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First-quarter 2010 presentation to analysts
Hafslund ASA
7 May 2010
Christian Berg, CEO
s.2
1. Powermarket and prices
2. First-quarter 2010 results
3. Additional information
s.3
1. Powermarket and prices
2. First-quarter 2010 results
3. Additional information
Extreme spot prices during some winter 2009/2010
periods
* North of Møre og
Romsdal and Sør-
Trøndelag (price areas NO3 and NO4) had the
same spot price as
Sweden during highest-
price delivery hours.
s.4
EUR
Cold, dry weather and high power consumption
These weather and hydrologic factors lead to higher power prices but do not fully explain
the price peaks in winter 2009/2010.
s.5
2
2,4
2,8
3,2
3,6
4
49 51 1 3 5 7 9 11 13
Vinter 2010 Vinter 2009
Vinter 2008 Vinter 2007
Vinter 2006
-45
-40
-35
-30
-25
-20
-15
-10
-5
0
16. des. 15. jan. 14. feb. 16. mar. 15. apr.
Hydrologisk ressurs mot normalt
-12
-10
-8
-6
-4
-2
0
2
4
1. des. 31. des. 30. jan. 1. mar. 31. mar.
Temp mot normalt i Norden
(1 uke glidende snitt)
Nordic temperatures vs. normal
(1 week rolling average)
Hydrologic resources vs. normal Winter 2010
Winter 2008
Winter 2006
Winter 2007
Winter 2009
Statnett reports on price peak causes
• Very limited access to Sweden’s nuclear power.
• Some production facilities in Denmark and mid-
Norway were not in operation.
• Extremely cold weather drove high consumption
despite economic downturn.
• Limited transmission capacity in Nordic grid.
• Little price sensitivity among consumers (demand
curve) at prevailing power prices.
s.6
Record winter power consumption in Norway despite general economic downturn
Record winter power consumption in Norway despite general economic downturn
:
Limited Swedish nuclear power availability
Availability
17 December 2010
s.7
MWh
50%
100%
II
0%
Availability
8 January 2010
MWh
50%
100%
II
0%
Corresponds to a loss of 4550 MW (on 17 Dec.) and 3100 MW (on 8 Jan.) of
power that would normally be available.
Source: Econ Pöyry
Examples:
Year
# units
reporting
Unit
capability
factor (%)
1990 373 77,2
1995 410 81,5
2000 420 85,9
2004 430 87,1
2005 429 86,8
2006 435 87,4
2007 433 85,7
2008 437 86,3
Output capability at nuclear
power plants worldwide (as a
percent of total capacity):
Source: WANOWorld Association of Nuclear Operators
Limited transmission capacity in Nordic grid
NO3
NO1
NO4
DK1
SE
FI
DK2
NO2
NO5
• Good transmission capacity
between Sweden and mid- and
northern Norway resulted in NO3
and NO4 having the same price
peaks as Sweden.
• Transmission capacity restrictions
resulted in significantly lower NO1
spot prices.
s.9
1. Powermarket and prices
2. First-quarter 2010 results
3. Additional information
s.10
Highlights — first quarter 2010 (excluding REC profit effect)
• Operating profit from operational businesses: NOK 511 million (excl. REC), up 12 percent from 1Q
2009.
• Record-high demand by Hafslund’s Power Sales and District Heating customers in 1Q 2010.
• Challenging market conditions for Power Sales.
• Power Generation sales price: NOK 0.457 per kWh, up 47 percent from 1Q 2009.
• Network business: profit growth continues.
• REC investment: value decline results in NOK 1 244 million charge against Hafslund Group
operating profit.
• Cash flow from operations before change in working capital: NOK 532 million (1Q 2009: NOK 310
million).
s.11
Operating profit — first quarter 2010 (excl. REC)
51192549
137
123
167
0
100
200
300
400
500
600
NOK million
Total Operating
Profit
Other ActivitiesVenturePower SalesNetworkDistrict HeatingPower
Generation
s.12
Operating profit — comparison with 1Q 2009 (excl. REC)
1924
7942
12
75
OtherActivities
VenturePower SalesNetworkDistrictHeating
Power Generation
Q1 09
455
Q1 10
511
• Higher power prices result in Power Generation profit growth.
• Record-high demand for district heating due to low temperatures.
• Continued progress for Network business.
• Strained Power Sales market.
NOK million
s.13
Earnings per share (excluding REC)
3.26 1.71
By quarterNOK
1.34
2008 2009 2010
1.34
0.22
-0.38
0.861.01
-1.68
0.53
2.60
1.81
s.14
Capital employed and return on capital employed
(ROCE) as of 31 March 2010 (excluding REC)
*Rolling average, last 12 months.
2010*
6.3%
2009
6.1%
2008
6.2%
3%
40%
18%
Power Sales
13%
Network
District Heating
Power Generation
19%7%
VentureOther Activities
s.15
Power and CO2 price development
EUR/MWh
EUR/tCO2
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
EUR
Mar-10
Apr-10
Feb-10
Jan-10
Dec-09
Nov-09
Oct-09
Sep-09
Aug-09
Jul-09
Jun-09
May-09
Apr-09
Mar-09
Feb-09
Jan-09
Dec-08
Nov-08
Oct-08
Sep-08
Aug-08
Jul-08
Jun-08
May-08
Apr-08
Nordic spot marketCO2 2011FWD 2011FWD 2014
s.16
Power Generation
• Profit and revenue figures reflect higher power prices compared with 1Q 2009.
• Power generation: 9 percent below normal for the reporting period.
• Operating expenses: NOK 60 million (NOK 51 million) reflect high maintenance activity levels.
• Expansion and upgrade program on schedule.
• Projected 2Q 2010 generation: approximately 860 GWh.
0
100
200
300
0
10
20
30
40
50
270
92
214
163
102
175140
207
167
Q1 10Q4 09Q3 09Q2 09Q1 09Q3 08 Q4 08
øre/kWhNOK million
Q2 08Q1 08
Power priceOperating profit
NOK million Q1 10 Q1 09 2009 2008
Operating revenue 238 153 856 1 001
Operating profit before
depreciation178 102 657 794
Operating profit 167 92 614 748
Sales price (øre/kWh) 45,7 31,0 27,5 31,5
Production (GWh) 520 471 3018 3248
Investments 40 61 165 110
s.17
Power Generation profile
*Normal production = 3,000 GWh based on 10-year average of production, adjusted for capacity improvements.
150 146
260
347
295
329 340
292
220 217
247
175
0
50
100
150
200
250
300
350
GWh
157142
Jan Feb Mar
221
May Jun Jul AugApr DecNovOctSep
20102009 Normal
s.18
District Heating
• High power prices and higher demand resulted in 1Q 2010 revenue growth compared with 1Q 2009.
• Delivered volume: 720 GWh.
• Volume growth: 24 percent due to high consumption and customer-base growth.
• Lower contribution margin per kWh due to high proportion of peak load.
• New delivery contracts signed in 1Q 2010: 75 GWh annual energy outtake.
- 50
0
50
100
150
0
20
40
60
80
-40
111
61
97
-22-43
31
-8
123
Q1 10Q4 09Q3 09Q2 09Q1 09Q3 08 Q4 08
øre/kWhNOK million
Q2 08Q1 08
District Heating priceOperating profit
NOK million 1Q 10 Q1 09 2009 2008
Operating revenue 467 349 747 691
Operating profit before
depreciation152 140 213 226
Operating profit 123 111 91 96
Salesprice (in øre per kWh) 73,0 67,2 60,8 64,9
Production cost (in øre per kWh) 38,4 29,3 27,8 26,1
Gross margin (øre/kWh) 34,6 37,9 33,0 38,9
Production (GWh) 720 582 1 382 1 192
Investments 46 81 397 403
s.19
District Heating — quarterly production mix
ElectricityOile & natural gas Waste & bioHeat pumps
0
100
200
300
400
500
600
700
800
GWh
Q1 10
720
Q4 09
512
Q3 09
98
Q2 09
188
Q1 09
582
s.20
Network
• 2010 income ceiling: NOK 2 759 million, up NOK 298 million from previous year.
• Continued profit growth.
• Stable operations with few service interruptions in a quarter with high grid loads.
• Operating profit includes under income of NOK 45 million (NOK 57 million).
• Quarterly profit: NOK 120 – 140 million throughout 2010.
Operating profit development
137
179
108112
9595
707384
0
50
100
150
200
Q1 08
NOK million
Q1 10Q4 09Q3 09Q2 09Q1 09Q4 08Q3 08Q2 08
NOK million Q1 10 Q1 09 2009 2008
Operating revenue 1 396 906 3 385 3 352
Operating profit before
depreciation274 231 1 035 868
Operating profit 137 95 493 322
Investments 56 57 521 541
Hafslund Network — Norway’s most reliable
power grid
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
2006 2007 2008 2009
Number of service interruptions
Norway excl. HafslundNorwayHafslund
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
2006 2007 2008 2009
Duration of power outages (in hours)
Norway excl. HafslundNorwayHafslund
Average number of service interruptions per customer
•Source: NVE 2006 – 2008 annual service interruption statistics
•NB: 2009 data not currently available
Average duration of power outages per customer (in hours)
•Source: NVE 2006 – 2008 annual service interruption statistics
•NB: 2009 data not currently available
s.22
Power Sales
Operating profit development
4949
20
43
128
108
-50
41
117
- 100
- 50
0
50
100
150
Q4 09Q3 09Q2 09Q1 09 Q1 10Q4 08
NOK million
Q3 08Q2 08Q1 08
• Revenue growth reflects higher wholesale prices for power contracts traded via Nord Pool and high demand.
• Challenging market conditions.
• A working-capital intensive quarter.
• 683 000 customers including 28 000 new customers in 1Q 2010.
• After-tax profit per customer: NOK 52 (1Q 2009: NOK 145).
NOK million Q1 10 Q1 09 2009 2008
Operating revenues 2 621 1 809 4 787 5 121
Operating profit before
depreciation52 130 248 224
Operating profit 49 128 240 216
Sold volume (GWh) 5 001 4 369 13 238 12 936
s.23
Venture
• Profit reflects improved operations and portfolio development.
• Hafslund Telekom EBITDA: NOK 31 million (1Q 2009: NOK 18 million).
• Capital employed excl. REC: NOK 1.6 billion as of 31 March 2010.
• NOK 52 million agreement to sell Elis shares. Transaction to be completed in May 2010.
• REC value impairment recognized in profit and loss due to significant share-price decline from established cost price.
• REC shareholding: 76.7 million shares or 11.5% stake. Market value: NOK 2.1 billion per 31 March 2010 closing price of NOK 27.80.
• Hafslund will take stand to REC share issue with pre-emptive rights for existing shareholders within the period.
15%
21%
Renewable energi
10%
AMS
Energy efficiency and other investments
Telecom54%
Portfolio composition (excl. REC)
NOK million Q1 10 Q1 09 2009 2008
Operating revenue 130 255 779 889
Operating profit (excl REC) 25 1 (162) 258
REC (1 244) 0 (137) (15 912)
s.24
Other Activities
• Other Renewable Energy
• Start-up of energy recovery plant at Borregaard.
• Total 1Q 2010 production: 66 GWh (28 GWh)
• Challenging bulk waste market and regulatory framework conditions.
• Wood pellets production begins pilot operation in April/May.
• Value growth on interest and currency derivatives boosts financial income by NOK 22 million (NOK 40 million).
NOK million Q1 10 Q1 09 2009 2008
Support (31) (42) (152) (158)
Power trading (3) (24) (10) (15)
Other renewable energy (3) (4) (27) (44)
Real estate 5 3 (0) 16
Billing and customer service 24 19 101 82
Financial derivatives, ass.
comp.17 86 182 (63)
Other 0 (10) (40) (85)
Operating profit other 9 28 54 (267)
s.25
Group cash flow statement
NOK million 1Q 10 Q1 09 ∆∆∆∆ 2009
Pretax profit 405 302 103 670
Depreciation 213 206 7 882
Profit and loss items without liquidity effects (86) (198) 112 (387)
Cash flow from operations 532 310 222 1 165
Change in working capital, etc. (532) 938 (1 470) 717
Total cash flow from operations - 1 248 (1 248) 1 882
Cash flow per share from operations - 6,4 (6,4) 9,6
Net operations and expansion investments (258) (365) 107 (1 617)
Portfolio changes Venture, etc. (22) (14) (8) (21)
Cash flow before financing activities and dividends (280) 869 (1 149) 244
s.26
Group profit and loss account (excluding REC)
NOK million Q1 10 Q1 09 ∆∆∆∆ 2009
Operating revenue 4 895 3 498 1 397 10 670
Gain/loss financial items 25 64 (39) 97
Operating expenses (4 196) (2 901) (1 295) (8 554)
Operating profit before depreciation 724 660 63 2 213
Depreciation (213) (206) (8) (882)
Operating profit 511 455 56 1 331
Interest expences (104) (131) 27 (526)
Market value change loan portfolio (1) (21) 20 (135)
Financial expenses (105) (153) 47 (661)
Pre-tax profit 405 302 103 670
Tax (143) (104) (38) (336)
Results discontinued operations - - - -
Profit after tax 262 198 65 335
-
Majority's share of profit (971) 197 (1 169) 202
Earnings per share (EPS) in NOK 1,34 1,01 0,33 1,71
s.27
Group balance sheet
NOK millioner 31.03.2010 31.12.2009 ∆∆∆∆ 31.03.2009
Intangible assets 2 299 2 288 11 2 330
Fixed assets 18 880 18 809 72 18 148
Financial assets 3 481 4 737 (1 256) 5 514
Accounts receivables and inventory 3 996 2 773 1 223 3 082
Cash and cash equivalents 828 311 517 989
Assets 29 484 28 918 566 30 063
Equity (incl. Min. int.) 10 126 11 154 (1 028) 12 134
Allocation for liabilities 3 362 3 287 74 3 157
Long-therm debt 10 908 9 805 1 104 8 562
Other currently liabilities 2 413 2 741 (328) 3 384
Short-term debt 2 675 1 931 744 2 827
Equity and liabilities 29 484 28 918 566 30 063
Net interest-bearing debt 11 873 11 601 273 10 548
Equity ratio 34 % 39 % -4 % 40 %
s.28
Hafslund: helping meet tomorrow’s energy demand
• 20% of energy derived from renewable energy sources
• 20% reduction in climate gas emissions
– (30% if international agreements are reached)
• 20% cut in energy consumption via measures that enhance energy efficiency
We need an energy revolution in Europe now, through 2020 – and beyond
We need an energy revolution in Europe now, through 2020 – and beyond
20
20
20
s.29
1. Powermarket and prices
2. First-quarter 2010 results
3. Additional information
s.30
Capital structure development
50,7
53,854,4
0
2
4
6
8
10
12
0
10
20
30
40
50
60
Equity ratio in %NOK billion
Q1 10
34,3
11,9
Q4 09
38,1
11,6
Q3 09
40,0
11,2
Q2 09
40,0
10,7
Q1 09
40,0
10,6
Q4 08
40,3
11,4
Q3 08
10,3
Q2 08
9,9
Q1 08
9,4
Equity ratioNet interest-bearing debt
s.31
Loans — portfolio data
Debt maturity profileNOK million
Loans at maturity, next 12 monthsNOK million
500
3.000
2.500
2.000
1.500
1.000
0
2019201820172016201520142013201220112010
Other loansBondsCertificate loans
500
1.500
1.000
0
MarFebJanDecNovOctSepAugJulJunMayApr
Other loansBondsCertificate loans
Portfolio data
Q1 10 Q4 09 ∆∆∆∆
Bonds 45 % 50 % -5,0 %
Certificate loans 18 % 18 % 0,0 %
Other loans 36 % 32 % 4,0 %
Q1 10 Q4 09 ∆∆∆∆
Nominal value - market value
of loans(164) (163) (1)
Market value interest rate
swaps(33) (55) 22
Average interest incl.
derivatives4,0 % 4,0 % 0,0 %
Proportion of loan portfolio
with fixed interest39 % 42 % -3,0 %
Loans at maturity next quarter
(NOK million)1 489 1 541 (52)
Unused drawing facilities (NOK
million)3 612 4 558 (946)
s.32
Hafslund Power Sales in Q1 2010: 4,984 GWh =
13.3% of total Norwegian consumption
Hafslund Power Sales
GWh
Norway’s gross general consumption of electricity*
GWh
* Gross general consumption encompasses gross consumption (excl. electro-boilers and pumped storage), which includes households and agriculture, services, wood processing, mining and other industries (excl. Power-intensive). Source: NVE
0
1 000
2 000
3 000
4 000
5 000
6 000
Q4 09Q3 09Q2 09Q1 09
201020092008
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
Q4 09Q3 09Q2 09Q1 09
201020092008
s.33
Power Generation – Glomma waterway flow
• Q1 2010 production: 9% below normal for the reporting period.• Maximum capacity utilization: 940 m³/second.
• Projected 2Q 2010 production: about 900 GWh, providing normal reservoir levels and precipitation.
0
500
1 000
1 500
2 000
m3/sec.
DecNovOctSepAugJulJunMayAprMarFebJan
Slukeevne2010 2009
s.34
Shareholders (as of 31 March 2010)
Merk: Antall 1.000 aksjer
# ShareholderClass A shares
held
Class B shares
heldTotal Ownership
Share of
voting rights
Shareholding in thousands
1 City of Oslo 67 525 37 343 104 868 53,7 % 58,5 %
2 Fortum Forvaltning AS 37 853 28 706 66 559 34,1 % 32,8 %
3 Østfold Energi AS 5 201 4 5 205 2,7 % 4,5 %
4 Odin Norden 55 2 358 2 413 1,2 % 0,0 %
5 MP Pensjon 1 564 1 564 0,8 % 0,0 %
6 Odin Norge 1 244 1 244 0,6 % 0,0 %
7 Hafslund ASA 451 451 0,2 % 0,0 %
8 AS Herdebred 107 271 378 0,2 % 0,1 %
9 Folketrygdfondet 352 352 0,2 % 0,0 %
10 Danish Invest, Norwegian shares 311 311 0,2 % 0,0 %
Total, 10 largest shareholders 110 741 72 604 183 345 93,9 % 95,9 %
Other shareholders 4 687 7 154 11 841 6,1 % 4,1 %
Total 115 428 79 758 195 186 100 % 100 %
s.35
Key figures
Group YTD 10 YTD 09
Capital matters
Total assets 29 484 30 063
Captial employed 25 257 25 812
Equity 10 126 12 134
Market capitalization 13 428 10 926
Equity ratio 34 % 40 %
Net interest-bearing debt 11 873 10 548
Profitability excl. REC
Profit after tax 262 198
Earnings per share (EPS) 1,34 1,01
Cash flow per share - 6,4
Power Generation YTD 10 YTD 09
Capital employed 4 342 4 172
Sales price (øre/kWh) 45,7 31,0
Production volume (GWh) 520 471
District Heating YTD 10 YTD 09
Capital employed 4 201 3 876
Sales price (øre/kWh) 73,00 67,2
Sales volume (GWh) 720 582
Network YTD 10 YTD 09
Capital employed 9 275 9 094
Annual Income ceiling 2 759 2 461
NVE-capital (regulatory) 6 256 6 024
Power Sales YTD 10 YTD 09
Capital employed 3 100 2 116
Total volume (GWh) 501 4 369
Venture YTD 10 YTD 09
Capital employed exl REC 1 557 1 700Market value REC 2 132 4 104
Definitions
Items Definition
Group
Capital employed Equity + Net interest-bearing debt + Net tax positions
Equity ratio (in%) (Equity incl. Minority interests / Total assets) X 100
Earnings per share Profit after tax / Average no. of shares outstanding
Cash flow per share Net cash from operations / Average no. of shares
Return on equity Result after tax / Average equity (incl. Minority interests)
Return on capital employed Operating profit / (Average equity + Net interest-bearing debt + Net tax positions)
Power generation
Mean production Average power generation over the past 10 years.
Investor information
• Additional information is available from Hafslund’s website:– www.hafslund.no
– You can subscribe to Hafslund press releases
• Group SVP Treasury and CFO, Gunnar Gjørtz
– Tel: +47 922 17 200
• SVP Communications, Karen Onsager
– Tel: +47 920 87 007
• Financial Director, Morten J. Hansen
– Tel: +47 908 28 577
www.hafslund.no
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