Reports higher net income

In the quarter to the end of March, Agder Energi’s underlying net income was NOK 241 million. The equivalent figure for the same period last year was NOK 173 million.

“Agder Energi’s hedging strategy is designed to ensure more stable and predictable financial results over the long term. In site of a sharp fall in electricity prices, our hedging activities and a lower tax expense meant that the net income of our hydroelectric power business was roughly in line with last year. Meanwhile, quarterly profit at our distribution system business and customer-facing companies was higher”, says CEO Steffen Syvertsen.

He adds that the coronavirus crisis has generated uncertainty in society and for businesses, but that Agder Energi has good hedge positions and is focusing on reducing its cost base.

Selling electricity is Agder Energi’s most important source of revenue. Prices in the electricity market are influenced by factors such as precipitation, temperatures, fossil fuel prices and CO2 quotas. In order to smooth out fluctuations in revenues caused by these factors, Agder Energi sells part of the electricity it generates in advance at a fixed price. This helps to reduce risk and uncertainty.

Helping society to prosper

Agder Energi is responsible for critical infrastructure, and it plays an important role by supplying the clean energy that allows our society to prosper. The current pandemic has really highlighted that.

“We are confident that we have a robust, good power grid capable of supplying electricity to all of our hospitals, home offices and other critical activities. Our operations haven’t been affected by the pandemic, but we have established a dedicated emergency response team that is planning and implementing measures to ensure that we are as well prepared as possible to perform our critical role”, says Syvertsen.

Higher volumes, lower prices

In the first three months of the year, Agder Energi generated 2,579 gigawatt hours (GWh) of clean, renewable energy. That is equivalent to the average annual consumption of around 160,000 households. It is also 13 percent higher than in the same period in 2019, when Agder Energi generated 2,282 GWh.

The average spot price for electricity fell sharply in the quarter to 15.3 øre per kilowatt hour (kWh). In the same period last year the average spot price was 46.8 øre per kWh, so the year-on-year decline was 67 percent.

“We have to go right back to March 2000 to find a time when March electricity prices were lower than this year. We expect electricity prices will be significantly lower in 2020 than in 2019. There is a great deal of uncertainty surrounding the coronavirus situation, which has caused a decline in price expectations for the autumn and beyond. However, our hedging activities mean that realised electricity prices shouldn’t fall as much”, says Syvertsen.

Dividend

The annual financial statements of 2019 were approved by the Board in the board meeting of April 2nd. Due to significant uncertainty about the long term impact of the coronavirus and future electricity prices, the Board decided to delay making a dividend proposal.

The Board has in its meeting of May 7th, after a thorough analysis of the group's financial position, decided to propose a dividend of NOK 612 million. The proposal is in accordance with the owners' dividend policy.

You can find more information in Agder Energi’s quarterly report for Q1 2020.

Contact people:

Steffen Syvertsen, CEO, tel. no. +47 90 92 84 15
Pernille K. Gulowsen, CFO, tel. no. +47 99 15 79 75