The underlying profit for the first half of 2015 amounted to NOK 823 million (NOK 687 million). The increase is mainly due to a one-off reduction in personnel costs caused by a move from a defined benefit pension plan to a defined contribution pension plan. System services costs have also been reduced. The effect is somewhat offset by lower interest rates which reduces the growth in permitted revenue.    

The underlying profit or loss is based on the regulated permitted revenue, whereas the recorded profit or loss 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 410 million in the second quarter of 2015 (NOK 328 million), and NOK 607 million in the first half of 2015 (NOK 499 million).

The Group's operating revenues in the second quarter of 2015 totaled NOK 1 365 million, compared to NOK 1 452 million for the same period in 2014. The Group`s operating revenues in the first half of 2015 totaled NOK 2 874 million (NOK 2 776 million). The reduction in the second quarter is mainly due to the decrease in congestion revenues in the Nordic region, which is a result of lower price differences and a decrease in tariff revenues from energy components. The increase in operating revenues in the first half of 2015 as a whole was mainly due to higher fixed tariff rates for consumption.

The Group's operating costs totaled NOK 702 million in the second quarter of 2015 (NOK 937 million). In the first half of 2015, the operating costs totaled NOK 1 864 million (NOK 1 968 million). The decrease is mainly due to a one-off reduction in personnel costs caused by a move from a defined benefit pension plan to a defined contribution pension plan. Costs related to system services have also been reduced.

The Statnett Group invested NOK 2 644 million in the first half of 2015, compared to NOK 2 862 million for the same period in 2014. Planned investments total approximately NOK 7 billion for 2015.

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 2 994 million in the first half of 2014 to NOK 3 130 million in the first half of 2015. In the first half of 2015, Statnett's lower revenue amounted to NOK 329 million (lower revenue of NOK 281 million). The lower revenue in the first half of 2015 is due to revenues from grid operations being lower than permitted revenue. Accumulated higher revenue including interest was NOK 1 494 million at the end of the first half 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 decade. Extensive construction activity is ongoing. The historically high investment level is driven by Norwegian society’s need for a stronger grid which will ensure a reliable power supply, facilitate projects in renewable energy and industrial and commercial development throughout the country. An updated Grid Development Plan (Statnett's 2015 Grid Development Plan) has been submitted for hearing consultation and the final plan will be released in October.

Together with its German and British partners, Statnett has commenced the construction phase for the interconnectors to Germany (NordLink) and the UK (NSN Link). The added power exchange capacity will create value 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, based on the 2013 budget. Statnett achieved its objectives for 2014 and there is good progress in the first half of 2015.

Statnett Q2 2015


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