93RX Statnett 30

TIDM93RX

RNS Number : 4271X

Statnett SF

26 August 2022

(26 .08.2022 )

Statnett SF- Results first half of 2022

On 26 August 2022, Statnett's Board of Directors approved the Group's Interim Report for the first half of 2022. The Interim Report is enclosed and available on www.statnett.no .

The Statnett Group's underlying profit after tax amounted to NOK 596 million in the first half of 2022 (NOK 862 million in the corresponding period of 2021). The reduction in the underlying profit is mainly attributable to increased costs for system services, higher grid loss and other operating costs. High congestion revenues (NOK 8,877 million) contributed to a recorded result significantly above the underlying result.

The underlying result is based on the regulated permitted revenue, whereas the recorded result will depend on stipulated tariffs and congestion revenues. The difference, referred to as higher or lower revenue, will level out over time through adjustment of tariffs, ensuring that Statnett's accumulated revenue corresponds with the regulated permitted revenue. The recorded profit after tax for the Group was NOK 4 921 million in the first half of 2022 (NOK 590 million).

The Group's operating revenues for the first half of 2022 amounted to NOK 12 616 million (NOK 5 279 million). Congestion revenues increased to NOK 8 877 million (NOK 1 064 million). The increase is due to large price differences with Sweden and with Europe, as well as within Norway. Tariff revenues were NOK 3,550 million, a reduction of NOK 415 million compared with the first half of last year. The fixed tariff component was reduced by NOK 944 million following Statnett's decision to reduce this component to zero from 1 April 2022. This has been slightly offset by a NOK 306 million increase in the energy component as a result of significantly higher power prices in the first half of 2022.

The Group's operating costs totaled NOK 5 911 million in the first half of 2022 ( NOK 4 240 million). The main reasons were higher costs for system services, transmission losses, increase in other operating costs as well as increased depreciation as a result of an increased asset base. Higher costs for system services amounted to NOK 561 million and are primarily due to high power prices and price differences. Transmission losses rose by NOK 836 million due to higher power prices and a higher volume.

The Statnett Group invested NOK 2 162 million in the first half of 2022, compared to NOK 3 231 million in the first half of 2021. The Statnett Group expects to invest a total of NOK 6 billion in 2022.

Statnett's higher/lower revenue

Statnett's operating revenues predominantly derive from grid operations regulated by The Norwegian Regulatory Authority (NVE-RME), which stipulates a cap (permitted revenue) for Statnett's revenues. Permitted revenue increased from NOK 5 492 million for the first half of 2021 to NOK 6 887 million for the first half of 2022. In the first half of 2022, revenues from grid operations were higher than the permitted revenue, resulting in a higher revenue for the period. Statnett's higher revenue amounted to NOK 5 545 million for the first half of 2022 (lower revenue of NOK 349 million for the first half of 2021). Accumulated higher revenue including interest was NOK 7 955 million at the end of the first half of 2022. Higher/lower revenues are not recognized in the balance sheet.

Outlook

The war in Ukraine has changed the situation in Europe in many areas and significantly affected the European energy system. These are very troubled times for Europe and the rest of the world as energy and security policies have become more intertwined. Statnett is playing a pivotal role in this context.

Europe is meeting the situation with large-scale investments in the construction of new renewable energy and measures to become independent of Russian gas imports. The RePowerEU package of measures was launched by the European Commission in May. In Norway, too, investment in renewable energy will be important for the future development of society. The number of requests for connection to the grid is continuing to rise and currently exceeds the available grid capacity. Statnett's analyses also show that the Norwegian power surplus is expected to reach zero as early as 2026.

Statnett's strategy emphasises the relationship between industrial investments in the coming decades and the need for more power generation and transmission grids. The strategy assumes that Norwegian power consumption could be around 220 TWh by 2050, up from the current level of around 140 TWh. This means that the industrial development requires significant investments in new renewable power production, and Statnett plans to invest NOK 60-100 billion by 2030 to meet the quickening pace of industrialization.

Contact :

Cathrine Lund Larsen

Chief Financial Officer

Mobile: +47 979 75 867

www.statnett.no

http://www.rns-pdf.londonstockexchange.com/rns/4271X_1-2022-8-26.pdf

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