Hafslund – Provisional result for the year and result for the fourth quarter of 2015: Solid operations and earnings growth

Hafslund posted EBITDA of NOK 2,920 million in 2015, an improvement of NOK 125 million on the previous year. The profit after tax came in at NOK 1,284 million, up 28 percent on 2014. The improved results were primarily achieved on the back of solid operations in all the business areas, and were achieved despite historically low power prices. The Board proposes a dividend of NOK 3 per share for 2015.

Hafslund posted EBITDA of NOK 796 million for the fourth quarter of 2015, an improvement of NOK 36 million on the same quarter in 2014. Strong results from Heat and Network, more than offset lower year-on-year power production and power prices.

“Both the quarterly and annual result show that the ongoing work on operational improvements across the entire organisation is paying off. It was particularly pleasing to improve our results in a year in which power prices reached their lowest level since 2001,” comments Hafslund CEO Finn Bjørn Ruyter.

After the purchase of the distribution network with 100,000 network customers in Østfold in 2014, Networks now accounts for 50 percent of the Group’s capital employed. EBITDA came in at NOK 403 million for the fourth quarter, and NOK 1,388 million for 2015, improvements of respectively 6.6 and 5.6 percent.

The integration of the acquired networks business in Østfold, which was completed in 2015, is expected to generate an annual synergy effect of NOK 45 million in 2016, rising to NOK 60 million a year following the roll-out of AMS in 2019.

Preparations for the installation of 700,000 smart meters (AMS) are now in full force. Autumn will see the start of the full roll-out of around 1,000 meters a day, which will continue into the second half of 2018.

“The introduction of AMS will make a significant contribution to modernisation and automation of the grid, and provide customers with better information on their own consumption. Together with significant investments in network facilities to cater for population growth in the Østland region, our investments in the networks area will be significantly increased,” confirms CEO Ruyter.

Heat posted EBITDA of NOK 383 million in 2015, up from NOK 277 million in the previous year. The quarterly result also represents a significant improvement on the comparable prior-year period, partly due to an ongoing focus on generating the district heating demanded using the most reasonably-priced available renewable energy sources. The fall in the power price, which is included in the price base for district heating deliveries to customers, was partially offset by hedging activities.

Hydropower posted EBITDA of NOK 428 million in 2015, down from the prior-year figure of NOK 599 million. The decrease was attributable to an almost 5 percent drop in power production, and a spot price for price area NO1 that was NOK 0.05 lower than in 2015. Hedging activities made a positive contribution to the result.

Markets returned EBITDA of NOK 523 million in 2015, an improvement of NOK 39 million on the previous year. EBITDA for the fourth quarter of 2015 totalled NOK 67 million. The result reflects higher power margins, increased sales of benefit products, along with lower operating expenses for the Norwegian power sales business. A number of significant cost-improvement measures were implemented in the Nordic businesses in 2015, while also focusing on establishing a new operating organisation to facilitate customer growth in Sweden and Finland. With a customer growth of 5,000 during last quarter, Markets have 1,050,000 customers at the end of 2015.

In the stock exchange notification of 9 December 2015, Hafslund announced that it had commenced work on a spin-off and potential initial public offering of the Group’s power sales business. A spin-off and a broader ownership base will help to further strengthen the business’ growth opportunities.

“A successful IPO of Hafslund Marked will result in the establishment of two strong energy companies. Hafslund Marked would then be equipped to realise the company’s Nordic growth strategy. Hafslund will continue to pursue organic and structural growth within production and infrastructure for renewable energy, in particular through the ongoing investment projects in Networks, and the new power plant at Vamma,” concludes CEO Ruyter.

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

Hafslund ASA
Oslo, 3 February 2016

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

Head of Finance and Investor Relations, Martin S. Lundby: Tel.: +47 416 14 448, E-mail: martin.lundby@hafslund.no