Hafslund — First quarter 2013: Cold weather spurs strong demand for energy and satisfactory profit

Hafslund reports a satisfactory operating profit (EBITDA) of NOK 638 million for the first quarter of 2013. Operating profit at the Group’s underlying businesses was up 16 percent, compared with the year-earlier reporting period. Cold weather drove strong demand for electric power and Oslo district heating production. Hydropower production was reduced due to below-normal water influx into the Glomma waterway. Power prices were somewhat above first-quarter 2012 prices.

“We see the results of improvement processes throughout the Hafslund Group, processes we will continuously develop further” says Finn Bjørn Ruyter, President and CEO of Hafslund ASA.

Hafslund Production sold the Group’s hydropower generation in the first quarter of 2013 at NOK 0.29 per kWh, up NOK 0.02 per kWh from the corresponding 2012 reporting period. Lower maintenance activity contributed to first-quarter 2013 profitability. A decline in water influx to the Glomma waterway negatively impacted profit. Overall, however, Hafslund Production reports year-on-year profit growth.

Prevailing cold weather in the three first months of 2013 lead to a 24 percent increase in district heating production compared with the first quarter of 2012, and profit growth for the business segment Hafslund Heat. Pilot operation of the wood-powder-fueled boiler facility at Haraldrud and a new bio-oil-fueled boiler at Rodeløkka helped raise the proportion of electricity and other renewable energy sources in Hafslund’s district heating network to 94 percent in the first quarter of 2013.

“Along with profit growth, Hafslund proved the importance of its district heating system to Oslo’s energy security in winter,” Hafslund’s CEO explains. “When there in short periods of time was limited supply of power to the capital, we turned off our electric boilers and fired up bio-oil boilers.”

The business segment Markets continues to grow, and has reached 912,000 customers at Hafslund’s wholly- or partly-owned power sales companies. Start-up of the new customer and billing system will reduce costs and enhance the competitiveness of electricity sales business. Establishment of the low-price power retailer SverigesEnergi is a key step to strengthening Hafslund’s position in Sweden’s power sales market.

Hafslund’s power distribution grid in Oslo and Akershus counties had stable operations throughout the quarter, with only minor penalties imposed for power outages. Customers’ grid rental fees will be kept at current levels. The regulatory authority NVE is applying a higher interest rate (so-called NVE interest) in calculating Hafslund Network’s income ceiling; this provides improved incentives for grid build-out to meet the population growth of Oslo and Akershus in the years to come.

Norway’s Ministry of Petroleum and Energy has postponed the deadline for installing AMS automatic metering systems at Hafslund Network’s more than 560,000 customers by two years, until 1 January 2019. “This important decision provides the lead time needed to select sound technical solutions, plan operations carefully, implement this major project in a cost-effective manner, and deliver excellent metering performance for our grid customers,” says Hafslund CEO Finn Bjørn Ruyter.

Read Hafslund’s first-quarter 2013 report at: www.hafslund.no/rapport (http://www.hafslund.no/rapport).

Hafslund ASA
Oslo, 7 May 2013

For further information, please contact at Hafslund:

Heidi Ulmo, Chief Financial Officer, tel: +47 909 19 325, email: heidi.ulmo@hafslund.no

Johan Chr. Hovland, SVP Corporate communications and Public Affairs, tel: +47 917 63 491, email: johan.hovland@hafslund.no

Morten J. Hansen, Financial Director contact: tel: +47 908 28 577, email: morten.j.hansen@hafslund.no