Hafslund – Result Q3 2014 – Stable operations – Result impacted by extraordinary impairment

Hafslund posted EBITDA of NOK 656 million for the third quarter, up 4 per cent on the comparable prior-year period. The company is therefore continuing the trend of stable profit development seen over the last three years.

“We are seeing signs that the improvement measures implemented across the organisation are gradually having the desired effect. We are going to realize synergies following the acquisitions of network, and power sales companies, and lay the foundations for further organic growth”, explains CEO Finn Bjørn Ruyter.

The achieved power price was 8 per cent lower than in the third quarter of 2013. Together with slightly lower energy production, this resulted in 14 percent lower EBITDA for Hydropower than in the same period last year.

The third quarter is generally a weak quarter for the Heat business due to high temperatures and low demand for district heating. Hafslund is stepping up its sales activities to connect customers who are due to replace oil heating in Oslo over the next two years. In the third quarter new customers with consumption equivalent to 12 GWh/year were connected to the district heating grid.

An impairment of NOK 127 million was recognised to reflect weakened profitability at the Bio-El Fredrikstad waste-to-energy plant and for the secondary grid at Søndre Nordstrand in Oslo.

"The impairment of the value of Søndre Nordstrand was necessary because the district heating herein is provided on terms other than in the rest of the district heating grid in Oslo. Along with the impairment on Bio-El Fredrikstad it provides a significant negative impact on profit, "says CEO Finn Bjørn Ruyter.

Networks posted EBITDA for the quarter of NOK 345 million, a 21 percent improvement on the comparable prior-year period. The improved result is attributable to a positive non-recurring effect relating to a change in rules for public service pensions. The results contribution in the quarter from the purchased Networks business in Østfold (now Hafslund Nett Øst) was restricted by the effect of integration expenses.

Initiatives to integrate activities and leverage synergies are currently in full swing. The two Networks companies will be merged before the end of 2014. The decision has been taken to bundle management of the entire new networks area at Hafslund’s operating centre in Oslo, and the rollout of the new automated metering systems will be performed as an integrated project for all Hafslund’s Networks customers.

Hafslund Markets posted a strong result in a quarter characterised by low energy demand. The 49 percent hike in the operating result is attributable to higher sales of energy and benefit products. At the end of the quarter Hafslund had around 1.1 million customers, 325,000 of whom were in Sweden and Finland.

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

Hafslund ASA
Oslo, 22 October 2014

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