Lower Nordic power prices reduced Statkraft’s net profit to Nkr491m (€46m) in the second quarter of 2020, down from over Nkr3.4bn in the same period last year.
The Norwegian company said Nordic power prices have been under pressure throughout 2020 and were pushed down during the second quarter.
Statkraft chief executive Christian Rynning-Tonnesen (pictured) said: “High snow melting has given exceptionally low Nordic power prices during the spring and summer, leading to a weak second quarter result.”
The company said that a “significant hydrological surplus due to high snow reservoirs” put pressure on the Nordic power prices.
In the second quarter, the average Nordic system price was €5.6 a megawatt-hour, a decrease of 84% compared with the same quarter in 2019.
Total generation was 15.9 terrawatt-hours in the quarter, an increase of 3.6TWh.
The increase in generation was primarily related to Nordic hydropower.
Statkraft recorded a negative underlying EBIT amounting to Nkr100m in the second quarter of 2020.
This was a decrease of Nkr2689m from the corresponding quarter last year.
The decrease was mainly driven by the substantially lower Nordic power prices.
In the first six months of 2020, the company made a net loss of almost Nkr1.4bn, compared with a profit of more than Nkr6.8bn in the same period of 2019.
The fall was mainly down to power prices, but was also hit by impairments and negative currency effects.
Statkraft said that due to the Covid-19 pandemic, three construction projects in the UK, Chile and India were temporarily halted earlier in the year.
“These projects will gradually restart in accordance with the respective national guidelines on Covid-19,” it added.
Stakraft said that its investment capacity has been reduced due to lower expected energy prices, but is still at a significant level.
The growth target of developing 9GW by 2025 remains, however, more projects are likely to be divested at completion.
The investment plan will be adapted to the market development and the company’s commitment to the existing rating target, it said.