2016-04-28 10:00:01 CEST
2016-04-28 10:00:01 CEST
REGULATED INFORMATION
Fingrid Oyj - Interim report (Q1 and Q3)
Fingrid Group’s Interim report 1 January - 31 March 2016
Helsinki. Finland, 2016-04-28 10:00 CEST (GLOBE NEWSWIRE) -- Fingrid Oyj
Interim report 28 April at 11.00 EET
Fingrid’s consolidated financial statements have been drawn up in accordance
with the International Financial Reporting Standards (IFRS). Unless otherwise
indicated, the figures in parentheses refer to the same period of the previous
year.
Financial development in January–March 2016
-- The Group’s turnover in January–March was EUR 183.9 (179.9) million
-- The Group’s operating profit was EUR 74.2 (72.8) million
-- The Group’s profit for January–March was EUR 59.0 (55.4) million
-- Cash flow from the Group’s operations, after capital expenditure, was EUR
92.4 (52.4) million
-- Interest-bearing net borrowings amounted to EUR 934.8 (999.3) million
-- Capital expenditure totalled EUR 27.3 (24.1) million
-- The equity ratio was 35.5 (33.5) per cent
-- Earnings per share totalled EUR 17,730 (16,656)
KEY FIGURES 1−3/16 1−3/15 change % 1−12/15
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Turnover €M 183.9 179.9 2.2 600.2
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Capital expenditure, gross €M 27.3 24.1 13.5 147.5
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- of turnover % 14.9 13.4 24.6
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Research and development €M 0.6 0.4 53.0 1.8
expenses
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- of turnover % 0.3 0.2 0.3
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Average number of employees 321 313 2.6 319
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Number of employees at end of 322 312 3.2 315
period
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Salaries and bonuses, total €M 5.6 5.5 2.6 21.3
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Operating profit €M 74.2 72.8 1.8 162.6
--------------------------------------------------------------------------------
- of turnover % 40.3 40.5 27.1
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Profit before taxes €M 73.6 69.2 6.5 129.3
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- of turnover % 40.0 38.5 21.5
--------------------------------------------------------------------------------
Profit for the period €M 59.0 55.4 6.5 103.6
--------------------------------------------------------------------------------
Comprehensive income for the €M 60.5 57.0 6.1 109.1
period
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Equity ratio % 35.5 33.5 33.5
--------------------------------------------------------------------------------
Interest-bearing net borrowings €M 934.8 999.3 -6.5 1,026.6
--------------------------------------------------------------------------------
Net gearing 1.2 1.4 1.4
--------------------------------------------------------------------------------
Earnings per share € 17,730.10 16,655.62 6.5 31,150.79
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Dividend, Series A shares € 33,686.24
--------------------------------------------------------------------------------
Dividend, Series B shares € 16,038.49
--------------------------------------------------------------------------------
Equity per share € 232,021 217,721 6.6 213,822
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Number of shares
--------------------------------------------------------------------------------
– Series A shares qty 2,078 2,078 2,078
--------------------------------------------------------------------------------
– Series B shares qty 1,247 1,247 1,247
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Total qty 3,325 3,325 3,325
--------------------------------------------------------------------------------
CEO Jukka Ruusunen: “The electricity system remained up and running during peak
cold weather – the price of electricity continues to decline in the Nordic
countries”
In early January, Finland’s electricity consumption exceeded 15,000 megawatts
for the first time. The peak consumption situation clearly demonstrated
Finland’s strong dependence on electricity imports and how the electricity
system’s margins shrink during peak consumption periods. The electricity system
functioned reliably, however, and the supply of electricity was not in
jeopardy. The electricity market’s Europe-wide market mechanism proved its
effectiveness by steering the Baltic Sea area power plants and electricity
transmission across borders in the most efficient way possible, which,
considering the circumstances, led to affordable electricity prices.
The low wholesale price of electricity will hamper market-based investments and
lead many current production plants to close down prematurely in Finland and
the neighbouring countries. The Nordic market price declined 21 per cent from
the price one year ago. The main reason for the low price level was the high
hydropower production in Sweden and Norway, and increased wind power production
in the Nordic countries. Finland was not able to take full advantage of the
strong production situation of the neighbouring countries due to the limited
transmission capacity.
We are rapidly modernising the transmission connection between eastern and
western Finland, i.e. the “Iron Lady”, Finland’s first high-voltage power line
from Turku to Imatra. The section between Hikiä and Forssa was commissioned in
March. The costs of the power line project amounted to EUR 25 million. During
the period under review, we made investment and procurement decisions valued at
altogether EUR 34 million.
We are preparing for the future by developing our leadership and corporate
culture. As the outcome of this determined work, we ranked tenth in the Great
Place to Work list among mid-sized companies in Finland.
Fingrid Group’s Interim Report 1 January - 31 March 2016
Accounting principles
Fingrid’s interim report has been drawn up in accordance with the standard IAS
34 Interim Financial Reporting. In preparing this report, where the recognition
of congestion income is concerned, Fingrid changed its accounting principles
from those applied in its annual financial statements for 2015. The change was
implemented as of the beginning of 2016. In other respects, the interim report
complies with the same accounting principles as those used for Fingrid’s 2015
financial statements.
As a consequence of the change in the regulation governing Fingrid’s grid
pricing, the company will include the congestion income received after 1
January 2016 as accruals in the item other liabilities in the balance sheet. Of
the accruals, congestion income will be recognised in the income statement as
other operating income when their corresponding costs, as defined in the
regulation, accrue as annual expenses in the income statement. Alternatively,
they are entered in the balance sheet against investments, as defined by
regulation, to lower the acquisition cost of property, plant and equipment,
which lowers the depreciation of the property, plant and equipment in question.
Financial result
The Group’s turnover for January–March was EUR 183.9 (179.9) million. Grid
service income grew in the first quarter to EUR 127.8 (115.4) million, as a
result of the change in grid pricing enacted at the start of the year and due
to the growth in electricity consumption. Other operating income totalled EUR
2.3 (0.8) million. Other operating income includes recognition of EUR 1.3
million in congestion income, which relates to the use of congestion income as
prescribed in the regulation to cover the expenses for maintaining transmission
capacity between Finland and other EU countries. Expenses in January–March
amounted to EUR 109.2 (103.9) million.
Between January and March, electricity consumption totalled 24.7 (23.4)
terawatt hours. Imbalance power sales amounted to EUR 41.8 (40.2) million.
Cross-border transmission income from the connection between Finland and Russia
increased to EUR 7.1 (5.6) million. This was due to the new tariff structure
that was introduced.
Fingrid’s congestion income from connections between Finland and Sweden grew to
EUR 19.9 (11.0) million as a result of the low price level for electricity in
Sweden. Fingrid’s congestion income from the links between Finland and Estonia
amounted to EUR 1.7 (0.4) million. As a consequence of the change in the way
congestion income is recognised, it is no longer reported in Fingrid’s turnover
as of the beginning of 2016; instead, congestion income is entered directly in
the balance sheet as accruals, from where they are used in the manner
prescribed by regulation to maintain or increase the transmission capacity
between Finland and other EU countries.
Imbalance power costs increased from the previous year’s level to EUR 33.0
(27.8) million, largely due to the increase in the price of imbalance power.
Loss energy costs increased to EUR 16.6 (15.9) million due to the higher volume
of loss energy than in the comparison period. At the end of March,
approximately 99 (101) per cent of Fingrid’s projected loss energy procurement
for the remaining part of 2016 was hedged at an average price of EUR 36.2
(40.1) per megawatt hour.
The cost of reserves to safeguard the grid’s system security decreased to EUR
10.6 (12.0) million. The reasons for the decline in costs were the interruption
of the procurement of an automatic frequency control reserve and the lowering
of the maintenance costs of Fingrid’s reserve power plants, which serve as
rapid response disturbance reserves. Depreciation amounted to EUR 23.7 (22.9)
million. Grid maintenance costs grew to EUR 3.7 (2.7) million, due to higher
spending on cutting down trees along power line roads and preventive
maintenance on power lines compared to the same period in 2015. Personnel costs
remained close to the previous year’s level and totalled EUR 6.9 (6.6) million.
Turnover and other income (€M) 1−3/16 1−3/15 change % 1−12/15
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Grid service income 128 115 10.8 333
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Imbalance power sales 42 40 4.0 137
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Cross-border transmission income 7 6 25.2 11
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Finland-Estonia congestion income* 0 0 -100.0 4
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Finland-Sweden congestion income* 0 11 -100.0 87
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Peak load capacity income** 2 2 -13.8 8
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ITC income 4 4 6.9 15
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Other turnover 1 1 -6.8 5
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Other operating income 2 1 200.1 5
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Turnover and other income total 186 181 3.1 605
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Costs (€M) 1−3/16 1−3/15 change 1−12/1
% 5
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Purchase of imbalance power 33 28 18.7 98
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Loss energy costs 17 16 4.7 69
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Depreciation 24 23 3.6 94
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Cost of reserves 11 12 -11.5 55
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Personnel costs 7 7 4.9 26
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Maintenance costs 4 3 35.3 19
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Peak load capacity costs** 2 2 -12.2 7
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ITC charges 3 4 -8.7 9
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Other costs 10 11 -7.7 41
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Costs total 109 104 5.1 419
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Operating profit, excl. the change in the fair 77 77 0.4 187
value of commodity derivatives
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Consolidated operating profit, IFRS 74 73 1.8 163
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*A change was made in how congestion income is reported, and it is not reported
in the turnover as of the beginning of 2016.
** 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 in the first quarter of the year was EUR 74.2
(72.8) million. Profit before taxes was EUR 73.6 (69.2) million. The biggest
differences from the corresponding period last year are explained by the growth
in grid service income (EUR +12.4 million), changes in the market value of
derivatives (EUR +4.0 million), and the elimination of congestion income from
the turnover (-11.4 million), due to the change in how congestion income is
reported. Profit for the financial period was EUR 59.0 (55.4) million and
comprehensive income was EUR 60.5 (57.0) million. The Group’s net cash flow
from operations, with net capital expenditure deducted, was EUR 92.4 (52.4)
million in the first quarter of the year. The equity ratio was 35.5 (33.5) per
cent at the end of the review period.
The Group’s profit for the financial period is characterised by seasonal
fluctuations, which is why the profit for the entire year cannot be directly
estimated on the basis of profit from the period under review. The good result
of the period under review is due to the higher electricity consumption during
winter compared to the rest of the year and the higher transmission price
collected for weekdays during the winter.
Investments and maintenance
Fingrid’s investment programme is progressing as planned. Fingrid is
modernising the “Iron Lady”, Finland’s first high-voltage power line from Turku
to Imatra, in order to reinforce the transmission connection between eastern
and western Finland. The Hikiä–Forssa section of this major project was
completed and commissioned in March. The costs of the project amounted to EUR
25 million. Modernisation of the Iron Lady continues between Lieto and Forssa,
where foundation work for the pylons is under way. The project is expected to
be completed in its entirety by 2020.
The renewal of the Hirvisuo–Pyhänselkä transmission connection is proceeding as
planned and will be completed in 2016. Once completed, the transmission
connection will ensure the supply of electricity in western Finland and enable
wind and nuclear power to be connected to the grid. The transmission capacity
between northern and southern Finland will also improve considerably.
The grid in western Finland will also be reinforced by the modernisation of the
Alajärvi substation and the expansion of the Kristinestad substation, in
connection with which Fingrid has concluded procurement contracts. The Alajärvi
substation project is valued at approximately EUR 7.5 million, and it will
reach completion at the end of 2017. The expansion of the Kristinestad
substation will allow hundreds of megawatts of wind power to be connected to
the grid, and it will improve the reliability of the electricity network in
Southern Ostrobothnia. The project will be completed in 2017 and its estimated
value is EUR 4.5 million.
With the aim of securing the electricity supply for both residents of the
capital city region and functions that are vital to society, Fingrid will
reinforce the Länsisalmi substation. A procurement decision on the
modernisation and expansion of the substation was made. The total value of the
contracts is roughly EUR 13 million and the project will be completed at the
end of 2017.
The Inkoo substation that was built in the 1970s secures the electricity supply
in western Uusimaa. Fingrid has come to an investment decision concerning the
modernisation of the ageing station. The project, with an estimated cost of EUR
9 million, is due for completion in 2018.
Development work on the Elvis ERP system is nearing completion. In 2006,
Fingrid launched a project aimed at building a complete, modern IT system to
support asset management operations. In March 2016, most of the functions were
taken into use, and the system will be in full use in 2016.
To improve the reliability of cross-border transmission connections, Fingrid
has made major changes to its operating model and increased the expert
resources on its DC connections. A 24/7 standby system was taken into use as of
the beginning of 2016.
Power system
During the winter, Finland’s electricity consumption exceeded 15,000 megawatts
for the first time: The hourly average power rating of Finland’s electricity
consumption rose to 15,100 megawatts between 5 pm and 6 pm on the 7th of
January 2016. During that peak consumption hour, Finland generated 10,800
megawatts of electricity and the remaining 4,300 megawatts was imported from
neighbouring countries. In peak consumption situations, Finland is dependent on
electricity imports. The electricity system functioned reliably during the
consumption peak, and the supply of electricity was not in jeopardy. Peak-load
capacity was not used.
Between January and March, electricity consumption in Finland totalled 24.7
(23.4) terawatt hours. Inter-TSO transmission in the same period amounted to
1.4 (1.3) terawatt hours. The total electricity transmission in Finland was
thus 25.1 (24.7) terawatt hours. Fingrid transmitted a total of 19.3 (17.9)
terawatt hours in its grid, representing 76.9 (72.5) per cent of the total
electricity transmission in Finland. During this period, Fingrid transmitted
17.8 (16.6) terawatt hours of electricity to its customers, which amounts to
72.3 (71.0) per cent of Finland’s total consumption.
Between January and March, 5.0 (4.2) terawatt hours of electricity were
imported from Sweden to Finland, and 0.0 (0.05) terawatt hours were exported
from Finland to Sweden. A high volume of electricity continued to be imported
from Sweden throughout the review period.
In January–March, 1.4 (1.2) terawatt hours of electricity were exported to
Estonia. In January–March, 0.06 (0.01) terawatt hours of electricity were
imported from Estonia.
Between January and March, 1.7 (2.1) terawatt hours of electricity were
imported from Russia to Finland. Electricity imports from Russia were
relatively low, as in the previous year. There are major intraday variations in
import volumes, however. No electricity was exported to Russia during the
reporting period.
The transmission capacity between Finland and its neighbouring countries was
fully available in the electricity markets, with the exception of a few brief
planned maintenance jobs and restrictions caused by disturbances.
There were no major disturbances in the grid during the period under review.
Power system 1−3/16 1−3/15 1−12/15
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Electricity consumption in Finland, TWh 24.7 23.4 82.5
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TSO transmission in Finland, TWh 1.4 1.3 3.9
-----------------------------------------------------------------------------
Transmission within Finland, TWh 25.1 24.7 87.2
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Fingrids electrity transmission volume, TWh 19.3 17.9 67.2
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Fingrid's electricity transmission to customers, TWh 17.8 16.6 63.3
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Fingrid’s loss energy volume, TWh 0.4 0.3 1.4
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Electricity transmission Finland - Sweden
Exports to Sweden TWh 0.0 0.0 0.2
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Imports from Sweden, TWh 5.0 4.2 17.8
-----------------------------------------------------------------------------
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Electricity transmission Finland - Estonia
Exports to Estonia, TWh 1.4 1.2 5.0
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Imports from Estonia, TWh 0.1 0.0 0.0
-----------------------------------------------------------------------------
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Electricity transmission Finland - Russia
Imports from Russia, TWh 1.7 2.1 3.9
-----------------------------------------------------------------------------
Electricity market
The average Nordic price (system price) of electricity in the day-ahead market
January–March 2016 was EUR 23.99 (28.13) per megawatt hour.
Congestion income between Finland and Sweden totalled EUR 39.8 (22.0) million.
Compared to the first quarter of 2015, congestion income was further increased
by the lower price level in Sweden. The main reason for the low price level was
the high hydropower production in Sweden and Norway, and increased wind power
production in the Nordic countries.
The imbalance price of power reached an all-time high of EUR 3,000 per megawatt
hour for one hour on 22 January 2016. In the hour of 7–8 am, Fingrid took
advantage of all available market-based upward capacity to balance electricity
production and consumption.
Electricity market 1−3/16 1−3/15 1−12/15
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Nord Pool system price, average €/MWh 23.99 28.13 20.98
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Area price Finland, average €/MWh 30.43 32.10 29.66
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Congestion income between Finland and Sweden, €M* 39.8 22.0 173.5
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Congestion hours between Finland and Sweden %** 55.3 38.8 47.1
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Congestion income between Finland and Estonia, €M* 3.5 0.7 8.4
---------------------------------------------------------------------------
Congestion hours between Finland and Estonia %** 20.8 6.6 12.0
---------------------------------------------------------------------------
* The congestion income between Finland and Sweden and between Finland and
Estonia is divided equally between the relevant TSOs.
** Congestion hours (%) indicate the share of congestion hours of all hours
during the period. Congestion hour refers to an hour between Finland and Sweden
during which Finland’s day-ahead area price differs from both Sweden’s SE1 and
its SE3 area price, and between Finland and Estonia, an hour during which
Finland’s day-ahead area price differs from Estonia’s area price.
In the first quarter of the year, the cost of countertrade was EUR 1.1 (1.0)
million. Countertrade costs mostly consisted of costs resulting from
disturbances in the transmission connections between Finland and Sweden.
Countertrade 1−3/16 1−3/15 1−12/15
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Countertrade between Finland and Sweden, €M 1.0 0.2 0.8
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Countertrade between Finland and Estonia, €M 0.1 0.0 0.8
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Countertrade between Finland's internal connections, €M 0.0 0.8 2.2
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Total countertrade, €M 1.1 1.0 3.8
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Financing
The company’s credit rating remained high, reflecting the company’s strong
overall financial situation and debt service capacity. The company’s net
financial costs between January and March were EUR 0.8 (3.9) million, including
the change in the fair value of derivatives of EUR 4.2 million positive (EUR
1.3 million positive). Interest-bearing borrowings totalled EUR 1,096.7
(1,182.8) million, of which non-current borrowings accounted for EUR 906.4
(955.2) million and current borrowings for EUR 190.3 (227.6) million.
The company’s liquidity remained good. Financial and cash assets recognised at
fair value through profit or loss on 31 March 2016 were EUR 161.9 (183.4)
million. The company additionally has an undrawn revolving credit facility of
EUR 300 million to secure liquidity and a total of EUR 50 million in
uncommitted overdraft facilities.
The change in the fair value of electricity derivatives during the period under
review includes EUR 1.8 million from a dismantled hedge fund resulting from the
discontinuation of hedge accounting, as an item reducing the Group’s result.
The counterparty risk arising from derivative contracts relating to financing
was EUR 17 (37) million. Fingrid’s foreign exchange and commodity price risks
were, as a general rule, fully hedged.
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 issuer rating and ‘F1’ for its short-term issuer 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.
Personnel
The total number of personnel employed by the Group averaged 321 (313), of
which 283 (282) were in a permanent employment relationship.
Other matters
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 16 February 2016, Fingrid established Fingrid Datahub Oy. The task of the
subsidiary, wholly owned by Fingrid, is to implement a centralised information
exchange system for the electricity markets, in which the exchange of
information between retail sellers and transmission system operators is
concentrated into a single service.
Auditing
This Interim Report is unaudited.
Events after the review period and outlook for the rest of the year
Fingrid Oyj's Annual General Meeting was held in Helsinki on the 6th of April
2016. The Annual General Meeting approved the financial statements for 2015,
confirmed the income statement and balance sheet, and discharged the members of
the Board of Directors and the CEO from liability.
The AGM elected Fingrid Oyj’s Board of Directors for the term that ends at the
close of the next Annual General Meeting. Juhani Järvi was appointed Chairman
of Fingrid’s Board of Directors. The other Board members are Juha Majanen,
(Vice Chairman), Esko Torsti, and Sanna Syri, as well as Anu Hämäläinen, who
was elected as a new Board member at the AGM. A more detailed presentation of
the board members is available on the company’s website.
The AGM decided to pay a dividend of EUR 33,686.24 for each Series A share and
EUR 16,038.49 for each Series B share, for a total of EUR 90,000,003.75.
PricewaterhouseCoopers Oy, which appointed Jouko Malinen as the principal
auditor, was elected as the auditor of the Company.
Fingrid Group’s profit for the 2016 financial period, excluding changes in the
fair value of derivatives and before taxes, is expected to decline 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. Comparability is also affected by the different way of
recognising congestion income as of the start of 2016. Results forecasts for
the full 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. In the Nordic countries, these are dependent on temperature
variations and precipitation and changes in water levels, 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.
Notes: Tables for Fingrid’s Interim Report 1.1.−31.3.2016
Further information:
Jan Montell, Chief Financial Officer, tel. +358 40 592 4419 (can be reached on
Thursday, 28
April and Friday, 29 April 2016
Jukka Ruusunen, President & CEO, tel. +358 40 593 8428 (can be reached on
Friday, 29
April 2016)
Notes: Tables for Fingrid´s Interim Report 1 January - 31 March 2016
CONSOLIDATED STATEMENT OF
--------------------------------------------------------------------------------
COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
€M 1−3/201 1−3/201 Change 1−12/201
6 5 5
--------------------------------------------------------------------------------
Turnover 183.9 179.9 4.0 600.2
--------------------------------------------------------------------------------
Other operating income 2.3 0.8 1.6 5.2
--------------------------------------------------------------------------------
Depreciation -23.7 -22.9 -0.8 -94.1
--------------------------------------------------------------------------------
Operating expenses -88.4 -84.9 -3.4 -348.7
--------------------------------------------------------------------------------
Operating profit 74.2 72.8 1.3 162.6
--------------------------------------------------------------------------------
Finance income and costs -0.8 -3.9 3.1 -33.7
--------------------------------------------------------------------------------
Share of profit of assoc. companies 0.2 0.2 0.0 0.4
--------------------------------------------------------------------------------
Profit before taxes 73.6 69.2 4.5 129.3
--------------------------------------------------------------------------------
Income taxes -14.7 -13.8 -0.9 -25.7
--------------------------------------------------------------------------------
Profit for the period 59.0 55.4 3.6 103.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Cash flow hedges 1.4 1.4 0.0 5.8
--------------------------------------------------------------------------------
Translation reserve 0.1 0.2 -0.1 -0.3
--------------------------------------------------------------------------------
Items available for sale 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
Total comprehensive income for the financial 60.5 57.0 3.5 109.1
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit attributable to:
--------------------------------------------------------------------------------
Shareholders of the company 59.0 55.4 3.6 103.6
--------------------------------------------------------------------------------
Comprehensive income attributable to:
--------------------------------------------------------------------------------
Shareholders of the company 60.5 57.0 3.5 109.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share on profit attributable to
--------------------------------------------------------------------------------
shareholders of the parent company (EUR)*: 17,730 16,656 1,074 31,151
--------------------------------------------------------------------------------
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* no dilution effect
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEET, €M 1−3/201 1−3/201 Change 1−12/201
6 5 5
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Goodwill 87.9 87.9 0.0 87.9
--------------------------------------------------------------------------------
Intangible assets 95.2 95.2 0.0 95.4
--------------------------------------------------------------------------------
Property, plant and equipment 1,681.4 1,627.0 54.4 1,677.0
--------------------------------------------------------------------------------
Investments 10.4 11.0 -0.6 10.2
--------------------------------------------------------------------------------
Derivatives 36.7 42.9 -6.2 32.1
--------------------------------------------------------------------------------
Receivables 19.6 13.6 6.1 19.0
--------------------------------------------------------------------------------
Total non-current assets 1,931.2 1,877.6 53.6 1,921.6
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Inventories 12.5 12.3 0.2 12.7
--------------------------------------------------------------------------------
Derivatives 2.1 10.3 -8.3 3.4
--------------------------------------------------------------------------------
Receivables 64.4 76.7 -12.4 69.9
--------------------------------------------------------------------------------
Financial assets recognised in income
--------------------------------------------------------------------------------
statement at fair value 87.2 115.9 -28.6 93.5
--------------------------------------------------------------------------------
Cash and cash equivalents and financial 74.7 67.6 7.1 23.4
assets
--------------------------------------------------------------------------------
Total current assets 240.8 282.8 -42.0 202.8
--------------------------------------------------------------------------------
Non-current assets held for sale 0.0 0.2 -0.2 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 2,171.9 2,160.6 11.4 2,124.4
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
Equity attributable to shareholders of the
parent company
--------------------------------------------------------------------------------
Shareholders' equity 771.5 723.9 47.5 711.0
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Interest-bearing 906.4 955.2 -48.8 907.2
--------------------------------------------------------------------------------
Derivatives 54.0 43.0 11.0 47.0
--------------------------------------------------------------------------------
Non-interest-bearing 128.8 125.5 3.3 126.9
--------------------------------------------------------------------------------
Total non-current liabilities 1,089.3 1,123.7 -34.4 1,081.1
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Interest-bearing 190.3 227.6 -37.2 236.2
--------------------------------------------------------------------------------
Derivatives 22.7 14.1 8.6 30.3
--------------------------------------------------------------------------------
Non-interest-bearing 98.2 71.3 26.9 65.8
--------------------------------------------------------------------------------
Total current liabilities 311.2 313.0 -1.7 332.4
--------------------------------------------------------------------------------
Total shareholders' equity and liabilities 2,171.9 2,160.6 11.4 2,124.4
--------------------------------------------------------------------------------
Consolidated statement of changes in total equity, €M
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
Equity attributable to Share Share Revalua Transla Retain Shareho
shareholders tion tion ed lders’
of the parent company capita premium reserve reserve earnin equity
l account s gs total
--------------------------------------------------------------------------------
Balance on 1 January 2015 55.9 55.9 -11.5 -0.4 567.0 666.9
--------------------------------------------------------------------------------
Comprehensive income for
the financial period
--------------------------------------------------------------------------------
Profit or loss 55.4 55.4
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Cash flow hedges 1.4 1.4
--------------------------------------------------------------------------------
Translation reserve 0.2 0.2
--------------------------------------------------------------------------------
Items related to long-term 0.0 0.0
asset items available for
sale
--------------------------------------------------------------------------------
Total other comprehensive 1.4 0.2 1.7
income adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive income 1.4 0.2 55.4 57.0
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Balance on 31 March 2015 55.9 55.9 -10.1 -0.2 622.4 723.9
--------------------------------------------------------------------------------
Comprehensive income for
the financial period
--------------------------------------------------------------------------------
Profit or loss 48.2 48.2
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Cash flow hedges 4.3 4.3
--------------------------------------------------------------------------------
Translation reserve -0.5 -0.5
--------------------------------------------------------------------------------
Items related to long-term 0.0 0.0
asset items available for
sale
--------------------------------------------------------------------------------
Total other comprehensive 4.4 -0.5 3.8
income adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive income 4.4 -0.5 48.2 52.0
--------------------------------------------------------------------------------
Balance on 1 January 2016 55.9 55.9 -5.7 -0.7 605.6 711.0
--------------------------------------------------------------------------------
Comprehensive income for
the financial period
--------------------------------------------------------------------------------
Profit or loss 59.0 59.0
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Cash flow hedges 1.4 1.4
--------------------------------------------------------------------------------
Translation reserve 0.1 0.1
--------------------------------------------------------------------------------
Items related to long-term 0.0 0.0
asset items available for
sale
--------------------------------------------------------------------------------
Total other comprehensive 1.4 0.1 1.6
income adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive income 1.4 0.1 59.0 60.5
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Balance on 31 March 2016 55.9 55.9 -4.3 -0.6 664.5 771.5
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, €M 1−3/201 1−3/201 Change 1−12/201
6 5 5
--------------------------------------------------------------------------------
Cash flow from operating activities
--------------------------------------------------------------------------------
Profit for the financial period 59.0 55.4 3.6 103.6
--------------------------------------------------------------------------------
Adjustments 41.2 44.0 -2.8 175.2
--------------------------------------------------------------------------------
Changes in working capital 24.2 -25.0 49.2 -19.7
--------------------------------------------------------------------------------
Interest paid -1.2 -1.2 0.0 -23.7
--------------------------------------------------------------------------------
Interest received 0.1 0.4 -0.4 0.8
--------------------------------------------------------------------------------
Taxes paid -5.0 -4.3 -0.8 -20.5
--------------------------------------------------------------------------------
Net cash flow from operating activities 118.2 69.4 48.9 215.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investing activities
--------------------------------------------------------------------------------
Purchase of property, plant and equipment -25.7 -30.6 4.9 -150.4
--------------------------------------------------------------------------------
Purchase of intangible assets -0.5 -0.9 0.4 -3.4
--------------------------------------------------------------------------------
Purchase of other assets
--------------------------------------------------------------------------------
Proceeds from sale of other assets 0.1 0.1 0.5
--------------------------------------------------------------------------------
Proceeds from sale of property, plant and 0.8 0.1 0.8 5.1
equipment
--------------------------------------------------------------------------------
Loans granted -0.9
--------------------------------------------------------------------------------
Dividend received 0.6
--------------------------------------------------------------------------------
Contributions received 15.0 -15.0 15.0
--------------------------------------------------------------------------------
Interest paid -0.6 -0.5 -0.1 -1.7
--------------------------------------------------------------------------------
Net cash flow from investing activities -25.8 -17.0 -8.8 -135.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing activities
--------------------------------------------------------------------------------
Proceeds from non-current financing 107.4
(liabilities)
--------------------------------------------------------------------------------
Payments of non-current financing -12.4 -2.0 -10.4 -104.2
(liabilities)
--------------------------------------------------------------------------------
Change in current financing (liabilities) -35.0 -46.2 11.2 -81.0
--------------------------------------------------------------------------------
Dividends paid -65.0
--------------------------------------------------------------------------------
Net cash flow from financing activities -47.4 -48.2 0.8 -142.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in cash and cash equivalents and 45.0 4.2 40.9 -62.4
financial assets
--------------------------------------------------------------------------------
Cash and cash equivalents 1 Jan 116.9 179.3 -62.4 179.3
--------------------------------------------------------------------------------
Cash and cash equivalents 31 Mar. 161.9 183.4 -21.5 116.9
--------------------------------------------------------------------------------
QUARTERLY FIGURES
--------------------------------------------------------------------------
Q1/2016 Q4/2015 Q3/2015 Q2/2015 Q1/2015 Q4/2014
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Turnover €M 183.9 172.5 134.6 113.2 179.9 148.2
Operating profit €M 74.2 57.4 23.1 9.3 72.8 26.5
Operating profit % 40.3 33.3 17.1 8.2 40.5 17.9
--------------------------------------------------------------------------
INVESTMENTS, €M 1−3/2016 1−3/2015 Change 1−12/2015
------------------------------------------------------------------
Grid investments 24.5 22.5 2.0 138.4
------------------------------------------------------------------
Substations 14.5 10.7 3.9 77.1
------------------------------------------------------------------
Transmission lines 9.9 11.8 -1.9 61.3
------------------------------------------------------------------
------------------------------------------------------------------
Gas turbine investments 0.3 0.0 0.3 0.7
------------------------------------------------------------------
Existing gas turbine plants 0.3 0.3 0.3
------------------------------------------------------------------
New gas turbine plants 0.0 0.0 0.4
------------------------------------------------------------------
------------------------------------------------------------------
Other investments 2.6 1.6 1.0 8.4
------------------------------------------------------------------
ICT 2.5 1.5 1.0 8.4
------------------------------------------------------------------
------------------------------------------------------------------
Total investments 27.3 24.1 3.3 147.5
------------------------------------------------------------------
RESEARCH AND DEVELOPMENT EXPENSES, €M 1−3/2016 1−3/2015 Change 1−12/2015
----------------------------------------------------------------------------
Research and development expenses 0.6 0.4 0.2 1.8
----------------------------------------------------------------------------
DERIVATIVE CONTRACTS, €M
--------------------------------------------------------------------------------
-----------------------
31 March 2016 31 March 2015
31 Dec 2015
--------------------------------------------------------------------------------
----------------------
Intere Fair Fair Net Nomina Fair Fair Net Nomina Fair
Fair Net Nomina
st and value value fair l value value fair l value
value fair l
curre pos. neg. value value pos. neg. value value pos.
neg. value value
ncy
deriv
atives
--------------------------------------------------------------------------------
----------------------
Curren 15 -19 -4 331 32 -13 19 321 15
-20 -5 341
cy
swaps
--------------------------------------------------------------------------------
----------------------
Forwar 0 0 0 4 0 0 1
0 0 5
d
contr
acts
--------------------------------------------------------------------------------
----------------------
Intere 31 -10 21 430 31 -12 18 435 24
-9 15 430
st
rate
swaps
--------------------------------------------------------------------------------
----------------------
Call 1 1 359 150 1
1 359
optio
ns.
bough
t
--------------------------------------------------------------------------------
----------------------
Total 46 -29 17 1,123 63 -26 37 907 40
-30 11 1,135
================================================================================
======================
Electr Fair Fair Net Volume Fair Fair Net Volume Fair
Fair Net Volume
icity value value fair TWh value value fair TWh value
value fair TWh
deriv pos. neg. value pos. neg. value pos.
neg. value
atives
--------------------------------------------------------------------------------
----------------------
Electr 0 -50 -50 4.13 0 -34 -34 4.18
-49 -49 4.22
icity
forwa
rd
contr
acts,
NASDA
Q OMX
Commo
dities
--------------------------------------------------------------------------------
----------------------
Total 0 -50 -50 4.13 0 -34 -34 4.18
-49 -49 4.22
================================================================================
======================
The Group terminated hedge accounting for derivatives at the start of 2014. As
a result, the entire change in the fair value of the derivatives in question
was recorded and will, in future as well, be recorded in the income statement.
The hedge fund in the balance sheet will be dismantled in the income statement
during 2015 and 2016 in fixed instalments such that it decreases the result by
EUR 11.6 million.
Fair value hierarchy of financial instruments, €M 31 March 2016
--------------------------------------------------------------------------------
Level 1 Level 2 Level 3
--------------------------------------------------------------------------------
Financial assets recognised at fair value
--------------------------------------------------------------------------------
Available-for-sale investments 0
--------------------------------------------------------------------------------
Interest and currency derivatives 46
--------------------------------------------------------------------------------
Financial assets recognised at fair value 40 48
--------------------------------------------------------------------------------
Electricity forward contracts. NASDAX OMX Commodities 0
--------------------------------------------------------------------------------
Financial assets recognised in the income statement 40 94
at fair value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial liabilities held at fair value
--------------------------------------------------------------------------------
Interest and currency derivatives, liabilities 29
--------------------------------------------------------------------------------
Electricity forward contracts. NASDAX OMX Commodities 50
--------------------------------------------------------------------------------
Total financial liabilities held at fair value 50 29
--------------------------------------------------------------------------------
In the presentation of fair value, assets and liabilities measured at fair
value are categorised into a three-level hierarchy. The appropriate hierarchy
is based on the input data of the instrument. The level is determined on the
basis of the lowest level of input for the instrument that is significant to
the overall fair value measurement.
Level 1: inputs are publicly quoted in active markets.
Level 2: inputs are not publicly quoted and are based on observable market
parameters either directly or indirectly.
Level 3: inputs are not publicly quoted and are unobservable market parameters.
Commitments Contingent liabilities, 31 March 31 March Change 31 Dec
€M 2016 2015 2015
--------------------------------------------------------------------------------
Pledged cash assets 0 1 -1 1
--------------------------------------------------------------------------------
Rental liabilities 25 27 -1 26
--------------------------------------------------------------------------------
Right-of-use agreements for reserve 87 97 -10 89
power plants
--------------------------------------------------------------------------------
Credit facility commitment fees 1 1 0 1
--------------------------------------------------------------------------------
Total 114 126 -12 118
--------------------------------------------------------------------------------
Investment commitments 123 134 -12 124
--------------------------------------------------------------------------------
Other financial liabilities 2 -2
--------------------------------------------------------------------------------
Changes in property, plant and 31 March 31 March Change 31 Dec
equipment, €M 2016 2015 2015
--------------------------------------------------------------------------------
Carrying amount at beginning of 1,677 1,640 37 1,640
period
--------------------------------------------------------------------------------
Increases 28 9 19 133
--------------------------------------------------------------------------------
Decreases 0 0 0 -3
--------------------------------------------------------------------------------
Depreciation and amortisation -23 -23 -1 -93
expense
--------------------------------------------------------------------------------
Carrying amount at end of period 1,681 1,627 54 1,677
--------------------------------------------------------------------------------
Transactions with associated 31 March 31 March Change 31 Dec
companies, €M 2016 2015 2015
--------------------------------------------------------------------------------
Sales 0 3 -2 1
--------------------------------------------------------------------------------
Purchases 10 10 0 40
--------------------------------------------------------------------------------
Trade receivables 2 3 -1 3
--------------------------------------------------------------------------------
Loan receivables 3 2 1 3
--------------------------------------------------------------------------------
Transactions with owners, €M 31 March 2016 31 March 2015 Change 31 Dec 2015
-------------------------------------------------------------------------------
Owners
-------------------------------------------------------------------------------
Purchases 6 6 0 6
-------------------------------------------------------------------------------
Trade payables 0 0 0
-------------------------------------------------------------------------------
Other related parties
-------------------------------------------------------------------------------
Sales 15 14 1 29
-------------------------------------------------------------------------------
Purchases 16 19 -3 70
-------------------------------------------------------------------------------
Trade receivables 2 1 1 1
-------------------------------------------------------------------------------
Trade payables 1 3 -2 2
-------------------------------------------------------------------------------
Accounting principles
This Interim Report has been drawn up in accordance with standard IAS 34,
Interim Financial Reporting. In preparing this report, where the recognition of
congestion income is concerned, Fingrid changed its accounting principles from
those applied in its annual financial statements for 2015. The change was
implemented as of the beginning of 2016. In other respects, the interim report
complies with the same accounting principles as those used for Fingrid’s 2015
financial statements. As a consequence of the change in the regulation
governing Fingrid’s grid pricing, the company will include the congestion
income received after 1 January 2016 as accruals in the item other liabilities
in the balance sheet. Of the accruals, congestion income will be recognised in
the income statement as other operating income when their corresponding costs,
as defined in the regulation, accrue as annual expenses in the income
statement. Alternatively, they are entered in the balance sheet against
investments, as defined by regulation, to lower the acquisition cost of
property, plant and equipment, which lowers the depreciation of the property,
plant and equipment in question.
Segment reporting
The entire business of the Fingrid Group is deemed to comprise transmission
grid operation in Finland with system responsibility, constituting a single
segment. There are no material differences in the risks and profitability of
individual products and services. For that reason, segment reporting in
accordance with the IFRS 8 standard is not presented.
Corporate restructuring
On 16 February 2016, Fingrid established Fingrid Datahub Oy. The task of the
subsidiary, wholly owned by Fingrid, is to implement a centralised information
exchange system for the electricity markets in which the exchange of
information between retail sellers and transmission system operators is
concentrated into a single service.
Seasonal fluctuations
The Group’s operations are characterised by substantial seasonal fluctuations.
General clause
Certain statements in this report are forward-looking and are based on the
current views of the company’s management. Due to their nature, they contain
some risks and uncertainties and are subject to general changes in the economy
and the business sector.
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