OSLO: Norway’s Statkraft, Europe’s biggest hydropower producer, posted a net loss of 1.4 billion crowns ($169 million) in the third quarter as it took hefty impairment charges on its assets due to a weak outlook for power prices.
The state-owned company said on Friday it had taken close to 2.4 billion crowns of impairment charges, with 1.1 billion attributed to hydropower assets in Albania and 585 million crowns to wind power assets in Sweden.
“A fall in fuel prices has led to lower long-term price forecast for a number of power markets. That’s the main reason for impairments of hydro and wind power assets across several countries,” Chief Financial Officer Hallvard Granheim said.
The company also said it had started preparations for selling offshore wind assets in Britain after deciding last year not to invest in new offshore projects because its finances had deteriorated due to persistently low power prices.
Statkraft made a net loss of 3.9 billion crowns in the third quarter of 2015. Earnings before interest, tax depreciation and amortisation (EBITDA) edged up by 700,000 crowns from the third quarter of last year to 2 billion crowns due to stronger Nordic power prices and higher output in Norway.
Nordic power prices averaged 25.2 euros per megawatt-hour (MWh) in the quarter, up 89 percent from the same quarter a year ago followed a return to more normal water levels compared with higher than average levels in the third quarter of 2015. Total power production was also up by 2.2 terawatt hours (TWh) to 13.3 TWh compared with the same quarter last year.
In September, Statkraft started its 73 megawatt (MW) Banja hydropower plant in Albania, and plans to build another hydropower plant there of 185 MW in 2019. The two plants will increase Albania’s power supply by 17 percent, Statkraft said.
The company launched a plan earlier this year to cut its costs by 800 million crowns by the end of 2018 compared with 2015 after Nordic power prices hit a 15-year low last year.
It also said it was considering selling shares in the operational Sheringham Shoal offshore wind farm and the Dudgeon and Dogger Bank offshore wind projects in Britain.
“Going forward we will make sure that our investments are adapted to our financial capacity,” Granheim said.($1 = 8.2744 Norwegian crowns)
