Low Nordic electricity prices saw underlying pre-tax earnings (EBIT) at Statkraft fall in the third quarter of 2020.
Stakraft reported a drop in EBIT to NOK1.1bn (€98m), in the third quarter, a decrease of NOK900m on the same period last year.
In the third quarter of this year the average Nordic system price was €9/MWh, 74% lower than during the third quarter of 2019.
“Successful price hedging secured satisfactory third-quarter earnings, despite very low Nordic spot prices,” said chief executive Christian Rynning-Tonnesen.
Total power generation for the quarter was 14.5 terawatt-hours (TWh), down 0.4TWh on the previous year.
Output from Nordic hydropower projects was lower during the period, though some of this was offset by higher production at gas and wind generators.
Changes in market outlook helped reverse previous impairments with a net positive effect of NOK 1.3bn, the company said.
A weakening of Norwegian Krone against the Euro led to net financial items of NOK -744m.
A new hedging agreement saw a 15-year financial contract signed in Q3 which contributed NOK2.4bn in pre-payment to boost cashflow in the quarter.
Net profit ended at NOK 1.9bn, an increase of NOK 1.3bn compared with the third quarter of 2019.
“The world needs more renewable energy and Statkraft’s target is to develop 9GW by 2025,” Rynning-Tonnesen said.
“We have ongoing construction projects in renewable energy in Norway, UK, Netherlands, Albania, Brazil, Chile and India, and the project portfolio is constantly growing in our core markets,” he added.
The company is also progressing two wind and two solar farms totalling 330MW secured at Ireland’s recent renewable energy action towards final investment decisions.