financial results q1 2020 · nok million 15 203 10 105 2 458 1 271 1 625 ... microsoft powerpoint -...
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FINANCIAL RESULTSQ1 2020CEO Christian Rynning-TønnesenCFO Anne Harris7 May 2020
Covid-19 pandemic The main priority is to take care of people and safeguard operations: Implemented actions to reduce spread of the virus while delivering a reliable supply of
power and heat
Most projects are continuing, but three construction projects temporarily halted:
• Tidong hydropower project in India• Los Lagos hydropower project in Chile• Windy Rig wind power project in Scotland
Reduced electricity demand has put pressure on power prices
2
Health, safety and environment
Health and safety- One fatal work-related accident in the quarter- No other serious work-related injuries in the quarter
Environment - No serious environmental incidents in the quarter
31TRI rate (12 months rolling): Total recordable injuries per million hours worked
TRI-rate1
0
1
2
3
4
5
6
20192017 2018 2020
4.9
Highlights in Q1
Low power prices
Extraordinary strong results from Market Operations
Underlying EBIT of NOK 4.1 billion
Net result of NOK -1.9 billion after impairments and negative currency effects
4
Dörverden hydropower plant, Germany
Long-term contracts portfolio New industry power contract with
Glencore Nikkelverk- Runs from 2021-2029- Annual volume of 90 GWh
Annual average generation in the Nordics is 57 TWh- Nordic hedging portfolio of 18 TWh through
2020
Hedging portfolio of 4 TWh through 2020 in International power
Hedging strategy supplemented with financial instruments
5
0
2
4
6
8
10
12
14
16
18
202320222020 20242021 20262025 2027 2028 2029 2030
New and renegotiated contracts 2017-2020
Long-term commercial contracts
Statkraft’s share of leasing agreements
Stautory priced lease agreements
TWh
ImpairmentsLow fuel prices, a large power surplus and reduced
demand due to the pandemic in the Nordic region are driving lower power prices
Changes in the energy market outlook has led to impairments- Wind assets in Fosen, Norway impaired by NOK 1263 million- Wind assets in Norrland, Sweden impaired by NOK 1288 million
6
Financial performance
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Q4-2018
11.9%
Q1-2018
12.5%
Q2-2018
13.2%
Q3-2018
14.7% 15.3%
Q1-2019 Q4-2019
16.1%
Q2-2019
15.2%
12.8%
Q3-2019
15.5%
Q1-2020
Return on average capital employed (ROACE): Underlying EBIT last 12 months / Average capital employed
12 months rolling ROACE of 12.8%- Lower underlying EBIT driven by lower Nordic power prices.- Average capital employed up 2% compared with year-end 2019.
Outlook
8
Strong organisational culture
Solid competence base and highly motivated employees
Commitment to act in an ethical and socially responsible manner a foundation for all activities
Solid competitive position
Solid financial position
Strong cost position in European hydropower
Flexible investment programme
Unique assets
Europe’s largest reservoir capacity and flexible power plants
Long term revenue optimisation and replacing long-term bilateral contracts
Styggevatn, Norway
Changes in energy market
Significant drop in energy demand and power prices
Medium to long-term effects of Covid-19 pandemic uncertain
NOK million Q1 2020 Q1 2019The year
2019Net operating revenues and other income underlying 7 593 9 678 29 318
Operating profit (EBIT) underlying 4 090 6 762 16 744
Net profit/loss -1 888 4 752 11 327
Nordic prices measured in EUR down 67% Q-on-Q
Overall generation up 10% Q-on-Q
Negative currency effects and impairments affecting net profit
Key figures
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Price drivers and the German power market
10
Q1 2020 vs. Q1 2019 Coal price significantly down
Gas price significantly down
CO2 price fairly stable
German power price (base) down 35%
0
20
40
60
80
100
120
Q2Q1-2018
Q3 Q3Q4 Q1-2019
Q2 Q4 Q1-2020
Coal, ARA (USD/t)
0
5
10
15
20
25
30
Q3Q2Q1-2018
Q4 Q1-2020
Q1-2019
Q4Q2 Q3
CO2, EUA (EUR/t)
0
5
10
15
20
25
30
Q3Q1-2018
Q2 Q3Q4 Q1-2019
Q2 Q4 Q1-2020
Gas, NBP/TTF (EUR/MWh)
0
10
20
30
40
50
60
Q3Q1-2018
Q2 Q4 Q3Q2Q1-2019
Q4 Q1-2020
EEX, base (EUR/MWh)
Nordic reservoir level
Reservoir levels above normal throughout Q1
Nordic reservoir level (total market) at 120% of median at the end of March
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0
20
40
60
80
100
Q1 Q2 Q3 Q4
Median
20192020
%
Nordic system price, monthly average
Nordic power prices 15.4 EUR/MWh, down 67% Q1 2020 vs. Q1 2019
EUR/MWh
12
0
5
10
15
20
25
30
35
40
45
50
55
Q4 Q4Q2Q1-2018
Q3Q2Q3 Q1-2019
Q1-2020
Energy management
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Q1 generation up 10% Q-on-Q
Technology TWh Change in TWh
Hydropower 15.6 1.0
Wind power 1.4 0.5
Gas power 0.7 0.2
Bio and solar power 0.1 0.0
Total 17.7 1.70
1
2
3
4
5
6
7
Feb AugJan DecJunMar Apr May Jul Sep Oct Nov
20202019
Smøla wind farm, Norway
NOK 4.1 billion in underlying EBIT
Underlying EBIT down NOK 2672 million Q-on-Q- Net operating revenues and other income down NOK
2085 million - Operating expenses up NOK 586 million
14
NOK million
6 762
4 090
Q12019
Q12020
-40%
Financial items
15
NOK million
Breakdown Net financial items Q1 2020 Breakdown Net financial items Q1 2020
78
-165
Interest income
-145
Other financial itemsInterest expenses Currency gains and losses Net financial items Q1 2020
-5 715
-5 947
Q1 net profit breakdown
16
NOK million
4 090
-1 888
2 853
722
-1 048
Q1 2020Operating profit
(EBIT) underlying
Unrealised value changes from energy derivatives
Q1 2020Net profit/loss
Impairments
-2 558
-5 947
Share of profit/loss in equity accounted
investments
Net financial items Tax
Q1 segment EBIT underlying
17
NOK million
1 078
198291
137
613
2 893
1 313
133
‐7
53219
Districtheating
Marketoperations
European wind and solar
European flexiblegeneration
Internationalpower
Industrialownership
4 428 Q1 2019Q1 2020
Q1 2020 capital expenditure1
Distribution of CAPEX in the quarter:- 49% new capacity investments- 46% maintenance/other investments- 5% shareholdings
New hydropower capacity under construction in India, Albania and Chile
Wind power in the UK and Norway
Maintenance primarily related to Nordic hydropower
18
European flexible
generation28%
1 Excluding loans to equity accounted investmentsOther includes District heating, Market operations and Other activities
30%
28%
15%
8%
19%
European flexible generation
International power
European wind and solar
Industrial ownership
Other
NOK1.3
billion
Cash flow and financial position NOK 26 billion in net interest-
bearing debt (NOK 16 billion end of 2019)
Net interest-bearing debt-equity 20%
Current ratings provide a framework for our investments going forward
19
NOK million15 203
10 105
2 458
1 271
1 625
Cash reserves 31.12.
256
Financing activities
Investing activities
Operatingactivities
Currency exchange rate effects
Cash reserves 31.03.
Strong performance from Market operations
Satisfactory underlying operating profit in spite of low power prices
Robust financial position
Investment plan with large degree of flexibility that will be adapted to the market development
Summary
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www.statkraft.com
THANK YOUInvestor contacts:Debt Capital Markets Financial information
Vice President Tron Ringstad Vice President Bjørn Inge NordangPhone: +47 992 93 670 Phone: +47 913 59 865 E-mail: [email protected] E-mail: [email protected]
Funding manager Stephan Skaane Senior Financial Advisor Arild Ratikainen Phone: +47 905 13 652 Phone: +47 971 74 132E-mail: [email protected] E-mail: [email protected]