Hafslund – Result for Q2 2016: Solid result on par with the previous year

Hafslund posted EBITDA of NOK 695 million in the second quarter of 2016, an improvement of NOK 11 million on the same quarter the previous year. The power price for price area NO1 was 25 percent higher than in the comparable prior-year period. Construction of the Vamma 12 hydropower generator is on track, Networks will start the roll-out of smart meters in the early autumn, and Markets and Heat are continuing to gain new customers.

"The continuing improvement in quarterly results shows that the Group’s improvement initiatives are paying off. At the same time, we are selling district heating to more customers, which means that more of Oslo’s heating is being generated from renewable energy sources. We are also in the middle of a major investment in more renewable hydropower production in Glomma and are modernising the power network in order to facilitate energy efficiency improvements, local power production and electrification of the transport sector. All the above are important prerequisites for creating a more environmentally friendly, pollution-free society," explains Hafslund CEO Finn Bjørn Ruyter.

Networks posted EBITDA of NOK 400 million, which is up 20 per cent against the same quarter the previous year. Operating expenses fell by NOK 49 million, partly as a result of an initiated cost-efficiency project. The quarter was also characterised by stable operating conditions and relatively few thunder storms.

"After thoroughly testing our technical solutions, customer communication procedures and actual installations at customers, in August we will start the marathon undertaking of installing new smart meters (AMS) at all of our almost 700,000 network customers. We will install up to 1,000 meters a day before we cross the finishing line in the second half of 2018," explains Hafslund CEO Finn Bjørn Ruyter.

Production posted EBITDA of NOK 147 million, an increase of 26 per cent against the second quarter of 2015. The results improvement is primarily attributable to an increase in the achieved power price, from 0.19 NOK/kWh in the second quarter of 2015 to 0.21 NOK/kWh in 2016.

"Construction of the new Vamma 12 hydropower generator is proceeding according to plan. We have completed three-quarters of the total 400,000 m3 of excavations, and will start concreting works in the autumn. When the plant is finished before the spring flood in 2019 we will have modernised a facility whose oldest turbines have been in operation for more than a century, and which will produce new environmentally friendly hydropower sufficient to cover the annual consumption of 11,000 homes," explains Hafslund CEO Finn Bjørn Ruyter.

The Heat business area posted EBITDA of NOK 5 million in the quarter. The NOK 14 million decrease compared with the previous year is attributable to higher maintenance activities and projects to improve monitoring of the pipe network and reduce the likelihood of leakages, and to cut the time customers are without heat in the event of a leakage. New district heating customers with an annual district heating requirement of 10 GWh were connected during the first half of the year.

Markets posted EBITDA for the quarter of NOK 124 million, a decrease of NOK 13 million compared with the same period the previous year. The result reflects slightly lower power margins, and higher sales and marketing activities. The customer base expanded by 8,000 in the second quarter, bringing the total number of new customers for the year to 30,000.

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

Hafslund ASA

Oslo, 12 July 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 63 491, E-mail: martin.lundby@hafslund.no