Supressed energy prices have resulted in a loss of €161m in Statkraft’s first quarter 2020 results, compared with the same period last year.
Statkraft cited a “significant drop” in energy demand and prices for electricity generated by its assets, which include wind and hydropower, for the reduction in profit.
The company recorded a Nkr2.7bn (€242m) decrease in earnings before interest and tax (EBIT) in the first quarter of this year, despite a 10% increase in production from its wind and hydropower assets.
EBIT was Nkr4.1bn in the first quarter of 2020 compared with Nkr6.8bn in the first quarter of 2019.
In the first quarter of this year the average Nordic system price was €15.4 per megawatt-hour, a decrease of 67% compared with the same quarter in 2019.
Low fuel prices, a “significant” hydrological surplus and low demand due to a mild winter combined with the outbreak of Covid-19 have put pressure on Nordic power prices, said the producer.
Statkraft said changes in the energy market outlook led to “impairments of wind power assets in the Nordics of Nkr2.6bn”, broken down as a Nkr1.3bn impairment to its wind assets in Fosen, Norway, and a Nkr1.3bn impairment to its wind assets in Norrland, in Sweden.
The company’s Nordic wind and hydropower portfolio generated 17.7 terawatt-hour in the first quarter of this year, an increase of 1.7TWh compared with the same period last year.
“Our market activities continue to deliver strong results. Overall, we are satisfied with the underlying EBIT considering the low Nordic power prices”, said Statkraft chief executive Christian Rynning-Tonnesen.
Due to Covid-19 Statkraft has halted construction work at Tidong hydropower project in India, Los Lagos hydropower project in Chile and Windy Rig wind power project.
“Safe operations and delivering a reliable supply of power and heat to society, remains a top priority for Statkraft,” added Rynning-Tonnesen.