The underlying result is based on the regulated permitted revenue, whereas the recorded result will depend on stipulated tariffs and congestion revenues. The difference (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 158 million in the fourth quarter of 2015 (NOK 106 million), and NOK 1 103 million in 2015 (NOK 829 million).

The Group's operating revenues in the fourth quarter of 2015 totaled NOK 1 507 million, compared to NOK 1 426 million for the same period in 2014. The Group`s operating revenues for the year 2015 totaled NOK 5 906 million (NOK 5 563 million). The increase in 2015 was mainly due to higher congestion revenues in the Nordic region and on the NorNed-interconnector. This was mainly caused by very low prices in Southern Norway, resulting in major price differences between the connected price areas.

The Group's operating costs totaled NOK 1 327 million in the fourth quarter of 2015 (NOK 1 226 million). In 2015, the operating costs totaled NOK 4 192 million (NOK 4 185 million). In 2015, operating costs were effected by a one-off reduction in personnel costs caused by a move from a defined benefit pension plan to a defined contribution pension plan. Furthermore, costs related to system services and transmission losses were reduced. The cost reductions were offset by higher depreciation.

The Statnett Group invested NOK 5 820 million in 2015, compared to NOK 6 037 million in 2014.

Statnett's higher/lower revenue

Statnett's operating revenues mainly derive from grid operations regulated by the Norwegian Water Resources and Energy Directorate (NVE), which stipulates a cap (permitted revenue) for Statnett's revenues. Permitted revenue increased from NOK

6 054 million in 2014 to NOK 6 236 million in 2015. In 2015, revenues from grid operations were lower than permitted revenue, resulting in a lower revenue for the year. Statnett's lower revenue amounted to NOK 489 million in 2015 (lower revenue of NOK 665 million in 2014). Remaining accumulated higher revenue including interest was NOK 1 346 million at the end of 2015. The reduction is in line with the plans to reduce accumulated higher revenue over several years.

Outlook

Statnett will invest considerably in new capacity in the main grid during the next five years. Extensive construction activity is ongoing. The historically high investment level is driven by the Norwegian society’s need for a stronger grid which will ensure a reliable power supply, facilitate renewable energy projects and industrial and commercial development throughout the country. An updated Grid Development Plan (Statnett's 2015 Grid Development Plan) was published in October. The plan comprises grid projects amounting to about NOK 40-55 billion over the coming five years.

Together with its German and British partners, Statnett has started the construction of the interconnectors to Germany (NordLink) and the UK (NSL). Both projects have high priority and are important for the development and integration of the Northern European power systems. The projects will help ensure security of supply in Norway, Germany and the UK, and balance variations in German and British renewable power production throughout the day. The added power exchange capacity will create value for the Norwegian power system and enhance security of supply. It will also support the increase of renewable energy generation throughout the region and help meet the EU's climate- and energy targets.

Statnett is focusing on maintaining its position as one of the most cost-efficient TSOs in Europe. In 2013, the enterprise established an objective to increase efficiency by 15 per cent-by the end of 2018. The results so far have been good .

Changed financial reporting

From 2016, Statnett will conduct external financial reporting twice a year, instead of quarterly. The decision was made based on an assessment of the nature of the enterprise, which changes very little from one quarter to the next, and that the financial information to the market will be reported satisfactorily. The change is part of Statnett's efficiency improvement programme.

Q4-report 2015.pdf

Contact:
Knut Hundhammer
Chief Financial Officer
Mobile: +47 901 65 299