RESULT 2 QUARTER 2001
HAFSLUND GROUP (HNA) RESULT 2 QUARTER 2001
Results for the second quarter 2001
Group operating profit for the second quarter amounted to NOK 76 million (NOK 100 million). Basic operations in the second quarter are positive and have higher achieved power prices and a high volume of generation from the generation activities in Norway along with a good return from power trading activities in this country. However, operating profit is weakened by the negative contribution from power trading in the USA.
Operating profit for the first six months of 2001 was NOK 102 million (NOK 133 million), income after taxes NOK 231 million (NOK 292 million) and earnings per share NOK 2.00 (NOK 2.50).
Income before taxes for the Hafslund group in the second quarter was NOK 33 million (NOK 218 million). Income after taxes for this period was NOK 33 million (NOK 136 million), corresponding to earnings per share of NOK 0.26 (NOK 1.15). This reflects good results from the group's core activities in Norway and power generation of NOK 83 million (NOK 43 million). However, weaker results from power trading in the USA and the investment portfolio diminish the result when compared with the same period last year.
* For report with tables, please follow the link.
Hafslund Generation
In the second quarter, Hafslund's generation activities had an operating profit of NOK 91 million (NOK 67 million). Total power generation in this quarter was 1,630 GWh (1,556 GWh). The operating profit shows continued good earnings in Norway as a result of higher power prices.
Operating profit for Hafslund's generation activities in Norway in the second quarter was NOK 83 million (NOK 43 million). Higher achived sales prices give an additional income of NOK 30 million compared with the same period in 2000. Own power generation in the second quarter was 907 GWh (881 GWh), which is 5% higher than the normal level. The supplementary generation contributes an additional income of NOK 5 million compared with the second quarter of 2000. Average spot price in this period was 20.3 øre/kWh (9.0 øre/kWh). Current power prices along with normal amounts of precipitation throughout the autumn indicate higher earnings in the third quarter compared with last year.
Operating profit from generation activities in the USA in the second quarter was NOK 8 million (NOK 24 million). The negative development is due to lower generation in the hydroelectric plants and the fact that a new power delivery agreement for the chip-fired plant in Greenville is producing significantly lower earnings. Higher chip costs resulting from shortage of chips have reinforced this development. Action is being taken, including towards local authorities, with the aim of improving the frame conditions and earnings of the business. Hafslund's generation in the USA amounted to 43 GWh (45 GWh ) in the second quarter.
Hafslund Power Trading
Operating result for Hafslund's entire power trading activities in the second quarter was NOK -2 million (NOK 55 million), divided between Power Trading Norway with NOK 14 million (NOK 3 million) and Power Trading USA with NOK -16 million (NOK 52 million). Power trading in the USA was resumed in the last half of June.
Hafslund Invest
The business area Hafslund Invest had a total accounting result from investments of NOK -5 million in the second quarter (NOK 154 mill). The accounting result for the first six months was NOK 46 million (NOK 370 million).
Hafslund's financial marketable securities portfolio had a return of -5.6%, in the first six months compared with the Oslo Stock Exchange total index of -3.1%. An unrealised loss of NOK 85 million at the start of 2001 has been taken to income and contributes to an accounting result in the first six months of NOK 29 million. Book value of the financial marketable securities portfolio at the end of the second quarter of 2001 was NOK 732 million which includes an unrealised loss of NOK 67 million.
NOK 16 million has been taken to income in the result from long-term investments in the second quarter (NOK 37 million).
Other transactions
Other business areas, which include Økokraft, corporate staff, investment activities and Nodenet, had an operating result in the second quarter of NOK -13 million (NOK -22 million).
Minority investments in the power sector
Hafslund has total investments in the field of downstream activities in the power sector of NOK 2,600 million, of which the investment in Viken Energinett amounts to NOK 1,865 million. An operating result from associated companies of NOK 14 million has been included in the second quarter and includes depreciation for goodwill of NOK 7 million.
* For report with tables, please follow the link.
Important transactions
· Merger between Hafslund and Viken Energinett
On 13 July it was made public that Hafslund ASA and the City of Oslo have entered a frame agreement on the merger of Hafslund ASA and Viken Energinett AS. Along with the purchase of Oslo Energi AS, the merger will create one of Norway's leading power companies. This is a breakthrough for Hafslund in its work of building new and more value-added structures in the Norwegian energy industry. Through subsidiaries and associated companies, the new company will have approximately 550,000 grid customers and over 700,000 electricity customers. On a group basis the company will have total assets of approximately NOK 17 billion, owner's equity of NOK 5.4 billion, and a turnover of approximately NOK 4.4 billion. The President and CEO of Hafslund, Rune Bjerke, will continue in this post in the merged company, and Bjørn Eidem, currently Chairman of the Board in Hafslund, will be proposed for this position. The City of Oslo and E-CO AS (100% owned by the City of Oslo) will have an ownership interest of 53.7% in the new company. The merger proposal is to be handled in the Oslo City Parliament in the middle of November and is submitted for extraordinary general meetings in Viken and Hafslund in November 2001.
· Letter of intent on the purchase of Oslo Energi
On 12 July 2001, Hafslund ASA drew up a letter of intent with Vattenfall on the purchase of 100% of the shares in Oslo Energi AS. Oslo Energi AS is Norway's largest power trading company for the household market and one of the major players on the business market. The Oslo Energi AS group has 128 employees. Its head office is in Oslo and it has 355,000 customers. In the year 2000, Oslo Energi AS sold approximately 7 TWh and had a turnover of NOK 1,340 million. The operating profit was NOK 73 million before depreciation for goodwill of NOK 69 million, and the profit for the year was NOK 5 million. As settlement, Vattenfall will receive 6,676,287 Class A shares and 4,611,708 B shares in Hafslund, along with a cash payment of NOK 188 million.
· Termination of power delivery agreement
The power delivery agreement with Østfold Energi Produksjon AS linked to the FKF plant has been terminated with effect from 1 July 2001. The termination agreement entails the cessation of the FKF delivery, and an estimated own power generation of approximately 480 GWh is made available for sale on the market in the period up to 31 December 2004.
Balance sheet as of 30 June 2001
Net interest-bearing debt as of 30 June 2001 was NOK 3,869 million, a reduction of NOK 356 million from the turn of the year.
Hafslund's share capital is NOK 115,463,420 divided into 68,290,861 class A shares and 47,172,559 B shares of NOK 1. The price on the Oslo Stock Exchange as of 29 June 2001 was NOK 37.90 for A shares and NOK 30.20 for B shares. Hafslund has 2,335,433 of its own B shares. The total cost price for this holding is NOK 61.5 million.
* For report with tables, please follow the link.