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HNA/HNB - Hafslund Q3 2010: Improved performance from all operative units

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Higher wholesale prices, higher profits from grid operations and higher energy output all contributed to a solid result for Hafslund in the third quarter. Operating profit before depreciation (EBITDA) totalled NOK 679 million, up 56 per cent on last year.

At NOK 2.7 billion, sales revenues were 48 per cent higher than last year, largely as a result of higher wholesale prices on Nord Pool, as well as a higher proportion of costs from the overlying grid (Statnett) that were passed on to customers.

 

"The positive trend from the first six months of the year continued into the third quarter," explained CEO Christian Berg. "Underlying operations were strong, and all operative units posted better results this year than in the third quarter last year."

 

Power generation: higher wholesale prices on Nord Pool and high electricity output
The company made an operating profit of NOK 292 million, NOK 117 million higher than last year, largely due to higher electricity prices. A total of 990 GWh was generated in the quarter, 28 GWh more than last year and 17 per cent more than the normal output for the quarter. The power generation business is carrying out an expansion and upgrade programme at the Kykkelsrud and Vamma power plants. This will increase annual generating capacity by around 100 GWh and will considerably extend the lifespan of existing generators. The plants are scheduled for completion in the spring of 2011.

 

District heating: satisfactory result in a seasonally weak quarter
Sales revenues from the district heating business totalled NOK 79 million, an increase of 64 per cent compared with last year. The increase in sales revenues is due to higher district heating prices resulting from higher wholesale electricity prices on Nord Pool and growth in demand for district heating. Seasonally, the third quarter is normally the weakest for the district heating business, with around 10 per cent of normal annual output. Operating profit before depreciation (EBITDA) totalled NOK 6 million, an improvement of NOK 17 million on last year.

 

Grid operations: results continue to improve
The business generated sales revenues of NOK 1,013 million, up NOK 315 million on last year. This rests on an overall revenue ceiling of NOK 2,861 million in 2010, an increase of NOK 400 million compared with 2009. The increased revenue ceiling is largely due to higher compensation for grid losses resulting from higher electricity prices and a higher cost basis for both Hafslund Nett and the grid industry as a whole. In addition, the growth in revenues must be seen in light of a NOK 247 million increase in the amount of costs from the overlying grid (Statnett) that have been passed on to customers. Grid operations made an operating profit of NOK 148 million in the quarter, NOK 40 million more than in the corresponding quarter last year.

 

Electricity sales: More customers and expansion in Sweden boosts results
The electricity sales business generated gross revenues of NOK 1,120 million, up 69 per cent on last year. The increase can largely be ascribed to higher wholesale electricity prices on Nord Pool. At 2,292 GWh, the sales volume is 6 per cent higher than in the corresponding quarter last year. The increase is due to growth in both demand and the number of customers. Operating profit totalled NOK 30 million, NOK 10 million more than last year. This result must be seen in light of the business's expansion in Sweden, which contributed NOK 12 million. Profit after tax corresponds to NOK 26 per electricity customer, compared with NOK 22 in the third quarter last year.

 

Highlights in the third quarter 2010:

  • An EBITDA of NOK 679 million (excluding REC) is 56 per cent higher than last year.
  • All established operative units performed better than last year.
  • Higher wholesale prices on Nord Pool contributed to the power generation business's improved profits.
  • Total energy output of 1,177 GWh, up 9 per cent on last year.

 

 

Hafslund ASA
Oslo, 27 October 2010

 

For further information, please contact:

 

CFO, Finn Bjørn Ruyter:
Mobile: +47 911 38 199
Email: finn.bjorn.ruyter@hafslund.no

 

Financial Director, Morten J. Hansen:
Mobile: + 47 908 28 577
Email: mjh@hafslund.no

 

 

Read a flip-the-page version of the quarterly report at www.hafslund.no/english/report

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)

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