Lower power prices hit Statkraft's op profit in Q1

Norwegian state-owned utility Statkraft AS has experienced a 2.67% year-on-year decline in underlying earnings before interest and tax (EBIT) for the first quarter of 2020, mainly because of substantially lower power prices.

The company reported an underlying operating profit of NOK 4.09 billion (USD 399.6m/EUR 369.8m) for January-March 2020 compared to NOK 6.76 billion a year back.

Statkraft explained that Nordic power prices in Q1 were under pressure by low fuel prices, a substantial hydrological surplus and low demand resulting from the mild winter and the COVID-19 outbreak. The average Nordic system price was down 67% on the year to EUR 15.4 (USD 16.6) per MWh.

The net result for the period is a loss of NOK 1.89 billion against a profit of NOK 4.75 billion a year earlier. The negative bottom line reflects NOK 2.6 billion in impairments of Nordic wind power assets arising from changes in the energy market outlook, along with negative currency effects.

Total power production rose by 10% to 17.7 TWh. More details are available in the table below.

Statkraft explained the increased wind power output with capacity additions and higher wind speeds during the period.

The company noted that construction work has been temporarily halted at hydropower project sites in India, Chile and the UK due to the coronavirus pandemic. At this point, it cannot foresee when works can be restarted.

(NOK 1.0 = USD 0.977/EUR 0.904)

(EUR 1.0 = USD 1.081)

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