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 Group reported a profit after tax of NOK 171 million in the first quarter of 2014 (NOK 84 million), which was lower than the underlying profit.
The Group's operating revenues in the first quarter of 2014 was NOK 1 324 million, compared to NOK 1 261 million for the same period in 2013. The increase is partly due to higher tariff revenues as a consequence of an adjusted tariff strategy, somewhat offset by a reduction in energy components due to lower energy prices and a reduction in transmission losses. In addition, congestion revenues were higher, mainly due to higher price differences in Norway.
The Group's operating costs totaled NOK 1 031 million in the first quarter of 2014 (NOK 1 089 million). The reduction was mainly due to lower system services costs, transmission loss and wage and staff costs, somewhat offset by an increase in depreciation and write-downs.
Statnett is planning and implementing major development projects. The Statnett Group invested NOK 1 251 million in the first quarter of 2014, compared to NOK 919 million for the same period in 2013.
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 1 370 million in the first quarter of 2013 to NOK 1 552 million in the first quarter of 2014. If the total revenues from grid operations for one year diverge from the permitted revenue, so-called higher or lower revenue will occur. Higher/lower revenue will level out over time through adjustment of future grid tariffs. In the first quarter of 2014, Statnett's lower revenue amounted to NOK 261 million, compared to higher revenue of NOK 158 million in the first quarter of 2013. Accumulated higher revenue including interest was NOK 2 163 million at the end of the first quarter of 2014. The reduction is in line with the plans to reduce accumulated higher revenue over several years.
Statnett's Grid Development Plan forms the basis for the next generation central grid and power system, which will be completed by 2030. Statnett will invest considerably in new capacity in the main grid during the next decade. Extensive construction activity is ongoing, and several projects will be completed in 2014 and the following years. Furthermore, Statnett is working to realize the construction of interconnectors to Germany and the UK, which are scheduled for completion in 2018 and 2020 respectively. The investment program aims to maintain the future security of supply, contribute to value creation and pave the way for better environmental solutions in Norway.
Chief Financial Officer
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