Half-year Report

Statnett SF

31 August 2023

 

Statnett SF- Results first half-year of 2023

The Statnett Group's underlying profit after tax amounted to NOK 970 million in the first half of 2023, almost double compared to the first half of 2022. At the same time, reduced congestion revenues contributed to a negative profit after tax.

"Statnett delivers a solid underlying result for the first half of the year", says Cathrine Lund Larsen, Executive Vice President and CFO. "At the same time, the market turbulence did diminish during first half of 2023 compared to first half of last year and contributed to a significant reduction in congestion revenues. The accounting result is affected by this".

The increase in underlying profit is mainly due to an increase in permitted revenue and is among other things due to increased grid capital and higher interest rates. The underlying result is based on the regulated permitted revenue, whereas the financial result under IFRS will depend on stipulated tariffs and congestion revenues. The difference, referred to as higher or lower revenue, will level out over time through adjustment of tariffs, ensuring that Statnett's accumulated revenue corresponds with the regulated permitted revenue.

Significant variation in revenues is the main reason why Statnett had a negative profit for the first half of the year despite a solid underlying profit. The Group's operating revenues for the first half of 2023 was significantly reduced compared to the first half of last year. The reduction in operating revenues is primarily due to a decrease in congestion revenues in the first half of 2023. Furthermore, Statnett has repaid parts of the congestion revenue to grid owners in line with the plan to reduce accumulated higher revenue and capped the tariff for 2023.

The Group's operating expenses increased compared to the same period last year. The increase in operating expenses is primarily due to higher costs related to cross boarder compensation and costs related to ancilliary services. At the same time, the transmission losses were reduced mainly as a result of lower power prices.

Sustainability and HSE

Statnett has worked systematically with its own climate emissions over the past year and is now delivering more complete climate accounts and targets in line with the Paris Agreement. Going forward, we will work with science-based targets to cut our own emissions, and in May we sent our commitment letter to the Science Based Targets initiative.

Within HSE, there is a great focus on strengthening safety both for contractors and in our own activities. The number of incidents with serious injury potential has decreased.

Satisfactory security of supply

The water level in Norwegian reservoirs has returned to normal and security of supply is good. Statnett has assessed the power situation to be normal throughout the country in the first half of 2023. There were periods of strong wind at the start of the year, which led to short outages on some power lines, but no longer downtime. The extreme weather Hans hit Norway in August. It had no significant impact on Statnett's installations.

Holding steady in uncertain times

Statnett's strategy is to ensure a power system that enables a zero-emissions society and facilitates the establishment of new industrial activity in Norway. This requires accelerated and efficient expansion of the grid while fully exploiting its existing capacity.

"Statnett has ambitious plans to reinforce and expand today's power grid throughout the country and is substantially ramping up its construction activities to enable this", says Cathrine Lund Larsen.

Statnett's forecasts show that without new power production, Norway will have a power deficit in a few years. Offshore wind power development is an important measure in securing sufficient power production in the years after 2030. In June, the Norwegian Ministry of Petroleum and Energy commissioned Statnett to investigate potential hybrid grid solutions. At the same time, the Ministry assumes that Statnett will build and own hybrid interconnectors for offshore wind power if such solutions are chosen and approved by the Government in the future. The Government has previously given Statnett system operator and planning authority for the offshore grid.

(Amounts in NOK million)	First half of 2023	First half of 2022
Total permitted revenue grid operations	8 204	6 709
Underlying profit	970	596
Total operating revenue	4 014	12 616
Congestion revenue	4 347	8 877
Total operating expenses	6 509	5 911
Profit for the period	-2 539	4 921
Investments	2 752	2 162
Higher(+)- and lower(-)revenue	-4 499	5 545
Accumulated higher revenue at the end of period	4 779	7 955

On 31 August 2023, Statnett's Board of Directors approved the Group's Interim Report for the first half of 2023. The Interim Report is enclosed and available on www.statnett.no.

Contact:

Cathrine Lund Larsen
Chief Financial Officer
Mobile: [phone]

Petter Erevik

Director of Finance

Mobile: [phone]

www.statnett.no

http://www.rns-pdf.londonstockexchange.com/rns/9985K_1-2023-8-31.pdf

 

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