fourth-quarter and preliminary results 2012 presentation to … · 2013-12-05 · district heating:...

Fourth-quarter and preliminary results 2012 presentation to analysts

Hafslund ASA

7 February 2013

Finn Bjørn Ruyter, CEO

Highlights – the year 2012

• EBITDA: NOK 2114 million (NOK 2235 million exclusive REC in 2011).

• Hydropower sales price: NOK 0.22 per kWh, down NOK 0.10 per kWh from 2011.

• Hydropower generation: 3273 GWh, 6 percent above normal.

• NOK 578 million in extraordinary write-downs and allocations post-tax due to challenging

market conditions within pellets and waste, as well as an ongoing tax dispute.

• Profit after-tax: NOK -52 million (NOK -698 million).

• Board will propose a NOK 2.50 per-share dividend for the 2012 accounting year.

s.2

s.3

EBITDA development: change from 2011

2 114

1 145

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2 200

2012Other

1 071

Markets

90

Network

36

Heat

53

Production

281

2011

MNOK

s.3

Highlights – fourth quarter 2012

s.4

• Satisfying operating profits before depreciation (EBITDA) of NOK 642 million (373 million ex.

REC) in the quarter.

• Achieved power price: NOK 0.27 per kWh - up NOK 0.02 compared to last year.

• Hydropower production 25 percent above normal levels.

• High energy demand due to cold weather in the latter parts of the quarter.

• Network: Stable operations and a profit influenced by high energy delivery.

• Negative cash flow from operations of NOK -659 million, including NOK 1109 million in

increased working capital.

EBITDA for fourth quarter 2012

s.5

NOK million

6422252

305

122

185

EBITDAOtherNetwork MarketsProduction Heat

s.6

EBITDA development: change from Q4 2011

642

207200

250

300

350

400

450

500

550

600

650

Q4 12Other

221

Markets

11

Network

94

Heat

61

Production

47

Q4 11

NOK million

EBITDA core business and power price development

s.7

2 201

1 9882 056

2 2282 304

2 586

2 738

2 8362 852

0

500

1 000

1 500

2 000

2 500

3 000

MNOK NOK/kWh

0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00

Q4 1

2

0.22

Q3 1

2

0.21

Q2 1

2

0.24

Q1 1

2

0.29

Q4 1

1

0.32Q

3 1

1

0.36

Q2 1

1

0.40

Q1 1

1

0.39

Q4 1

0

0.39

Power prices - rolling 12 month EBITDA rolling 12 months

• Power prices and Network’s regulated income ceiling are key value drivers.

– Power price: NOK 0.22 per kWh for most

recent 12 months (2011: 0.32).

– EBITDA change of NOK 360 million upon a

NOK 0.10 per kWh change in power prices.

– NVE interest: 4.2% for 2012 – will increase

approximately 3 percentage points in 2013

due to an adjustment in the regulated-income

model.

Power price achieved by Hafslund’s Hydropower business — 12-month rolling average (in NOK/kWh).

EBITDA 12m rolling Q4 12 ∆ ∆ ∆ ∆ Q4 10

Production 487 -514

Heat 312 -3

Network 1 019 -59

Markets 383 -76

Working capital — seasonal variation

s.8

Working capital and power prices

Power Sales — volume sold

-1 000

-500

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

NOK/kWh

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0.00

NOK million

Dec.12Sep.12Jun.12Mar.12Dec.12Sep.11Jun.11Mar.11Dec.10

Average power priceWorking capital

0

1 000

2 000

3 000

4 000

5 000

6 000

GWh

Q4 12

5 085

Q3 12

2 782

Q2 12

3 334

Q1 12

5 173

Q4 11

4 369

Q3 11

2 700

Q2 11

2 952

Q1 11

5 453

Q4 10

5 246

• Working capital of NOK 587 million at the end of 2012.

• Working capital normally seasonally increases in the fourth quarter due to high energy demand.

• Power price development and level also central for working capital development.

• Working capital is NOK 835 million higher than at the end of 2011:

– Power prices in the latter part of the

quarter relatively higher compared to

corresponding period in 2011.

– High energy demand due to cold

weather towards end of the period

compared to Q4 2011.

Working capital increases interest-bearing debt in the quarter

s.9

0

2

4

6

8

10

12

0

10

20

30

40

50

60

NOK billion Equity ratio in %

Q3 2012

9.6

31%

Q2 2012

9.8

33%

Q1 2012

9.3

33%

Q4 2011

9.3

33%

Q4 2012

10.6

31%

Net interest-bearing debt and equity ratioChange in interest-bearing debt in Q4 2012Amounts in NOK million

Equity ratioNet interest-bearing debt

Net interest-bearing debt 30.09.2012 (9 579)

EBITDA 642

Interest paid (104)

Tax paid (7)

Change in market value of financial instruments (89)

Change working capital (1 109)

Investments (401)

Net interest-bearing debt 31.12.2012 (10 648)

Uncertainty regarding future power prices in the Nordic region

s.10

0,00

0,05

0,10

0,15

0,20

0,25

0,30

0,35

0,40

0,45

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

NOK/kWh

Period averageNordic power price - System

29 NOK/kWh*

*Period average 2013 – 2018 is based on averages of forward prices for SYS on 31 December 2012.

Source: www.nordpoolspot.com and www.nasdaqcommodities.com

Production

s.11

0

50

100

150

200

250

300

350

400

0

200

400

600

800

1 000

1 200

EBITDA per quarter EBITDA rolling 12-months

Q4 12

487

185

Q3 12

83

Q2 12

133

Q1 12

87

Q4 11

138

Q3 11

209

Q2 11

306

Q1 11

116

Q4 10

275

EBITDA rolling 12-monthEBITDA

• Achieved power price of 0.27 NOK/kWh –about equal to the volume-weighted spot price on Nord Pool for the bidding area NO1.

• Hydropower production 25 percent above normal levels for the quarter.

• Production availability: 98.4 percent in the quarter.

• Delayed maintenance due to a high rate of flow.

• Hedge ratio the next six months as of 31.12.12: 39 percent of normal production level.

NOK million Q4 12 Q4 11 Year 12 Year 11

Operating revenue 243 197 755 1 024

EBITDA 185 138 487 769

Operating profit 174 127 442 724

Sales price (NOK/kWh) 0.27 0.25 0.22 0.32

Production volume (GWh) 860 765 3 273 3 134

Investments 15 21 24 57

Hydro power – production and power prices

s.12

211

174160

225

363350

328

247 238220

232

0

50

100

150

200

250

300

350

400

NOK/kWh

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00

GWh

Dec

241

Nov

323

Oct

296

Sep

291

Aug

321

Jul

311

Jun

310

353

May

352

Apr

226

Mar

200

Feb

193

Jan

208

Historical spot prices2012Normal*

*Normal = 3100 GWh based on 10 years of data adjusted for efficiency improvements.

Heat

s.13

312

0

20

40

60

80

100

120

140

160

0

50

100

150

200

250

300

350

EBITDA per quarter EBITDA rolling 12-month

Q4 12

122

Q3 12

41

Q2 12

20

Q1 12

129

Q4 11

61

Q3 11

10

Q2 11

35

Q1 11

152

Q4 10

106


• High demand for district heating due to cold weather in the latter parts of the quarter.

• Gross margin up NOK 0.04 per kWh from last year.

• Of the investments, NOK 108 million relates to new renewable capacity and NOK 27 million to new customer tie-ins.

• New customer tie-ins with an annual outtake of 90 GWh during 2012.

• Gradual hedging of power price exposure in the coming months.


Operating revenue 395 291 1 107 1 120

Gross margin 212 149 597 522

EBITDA 122 61 312 259

Operating profit 91 19 (83) 102

Production volume (GWh) 699 558 1 993 1 829

Gross margin (NOK/kWh) 0.30 0.26 0.28 0.27


District Heating: energy source, unit cost, and contribution margin

s.14

% renewable energy sources (rolling 12m av.)

Waste & biomassmasse

Heat pumps

Pellets

Bio-oil & bio-diesel

Electricity

Oil/natural gas

0

100

200

300

400

500

600

700

50

60

70

80

90

100

GWh

Q4 12

634

Q3 12

166

Q2 12

266

Q1 12

652

Q4 11

%

479

• District Heating price: NOK 0.62 per kWh, up NOK 0.02 per kWh from last year.

• Production cost: NOK 0.27 per kWh –same as Q4 2011.

• An increase in production of 156 GWh compared to Q4 2011 with 93 percentage of renewable energy sources maintained.

• Test run started for 56 MW wood powder fueled boiler plant at Haraldrud, Oslo.

Energy prices (NOK/kWh) Q4 11 Q1 12 Q2 12 Q3 12 Q4 12

Waste & biofuel 0.18 0.19 0.20 0.22 0.19

Heat pumps 0.13 0.13 0.09 0.05 0.13

Biooil & biodiesel 0.61 0.60 0.64 0.00 0.40

Pellets 0.00 0.00 0.00 0.00 0.24

Electricity 0.35 0.37 0.32 0.22 0.34

Oil/natural gas 0.59 0.52 0.62 0.83 0.58

Total fuel cost 0.27 0.30 0.22 0.25 0.27

District heating incl. Distribution 0.60 0.61 0.52 0.48 0.62

Gross contribution margin 0.29 0.28 0.28 0.27 0.32

Heat - production profile and prices

s.15

294267

230

127

88

56 62 6186

139

178

241

0

50

100

150

200

250

300

350 0.65

0.60

0.55

0.50

0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00

GWh

Dec

321

Nov

204

Oct

174

Sep

98

Aug

61

Jul

72

Jun

NOK / kWh

60

May

105

Apr

170

Mar

169

Feb

268

Jan

292

2012 Heat price2011

Network

s.16

1 019

0

50

100

150

200

250

300

350

0

200

400

600

800

1 000

1 200


Q4 12

305

Q3 12

238

Q2 12

239

Q1 12

238

Q4 11

211

Q3 11

248

Q2 11

264

Q1 11

260

Q4 10

246

EBITDA EBITDA rolling 12-month

• Increased transfer income due to high energy delivery results in solid operating profits.

• Stable operations in the quarter with outage penalty (KILE) of NOK 25 million – down NOK 16 million from last year.

• A change in the regulated-income model from 2013 gives an increase in the NVE interest rate of about 3 percentage points compared to 2012.

– 1 percentage point increases the

income ceiling with about NOK 60

million.

– Excess income due to high transfer

volume in the fourth quarter 2012

reduces this effect in 2013.

• Based on planned transfer tariffs and maintenance an increase in operating profits in the region of 15 percent is expected in 2013 compared to 2012.


Operating revenue 1 193 1 033 3 992 4 202

Gross margin 714 600 2 415 2 293

EBITDA 305 211 1 019 983

Operating profits 173 88 515 469


Markets

s.17

383

0

50

100

150

0

100

200

300

400

500

600


Q4 12

52

Q3 12

83

Q2 12

107

Q1 12

142

Q4 11

41

Q3 11

46

Q2 11

65

Q1 11

141

Q4 10

106


• Increased revenue due to increased demand in the latter parts of the quarter.

• Low margins for Power Sales results in weak profits in a normally seasonally good quarter.

• Start-up costs of establishing Sveriges-Energi AB.

• Power Sales’ after-tax profit: NOK 33 per customer in the quarter (Q4 2011: NOK 24).

• A total customer base of 905,000, an increase of 12,000 in the quarter.


Operating revenues 1 738 1 578 5 537 7 275

EBITDA 52 41 383 293

Operating profit 46 36 364 277

Sold volume (GWh) 5 085 4 369 16 374 15 474

Other Activities

s.18

• BioWood Norway

– Operations decided to be shut down as of 21 November 2012 and operations discontinued in February /

March.

– Operating profit of NOK -47 million includes liquidation costs (NOK 20 million) and write-downs (NOK 17

million)

• Embriq’s operating profits includes write-down of AMS software (NOK 20 million) in Sweden due to the operating agreement with Göteborg Energi being discontinued from 1 January 2013.

• Last year’s result of Other includes NOK -166 million in value reduction regarding the former ownership in REC.


Support (28) (48) (67) (133)

BioWood Norway (47) (38) (398) (80)

Embriq (33) (3) (34) (1)

Other 36 (174) 116 (1 014)

Operating profit other (72) (263) (383) (1 228)

Group profit and loss account

s.19

NOK million Q4 12 Q4 11 ∆∆∆∆ Year 12 Year 11

Operating revenue 3 592 3 112 480 11 466 13 704

Cost of energy (2 190) (1 971) (219) (6 830) (9 015)

Gross margin 1 402 1 141 261 4 637 4 689

Gain/loss financial items 51 (139) 190 137 (1 050)

Operating expenses (811) (795) (16) (2 660) (2 494)

EBITDA 642 207 435 2 114 1 145

Depreciation and write-downs (229) (199) (30) (1 259) (803)

Operating profit 413 8 405 854 343

Interest expences (117) (114) (3) (509) (495)

Market value change loan portfolio 11 25 (13) (48) (89)

Financial expenses (105) (89) (17) (557) (584)

Pre-tax profit 307 (81) 388 297 (241)

Tax (114) (115) 1 (349) (456)

Profit after tax 194 (196) 390 (52) (698)

Earnings per share (EPS) in NOK 0.99 (1.01) 2.00 (0.27) (3.58)

NOK million 31.12.2012 30.09.2012 ∆ ∆ ∆ ∆ Q12 31.12.2011 01.01.2013

Intangible assets 2 432 2 440 (8) 2 379

Fixed assets 18 365 18 190 175 18 632

Financial assets 657 613 45 579

Accounts receivables and inventory 3 114 1 845 1 269 2 250

Cash and cash equivalents 223 873 (650) 870

Assets 24 791 23 962 830 24 710

Equity (incl. min. int.) 7 576 7 394 182 8 131 7 290

Allocation for liabilities 3 273 3 124 150 3 205 3 559

Long-term debt 8 422 8 771 (349) 9 047

Other current liabilities 3 119 2 381 738 1 802

Short-term debt 2 402 2 293 109 2 525

Equity and liabilities 24 791 23 962 830 24 710

Net interest-bearing debt 10 648 9 579 1 070 9 321

Equity ratio 31 % 31 % 0 % 33 % 30 %

Group balance sheet

s.20

Implementation ofnew IFRS pensionstandard January

1 expected to reduce equity by NOK 286 million.

Strong focus on core business

Capital employed[MNOK]

45.000

40.000

35.000

30.000

25.000

20.000

15.000

10.000

5.000

0

201220112010200920082007

Heat

Production

Network

Markets

Other businesses

Divestments

Fiber

Other

Central grid plants

Historic organic growth within core business units

Markets

Production

Network

Heat

2007 20121

Customers

(thousands)

1.000

400

600

800

2,0

2,5

3,0

3,5

TWh/yr

500

520

540

560

Customers

(thousands)

0

1

2

TWh/yr

Growth

2007-2012

45% more

customers

7% higher

volume

5% more

customers

90% higher

volume

2013 and

forward

High growth

Upgrades and

green certificates

Increased growth

Increased

customer density

+287.000 customers

+200 GWh

+29.000 customers

+900 GWh

Continued organic growth – Hafslund’s infrastructure located in areas with high population growth

Network

Heat

Production

Markets

Population growth

Summary and outlook

• Annual result for 2012 of NOK -52 million reflects low power prices and extraordinary conditions.

• Achieved power prices of NOK 0.22 per kWh is a decrease of NOK 0.10 per kWh compared to

2011.

• Network with stable operations and profits better than expected due to high energy deliverance in

the fourth quarter.

• Markets has a total of 905 000 customers, a net growth of 26 000 in 2012.

• BioWood Norway decided to be shut down.

• The work on concentrating the operations around the four business segments: Production, Heat,

Network and Markets and to consolidate the position as a leading energy company continues.

• Partial price hedging of the sale of produced energy will be continued to better secure earnings

and to exploit the market outlook.

• Forward prices for electricity for 2013 and 2014 listed at NOK 0.28 per kWh at Nasdaq OMX at

2012 year end.

• New model for calculating the NVE interest rate means approximately 3 percentage points higher

interest rate in 2013 compared to 2012.

s.24

s.25

We deliver the energy solutions and infrastructure of the future

Additional analytic information

Earnings per share

s.27

-2.01 -3.58 -0.27

2010 2011 2012

0.67

-3.02

1.09

-1.01-1.61

-2.13

1.17

5.02

0.761.00

-4.98

0.99

By quarterNOK

Capital employed and return on capital employed

s.28

Distribution of capital employed.

As of 31 December 2012 a total of NOK 21.7 billion

43%

26%

Market

8%

Network

Other

2%

Heat

Hydropower

22%

2012 *

4.1%

1.5%

2011*2010 *

2.7%

* 2010 - includes value reduction in REC of NOK -1991 million as well as profit effect from sale of Hafslund Fibernett and write-down of BioWood Norway i.a. net NOK 575 million.

2011 – includes value reduction in REC of NOK -1090 million

2012 - includes write-down and provision regarding BioWood Norway and Bio-El Fredrikstad of NOK -548 million.

Return on capital employed

Group cash flow statement

s.29

NOK million Q4 12 Q4 11 ∆∆∆∆ 2011

EBITDA 642 207 435 1 145

Paid interests (104) (127) 23 (540)

Paid tax (7) (298) 291 (490)

Marketvalue changes and other liquidity adjustments (81) 149 (230) 1 138

Change in working capital, etc. (1 109) (201) (907) 2 260

Total cash flow from operations (659) (271) (388) 3 513

Net operations and expansion investments (418) (396) (22) (1 172)

Sold operations etc. 17 704 (687) 2 647

Cash flow from investments activities (401) 308 (709) 1 475

Cash flow to down payments and interests (1 060) 37 (1 097) 4 988

Capital structure development

s.30

6

8

10

12

14

0

10

20

30

40

NOK billion Equity ratio in %

Q3 12

31%

9.6

Q2 12

33%

9.8

Q1 12

33%

9.3

Q4 11

33%

9.3

Q3 11

33%

9.3

Q2 11

33%

10.2

Q1 11

37%

10.3

Q4 10

35%

13.1

Q4 12

10.6

31%

Equity ratioNet interest-bearing debt

Loans - portfolio data

s.31

Debt maturity profileNOK million

Loans at maturity, next 12 monthsNOK million

293300

0

700

1 000

0

1 000

2 000

3 000

4 000

2021

319

202020192018

1 059

2017

860

20162015

2 086

2014

1 534

2013

3 117

202420232022

Other loansBond loansCertificate loans

408434

179

400

494

300

0

400

800

0

300

DesNovOktSepAugJulJunMai

350

AprMarFebJan

Other loansBond loansCertificate loan

Portfolio data

Q4 12 Q3 12 ∆∆∆∆

Bonds 56 % 54 % 2 %

Certificate loans 8 % 6 % 2 %

Other loans 36 % 40 % -4 %

NOK million Q4 12 Q3 12 ∆∆∆∆

Nominal value - market value of loans (273) (284) 11

Market value interest rate swaps (25) (32) 7

Average interest incl. Derivatives (%) 4.0 % 4.2 % -0.2 %

Proportion of loan portfolio with fixed

interest (%)48 % 48 % 0 %

Loans at maturity next quarter 1 194 800 394

Unused drawing facilities 3 900 4 100 (200)

Power and CO2 price development

s.32

EUR/MWh

EUR/tCO2

0

10

20

30

40

50

60

70

Q4 2009 Q2 2010 Q4 2010 Q2 2011 Q4 2011 Q2 2012 Q4 2012

FWD 2014 FWD 2013 CO2 2012 Nordic spotmarket

EUR

Source: www.nasdaqomxcommodities.com as of 30.09. 2012Nordic spotmarket prices are quartarly average while FWD14, FWD13 and CO2 prices are from last working day in each quarter.

Hydropower – Glomma waterway flow

s.33

0

500

1 000

1 500

2 000

2 500

3 000

m3/sec.

DecNovOctSepAugJulJunMayAprMarFebJan

Max. capacity utilization20112012

• Q4 2012 hydropower production: 25 percent above normal for the quarter.

• Projected Q1 2013 production: about 535 GWh (in line with normal production), providing

normal reservoir levels and precipitation.

Source: Own data / GLB

Key figures

s.34

Group Year 12 Year 11

Capital matters

Total assets 24 791 24 710

Captial employed 21 666 20 919

Equity 7 576 8 131

Market capitalization 8 877 11 321

Equity ratio 31 % 33 %

Net interest-bearing debt 10 648 9 321

Profitability excl. REC

Profit after tax (52) (698)

Earnings per share (EPS) (0.27) (3.58)

Cash flow per share 1.19 18.00

Power Generation Year 12 Year 11

Capital employed 4 776 4 464

Sales price (NOK/kWh) 22 32

Production volume (GWh) 3 272 3 134

Heat Year 12 Year 11


Sales price Heat (NOK/kWh) 54 64

Gross margin (NOK/kWh) 28 27

Sales volume (GWh) 1 993 1 829

Network Year 12 Year 11


Annual Income ceiling 1 846 1 916

NVE-capital (regulatory) 6 149 6 058

Market Year 12 Year 11


- of this working capital 358 (68)

Volume power sales (GWh) 16 374 15 474

Definitions

s.35

Name 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)

Hedge ratio Ratio of the estimated production portfolio hedged in the period (excluding fixed-price contracts)

Shareholders as of 31 December 2012

s.36 Merk: Antall 1.000 aksjer

# ShareholderClass A

shares held

Class B

share heldTotal Ownership

Share of

voting rights

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 Norge 3 735 3 735 1.9 % 0.0 %

5 MP Pensjon PK 5 1 579 1 584 0.8 % 0.0 %

6 Folketrygdfondet 85 865 950 0.5 % 0.1 %

7 AS Herdebred 107 321 428 0.2 % 0.1 %

8 Hafslund ASA 397 397 0.2 % 0.0 %

9 New Alternatives Fund, Inc 328 328 0.2 % 0.3 %

10 Handelsbanken Helsinki 145 175 320 0.2 % 0.1 %

Total, 10 largest shareholders 111 249 73 126 184 375 94.5 % 96.4 %

Other shareholders 4 179 6 632 10 811 5.5 % 3.6 %

Total 115 428 79 758 195 186 100 % 100 %

Investor information

s.37

• Additional information is available from Hafslund’s website:– www.hafslund.no

– You can subscribe to Hafslund press releases

• Group CFO, Heidi Ulmo

– [email protected]

– Tel: +47 909 19 325

• Financial Director and Investor Relations contact, Morten J. Hansen– [email protected]

– Tel: +47 908 28 577

www.hafslund.no

fourth-quarter and preliminary results 2012 presentation to … · 2013-12-05 · district heating:...

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