in Brazil, and made final investment decisions for two solar hybrid (269 MWp) projects in Brazil and the Mihir solar (445 MWp) project in India.

The annual report for Statkraft AS Group for 2023 has been approved by the Board of Statkraft AS.

Note: Statkraft does not publish a separate external report for the fourth quarter as the annual report is disclosed together with this stock exchange notice. Selected statements for the fourth quarter are attached as an appendix.

For further information, please contact:

Debt Capital Markets:
Vice President Stephan Skaane, tel: +47 905 13 652, e-mail: stephan.skaane@statkraft.com
Senior Financial Advisor Arild Ratikainen, tel: +47 971 74 132, e-mail: arild.ratikainen@statkraft.com

Media:
Media Spokesperson Lars Magnus Günther, tel: +47 912 41 636, e-mail: lars.gunther@statkraft.com Vice President Torbjørn Steen, tel: +47 911 66 888, e-mail: torbjorn.steen@statkraft.com

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 over 6,000 employees in more than 20 countries.

 

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