2016-02-19 10:00:05 CET
2016-02-19 10:00:05 CET
REGULATED INFORMATION
Fingrid Oyj - Annual Financial Report
Fingrid Group’s Financial Statements Bulletin January–December 2015. Strong financials – investments continued systematically
Helsinki, Finland, 2016-02-19 10:00 CET (GLOBE NEWSWIRE) -- Fingrid Oyj
Financial Statement Release 19 February 2016 at 11.00 EET
Unless otherwise indicated, the figures in parentheses refer to the same period
of the previous year.
Financial development in October - December 2015
-- The Group’s turnover in October - December was EUR 172.5 (148.2) million
-- The Group’s operating profit in October - December was EUR 57.4 (26.5)
million
Financial development in January - December 2015
-- The Group’s turnover in January - December was EUR 600.2 (567.2) million
-- The Group’s operating profit was EUR 162.6 (142.8) million
-- The consolidated profit for the year was EUR 103.6 (106.5) million
-- Cash flow from the Group’s operations, after capital expenditure, was EUR
80.4 (94.9) million
-- Interest-bearing net borrowings totalled EUR 1,026.6(1,046.1) million
-- Capital expenditure totalled EUR 147.5 (129.5) million
-- The equity ratio was 33.5 (31.0) per cent
-- Earnings per share totalled EUR 31,151 (32,028)
KEY FIGURES 1-12/15 1-12/14 change 10-12/15 10-12/14 change
% %
--------------------------------------------------------------------------------
Turnover €M 600.2 567.2 5.8 172.5 148.2 16.4
--------------------------------------------------------------------------------
Capital €M 147.5 129.5 13.9 47.1 42.4 11.1
expenditure,
gross
--------------------------------------------------------------------------------
- of turnover % 24.6 22.8 27.3 28.6
--------------------------------------------------------------------------------
Research and €M 1.8 1.7 5.1 0.7 0.5 38.1
development
expenses
--------------------------------------------------------------------------------
- of turnover % 0.3 0.3 0.4 0.4
--------------------------------------------------------------------------------
Average number 319 305 4.6 315 314 0.3
of employees
--------------------------------------------------------------------------------
Number of 315 313 0.6 315 313 0.6
employees at
end of period
--------------------------------------------------------------------------------
Salaries and €M 21.3 20.5 4.2 5.6 5.5 1.9
bonuses, total
--------------------------------------------------------------------------------
Operating profit €M 162.6 142.8 13.8 57.4 26.5 116.2
--------------------------------------------------------------------------------
- of turnover % 27.1 25.2 33.3 17.9
--------------------------------------------------------------------------------
Profit before €M 129.3 132.9 -2.7 45.1 23.8 89.4
taxes
--------------------------------------------------------------------------------
- of turnover % 21.5 23.4 26.2 16.1
--------------------------------------------------------------------------------
Profit for the €M 103.6 106.5 -2.7 36.2 19.1 89.4
period
--------------------------------------------------------------------------------
Comprehensive €M 109.1 106.1 2.8 37.5 18.5 102.6
income for the
period
--------------------------------------------------------------------------------
Return on % 8.7 7.6
investments
(ROI)
--------------------------------------------------------------------------------
Return on equity % 15.0 16.3
(ROE)
--------------------------------------------------------------------------------
Equity ratio % 33.5 31.0 33.5 31.0
--------------------------------------------------------------------------------
Interest-bearing €M 1,026.6 1,046.1 -1.9 1,026.6 1,046.1
net borrowings
--------------------------------------------------------------------------------
Net gearing 1.4 1.6 1.4 1.6
--------------------------------------------------------------------------------
Earnings per € 31,150.79 32,027.89 -2.7 10,872.71 5,739.47 89.4
share
--------------------------------------------------------------------------------
Dividend, Series € 33,686.24 21,655.44
A shares *
--------------------------------------------------------------------------------
Dividend, Series € 16,038.49 16,038.49
B shares *
--------------------------------------------------------------------------------
Equity per share € 213,822 200,568 6.6
--------------------------------------------------------------------------------
Dividend payout % 108.1 67.6
ratio, A shares
--------------------------------------------------------------------------------
Dividend payout % 51.5 50.1
ratio, B shares
--------------------------------------------------------------------------------
Number of shares
--------------------------------------------------------------------------------
– Series A qty 2,078 2,078 2,078 2,078
shares
--------------------------------------------------------------------------------
– Series B qty 1,247 1,247 1,247 1,247
shares
--------------------------------------------------------------------------------
Total qty 3,325 3,325 3,325 3,325
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
*The Board of Directors’ proposal to the
Annual General Meeting
Jukka Ruusunen, President & CEO of Fingrid, on the year 2015:
From an operational point of view, Fingrid had a successful year 2015.
Finland’s national grid achieved excellent operational reliability. Our
ten-year grid development programme for the 2016–2025 period includes
investments totalling EUR 1.2 billion. The focal areas of our investment
programme are currently western Finland, where we are investing roughly EUR 250
million to develop the grid between 2007 and 2016, and the modernisation of the
“Iron Lady” transmission line, which connects eastern and western Finland, by
the year 2020 at a cost of EUR 135 million. We also made decisions on
investments to develop substations in Espoo and in Länsisalmi, Vantaa. This
will help us to improve the supply of electricity and keep system security at a
high level in the capital city area.
Our finances are in good shape, despite significant capital expenditure and
operational development in recent years. Fingrid’s profitability was stronger
than projected. The consolidated turnover amounted to EUR 600.2 (567.2) million
and profit for the financial period to EUR 103.6 (106.5) million. The
exceptionally high congestion income had a positive impact on the result. We
have used our congestion income from past years to maintain cross-border
transmission capacity and for additional investments. We lowered grid fees at
the start of the year, and kept them the same all year long. Due to the
exceptionally high congestion income in 2015, we generated surplus revenue, in
terms of the financial regulation model, for the four-year regulatory period
that ended in 2015. This surplus was taken into account in the grid fees for
2016. Our customers have communicated to us that they appreciate stability in
grid service fees, and with this operating model we are striving for the most
customer-orientated solution possible.
The company’s dividend payout capacity is good, and our grid service fees are
among the lowest in Europe. Fingrid’s credit ratings are among the top company
ratings in Finland. We are also one of the best corporate income tax payers in
Finland. At the end of the year, the Energy Authority published a new financial
regulatory model that will support our long-term operations.
The energy industry is undergoing a great transformation. We are doing our part
to ensure reasonably priced electricity for citizens and industry – now and for
years to come. We are carrying out this work together, in one of Finland’s best
places to work.
Accounting principles
The information published in this report is based on Fingrid’s audited
financial statements for 2015, published in connection with this bulletin.
Financial result
In preparing these consolidated financial statements, the Group has followed
the same accounting principles as in 2014.
The Group’s turnover was EUR 600.2 (567.2) million. Other operating income
totalled EUR 5.2 (4.6) million.
Grid service income totalled EUR 333.0 (326.3) million. A two-per cent
reduction in grid service fees was enacted at the start of 2015. Grid service
income grew slightly compared to the previous year, as grid fees were lowered
in December 2014. Electricity consumption in Finland decreased by 1.1 per cent
(0.8) compared with the previous year. Fingrid transmitted 67.9 (67.1) terawatt
hours of electricity in its grid, which represents 82.5 (80.7) per cent of all
electricity transmitted in Finland. Sales of imbalance power decreased to EUR
137.1 (150.7) million due to lower imbalance power prices. Fingrid’s congestion
income between Finland and Sweden increased significantly, to EUR 86.8 (48.9)
million. The increase in congestion income resulted from the growing area price
difference between Finland and Sweden. Both Finland’s and Sweden’s area prices
declined, but the decline was more pronounced in Sweden. The main reason for
the low price level in Sweden was the high hydropower production in Sweden and
Norway, as well as the growth in subsidised energy production in the Nordic
countries and northern Europe. Congestion income between Finland and Estonia
also increased as a result of the market situation, to EUR 4.2 (2.4) million.
ITC income increased to EUR 15.3 (12.2) million mainly due to increased exports
to Estonia. Cross-border transmission income between Finland and Russia
increased to EUR 11.2 (9.4) million as a consequence of increased exports from
Russia.
Imbalance power costs decreased from the previous year, to EUR 98.2 (107.2)
million, due to lower imbalance power prices. Loss energy costs grew to EUR
68.6 (65.8) million. The average price of loss energy procurement was EUR 48.22
(49.98) per megawatt hours, but the volume of losses grew slightly.
Depreciation costs increased by EUR 94.1 (91.5) million euros as new capital
investment projects were completed. The cost of reserves to safeguard the
grid’s system security decreased to EUR 54.7 (62.4) million. With regard to
reserve costs, the favourable market situation and lower maintenance costs of
Fingrid’s own reserve power plants, which act as rapid-response disturbance
reserves, lowered the procurement costs of frequency-controlled reserves.
Correspondingly, frequency-controlled disturbance reserve costs grew as a
consequence of the problematic spring floods and high volumes of water in the
autumn. Personnel costs grew somewhat and totalled EUR 25.8 (25.0) million.
Maintenance costs, which amounted to EUR 19.2 (18.8) million, remained at the
previous year’s level. ITC costs decreased to EUR 9.4 (10.8) million.
Turnover and other operating income, Jan-Dec/1 Jan-Dec/1 Oct-Dec/1 Oct-Dec/1
€ million 5 4 5 4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Grid service revenue 333.0 326.3 100.8 82.8
Sales of imbalance power 137.1 150.7 37.9 40.5
Cross-border transmission income 11.2 9.4 2.9 3.5
Finland-Estonia congestion income 4.2 2.4 0.8 0.5
Finland-Sweden congestion income 86.8 48.9 22.0 13.1
Peak load capacity income* 7.6 8.0 1.8 2.0
ITC income 15.3 12.2 4.5 3.8
Other turnover 5.1 9.3 1.8 1.9
Other operating income 5.2 4.6 3.0 2.5
--------------------------------------------------------------------------------
Turnover and other income total 605.4 571.8 175.5 150.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Costs, € million
--------------------------------------------------------------------------------
Jan-Dec Jan-Dec Oct-Dec Oct-Dec
/15 /14 /15 /14
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Purchase of imbalance power 98.2 107.2 29.6 31.4
Cost of loss energy 68.6 65.8 17.8 16.9
Depreciation 94.1 91.5 24.2 23.2
Cost of reserves 54.7 62.4 12.6 16.7
Personnel costs 25.8 25.0 6.8 7.3
Maintenance management costs 19.2 18.8 7.9 7.4
Cost of peak load capacity* 7.2 7.8 1.4 1.9
ITC charges 9.4 10.8 2.0 2.6
Other costs 41.3 45.9 11.4 11.3
--------------------------------------------------------------------------------
Costs total 418.6 435.1 113.7 118.7
--------------------------------------------------------------------------------
Operating profit excluding the change in the 186.8 136.6 61.9 32.0
fair value of commodity derivatives
--------------------------------------------------------------------------------
Operating profit of Group, IFRS 162.6 142.8 57.4 26.5
--------------------------------------------------------------------------------
* Peak load capacity income and costs are related to the securing of sufficient
electricity supply during peak consumption hours in compliance with the Finnish
Peak Load Capacity Act.
The Group’s operating profit was EUR 162.6 (142.8) million. Of the changes in
the fair value of electricity derivatives, EUR -24 (6) million was recognised
in the income statement.
Net financial costs in accordance with IFRS were EUR 33.7 (10.7) million,
including a change of EUR 13.3 million negative (10.9 positive) in the fair
value of derivatives.
The consolidated profit for the year was EUR 103.6 (106.5) million. The return
on investments was 8.7 (7.6) per cent and the return on equity was 15.0 (16.3)
per cent. The equity ratio improved and was 33.5 (31.0) per cent at the end of
the review period.
The parent company’s turnover was EUR 592.4 (559.4) million, profit for the
financial year EUR 123.7 (81.0) million and the distributable funds EUR 162.1
million.
By the company’s own calculations, the return according to the regulatory model
that governs grid operations amounts to a surplus of some EUR 60 million for
the 2012–2015 regulatory period. This has been taken into account in the grid
service pricing for 2016, which has been set to generate a corresponding
deficit in 2016.
Investments and maintenance
Fingrid’s grid investment programme promotes the national climate and energy
strategy, improves system security, increases transmission capacity and
promotes the electricity markets. The annual capital expenditure in the grid
has remained extensive.
The company’s total capital expenditure in 2015 amounted to EUR 147.5 (129.5)
million, including a total of EUR 138.4 (117.5) million invested in the
transmission grid and EUR 0.4 (1.0) million for reserve power. ICT investments
totalled EUR 8.4 (11.1) million. A total of EUR 1.8 (1.7) million was used for
R&D projects during the year under review.
At the end of 2015, Fingrid had eight 400 kilovolt substation sites and more
than 370 kilometres of 400 kilovolt power line contracts as well as a
significant number of 110 kilovolt substation and power line projects under
construction.
The replacement of the ageing Ostrobothnian grid system, with its insufficient
transmission capacity, continued in 2016. The 400 kilovolt ring network from
Pori to Oulu, seven new substations and a 400 kilovolt transmission line
spanning 380 kilometres will be completed on Finland’s west coast by 2017. The
projects in Ostrobothnia will secure the supply of electricity in the region
and create the conditions for connecting wind and nuclear power to the grid.
The new transmission connection will also improve the transmission capacity
between northern and southern Finland and thus promote effective electricity
markets. The related Hirvisuo–Pyhänselkä project has proceeded according to
plan. The new 400/110/20 kilovolt substation for Jylkkä in Kalajoki, which is
part of the overall project in Ostrobothnia, has been started and will be
completed in autumn 2016. Two 400 kilovolt series capacitors will be built for
the substation under construction in Hirvisuo. The project will be completed at
the end of 2016.
The major project between Hikiä and Forssa is in the final stages of
completion. The Forssa substation was completed in October and the project will
be fully completed in early 2016. The project involves replacing the aging 110
kilovolt power line that connects eastern and western Finland and which dates
back to the 1920s with new 400 and 110 kilovolt power lines. Of the power line,
230 kilometres has been replaced or is in the process of being replaced, and
the remaining roughly 190 kilometres will be replaced by 2020. In the next
phase, the 68-kilometre-long power line between Lieto and Forssa will be
renewed. The construction work will start up in late 2016 with foundation work
for the transmission line pylons, and the line is expected to be completed in
spring 2018. The upgrading and expansion of the related Lieto substation will
start up in 2016.
In June, the 117-kilometre-long, 110 kilovolt transmission line between
Huutokoski and Kontiolahti was taken into use. The project is valued at some
EUR 15 million.
A number of new investment decisions were made during the period under review.
The main busbar of the switchgear of the 400 kilovolt Alajärvi substation, a
significant substation in the main grid, is being modernised. The total costs
of the projects due for completion in 2017 are estimated at roughly EUR 15
million.
The expansion of the Kristinestad substation will allow hundreds of megawatts
of wind power to be connected to the grid and will improve the reliability of
the electricity network in southern Ostrobothnia. The project, valued at around
EUR 10 million, will be completed in autumn 2017.
An investment to develop the Länsisalmi substation in Vantaa will improve the
supply of electricity into Helsinki and secure functions that are vital to
society in the capital region. Construction work on the investment project,
valued at some EUR 20 million, will begin in 2016 and the project is due for
completion in 2017. The Espoo substation will be developed further. The
investment will secure the electricity supply of western Uusimaa, particularly
the areas of Espoo, Kirkkonummi and Kauniainen. The future investments in Espoo
and Länsisalmi will keep the system security of the capital region’s
electricity supply at a high level, despite the reduction of local electricity
generation.
A decision made in October to modernise the Huutokoski substation will help to
ensure eastern Finland’s electricity supply. The Huutokoski substation near
Varkaus is important for eastern Finland’s system security. In addition,
Fingrid’s reserve power plant, which ensures sufficient electricity in the
event of disturbances to the grid, has been connected to the Huutokoski
substation’s 110 kilovolt switchgear. Construction work on the investment
project, valued at some EUR 12 million, will begin in summer 2016 and the
project will be completed by the end of 2017.
A decision was made on the modernisation of Koria’s 400 kilovolt substation and
the renovation of its 110 kilovolt switching gear. Koria’s 400/110 kilovolt
transformer substation is a central grid node in Southeast Finland. The
project’s investment costs are estimated at EUR 13 million and the targeted
completion is early 2019.
Cross-border connections were a key focus of basic grid maintenance. The goal
is to improve, in particular, the system security of four DC connections. The
implemented measures are part of the company’s multi-year strategic project.
Substation maintenance agreements on cross-border connections were concluded
for the 2016–2020 contractual period with the goal of improving availability
and reliability. Particular attention was paid to ensuring the system security
of our cross-border transmission connections, and multi-year maintenance
agreements were concluded with two service providers. The objective is to
improve the systematic maintenance of cross-border connections and to speed up
the work related to settling disturbances.
Fingrid once again placed at the top in the International Transmission Asset
Management Study (ITAMS). ITAMS is a qualitative study that seeks to find good
operating models for managing grid companies’ assets. Lloyd’s Register carried
out the annual on-site audit for the PAS 55 (Publicly Available Specification)
certification. According to the audit results, Fingrid’s asset management is at
an excellent level.
The multi-year programme to develop the grid information and ERP system (Elvis)
progressed to the second phase of implementation, and the goal is to have the
system fully up and running this year.
Special attention was paid to preventing accidents at work sites. The ongoing
occupational safety development project continued during the year under review.
Its main focuses are occupational safety management, the creation of a virtual
learning environment, and the introduction and further development of mobile
reporting. The accident frequency rate and average severity of workplace
accidents increased in 2015 compared to 2014. A total of 13 (8) absences due to
accidents were recorded among Fingrid’s service providers.
Power system
In 2015, electricity consumption in Finland amounted to 82.5 (83.4) terawatt
hours. A total of 67.9 (67.1) terawatt hours of electricity was transmitted in
Fingrid’s grid, representing 82.5 (80.7) per cent of the total transmission
volume in Finland (consumption and inter-TSO).
Electricity import and production capacity was well sufficient to cover the
peak consumption, which amounted to a maximum of 13,500 (14,288) megawatts.
During the consumption peaks early in the year, electricity production in
Finland totalled approximately 11,200 (12,100) megawatts.
Electricity transmissions between Finland and Sweden consisted mostly of large
imports to Finland. During 2015, 17.8 (18.2) terawatt hours of electricity was
imported from Sweden to Finland, and 0.2 (0.2) terawatt hours were exported
from Finland to Sweden.
The electricity transmission between Finland and Estonia was dominated by
exports from Finland to Estonia, which amounted to 5.0 (3.5) terawatt hours.
Similar to previous years, electricity imports from Russia were at a low level.
Nearly the full transmission capacity was available, however. Electricity
imports from Russia totalled 3.9 (3.3) terawatt hours. Electricity was exported
commercially from Finland to Russia for the first time on 7 June 2015, at the
power rating of 140 megawatts. Previously, the transfer of electricity along
400 kilovolt cross-border transmission lines was only possible in one
direction, from Russia to Finland.
With a transmission reliability rate of 99.9998 per cent, the reliability of
the transmission grid was at an excellent level during the year under review.
The number of disturbances in the Finnish grid was lower than normal during
summer, and at the average level during the rest of the year.
Counter trade Jan-Dec/ Jan-Dec/ Oct-Dec/ Oct-Dec/
15 14 15 14
--------------------------------------------------------------------------------
Counter-trade between Finland and 0.8 7.6 0.2 1.0
Sweden, €M
--------------------------------------------------------------------------------
Counter-trade between Finland and 0.8 0.8 0.0 0.2
Estonia, €M
--------------------------------------------------------------------------------
Counter-trade between Finland's internal 2.2 1.7 0.6 0.0
connections, €M
--------------------------------------------------------------------------------
Total counter-trade, €M 3.8 10.1 0.9 1.2
--------------------------------------------------------------------------------
Reserves required to maintain the power balance of the power system were
procured from Finland, the other Nordic countries, the Baltic countries and
Russia. Countertrade costs totalled EUR 3.8 (10.1) million. Countertrade refers
to special adjustments made in the management of electricity transmission which
are used to eliminate short-term bottlenecks (an area where electricity
transmission is congested) from the grid. Fingrid guarantees the cross-border
transmission it has confirmed by carrying out countertrades, i.e. purchasing
and selling electricity, up until the end of the 24-hour usage period. The need
for countertrade can arise from, for example, a power outage or disruption in a
power plant or in the grid.
An outage in a connection point in the grid caused by a disturbance in
Fingrid’s electricity network lasted an average of 2.1 minutes, which is well
below the ten-year average of 3.3 minutes. The estimated cost of the
disturbances was EUR 3.5 (4.1) million.
Power system operation Jan-Dec/1 Jan-Dec/1 Oct-Dec/1 Oct-Dec/1
5 4 5 4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Electricity consumption in Finland 82.5 83.4 22.1 22.5
TWh
Fingrid's transmission volume TWh 67.9 67.1 17.7 17.5
Fingrid's loss energy volume TWh 1.4 1.3 0.3 0.4
Electricity transmission Finland -
Sweden
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exports to Sweden TWh 0.2 0.2 0.1 0.1
Imports from Sweden TWh 17.8 18.2 4.7 4.1
Electricity transmission Finland -
Estonia
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exports to Estonia TWh 5.0 3.5 1.2 0.9
Imports from Estonia TWh 0.0 0.1 0.0 0.0
Electricity transmission Finland -
Russia
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Imports from Russia TWh 3.9 3.3 1.0 1.4
Electricity market
The average market price of spot electricity on the electricity exchange
(system price) was EUR 20.98 (29.61) per megawatt hour. The price level of
electricity in the Nordic electricity market has been declining for some time,
but at the same time, area price differences have grown. The increase in
congestion income resulted from the growing area price difference between
Finland and Sweden due to the low level of Sweden’s area price. The low price
level can be directly attributed to the low demand caused by the economic
recession and the high hydropower production in Sweden and Norway. The
subsidised production of renewable energy in the Nordic countries and northern
Europe have also affected the market. This type of production has increased
substantially in many countries, and it affects price levels in the entire
region.
In 2015, prices on the Finnish wholesale market were higher than they were in
other Nordic countries. In Sweden, for example, the average price was EUR 8 (5)
lower per megawatt hour than in Finland. This was due to the structure of and
significant deficit of electricity production in Finland, as the completion of
Olkiluoto 3 has been delayed and other electricity production has been shut
down due to unprofitability. Market demand for imports would have been higher
than the cross-border transmission capacity allowed.
Transmission capacity was in full use and limited cross-border trade with
Sweden for more than half of all the hours in 2015, which is historically a
high amount. As a result, Fingrid accrued EUR 86.8 (48.9) million in congestion
income. In addition, the links between Finland and Estonia generated EUR 4.2
(2.4) million in congestion income. Congestion income is used to maintain
cross-border transmission capacity and for additional investments, as is also
required by law.
Imports from Russia remained at the low level of 3.9 (3.3) terawatt hours.
Electricity imports from Russia to Finland have decreased significantly in
recent years, and the hourly import volumes from Russia have varied
considerably. The reduction in electricity trade is attributed not only to
Russia’s capacity mechanism, but also to increased energy prices in the
country. In June, a new cross-border transmission tariff was introduced,
whereby the tariff is dependent on the difference between Finland’s area price
and north-western Russia’s area price. The objective of the new tariff
structure was to boost electricity trade between Finland and Russia
particularly during periods of low price differences. At the end of 2014, an
agreement concerning electricity exports from Finland to Russia was concluded.
The first transmission to Russia took place in June 2015. Previously, it has
only been possible to import electricity from Russia to Finland.
The possibility of an electricity shortage in Finland was prominently featured
in the headlines in 2015. In January, Pöyry Management Consulting Oy released a
study commissioned by Fingrid and other energy industry operators on the
sufficiency of electricity. According to the study, Finland does not, nor will
it in future, generate enough electricity to meet demand during peak
consumption periods. By Fingrid’s estimation, approximately 15,000 megawatts of
electricity is needed during peak consumption on a cold winter’s day. In such
cases, 3,400 megawatts of electricity must be imported from neighbouring
countries. There is not much room for defects among power plants and
transmission connections.
The completion of Olkiluoto 3 will boost capacity towards the end of the
decade, but electricity will need to be imported into Finland during extended
periods of freezing temperatures also in the future. Electricity import
connections and production capacity that exceeds the demand for electricity in
neighbouring countries will, however, be sufficient to cover the deficit, but
the likelihood of short-term consumption limits has grown. Fingrid’s goal is to
increase the transmission connections with Sweden, but that will not happen
until the 2020s. Fingrid already has the capabilities for it.
In spring, on the request of the Ministry of Employment and the Economy,
Fingrid began developing a solution for electronic information exchange in the
markets. The centralised solution, called Datahub, will be realised under a
separate subsidiary. The Datahub will facilitate the processing of measurement
data, simplify and speed up client agreement events, and enhance the
reliability of the service. Data exchange among retail markets is needed in
managing the various business processes of the electricity markets.
The European Union’s first network code was published in August, with the entry
into force of the Capacity Allocation and Congestion Management (CACM) network
code. The entry into force of network codes is a major step towards creating an
internal European electricity market, as it lays the foundation for
establishing common ground rules for promoting effective electricity markets in
Europe. The main players drawing up the network codes are the European
Commission, European transmission system operators and energy sector control
authorities. Fingrid actively participates in this work via ENTSO-E, the
European Network of Transmission System Operators for Electricity.
The Finnish, Norwegian and Swedish TSOs continued with the switchover to shared
Nordic balance settlement. The jointly owned company eSett Oy, which Fingrid
owns one third of, aims to start up operations in October 2016.
Electricity market Jan-Dec/ Jan-Dec/ Oct-Dec/ Oct-Dec/
15 14 15 14
--------------------------------------------------------------------------------
Nord Pool system price, average €/MWh 20.98 29.61 21.92 30.73
--------------------------------------------------------------------------------
Area price Finland, average €/MWh 29.66 36.02 30.59 36.44
--------------------------------------------------------------------------------
Congestion income between Finland and 173.5 97.7 44.1 26.3
Sweden, € million*
--------------------------------------------------------------------------------
Congestion hours between Finland and 47.1 46.1 47.4 41.6
Sweden %**
--------------------------------------------------------------------------------
Congestion income between Finland and 8.4 4.8 1.6 1.0
Estonia, € million*
--------------------------------------------------------------------------------
Congestion hours between Finland and 12.0 9.3 9.1 6.4
Estonia %
--------------------------------------------------------------------------------
* The congestion income between Finland and Sweden and between Finland and
Estonia is divided equally between the relevant TSOs. The income and costs of
the transmission connections are presented in the tables under ‘Financial
result’. Congestion income is used for investments aimed at eliminating the
cause of congestion.
** The calculation of a congestion hour between Finland and Sweden refers to an
hour during which Finland’s day-ahead area price differs from both Sweden’s SE1
and its SE3 area prices.
Financing
The company’s credit rating remained high, reflecting the company’s strong
overall financial situation and debt service capacity. The high credit rating
and good bank and investor relations enable ready access to the debt capital
market and thus minimises the company’s debt refinancing risks and financing
costs. Interest-bearing borrowings totalled EUR 1,143.4 (1,225.4) million, of
which non-current borrowings accounted for EUR 907.2 (962.3) million and
current borrowings for EUR 236.2 (263.0) million.
The company’s liquidity remained good. Financial and cash assets on 31 December
2015 were EUR 116.9 (179.3) million. The company additionally has an undrawn
revolving credit facility of EUR 300 million to secure liquidity and EUR 50
million in uncommitted overdraft facilities.
The counterparty risk arising from currency and interest rate derivative
contracts (receivables) was EUR 11 (28) million. Fingrid’s foreign exchange and
commodity price risks were, as a general rule, fully hedged.
Of the international credit rating agencies, the company’s credit rating was
updated by Standard & Poor’s Rating Services (S&P) and Fitch Ratings. The valid
credit ratings are as follows:
-- On 9 December 2014, Moody’s Investors Service (Moody’s) affirmed the rating
‘A1’ for Fingrid Oyj’s long-term debt and company rating and ‘P-1’ for its
short-term debt and company rating, with a stable outlook.
-- On 15 January 2016, Fitch Ratings (Fitch) affirmed the rating ‘A+’ for
Fingrid Oyj’s unsecured senior debt, ‘A’ for its long-term company rating
and ‘F1’ for its short-term company rating, with a stable outlook.
-- On 26 October 2015, S&P affirmed the rating ‘A+’ for Fingrid Oyj’s
unsecured senior debt and long-term company rating and ‘A-1’ for its
short-term company rating. S&P updated Fingrid’s outlook to positive.
The company signed a five year revolving credit facility agreement of EUR 300
million on 11 December 2015. The facility has two one-year extension options.
The revolving credit facility agreement replaces the EUR 250 million revolving
credit facility signed in 2011.
In 2015, the company issued a three year SEK 1,000 million floating rate bond
to refinance its current loans. The exchange rate risk and interest rate risk
of the SEK-denominated bond are fully hedged.
Share capital and shareholders
The company’s share capital is EUR 55,922,485.55. Fingrid shares are divided
into Series A shares and Series B shares. The number of Series A shares is
2,078 and the number of Series B shares is 1,247. The voting and dividend
rights related to the shares are described in more detail in the notes to the
financial statements and in the articles of association available on the
company’s website.
LocalTapiola General Mutual Insurance Company and LocalTapiola Mutual Life
Insurance Company sold their Fingrid shares to the State Pension Fund. The
transaction was finalised on 9 April 2015.
In a share transaction completed on 7 May 2015, the Finnish State transferred a
total of 443 of its Fingrid shares to the National Emergency Supply Agency. The
State’s total ownership in the company was thus not changed.
In an arrangement completed on 1 July 2015, Pohjola Insurance Ltd transferred a
total of 149 of its Fingrid B Shares to Aino Holdingyhtiö Ky. Also on 1 July
2015, the State Pension Fund sold altogether 181 of its Fingrid B Shares to
Aino Holdingyhtiö Ky.
In an arrangement completed on 25 September 2015, the State Pension Fund and
Elo Mutual Pension Insurance Company invested the majority of their Fingrid B
shares in Aino Holdingyhtiö Ky.
Aino Holdingyhtiö Ky is owned by OP Insurance and pension entities (Pohjola
Insurance Ltd, OP Life Assurance Ltd., OP Pension Fund and OP Pension
Foundation), the State Pension Fund and Elo Mutual Pension Insurance Company.
Number of Of all Of
shares qty shares votes
% %
--------------------------------------------------------------------------------
Shareholders, 31 Dec 2015
--------------------------------------------
------------------------------------
Republic of Finland, represented by the 939 28.24 37.66
Ministry of Finance
Mutual Pension Insurance Company Ilmarinen 878 26.41 11.74
The State Pension Fund 828 24.90 33.20
National Emergency Supply Agency 661 19.88 17.15
LocalTapiola Mutual Pension Insurance 10 0.30 0.13
Company
Pohjola Insurance Ltd 6 0.18 0.08
LocalTapiola General Mutual Insurance 1 0.03 0.01
Company
LocalTapiola Mutual Life Assurance Company 1 0.03 0.01
Imatran Seudun Sähkö Oy 1 0.03 0.01
--------------------------------------------------------------------------------
Total 3,325 100.00 100.00
================================================================================
Share transfers
In a transaction completed on 17 June 2015, Fingrid Oyj sold its shares in
Porvoon Alueverkko Oy to Porvoon Sähköverkko Oy, which is part of the Porvoon
Energia Oy - Borgå Energi Ab Group. The transaction covered Fingrid’s entire
ownership in the company, i.e. 1/3 of all of Porvoon Alueverkko Oy’s shares and
votes. The transaction did not have a significant financial impact.
Personnel and remuneration systems
Fingrid Oyj employed 315 (313) persons, including temporary employees, at the
end of the year. The number of permanent personnel was 282 (282).
Of the personnel employed by the company, 24.4 (23.0) per cent were women and
75.6 (77.0) per cent were men. The average age of the personnel was 44 (44).
During 2015, personnel received a total of 11,794 (9,797) hours of training,
with an average of 37.4 (31.3) hours per person. Employee absences due to
illness accounted for 2 (2) per cent of the total working hours. In addition to
a compensation system that is based on the requirements of each position,
Fingrid applies incentive bonus schemes.
Board of Directors and corporate management
Fingrid Oyj’s Annual General Meeting was held in Helsinki on 14 April 2015.
Helena Walldén, M.Sc. (Tech.) was elected Chair of the Board. Juha Majanen,
Budget Counsellor and Head of the Fiscal Policy Unit of the Ministry of
Finance, was elected Vice Chairman. Other members elected to the Board were
Juhani Järvi (M.Sc. Finance.), Aalto University Professor Sanna Syri, and Esko
Torsti, Head of Non-Listed Investments, Ilmarinen Mutual Pension Insurance
Company.
The Board members until 14 April 2015 were Helena Walldén, Juha Majanen, Juhani
Järvi, Sirpa Ojala and Esko Torsti.
PricewaterhouseCoopers Oy was elected as the auditor of the company, with Jouko
Malinen serving as the responsible auditor.
The Board of Directors has two committees: the Audit Committee and the
Remuneration Committee. As of 14 April 2015, the Audit Committee consists of
Juha Majanen (Chairman), Juhani Järvi and Helena Walldén. The members of the
Audit Committee until 14 April 2015 were Juha Majanen (Chairman), Juhani Järvi
and Helena Walldén.
As of 14 April 2015, the Remuneration Committee consists of Helena Walldén
(Chair), Sanna Syri and Esko Torsti. The members of the Remuneration Committee
until 14 April 2015 were Helena Walldén (Chair), Sirpa Ojala and Esko Torsti.
Jukka Ruusunen serves as President & CEO of the company. Fingrid has an
executive management group which supports the CEO in the company’s management
and decision-making.
A corporate governance statement, required by the Finnish Corporate Governance
Code, has been provided separately. The statement and other information
required by the Code are also available on the company’s website at
www.fingrid.fi.
Internal control and risk management
Fingrid’s internal control is a natural component of the company’s operations
and deals with all those operating methods and procedures whose objective it is
to ensure
• effective and profitable operations that are in line with
the company’s strategy,
• the reliability and integrity of the company’s financial
and management information,
• that assets are protected,
• that applicable legislation, guidelines, regulations,
agreements and the company’s own governance and operating guidelines are
complied with, and
• a risk management to a high standard.
Risk management is planned as a whole with the objective of comprehensively
identifying, assessing, monitoring and safeguarding the company’s operations,
the environment, personnel and assets from various threats and risks. Due to
the nature of the company’s basic mission, risks are also assessed from the
perspective of society in general.
Continuity management is a part of risk management. Its objective is to improve
the organisation’s capacity to prepare and to react in the best possible way
should risks occur, and to ensure the continuity of operations in such
situations.
Well-functioning internal control is founded on good management, a healthy
corporate culture, appropriate procedures and processes, sufficient monitoring
procedures, open and transparent distribution of information, continuous
monitoring and development of functions and processes and independent
verification.
Further information on internal control, risk management and the foremost risks
and factors of uncertainty is available on the company’s website at
www.fingrid.fi.
Board of Directors
The company’s Board is responsible for organising internal control and risk
management, and it approves the principles of internal control and risk
management on an annual basis. The Board decides on the company’s strategic
risks and related management procedures as part of the company’s strategy and
action plan, and monitors their occurrence. The Board decides on the operating
model for the company’s internal audit. The Board regularly receives internal
audit and financial audit reports, as well as a status update at least once a
year on the strategic risks and continuity threats relating to the company’s
operations and their management and occurrence.
Line management and other organisation
Assisted by the executive management group, the CEO is responsible for
executing and steering the company’s governance, decision-making procedures,
control and risk management, and for the assessment of strategic risks and
continuity threats at the company level, and their related risk management.
The heads of functions are responsible for the practical implementation of the
governance, decision-making procedures, controls and risk-management for their
areas of responsibility, as well as for the reporting of deviations and the
sufficiency of more detailed guidelines. Directors appointed in charge of the
threats to continuity management are responsible for drawing up and maintaining
continuity management plans and guidelines, and for arranging sufficient
training and practice.
The CFO is responsible for arranging procedures, controls and monitoring at the
company level as required by the harmonised operating methods of internal
control and risk management. The company’s general counsel is responsible for
assuring the legality and regulation compliance of essential contracts and
internal guidelines, as well as for the procedures these require. Each Fingrid
employee is obligated to identify and report any risks or control deficiencies
she or he observes and to carry out the agreed risk management procedures.
Internal auditor and auditor
The Board decides on the operating model for the company’s internal audit. The
internal audit acts on the basis of plans processed by the Audit Committee and
approved by the Board. Audit results are reported to the object of inspection,
the CEO, the Audit Committee and the Board. Upon decision of the Board, an
internal audit outsourced to an authorised public accounting company acts
within the company. From an administrative perspective, the internal audit is
subordinate to the company’s CEO. The internal audit provides a systematic
approach to the assessment and development of the efficacy of the company’s
risk management, monitoring, management and administrative processes and
ensures their sufficiency and functionality as an independent party. The
internal audit has the authority to carry out reviews and to access all
information that is essential to the audit. The company’s internal audit
carries out risk-based auditing on the company’s various processes.
An authorised public accounting company selected by the general meeting acts as
auditor for the company. The company’s financial auditor inspects the
accounting, financial statements and financial administration for each
financial period and provides the general meeting with reports required by
accounting legislation or otherwise stipulated in legislation. The financial
auditor reports on his or her work, observations and recommendations for the
Board and may also carry out other authorisation-related tasks commissioned by
the Board or management.
Foremost risks and uncertainty factors for society and Fingrid
One of the company’s biggest business risks and the biggest risk where society
is concerned is a major disturbance related to the functioning of the power
system. A major disturbance or other electrical system disruption can cause
significant financial and physical damage to Fingrid and society in general.
Other major risks for Fingrid and society are a loss of confidence in the
electricity market, environmental risks and electricity and occupational health
and safety risks.
The risks to Fingrid’s operations are risks related to the unfavourable trend
in official regulation, capital investments which have become unnecessary - an
unexpected increase in costs or reduction in income, financing risks, personnel
risks, risks related to ICT and data transfer, asset risks and reputation
risks.
Risks to society arising from Fingrid’s operations are unsuccessful timing of
capital investments and long-term restrictions in transmission capacity.
The most significant of the above-mentioned risks to Fingrid are explored in
greater detail in the company’s annual report. Fingrid’s financing risks are
described in more detail in note 35 to the consolidated financial statements
(IFRS). No substantial risks were realised in 2015.
Corporate responsibility
Fingrid’s strategy and its various perspectives form the starting point also
for its corporate responsibility. Key targets have been set by identifying
matters that are essential to Fingrid’s strategy and the company’s basic
operations.
Corporate responsibility is managed as an integrated part of Fingrid’s
management system. Corporate responsibility is a systematic, targeted component
of the company’s basic operations and annual cycle of management. Corporate
responsibility is part of the annual planning of operations and an integral,
strategy-based component in assessing development opportunities and risks and
devising measures for the subsequent year.
Responsible operations are ensured through shared values and, among other
things, Fingrid’s Code of Conduct, which is based on the UN Global Compact
Initiative. Managers and the entire work community ensure that behaviour is in
line with the Code of Conduct. An online induction programme on Fingrid’s Code
of Conduct was introduced in 2015, as well as an external ‘whistleblowing’
channel for reporting behaviour that is in violation of the Code of Conduct.
Responsible behaviour is also promoted throughout the supply chain. Service and
goods suppliers must comply with a Supplier Code of Conduct or with their own
similar code. Fulfilment of the requirements is monitored on a risk basis. The
corporate responsibility standards are also criteria for entry into Fingrid’s
supplier registers, which are in use for regular substation and power line
procurements. In addition, contractual partners are subject to separate
contract conditions related to the use of subcontractors and workforce, and to
occupational safety and environmental matters. In 2015, audits to ensure the
realisation of responsibility requirements were continued on the grid’s work
sites and in the international operating environment.
In order to ensure transparency and comparability, Fingrid reports on its
corporate responsibility in accordance with the international Global Reporting
Initiative (GRI) framework. The reporting complies with the G4 core level
guidelines of the latest GRI G4 framework. Requirements for corporate
responsibility reporting by state-owned companies are also taken into account.
Fingrid continues with the balanced development of responsibility in all its
strategic perspectives and processes, ensuring good leadership and management
of corporate responsibility issues. The goal remains to encourage the
participation of both personnel and the company’s other stakeholders in the
continuous development of practices and procedures.
Environmental matters
Changes to the landscape, restrictions on land use and ecological impacts
caused by power lines, as well as the consumption of natural resources during
the building and maintenance of the grid represent Fingrid’s key areas of
environmental responsibility. Fuel leaks at substations and reserve power
plants may have an impact on soil and water in exceptional circumstances.
When designing, building and maintaining power lines, substations and reserve
power plants, one of Fingrid’s main objectives is to make sure that
environmental and land-use issues are taken into account for the long term.
Fingrid’s principles for reducing its environmental impacts are contained in
the company’s land use and environmental policy, which can be found on the
company website. The environmental impacts of the company’s operations are
carefully assessed, with special attention paid to managing environmental
risks. In 2015, an Environmental Impact Assessment (EIA) was started up on the
power lines required for the connection of the Hanhikivi 1 nuclear power plant
to the grid, and the EIA procedure for the power line project between Hikiä and
Orimattila was concluded. In addition to Fingrid’s personnel, the company’s
contractors and service suppliers participating in grid construction and
maintenance are also engaged in environmental sustainability with the help of
contractual terms, auditing and environmental training.
Environmental aspects are monitored as part of work site monitoring. During the
year under review, the company succeeded in its goal of completing grid
investment projects and maintenance without any environmental deviations. In
questionnaires of landowners after the completion of power line projects,
Fingrid received a general score of good.
Fingrid’s reserve power plants are subject to an environmental permit and
covered by the EU’s emissions trading scheme. A total of 6,697 (10,993) units
(tCO2) of emission allowances were returned, all of which consisted of acquired
emission rights units. Fingrid has not been granted free-of-charge emission
rights for the emissions trade period 2013–2020. No emission rights were
purchased in 2015. Emissions trading had minor financial significance for
Fingrid.
Legal proceedings and proceedings by authorities
On 19 January 2015, the Energy Authority granted Fingrid a licence to operate
the electricity transmission system in the national grid and appointed Fingrid
Oyj as the distribution system operator responsible for the transmission grid.
In its verdict on 29 June 2015, the Supreme Administrative Court rejected
Fingrid’s appeal concerning the Market Court’s decision of 21 January 2013. The
Market Court had rejected Fingrid’s appeal concerning the methods confirmed by
the Energy Authority which are applied in determining the grid owner’s income
from grid operations and payments for transmission service for the 2012–2015
regulatory period. The decision did not have financial impacts on the company.
In its decision of 30 June 2015, the Energy Authority demanded that Fingrid
change its decision of 31 March 2015 on the naming of the grid. Fingrid
appealed this decision to the Market Court on 24 July 2015. This was the first
time a naming decision was made, and it is based on the Electricity Market Act,
amended in 2013, according to which Section 31 stipulates that the grid owner
must name the transmission lines, electricity substations and other devices
which fall under the scope of its grid network for the regulatory period. The
Energy Authority’s change request concerns the eastern capital city region and
the 400 kV Ulvila–Meri–Pori transmission line, which the Energy Authority
requests be named to the national grid. Helen Sähköverkot Oy, Vantaan Energian
Sähköverkot Oy have also appealed the Energy Authority’s decision on the naming
of the grid.
The Group is not aware of any other ongoing legal proceedings or proceedings by
authorities that would have a significant impact on Fingrid’s operations.
Events after the review period and estimate of future outlook
The Energy Authority decided on the regulation methods for electricity grid
operations for the regulatory periods 2016–2019 and 2020–2023. The regulation
methods entered into force on 1 January 2016 and the appeal period ended on 4
January 2016. Fingrid did not appeal the decision.
On 15 January 2016, the international credit rating agency Fitch Ratings
(Fitch) affirmed the rating ‘A+’ for Fingrid Oyj’s unsecured senior debt, ‘A’
for its long-term company rating and ‘F1’ for its short-term company rating,
with a stable outlook.
On 1 February 2016, Fingrid finalised a competitive tender for rating services.
Fingrid continued its rating service agreements with Standard & Poor’s Ratings
Services and Fitch Ratings, and terminated its rating service agreement with
Moody’s Investors Service. The ratings service agreement with Moody’s Investors
Service ended on 1 February 2016.
On 16 February 2016, Fingrid established Fingrid Datahub Oy. The task of the
subsidiary, wholly owned by Fingrid, is to implement an information exchange
system for the electricity market in which information between retailers and
grid companies is centralised in one service.
Fingrid Group’s profit for the 2016 financial period, excluding changes in the
fair value of derivatives and before taxes, is expected to decline clearly from
the previous year. Grid service pricing for 2016 is set in such a way as to
balance out the surplus that was generated in the previous regulatory period
with a corresponding deficit. Due to a regulatory amendment, the company has
changed the manner in which it recognises congestion income. Congestion income
received by Fingrid will, in future, be entered directly in the company’s
balance sheet as accruals and will be recognised when their corresponding costs
accrue as annual expenses or are entered against completed capital expenditure.
Results forecasts for the full financial year are complicated especially by the
uncertainty related to grid income, ITC income and cross-border transmission
income, and to reserve and loss energy costs. These are particularly dependent
on temperature variations and precipitation and changes in water levels in the
Nordic countries, which affect electricity consumption and electricity prices
in Finland and its nearby areas, and thereby also the volume of electricity
transmission in the grid. The company’s debt service capacity is expected to
remain stable.
Board of Directors’ proposal for the distribution of profit
Fingrid updated its dividend policy in 2014. The guiding principle for
Fingrid’s dividend policy is to distribute substantially all of the parent
company profit as dividend. When making the decision, however, the economic
conditions, the company’s near term investment and development needs as well as
any prevailing financial targets of the company are always taken into account.
Fingrid Oyj’s distributable funds in the financial statements total EUR
162,087,956.09. Since the close of the financial year, there have been no
material changes in the company’s financial position and, in the Board of
Directors’ view, the proposed dividend distribution does not threaten the
company’s solvency.
The company’s Board of Directors will propose to the Annual General Meeting of
Shareholders that
- a dividend of EUR 33,686.24 per share be paid for Series A shares and EUR
16,038.49 per share be paid for Series B shares, for a total of EUR
90,000,003.75.
- EUR 72,087,952.34 be retained in unrestricted equity.
Annual General Meeting 2016
Fingrid Oyj’s Annual General Meeting is preliminarily scheduled for 6 April
2016 in Helsinki.
Helsinki, 19 February, 2016
Fingrid Oyj
Board of Directors
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 1 Jan - 31 1 Jan - 31
Dec, 2015 Dec, 2014
--------------------------------------------------------------------------------
Notes € 1000 € 1000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TURNOVER 2 600,224 567,155
Other operating income 3 5,199 4,619
Raw materials and consumables used 4 -240,643 -264,304
Employee benefits expenses 5 -25,804 -24,993
Depreciation 6 -94,119 -91,511
Other operating expenses 7,8,9 -82,288 -48,149
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OPERATING PROFIT 162,570 142,817
Finance income 10 706 1,172
Finance costs 10 -34,401 -11,910
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Finance income and costs -33,695 -10,738
Share of profit of associated companies 447 854
PROFIT BEFORE TAXES 129,321 132,934
Income taxes 11 -25,745 -26,441
--------------------------------------------------------------------------------
PROFIT FOR THE FINANCIAL YEAR 103,576 106,493
================================================================================
OTHER COMPREHENSIVE INCOME
Items that may subsequently be transferred to
profit or loss
Cash flow hedges 12 5,785
Translation reserve 12 -309 -419
Available-for-sale financial assets 12 18 16
--------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD 109,070 106,090
================================================================================
Profit attributable to:
Equity holders of parent company 103,576 106,493
Total comprehensive income attributable to:
Equity holders of parent company 109,070 106,090
Earnings per share, € 13 31,151 32,028
Earnings per share for profit attributable to
the equity holders of the parent company:
Undiluted earnings per share, € 13 31,151 32,028
Diluted earnings per share, € 13 31,151 32,028
Income tax related to other comprehensive income is presented in note 12.
Notes are an integral part of the financial statements.
Consolidated balance sheet
--------------------------------------------------------------------------------
-
ASSETS 31 Dec 31 Dec
2015 2014
--------------------------------------------------------------------------------
Notes € 1 000 € 1 000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NON-CURRENT ASSETS
Intangible assets:
Goodwill 15 87,920 87,920
Other intangible assets 16 95,428 95,016
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
183,348 182,937
Property, plant and equipment: 17
Land and water areas 15,349 14,974
Buildings and structures 167,280 156,541
Machinery and equipment 567,627 576,891
Transmission lines 789,614 798,120
Other property, plant and equipment 7,548 7,906
Prepayments and purchases in progress 129,566 86,023
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1,676,984 1,640,454
Investments: 18
Equity investments in associated companies 9,888 10,515
Available-for-sale investments 284 262
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
10,173 10,777
Receivables:
Derivative instruments 30 32,148 42,063
Deferred tax assets 27 16,479 10,674
Loan receivables from associated companies 20 2,500 1,600
Other receivables 20 991
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
51,127 55,328
TOTAL NON-CURRENT ASSETS 1,921,632 1,889,496
CURRENT ASSETS
Inventories 19 12,665 12,843
Derivative instruments 30 3,353 11,208
Trade receivables and other receivables 21 69,909 57,699
Financial assets recognised in the income statement 22 93,451 116,694
at fair value
Cash in hand and cash equivalents 23 23,403 62,566
TOTAL CURRENT ASSETS 202,782 261,010
--------------------------------------------------------------------------------
TOTAL ASSETS 2,124,414 2,150,507
================================================================================
Notes are an integral part of the financial
statements.
CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES 31 Dec 31 Dec
2015 2014
Notes € 1 000 € 1 000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT COMPANY
Share capital 26 55,922 55,922
Share premium account 26 55,922 55,922
Revaluation reserve 26 -5,740 -11,543
Translation reserve 26 -731 -422
Retained earnings 26 605,585 567,009
--------------------------------------------------------------------------------
TOTAL EQUITY 710,960 666,889
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NON-CURRENT LIABILITIES
Deferred tax liabilities 27 125,240 123,048
Borrowings 28 907,232 962,324
Provisions 29 1,668 1,685
Derivative instruments 30 46,952 44,974
--------------------------------------------------------------------------------
1,081,092 1,132,032
--------------------------------------------------------------------------------
CURRENT LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Borrowings 28 236,217 263,033
Derivative instruments 30 30,331 16,968
Trade payables and other liabilities 31 65,815 71,585
--------------------------------------------------------------------------------
332,363 351,586
--------------------------------------------------------------------------------
TOTAL LIABILITIES 1,413,455 1,483,617
--------------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 2,124,414 2,150,507
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Notes are an integral part of the financial
statements.
CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
-
Attributable to equity holders of the parent company, € 1,000
--------------------------------------------------------------------------------
-
Notes Share Share Revalua Transl Retaine Total
pre- tion ation d
capita mium reserve reserv earning capital
l accoun e s
t
reserve equity
s
--------------------------------------------------------------------------------
Balance on 1 Jan 2014 55,922 55,922 -11,559 -3 542,416 642,699
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Comprehensive income
Profit or loss 26 106,493 106,493
Other comprehensive
income
Translation reserve 12 -419 -419
Items related to 12 16 16
long-term asset items
available-for-sale
--------------------------------------------------------------------------------
Total other 16 -419 -403
comprehensive income
adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive 16 -419 106,493 106,090
income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transactions with
owners
Dividend relating to 26 -81,900 -81,900
2013
--------------------------------------------------------------------------------
Balance on 31 Dec 2015 55,922 55,922 -11,543 -422 567,009 666,889
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Balance on 1 Jan 2015 55,922 55,922 -11,543 -422 567,009 666,889
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Comprehensive income
Profit or loss 26 103,576 103,576
Other comprehensive
income
Cash flow hedges 12 5,785 5,785
Translation reserve 12 -309 -309
Items related to 12 18 18
long-term asset items
available-for-sale
--------------------------------------------------------------------------------
Total other 5,803 -309 5,494
comprehensive income
adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive 5,803 -309 103,576 109,070
income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transactions with
owners
Dividend relating to 26 -65,000 -65,000
2014
--------------------------------------------------------------------------------
Balance on 31 Dec 2015 55,922 55,922 -5,740 -731 605,585 710,960
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
-
Notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT 1 Jan - 31 1 Jan - 31
Dec, 2015 Dec, 2014
Notes € 1,000 € 1,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from operating activities:
Profit for the financial year 26 103,576 106,493
Adjustments:
Business transactions not involving a 36 115,978 83,495
payment transaction
Interest and other finance costs 34,401 11,910
Interest income -701 -1,163
Dividend income -5 -9
Taxes 25,745 26,441
Financial assets recognised in the income -233 -192
statement at fair value
Changes in working capital:
Change in trade receivables and other -11,517 19,605
receivables
Change in inventories 178 -1,446
Change in trade payables and other -8,332 974
liabilities
Change in provisions 29 -18 -50
Interests paid -23,734 -21,687
Interests received 821 1,225
Taxes paid 11 -20,470 -19,677
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash flow from operating activities 215,690 205,919
Cash flow from investing activities:
Purchase of property, plant and equipment 17 -150,449 -124,479
Purchase of intangible assets 16 -3,421 -5,377
Purchase of other assets
Proceeds from sale of other assets 18 500 57
Proceeds from sale of property, plant and 17 5,066 1,389
equipment
Loans granted -900 -1,600
Dividends received 10.18 556 346
Contributions received 15,000 19,935
Interests paid 10 -1,690 -1,326
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash flow from investing activities -135,339 -111,055
Cash flow from financing activities:
Proceeds from non-current financing 107,424 110,000
(liabilities)
Payments of non-current financing -104,220 -103,003
(liabilities)
Change in current financing (liabilities) -80,961 -58,012
Dividends paid 26 -65,000 -81,900
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash flow from financing activities -142,757 -132,915
Change in current financing (liabilities) -62,406 -38,051
Cash and cash equivalents 1 Jan 179,261 217,311
Cash and cash equivalents 31 Dec 22, 23 116,855 179,261
--------------------------------------------------------------------------------
CONSOLIDATED 2015 2014 2013 2012 2011
KEY FIGURES
--------------------------------------------------------------------------------
IFRS IFRS IFRS IFRS IFRS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Extent of operations
Turnover MEUR 600.2 567.2 543.1 522.1 438.5
Capital expenditure, MEUR 147.5 129.5 225.3 139.0 244.4
gross
- % of turnover % 24.6 22.8 41.5 26.6 55.7
Research and MEUR 1.8 1.7 1.8 1.5 1.8
development
expenses
- % of turnover % 0.3 0.3 0.3 0.3 0.4
Personnel, average 319 305 277 269 263
Personnel at the end 315 313 287 275 266
of period
Salaries and MEUR 21.3 20.5 19.0 18.2 17.2
remunerations total
Profitability
Operating profit MEUR 162.6 142.8 115.3 94.6 56.5
- % of turnover % 27.1 25.2 21.2 18.1 12.9
Profit before taxes MEUR 129.3 132.9 87.3 88.3 34.2
- % of turnover % 21.5 23.4 16.1 16.9 7.8
Return on % 8.7 7.6 6.3 5.6 3.6
investments (ROI)
Return on equity % 15.0 16.3 15.0 12.4 6.5
(ROE)
Financing and
financial position
Equity ratio % 33.5 31.0 29.5 27.3 25.7
Interest-bearing net MEUR 1,026.6 1,046.1 1,076.7 1,030.3 1,020.2
borrowings
Share-specific key
figures
Profit/share € 31,150.8 32,027.9 27,277.9 20,159.2 9,924.1
Dividend/A shares € 33,686.2 21,655.44 29,788.26 5,115.89 3,962.52
4 *
Dividend/B shares € 16,038.4 16,038.49 16,038.50 2,018.26 2,018.26
9 *
Dividend payout % 108.1 67.6 109.2 25.4 39.9
ratio A shares
Dividend payout % 51.5 50.1 58.8 10.0 20.3
ratio series B
shares
Equity/share € 213,822 200,568 193,293 171,365 152,573
Number of shares at
31 Dec
– Series A shares shares 2,078 2,078 2,078 2,078 2,078
– Series B shares shares 1,247 1,247 1,247 1,247 1,247
Total shares 3,325 3,325 3,325 3,325 3,325
* The Board of
Directors proposal
to the Annual
General Meeting
CALCULATION OF KEY INDICATORS
Return on investment, % = (profit before taxes + interest and other finance
costs) / ((balance sheet total - non-interest bearing liabilities (average for
the year)) x 100
Return on equity, %= profit for the financial year / shareholders' equity
(average for the year) x 100
Equity ratio, %= shareholders' equity / (balance sheet total - advances
received) x 100
Earnings per share, €= profit for the financial year / average number of shares
Dividends per share, € = dividends for the financial year / average number of
shares
Dividend payout ratio, % = (dividend / share ) / (earnings / share)
Equity per share, € = shareholders' equity / number of shares at closing date
Interest-bearing net borrowings, € = interest-bearing borrowings - cash and
cash equivalents
Gearing = (interest-bearing borrowings - cash and cash equivalents) /
shareholders' equity x 100
QUARTERLY FIGURES
-----------------------------------------------------------------
Q4/2015 Q3/2015 Q2/2015 Q1/2015 Q4/2014
-----------------------------------------------------------------
Turnover €M 172.5 134.6 113.2 179.9 148.2
-----------------------------------------------------------------
Operating profit €M 57.4 23.1 9.3 72.8 26.5
-----------------------------------------------------------------
Operating profit % 33.3 17.1 8.2 40.5 17.9
-----------------------------------------------------------------
INVESTMENTS, €M 1-12/2015 1-12/2014 Change 1-12/2014
--------------------------------------------------------------------
Grid investments 138.4 117.5 20.9 117.5
--------------------------------------------------------------------
Substations 77.1 63.0 14.2 63.0
--------------------------------------------------------------------
Transmission lines 61.3 54.6 6.7 54.6
--------------------------------------------------------------------
--------------------------------------------------------------------
Gas turbine investments 0.7 0.8 -0.1 0.8
--------------------------------------------------------------------
Existing gas turbine plants 0.3 -0.2 0.5 -0.2
--------------------------------------------------------------------
New gas turbine plants 0.4 1.0 -0.6 1.0
--------------------------------------------------------------------
--------------------------------------------------------------------
Other investments 8.4 11.2 -2.7 11.2
--------------------------------------------------------------------
ICT 8.4 11.1 -2.7 11.1
--------------------------------------------------------------------
--------------------------------------------------------------------
Total investments 147.5 129.5 18.0 129.5
--------------------------------------------------------------------
RESEARCH AND DEVELOPMENT EXPENSES, €M 1-12/2015 1-12/2014 Change 1-12/2014
------------------------------------------------------------------------------
Research and development expenses 1.8 1.7 0.1 1.7
------------------------------------------------------------------------------
Number of salaried employees in the company during the financial 2015 2014
year:
Personnel, average 319 305
Personnel, 31 Dec 315 313
Number of Of all shares % Of votes %
shares
--------------------------------------------------------------------------------
Shareholders by category
-----------------------------------
Public organisations 1,768 53.17 70.87
--------------------------------------------------------------------------------
Financial and insurance 1,557 46.83 29.12
institutions
--------------------------------------------------------------------------------
Total 3,325 100.00 100.00
================================================================================
Number of Of all Of votes
shares shares % %
--------------------------------------------------------------------------------
Shareholders, 31 Dec 2015
--------------------------------------------------------------------------------
Republic of Finland, represented by the 939 28.24 37.66
Ministry of Finance
Aino Holding Ky 878 26.41 11.74
National Emergency Supply Agency 828 24.90 33.20
Mutual Pension Insurance Company Ilmarinen 661 19.88 17.15
Imatran Seudun Sähkö Oy 10 0.30 0.13
Fennia Life 6 0.18 0.08
Elo Mutual Pension Insurance 1 0.03 0.01
Pohjola Insurance Ltd 1 0.03 0.01
The State Pension Fund 1 0.03 0.01
--------------------------------------------------------------------------------
Total 3,325 100.00 100.00
================================================================================
DERIVATIVE AGREEMENTS. 1 000 €
--------------------------------------------------------------------------------
---------
2015 2014
--------------------------------------------------------------------------------
--------
Intere Fair Fair Net fair Nominal Fair Fair Net fair
Nominal
st and value value value value value value value
value
curre pos. neg. pos. neg.
ncy
deriv
atives
--------------------------------------------------------------------------------
--------
31.12.15 31.12.15 31.12.15 31.12.15 31.12.14 31.12.14 31.12.14
31.12.14
--------------------------------------------------------------------------------
--------
Cross- 15,286 -20,297 -5,011 341,205 28,599 -19,758 8,841
321,383
curren
cy
swaps
--------------------------------------------------------------------------------
--------
Forwar -88 -88 4,505 3,308 3,308
55,401
d
contr
acts
--------------------------------------------------------------------------------
--------
Intere 24,348 -9,442 14,905 430,000 27,480 -11,894 15,585
435,000
st
rate
swaps
--------------------------------------------------------------------------------
--------
Bought 862 862 358,820
310,000
inter
est
rate
optio
ns
--------------------------------------------------------------------------------
--------
Total 40,496 -29,827 10,668 1,134,531 59,386 -31,652 27,734
1,121,783
================================================================================
========
Electr Fair Fair Net fair Volume Fair Fair Net fair
Volume
icity value value value TWh value value value
TWh
deriv pos. neg. pos. neg.
atives
--------------------------------------------------------------------------------
--------
31.12.15 31.12.15 31.12.15 31.12.15 31.12.14 31.12.14 31.12.14
31.12.14
--------------------------------------------------------------------------------
--------
Electr -49,060 -49,060 4.22 6 -32,171 -32,165
4.19
icity
forwa
rd
contr
acts.
NASDA
Q OMX
Commo
dities
not
desig
nated
as
hedge
accou
nting
--------------------------------------------------------------------------------
--------
Total -49,060 -49,060 4.22 6 -32,171 -32,165
4.19
================================================================================
========
The net fair value of derivatives indicates the realised profit/loss if they
had been reversed on the last trading day of 2015. The net fair value cannot be
used for deriving the net derivative liabilities or receivables in the balance
sheet, as accrued interest is taken into account here.
The company uses electricity derivatives to hedge the price risk of future loss
energy purchases.
Maturity of derivative contracts:
Nominal value, 2016 2017 2018 2019 2020 2020+ Total
€1,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Interest rate swaps 70,000 30,000 105,000 60,000 165,000 430,000
Interest rate 90,000 108,820 160,000 358,820
options
Cross-currency 144,809 52,852 107,308 23,725 12,512 341,205
swaps
Forward contracts 2,432 2,074 4,505
--------------------------------------------------------------------------------
Total 307,241 84,926 321,127 243,725 177,512 1,134,531
================================================================================
TWh 2016 2017 2018 2019 2020 2020+ Total
--------------------------------------------------------------------------------
Electricity 1.41 1.23 0.79 0.53 0.26 4.22
derivatives
--------------------------------------------------------------------------------
Total 1.41 1.23 0.79 0.53 0.26 4.22
================================================================================
COMMITMENTS AND CONTINGENT LIABILITIES, 1 000 €
----------------------------------------------------------------------
2015 2014
---------------------------------------------------------------------
---------------------------------------------------------------------
Pledges
Pledge covering property lease agreements 9 9
Pledge covering customs credit account 280 280
Pledge covering electricity exchange purchases 863 991
---------------------------------------------------------------------
---------------------------------------------------------------------
1,151 1,279
Unrecognised investment commitments 124,314 143,527
Other financial commitments
Counterguarantee in favour of an associated company 1,700
Rent security deposit, guarantee 38 38
Credit facility commitment fee and commitment fee:
Commitment fee for the next year 326 355
Commitment fee for subsequent years 1,154 815
---------------------------------------------------------------------
---------------------------------------------------------------------
1,518 2,907
© 2024 Nasdaq, Inc. All Rights Reserved |