Statkraft reports net loss due to currency weakness and lower power prices

Statkraft, a Norwegian state-owned energy company and one of Europe's largest renewable energy producers, reported Thursday a net loss in the third quarter, primarily due to a lower Norwegian currency against euro, as well as lower electricity prices and output.

The group reported a net loss for the quarter of July-September of 225 millions Norwegian crowns ($20.41million), down from 4,47 billion Norwegian crowns a year ago.

Statkraft recorded a negative exchange rate effect of 2,64 billion crowns compared to a positive level of 1,64 billion crowns a year ago. This reflects a change in the value of group debt, which is mainly denominated by euros.

Due to lower electricity prices, weaker hydropower production and hedge effects, the group's earnings before interest and taxes (EBIT), which were 4.94 billion Norwegian Crowns last year, fell to 3.0 billion Norwegian Crowns.

Birgitte R. Vartdal, Statkraft's CEO, said that the company continues to produce robust results despite lower hydropower prices in Norway and lower production.

The Nordic System benchmark power price was 19.40 euros per Megawatt Hour (MWh) on average in the third quarter. This is down by 28% from the 27.70 euros/MWh of a year ago, according to the report.

According to the company, the fall in prices is due to high water levels, increased wind energy production, and high reservoir levels throughout southern Norway as well as lower European prices.

Statkraft's power generation in the third quarter increased from 13.1 terawatt-hours (TWh) a year ago to 13.3 TWh, mainly due to a 1.7 TWh increase in wind power, while hydropower production decreased by 1.6 TWh.

Vartdal said that Statkraft, in comparison with other Nordic producers has a greater share of hydropower generated by reservoirs, which allows it to conserve water when production costs are higher. $1 = 11.0242 Norwegian Crowns (Reporting and editing by Terje Sollvik and Jane Merriman).

(source: Reuters)