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 224 million in the third quarter of 2014 (NOK 87 million), and NOK 723 million for the first three quarters of 2014 (NOK 151 million). The reported profit after tax was lower than the underlying profit for both the quarter and the first nine months of 2014. 

The Group's operating revenues in the third quarter of 2014 was NOK 1 361 million, compared to NOK 1 105 million for the same period in 2013. Total operating revenues for the Statnett Group for the first three quarters of 2014 amounted to NOK 4 137 million (NOK 3 490 million). The increase for the first three quarters of 2014 was due to both higher tariff revenues and higher congestion revenues.

The Group's operating costs totaled NOK 991 million in the third quarter of 2014 (NOK 922 million). The increase was mainly due to higher costs for system services and higher depreciation. Operating costs for the first three quarters of 2014 amounted to NOK 2 959 million (NOK 3 114 million). The reduction for the first three quarters of 2014 was mainly due to lower costs for system services, transmission losses, as well as other operating costs.   Statnett is planning and implementing major development projects. The Statnett Group invested NOK 4 227 million in the first three quarters of 2014, compared to NOK 4 465 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 3 982 million for the first three quarters of 2013 to NOK 4 470 million for the first three quarters 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. The lower revenue for the first nine months of 2014 amounted to NOK 493 million (lower revenue of NOK 620 million). Accumulated higher revenue including interest was NOK 1 952 million at the end of the first three quarters of 2014. The reduction is in line with the plans to reduce accumulated higher revenue going forward.

Outlook
Statnett will invest considerably in new capacity in the main grid during the next decade and is in a period of high construction activity and strong growth. Several projects have been commissioned recently and several projects will be completed by the end of 2014 and in the following years. In October 2014, the Ministry of Petroleum and Energy (MPE) granted Statnett foreign trade licences for international interconnectors to Germany (NordLink) and the UK (NSN). The two international interconnectors are scheduled for completion in 2018 and 2020 respectively. The investment program will contribute to greater security of supply and more value creation in Norway. The investment program will also pave the way for increased utilization of renewable energy.

Statnett Q3 report 2014

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