Hafslund – Provisional result for the year and result for the fourth quarter of 2014: Strong result characterised by mild weather and low power prices

Hafslund posted EBITDA of NOK 2,795 million in 2014, an improvement of NOK 349 million against 2013. The improvement in results was primarily due to higher surplus income for Networks, as well as improved margins and sales of benefit products from Markets. High levels of precipitation resulted in record hydropower production. A historically warm year generated low energy demand, resulting in the lowest power prices seen for many years.

“The result for the year shows that Hafslund can also deliver good results in a year of record-low demand for electricity and heat, and the lowest power prices in seven years,” explains Hafslund CEO Finn Bjørn Ruyter.

Fourth-quarter EBITDA came in at NOK 760 million, up NOK 154 million on the comparable prior-year quarter. The redemption of a vendor loan note issued on the sale of the fibre-optics business in 2010 contributed a gain of NOK 52 million.

In 2014 Hafslund’s hydropower plant at Glomma recorded its highest-ever production: 5 percent higher than the previous record set in 2000. Production in the fourth quarter was 26 percent higher than in the fourth quarter of 2013. However, the achieved power price was 0.04 NOK/kWh lower than the previous year, both for the fourth quarter and for the year as a whole.

High temperatures in 2014 meant that district heating production for the year was almost 10 percent lower than in 2013, despite a significant number of new customers being connected to the district heating grid. Energy production in the fourth quarter was slightly higher than the comparable prior-year quarter. Together with operational improvements, this produced a result on a par with the fourth quarter of 2013.

“The power price in the wholesale market for the Oslo market was 0.23 NOK/kWh in 2014. This was accompanied by positive results from active hedge-trading for both Production and Heat. Power price hedging helped to even out the results as intended,” commented CEO Finn Bjørn Ruyter.

Markets posted significantly better results in 2014 on the back of an improved margin and growth in the sale of benefit products. In general, fourth-quarter margins were weaker than the corresponding prior-year period.

Networks posted stronger year-on-year results for both 2014 and the fourth quarter, primarily due to higher surplus income. The above was also in part attributable to lower grid losses and Hafslund’s desire to maintain stable longer-term tariffs. The purchased Networks business in Østfold was merged with Hafslund Nett AS at the end of 2014, and integration work is proceeding according to plan.

“Following the acquisition of the Networks business in Østfold the regulated Networks business accounts for almost half of Hafslund’s capital employed. Networks guarantees Hafslund a stable return in a period marked by low power prices and uncertain economic conditions,” writes the board in the quarterly report.

The Board of Directors has adjusted the wording on Hafslund's dividend policy. The long-term dividend policy for the Group is to pay stable dividends which over time equal to at least 50 percent of annual results. On this basis, the Board proposes a dividend of NOK 2.50 per share for 2014.

You can read the report at www.hafslund.no/reports

Hafslund ASA
Oslo, 4 February 2015

For further information please contact:

Chief Financial Officer (CFO), Heidi Ulmo, Tel.: +47 909 19 325, E-mail: heidi.ulmo@hafslund.no

Senior Vice President Corporate Communications and Public Affairs, Johan Chr. Hovland: Tel.: +47 917 63 491, E-mail: johan.hovland@hafslund.no

Financial Director, Morten J. Hansen, Tel.: +47 908 28 577, E-mail: morten.j.hansen@hafslund.no