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Hafslund during the 1st quarter: Good results and stable operations

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High wholesale prices for electricity and a strong demand for district heating and electricity positively affected Hafslund's earnings in the 1st quarter, whereas a lower level of power production had a negative effect. The quality of delivery in the grid was good.

Highlights

  • EBITDA of NOK 656 million where operating activities are comparable to the same quarter last year.
  • Strong demand for electricity and district heating during the quarter.
  • Low water inflow resulted in 35 per cent lower hydroelectric power production than is normal for the quarter.
  • The price of electricity is NOK 0.474 per kWh for the power production operation, up 4 per cent from last year.
  • Normal earnings for the power grid during the quarter.
  • High level of cash flow at NOK 2.6 billion during the quarter, of which NOK 1.5 billion represents freeing of capital through sales.
  • The board of directors proposes an extra dividend of NOK 5 in addition to the ordinary dividend of NOK 2.5 per share.

The quarter was characterised by sound underlying operations, a strong demand for electricity and district heating, low hydroelectric power production and good delivery quality in the grid.

The rate of flow in the lower part of the Glomma River, where Hafslund has its power plants, was affected by the low level of reservoir filling and the dry winter weather in Eastern Norway. Hafslund's power production in the 1st quarter was 35 per cent lower than the norm would indicate for this quarter. The operating profit for power production operations was NOK 123 million, a profit decline of NOK 44 million from the 1st quarter 2010. The new 40 MW turbine at Kykkelsrud was put into trial operation on 28 April.

The operating profit for power sales was NOK 117 million, an increase of NOK 68 million against 1st quarter last year. The profit increase was due to an increased number of customers along with a general improvement in profit and profit margin. This corresponds with a profit after tax of NOK 100 per power customer, which is a usual level during a quarter which normally represents between 30 and 40 per cent of annual consumption.

The operating profit for the district heating operations during the 1st quarter was NOK 101 million, a decrease of NOK 22 million against 1st quarter last year, due among other things to higher production costs as a result of the introduction of bio-petroleum as peak load.

The operating profit for grid operations was NOK 131 million, a decrease of NOK 6 million against 1st quarter last year. Delivery quality in the grid has been good without any major power interruptions as a result of failure in Hafslund's grid.

The board of directors proposes to the Annual General Meeting an extra dividend of NOK 5.00 in addition to the ordinary dividend of NOK 2.5 per share. The extra dividend is to be considered in connection with the freeing of capital from sales of companies and assets in 2010 and thus far in 2011.

Hafslund ASA
Oslo, 4 May 2011

For further information, please contact:

Chief Financial Officer, Finn Bjørn Ruyter: Tel: +47 911 38 199,
e-mail: finn.bjorn.ruyter@hafslund.no

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

Senior Vice President, Communications, Karen Onsager: Tel: +47 920 87 007
e-mail: karen.onsager@hafslund.no

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