2015-07-22 10:00:00 CEST
2015-07-22 10:00:06 CEST
REGULATED INFORMATION
Fingrid Oyj - Interim report (Q1 and Q3)
Fingrid group's Interim report 1 January - 30 June 2015
Helsinki, Finland, 2015-07-22 10:00 CEST (GLOBE NEWSWIRE) -- Fingrid Oyj
Interim report 22 July 2015 at 11.00 EET
The 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-June 2015
-- The Group's turnover in January-June was EUR 293.1 (305.3) million
-- The Group's operating profit was EUR 82.1 (99.0) million
-- Consolidated profit for the period was EUR 52.3 (76.2) million
-- Cash flow from the Group's operations, after capital expenditure, was EUR
45.6 (97.2) million
-- Interest-bearing net borrowing amounted to EUR 1,067.2 (1,056.2) million
-- Capital expenditure totalled EUR 67.8 (57.5) million
-- The equity ratio was 31.8 (29.8) per cent
-- Earnings per share totalled EUR 15,744 (22,906)
Financial development in April-June 2015
-- The Group's turnover in April-June was EUR 113.2 (114.1) million
-- The Group's operating profit for April-June was EUR 9.3 (19.7) million
-- Consolidated profit for the April-June period was EUR -3.0 (13.8) million
KEY 1-6/15 1-6/14 change 4-6/15 4-6/14 change 1-12/14
FIGURE % %
S
--------------------------------------------------------------------------------
Turnove €M 293.1 305.3 -4.0 113.2 114.1 -0.7 567.2
r
--------------------------------------------------------------------------------
Capital €M 67.8 57.5 18.0 43.8 25.9 69.2 129.5
expend
iture,
gross
--------------------------------------------------------------------------------
- of % 23.1 18.8 38.7 22.7 22.8
turnov
er
--------------------------------------------------------------------------------
Researc €M 0.8 0.9 -6.6 0.4 0.5 -14.1 1.7
h and
develo
pment
expens
es
--------------------------------------------------------------------------------
- of % 0.3 0.3 0.4 0.4 0.3
turnov
er
--------------------------------------------------------------------------------
Average 319 297 7.4 325 306 6.2 305
number
of
employ
ees
--------------------------------------------------------------------------------
Number 332 317 4.7 332 317 4.7 313
of
employ
ees at
end of
period
--------------------------------------------------------------------------------
Salarie €M 11.2 10.4 7.6 5.7 5.2 8.9 20.5
s and
bonuse
s,
total
--------------------------------------------------------------------------------
Operati €M 82.1 99.0 -17.0 9.3 19.7 -52.7 142.8
ng
profit
--------------------------------------------------------------------------------
- of % 28.0 32.4 8.2 17.2 25.2
turnov
er
--------------------------------------------------------------------------------
Profit €M 65.4 95.0 -31.1 -3.7 17.2 -121.6 132.9
before
taxes
--------------------------------------------------------------------------------
- of % 22.3 31.1 -3.3 15.1 23.4
turnov
er
--------------------------------------------------------------------------------
Profit €M 52.3 76.2 -31.3 -3.0 13.8 -121.9 106.5
for
the
period
--------------------------------------------------------------------------------
Compreh €M 55.4 75.8 -26.9 -1.6 13.9 -111.6 106.1
ensive
income
for
the
period
--------------------------------------------------------------------------------
Equity % 31.8 29.8 31.8 29.8 31.0
ratio
--------------------------------------------------------------------------------
Interes €M 1,067.2 1,056.2 1.0 1,067.2 1,056.2 1,046.1
t-beari
ng net
borrow
ings
--------------------------------------------------------------------------------
Net 1.6 1.7 1.6 1.7 1.6
gearin
g
--------------------------------------------------------------------------------
Earning € 15,744.04 22,905.58 -31.3 -911.57 4,161.49 -121.9 32,027.89
s per
share
--------------------------------------------------------------------------------
Dividen € 21,655.44
d,
Series
A
shares
--------------------------------------------------------------------------------
Dividen € 16,038.49
d,
Series
B
shares
--------------------------------------------------------------------------------
Equity € 197,687 191,459 3.3 200,568
per
share
--------------------------------------------------------------------------------
Dividen % 67.6
d
payout
ratio,
A
shares
--------------------------------------------------------------------------------
Dividen % 50.1
d
payout
ratio,
B
shares
--------------------------------------------------------------------------------
Number
of
shares
--------------------------------------------------------------------------------
- qty 2,078 2,078 2,078 2,078 2,078
Series
A
shares
--------------------------------------------------------------------------------
- qty 1,247 1,247 1,247 1,247 1,247
Series
B
shares
--------------------------------------------------------------------------------
Total qty 3,325 3,325 3,325 3,325 3,325
--------------------------------------------------------------------------------
Jukka Ruusunen, President & CEO of Fingrid: “In Q2 the wholesale price of
electricity fell 25 per cent in Finland and exports to Estonia grew by more
than 70 per cent compared to last year” "Affordable electricity continues to be imported to Finland from Scandinavia,
as a result of which the Finnish area price on the wholesale electricity
markets fell by 25 per cent in the second quarter compared to the corresponding
period last year. In June, the wholesale price of electricity in Finland was at
its lowest level in fifteen years. The transmission capacity of electricity
between Finland and Sweden has been almost fully utilised for the entire first
half of the year. Steered by the European market mechanism, large volumes of
affordable Scandinavian electricity imported to Finland have been exported to
Estonia. Exports from Finland to Estonia increased in the second quarter by as
much as 75 per cent compared to the previous year. In terms of Fingrid's
finances, the market situation is evident, on the one hand, in the form of
significant congestion income, and on the other hand in higher transmission
losses. The system security of Finland's national grid was excellent in the
first half of this year.
Fingrid's long-term investment programme is continuing according to plan.
During the current year, the company will invest EUR 150 million in the
national grid. The focal areas of the investment programme are to develop the
main grid in Ostrobothnia and to modernise the network running from east to
west in southern Finland. The Finnish government's new programme proposes
changes to the feed-in tariff system for wind power, which will add to the risk
inherent in wind power production. Changes to the government programme have
expedited current wind power projects, which also hold a key role in Fingrid's
investment programme. The alterations to the in-feed tariff system may impact
Fingrid's planned investments based on linking wind power to Finland's main
grid."
Fingrid Group's Interim report 1 January - 30 June 2015
Accounting principles
Fingrid's Interim Report has been drawn up in accordance with the standard IAS
34 Interim Financial Reporting. In preparing this Interim Report, Fingrid has
applied the same accounting principles as those used for its 2014 financial
statements.
Financial result
The Group's second quarter turnover was EUR 113.2 (114.1) million. Grid service
income in Q2 totalled EUR 60.3 (61.1) million. Other operating income totalled
EUR 1.1 (0.5) million. Costs during the period amounted to EUR 101.5 (105.8)
million.
The Group's turnover for January-June was EUR 293.1 (305.3) million. Grid
service income declined during the first half of the year to EUR 175.7 (185.2)
million due to lower electricity consumption and the two-percent reduction in
grid pricing enacted at the start of the year. Other operating income totalled
EUR 1.9 (1.7) million. Costs during January-June amounted to EUR 205.4 (211.3)
million.
Between January and June, electricity consumption totalled 42.3 (42.9) terawatt
hours. Imbalance power sales amounted to EUR 69.7 (76.6) million. Fingrid's
congestion income from connections between Finland and Sweden increased and
amounted to EUR 24.3 (23.9) million. The increase in the congestion income
resulted from a market situation in which Finland imported significant volumes
of electricity from Sweden. In addition the differences between the area prices
of Finland and Sweden were larger, due to the extremely low wholesale price of
electricity in the Nordic countries. Cross-border transmission income from the
connection between Finland and Russia increased to EUR 7.1 (4.1) million. The
increase was due to the growth in Russian imports, which is attributed to the
weakening rouble. Congestion income from the connections between Finland and
Estonia increased by EUR 3.2 (0.6) million due to a substantial increase in
congestion hours. ITC income remained at the same level as in the corresponding
period last year.
Imbalance power costs fell from the previous year's level to EUR 47.9 (51.5)
million. Loss energy costs fell to EUR 30.9 (33.9) million due to a lower
acquisition cost and the price difference between the Finnish area price and
systemic price. At the end of June, approximately 96 (96) per cent of Fingrid's
projected loss energy procurement for the remaining part of 2015 was hedged at
an average price of EUR 39.9 (42.4) per megawatt hour.
Due to an increase in the market prices of frequency controlled reserves
resulting from major flooding in the spring, the cost of reserves to safeguard
the system security of the national grid grew to EUR 29.4 (28.1) million.
Depreciation amounted to EUR 46.2 (45.6) million. Maintenance costs amounted to
EUR 7.1 (6.8) million, remained almost at last year's level. Personnel costs
grew slightly as a consequence of the increased number of personnel and were
EUR 13.5 (12.4) million.
Turnover and other income 1-6/15 1-6/14 change % 4-6/15 4-6/14 change %
(€M)
--------------------------------------------------------------------------------
Grid service income 176 185 -5.1 60 61 -1.2
--------------------------------------------------------------------------------
Imbalance power sales 70 77 -9.0 30 35 -16.3
--------------------------------------------------------------------------------
ITC income 7 7 0.7 3 3 -4.7
--------------------------------------------------------------------------------
Cross-border transmission 7 4 73.9 1 2 -8.7
income
--------------------------------------------------------------------------------
Finland-Estonia congestion 3 1 454.1 3 0 1,709.5
income
--------------------------------------------------------------------------------
Peak load capacity income* 4 4 0.3 2 2 -0.3
--------------------------------------------------------------------------------
Finland-Sweden congestion 24 24 1.9 13 9 50.1
income
--------------------------------------------------------------------------------
Other turnover 2 4 -47.4 1 2 -54.5
--------------------------------------------------------------------------------
Other operating income 2 2 11.0 1 1 114.9
--------------------------------------------------------------------------------
Turnover and other income 295 307 -3.9 114 115 -0.2
total
--------------------------------------------------------------------------------
Costs (€M) 1-6/15 1-6/14 change 4-6/15 4-6/14 change
% %
--------------------------------------------------------------------------------
Purchase of imbalance power 48 52 -7.0 20 24 -17.3
--------------------------------------------------------------------------------
Loss energy costs 31 34 -8.9 15 16 -4.7
--------------------------------------------------------------------------------
Depreciation 46 46 1.3 23 24 -1.0
--------------------------------------------------------------------------------
Cost of reserves 29 28 4.7 17 15 13.6
--------------------------------------------------------------------------------
Personnel costs 13 12 8.5 7 6 11.6
--------------------------------------------------------------------------------
Peak load capacity costs* 4 4 0.2 2 2 3.4
--------------------------------------------------------------------------------
Maintenance costs 7 7 3.3 4 4 8.2
--------------------------------------------------------------------------------
ITC charges 5 5 -11.0 1 2 -46.5
--------------------------------------------------------------------------------
Other costs 22 24 -8.1 11 12 -9.9
--------------------------------------------------------------------------------
Costs total 205 211 -2.8 101 106 -4.1
--------------------------------------------------------------------------------
Operating profit, excl. the 90 96 -6.4 13 9 46.6
change in the fair value of
commodity derivatives
--------------------------------------------------------------------------------
Consolidated operating profit, 82 99 -17.0 9 20 -52.7
IFRS
--------------------------------------------------------------------------------
* 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 for the second quarter was EUR 9.3 (19.7) million.
Profit before taxes was EUR -3.7 (17.2) million. Profit for the period was EUR
-3.0 (13.8) million and the comprehensive income was EUR -1.6 (13.9) million.
The Group's net cash flow from operations, with net capital expenditure
deducted, was -6.8 (24.0) million euros in the financial period. The sale of
the shares of the associated company Porvoon Alueverkko Oy during the period
under review did not have a significant impact on the Group's result or cash
flow.
The Group's operating profit in the first half of the year was EUR 82.1 (99.0)
million. Profit before taxes was EUR 65.4 (95.0) million. Profit for the
financial period was EUR 52.3 (76.2) million and the comprehensive income was
EUR 55.4 (75.8) million. The biggest negative differences from the
corresponding period last year are explained by changes in the market value of
derivatives (EUR -22.9 million) and lower grid service income (EUR -9.5
million). The Group's net cash flow from operations, with net capital
expenditure deducted, was EUR 45.6 (97.2) million in the first half of the
year. The equity ratio was 31.8 (29.8) 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.
Investments and maintenance
Fingrid's investment programme is continuing according to plan. Work involving
the major projects specified in the investment programme, developing the
Ostrobothnian grid system and modernising the old transmission system that
connects eastern and western Finland, is proceeding as planned.
The company made an investment decision to modernise the 400 kilovolt
switchgear at Alajärvi. The Alajärvi transformer substation is one of the key
substations in the national grid. In order to ensure the system security of the
switchgear, the substation's ageing main busbar system will be modernised. The
project's investment costs will equal some EUR 17 million and it will be
carried out in 2017.
In June, the 117-kilometre-long, 110 kilovolt transmission line between
Huutokoski and Kontiolahti was taken into use. The project, costing
approximately EUR 15 million, was implemented by TLT Building Oy and Eltel
Networks Oy.
The company has made several new procurement decisions. The new 400/110/20
kilovolt substation for Jylkkä in Kalajoki, related to reinforcing the
transmission line between Hirvisuo and Pyhäselkä in Ostrobothnia, will be
carried out by Infratek Oy. The value of the project is some EUR 11.5 million
and the substation will be completed in autumn 2016. Two 400 kilovolt series
capacitors will be built for the substation under construction in Hirvisuo.
Siemens Osakeyhtiö will supply the capacitors. The project is valued at EUR 7
million and will achieve completion at the end of 2016.
The company will continue investing in improving occupational safety. However,
the number of accidents in the first half of the year slightly exceeded the
number in the corresponding period last year. The volume of accidents declined
during the financial period and work to improve occupational safety continues.
Fingrid's employees suffered a serious electricity-related accident at the
Nikuviken substation in May. The cause of the accident has been investigated
and Fingrid has drawn up an action plan based on the accident report in order
to avoid similar incidents in the future.
Fingrid 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.
Power system
Between April and June, electricity consumption in Finland totalled 18.8 (18.9)
terawatt hours. Inter-TSO in the same period amounted to 1.6 (0.9) terawatt
hours. The total electricity transmission in Finland was 20.4 (19.8) terawatt
hours. Fingrid transmitted a total of 15.9 (15.8) terawatt hours in its grid,
representing 78.0 (79.9) per cent of the total electricity transmission in
Finland. During this period, Fingrid transmitted 14.4 (14.9) terawatt hours of
electricity to its customers which amounts to 76.2 (79.0) per cent of Finland's
total consumption.
In January-June, electricity consumption in Finland amounted to 42.3 (42.9)
terawatt hours. Inter-TSO in the same period amounted to 2.9 (2.2) terawatt
hours. The total electricity transmission in Finland was 45.1 (45.0) terawatt
hours. Fingrid transmitted a total of 33.9 (34.0) terawatt hours in its grid,
representing 75.0 (75.6) per cent of the total electricity transmission in
Finland. During this period, Fingrid transmitted 31.0 (31.8) terawatt hours of
electricity to its customers, which amounts to 73.3 (74.1) per cent of
Finland's total consumption.
Between April and June, 4.1 (4.2) terawatt hours of electricity were imported
from Sweden to Finland, and 0.1 (0.0) terawatt hours were exported from Finland
to Sweden. In January-June, 8.3 (9.3) terawatt hours of electricity were
imported from Sweden to Finland and 0.1 (0.07) terawatt hours were exported
from Finland to Sweden.
The volume of electricity exported to Estonia between April and June was 1.4
(0.8) terawatt hours. Between January and June 2.6 (2.0) terawatt hours were
exported to Estonia. The EstLink 2 DC connection was out of operation for two
weeks in early May due to repairs.
Between April and June, 0.5 (0.5) terawatt hours of electricity was imported
from Russia to Finland and between January and June imports totalled 2.6 (1.3)
terawatt hours. Transmission capacity from Russia to Finland was fully
available during the reporting period, with the exception of maintenance work
performed on the Russian grid in April. During the repair work transmission
capacity was lower than normal but sufficient to meet the needs of the markets.
Electricity imports from Russia were low as in the previous year. There are
major intraday variations in import volumes, however.
The most significant disturbance in terms of consumers during the review period
was a disturbance in a section of line owned by Fingrid's customer, which was
caused by a storm on 3 June 2015. The disturbance caused a power outage of a
few minutes in the Varkaus area's main grid and a longer outage in the area
between Varkaus and Joensuu.
Power system operation 1-6/15 1-6/14 4-6/15 4-6/14
--------------------------------------------------------------------------------
Electricity consumption in Finland, TWh 42.3 42.9 18.8 18.9
--------------------------------------------------------------------------------
TSO transmission in Finland, TWh 2.9 2.2 1.6 0.9
--------------------------------------------------------------------------------
Transmission within Finland, TWh 45.1 45.0 20.4 19.8
--------------------------------------------------------------------------------
Fingrids electrity transmission volume, TWh 33.9 34.0 15.9 15.8
--------------------------------------------------------------------------------
Fingrid's electricity transmission to customers, 31.0 31.8 14.4 14.9
TWh
--------------------------------------------------------------------------------
Fingrid's loss energy volume, TWh 0.7 0.6 0.3 0.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Electricity transmission Finland - Sweden
Exports to Sweden TWh 0.1 0.1 0.1 0.0
--------------------------------------------------------------------------------
Imports from Sweden, TWh 8.3 9.3 4.1 4.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Electricity transmission Finland - Estonia
Exports to Estonia, TWh 2.6 2.3 1.4 1.0
--------------------------------------------------------------------------------
Electricity transmission Finland - Russia
Imports from Russia, TWh 2.6 1.3 0.5 0.5
--------------------------------------------------------------------------------
Electricity market
In the second quarter of the year, the average day-ahead Nordic market price
(system price) of electricity between April and June was EUR 20.71 (25.68) per
megawatt hour and the area price for Finland was EUR 25.83 (34.55) per megawatt
hour. In January-June, the average day-ahead market price for the Nordics was
EUR 24.40 (27.92) per megawatt hour and Finland's area price was EUR 28.95
(34.89) per megawatt hour.
Congestion income between Finland and Sweden totalled EUR 48.6 (47.7) million.
The increase in congestion income resulted in particular from the widening of
the price difference between Finland and Sweden, due to a decline in Sweden's
area prices. The reason behind this was an exceptionally low market price in
the Nordic countries, resulting from a high volume of hydroelectric power
production.
The first commercial exports of electricity from Finland to Russia took place
on 7 June. Commercial exports of electricity to Russia became possible at the
end of 2014 when Fingrid and the Russian grid operator parties signed
agreements on bidirectional electricity trade between Finland and Russia.
Previously, the transfer of electricity along 400 kilovolt cross-border
transmission lines was only possible in one direction, from Russia to Finland.As of 1 June 2015, Fingrid took into use a new transmission tariff, where the
tariff depends on the price difference between the area prices in Finland and
north-western Russia. The purpose of the new tariff structure is to boost
electricity trade between Finland and Russia particularly during periods of low
price differences. During 2015, more electricity was exported to Russia than
was imported. Transmission volumes were small.
Fingrid started up, by request of the Ministry of Employment and Economy, a
review of a centralised electricity market information exchange solution, or
datahub. The goal is to assemble all of the information exchange in one
service. It is estimated that the implementation of the datahub will take
approximately four years. This means that the actual launch of the information
exchange solution will occur in 2019.
Electricity market 1-6/15 1-6/14 4-6/15 4-6/14
--------------------------------------------------------------------------------
Nord Pool system price, average €/MWh 24.40 27.92 20.71 25.68
--------------------------------------------------------------------------------
Area price Finland, average €/MWh 28.95 34.89 25.83 34.55
--------------------------------------------------------------------------------
Congestion income between Finland and Sweden, 48.6 47.7 26.6 17.7
€M*
--------------------------------------------------------------------------------
Congestion hours between Finland and Sweden %* 38.3 46.7 31.9 31.5
--------------------------------------------------------------------------------
Congestion income between Finland and Estonia, 6.3 1.1 5.6 0.3
€M*
--------------------------------------------------------------------------------
Congestion hours between Finland and Estonia %* 18.4 6.9 30.1 2.4
--------------------------------------------------------------------------------
* The congestion income between Finland and Sweden as well as between Finland
and Estonia is divided equally between the relevant TSOs. The income and costs
of the transmission connections are presented in the tables in the Financial
result section.
During the second quarter of the year, Fingrid used EUR 1.7 (3.7) million for
countertrade. The biggest costs were caused by disturbances in the DC
connection between Finland and Sweden in May, and by countertrade carried out
to maintain system security in April during transmission outages in
Ostrobothnia and northern Finland.
During the first half of the year, Fingrid used EUR 2.7 (6.5) million for
countertrade. The biggest costs were caused by disturbances in the DC
connection between Finland and Sweden in February and May, and by countertrade
carried out to maintain system security in March and April during transmission
outages in Ostrobothnia and northern Finland.
Countertrade 1-6/15 1-6/14 4-6/15 4-6/14
--------------------------------------------------------------------------------
Countertrade between Finland and Sweden, €M 0.5 4.6 0.3 1.7
--------------------------------------------------------------------------------
Countertrade between Finland and Estonia, €M 0.7 0.1 0.7 0.0
--------------------------------------------------------------------------------
Countertrade between Finland's internal 1.4 1.9 0.6 1.9
connections, €M
--------------------------------------------------------------------------------
Total countertrade, €M 2.7 6.5 1.7 3.7
--------------------------------------------------------------------------------
Financing
The company's financial position remained satisfactory and liquidity remained
good. The company's net financial costs between April and June were EUR 13.0
(2.7) million. Between January and June the company's net financial costs
amounted to EUR 16.9 (4.6) million, including the change in the fair value of
derivatives of EUR 6.9 million negative (EUR 5.3 million positive). Financial
and cash assets recognised at fair value through profit or loss on 30 June 2015
were EUR 109.1 (203.4) million. The company has reduced financial and cash
assets during the second quarter to achieve a more efficient capital structure.
Fingrid agreed with the banks on a total of EUR 50 million uncommitted
overdraft facilities in order to secure liquidity. An undrawn committed
revolving credit facility of EUR 250 million is additionally available to the
company.
Interest-bearing borrowings totaled EUR 1,176.2 (1,259.7) million, of which
non-current borrowings accounted for EUR 951.5 (1,011.9) million and current
borrowings for EUR 224.7 (247.8) million.
The change in the fair value of electricity derivatives during the period under
review includes EUR 3.6 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 23 (33) million. Fingrid's foreign exchange and commodity price risks
are generally fully hedged.
Personnel
The total number of personnel employed by the Group averaged 319 (297), of
which 283 (271) were in a permanent employment relationship.
Other matters
Fingrid Oyj's Annual General Meeting was held on 14 April 2015. The Annual
General Meeting approved the financial statements for 2014, confirmed the
income statement and balance sheet, and discharged the members of the Board of
Directors and the CEO from liability.
The Annual General Meeting elected Fingrid Oyj's Board of Directors for 2015.
Continuing as board members are Helena Walldén (Chairman), Juha Majanen (Vice
Chairman), Juhani Järvi and Esko Torsti. Sanna Syri was elected as a new
member. A more detailed presentation of the board members is available on the
company's website. The Annual General Meeting decided on a dividend payment of
EUR 21,655.44 for each Series A share and EUR 16,038.49 for each Series B
share, representing a total dividend payout of EUR 65,000,001.35.
In a share transaction completed on 9 April 2015, LocalTapiola General Mutual
Insurance Company and LocalTapiola Mutual Life Insurance Company sold a total
of 97 of their Fingrid Series B shares to the State Pension Fund.
In a share transaction completed on 7 July 2015, the Finnish State transferred
a total of 443 of its Fingrid Series A shares to the National Emergency Supply
Agency. The State's combined ownership in the company remains unaltered.
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 had a minor positive effect on Fingrid's second quarter
result.
On 21 January 2013, Fingrid launched an appeal to the decision of the Market
Court to the Supreme Administrative Court. The appeal concerned the
confirmation of methods applied in determining the grid owner's income from
grid operations and payments for transmission service for the 2012-2015 control
period. The Supreme Administrative Court rejected Fingrid's appeal in its
verdict on 29 June 2015. The verdict has no financial impact on Fingrid's
financial result for the control period.
Auditing
The consolidated figures in this Interim Report are unaudited.
Events after the review period and outlook for the rest of the year
In an arrangement completed on 1 July 2015, Pohjola Insurance Ltd transferred a
total of 149 of its Fingrid B Shares to Aino Ky. On 1 July 2015, the State
Pension Fund sold altogether 181 of its Fingrid B Shares to Aino Ky.
Fingrid Group's profit for the 2015 financial period, excluding changes in the
fair value of derivatives and before taxes, is expected to decline from the
previous year. Uncertainty related to reserve costs, congestion income, loss
energy costs and cross-border transmission with Russia make it difficult to
forecast the result for the full financial year. The company's debt service
capacity is expected to remain stable.
Notes: Tables for Fingrid's Interim Report 1 January - 30 June 2015
Further information:
Jukka Ruusunen, President & CEO, tel. +358 30 395 5140 or +358 40 593 8428
Jan Montell, Chief Financial Officer, tel. +358 30 395 5213 or +358 40 592 4419
Notes: Tables for Fingrid´s Interim Report 1 January - 30 June 2015
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
€M 1-6/20 1-6/20 Change 4-6/20 4-6/20 Change 1-12/2
15 14 15 14 014
--------------------------------------------------------------------------------
Turnover 293.1 305.3 -12.2 113.2 114.1 -0.8 567.2
--------------------------------------------------------------------------------
Other operating income 1.9 1.7 0.2 1.1 0.5 0.6 4.6
--------------------------------------------------------------------------------
Depreciation -46.2 -45.6 -0.6 -23.3 -23.6 0.2 -91.5
--------------------------------------------------------------------------------
Operating expenses -166.6 -162.4 -4.2 -81.7 -71.4 -10.3 -337.4
--------------------------------------------------------------------------------
Operating profit 82.1 99.0 -16.8 9.3 19.7 -10.4 142.8
--------------------------------------------------------------------------------
Finance income and costs -16.9 -4.6 -12.2 -13.0 -2.7 -10.3 -10.7
--------------------------------------------------------------------------------
Share of profit of 0.2 0.7 -0.5 0.0 0.2 -0.3 0.9
assoc. companies
--------------------------------------------------------------------------------
Profit before taxes 65.4 95.0 -29.6 -3.7 17.2 -20.9 132.9
--------------------------------------------------------------------------------
Income taxes -13.1 -18.9 5.8 0.7 -3.4 4.1 -26.4
--------------------------------------------------------------------------------
Profit for the period 52.3 76.2 -23.8 -3.0 13.8 -16.9 106.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive
income
--------------------------------------------------------------------------------
Cash flow hedges 2.9 2.9 1.4 1.4
--------------------------------------------------------------------------------
Translation reserve 0.2 -0.4 0.5 0.0 0.1 -0.1 -0.4
--------------------------------------------------------------------------------
Items related to
long-term asset
--------------------------------------------------------------------------------
Items available for sale 0.0 0.0 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
Total comprehensive 55.4 75.8 -20.4 -1.6 13.9 -15.5 106.1
income for the
financial period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit attributable to:
--------------------------------------------------------------------------------
Shareholders of the 52.3 76.2 -23.8 -3.0 13.8 -16.9 106.5
company
--------------------------------------------------------------------------------
Comprehensive income
attributable to:
--------------------------------------------------------------------------------
Shareholders of the 55.4 75.8 -20.4 -1.6 13.9 -15.5 106.1
company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share on
profit attributable to
--------------------------------------------------------------------------------
shareholders of the 15,744 22,906 -7,162 -912 4,161 -5,073 32,028
parent company (EUR)*:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
* no dilution effect
CONDENSED CONSOLIDATED BALANCE SHEET,
€M 1-6/201 1-6/201 Change 1-12/201
5 4 4
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Goodwill 87.9 87.9 0.0 87.9
--------------------------------------------------------------------------------
Intangible assets 95.1 92.8 2.4 95.0
--------------------------------------------------------------------------------
Property, plant and equipment 1,647.7 1,615.9 31.8 1,640.5
--------------------------------------------------------------------------------
Investments 10.4 11.0 -0.6 10.8
--------------------------------------------------------------------------------
Derivatives 33.7 42.3 -8.6 42.1
--------------------------------------------------------------------------------
Receivables 12.4 13.0 -0.6 13.3
--------------------------------------------------------------------------------
Total non-current assets 1,887.2 1,862.9 24.4 1,889.5
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Inventories 12.7 13.2 -0.4 12.8
--------------------------------------------------------------------------------
Derivatives 6.6 4.9 1.8 11.2
--------------------------------------------------------------------------------
Receivables 54.9 51.1 3.8 57.7
--------------------------------------------------------------------------------
Financial assets recognised in income
--------------------------------------------------------------------------------
statement at fair value 92.5 105.2 -12.8 116.7
--------------------------------------------------------------------------------
Cash and cash equivalents and financial 16.6 98.2 -81.6 62.6
assets
--------------------------------------------------------------------------------
Total current assets 183.3 272.6 -89.3 261.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 2,070.6 2,135.4 -64.9 2,150.5
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
Equity attributable to shareholders of the
parent company
--------------------------------------------------------------------------------
Shareholders' equity 657.3 636.6 20.7 666.9
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Interest-bearing 951.5 1,011.9 -60.4 962.3
--------------------------------------------------------------------------------
Derivatives 44.5 44.9 -0.4 45.0
--------------------------------------------------------------------------------
Non-interest-bearing 123.2 129.1 -5.9 124.7
--------------------------------------------------------------------------------
Total non-current liabilities 1,119.2 1,185.9 -66.7 1,132.0
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Interest-bearing 224.7 247.8 -23.1 263.0
--------------------------------------------------------------------------------
Derivatives 12.5 8.6 3.9 17.0
--------------------------------------------------------------------------------
Non-interest-bearing 56.8 56.5 0.3 71.6
--------------------------------------------------------------------------------
Total current liabilities 294.0 312.9 -18.9 351.6
--------------------------------------------------------------------------------
Total shareholders' equity and liabilities 2,070.6 2,135.4 -64.9 2,150.5
--------------------------------------------------------------------------------
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 2014 55.9 55.9 -11.6 0.0 542.4 642.7
--------------------------------------------------------------------------------
Comprehensive income for
the financial period
--------------------------------------------------------------------------------
Profit or loss 76.2 76.2
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Translation reserve -0.4 -0.4
--------------------------------------------------------------------------------
Items related to long-term 0.0 0.0
asset items available for
sale
--------------------------------------------------------------------------------
Total other comprehensive 0.0 -0.4 -0.4
income adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive income 0.0 -0.4 76.2 75.8
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Dividend relating to 2013 -81.9 -81.9
--------------------------------------------------------------------------------
Balance on 30 June 2014 55.9 55.9 -11.6 -0.4 536.7 636.6
--------------------------------------------------------------------------------
Comprehensive income for
the financial period
--------------------------------------------------------------------------------
Profit or loss 30.3 30.3
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Translation reserve -0.1 -0.1
--------------------------------------------------------------------------------
Items related to long-term 0.0 0.0
asset items available for
sale
--------------------------------------------------------------------------------
Total other comprehensive 0.0 -0.1 0.0
income adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive income 0.0 -0.1 30.3 30.3
--------------------------------------------------------------------------------
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 52.3 52.3
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Cash flow hedges 2.9 2.9
--------------------------------------------------------------------------------
Translation reserve 0.2 0.2
--------------------------------------------------------------------------------
Items related to long-term 0.0 0.0
asset items available for
sale
--------------------------------------------------------------------------------
Total other comprehensive 2.9 0.2 3.1
income adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive income 2.9 0.2 52.3 55.4
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Dividend relating to 2014 -65.0 -65.0
--------------------------------------------------------------------------------
Balance on 30 June 2015 55.9 55.9 -8.6 -0.3 554.4 657.3
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, €M 1-6/201 1-6/201 Change 1-12/201
5 4 4
--------------------------------------------------------------------------------
Cash flow from operating activities
--------------------------------------------------------------------------------
Profit for the financial period 52.3 76.2 -23.8 106.5
--------------------------------------------------------------------------------
Adjustments 83.2 65.0 18.1 120.5
--------------------------------------------------------------------------------
Changes in working capital -10.6 16.9 -27.4 19.1
--------------------------------------------------------------------------------
Interest paid -14.3 -12.0 -2.2 -21.7
--------------------------------------------------------------------------------
Interest received 0.7 0.8 -0.1 1.2
--------------------------------------------------------------------------------
Taxes paid -11.6 -7.9 -3.7 -19.7
--------------------------------------------------------------------------------
Net cash flow from operating activities 99.8 138.9 -39.1 206.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investing activities
--------------------------------------------------------------------------------
Purchase of property, plant and equipment -67.2 -59.9 -7.4 -124.5
--------------------------------------------------------------------------------
Purchase of intangible assets -1.7 -1.6 -0.1 -5.4
--------------------------------------------------------------------------------
Purchase of other assets
--------------------------------------------------------------------------------
Proceeds from sale of other assets 0.5 0.0 0.5 0.1
--------------------------------------------------------------------------------
Proceeds from sale of property, plant and 0.2 0.2 0.0 1.4
equipment
--------------------------------------------------------------------------------
Loans granted -1.6
--------------------------------------------------------------------------------
Dividend received 0.6 0.3 0.2 0.3
--------------------------------------------------------------------------------
Contributions received 15.0 19.9 -4.9 19.9
--------------------------------------------------------------------------------
Interest paid -1.1 -0.9 -0.3 -1.3
--------------------------------------------------------------------------------
Net cash flow from investing activities -53.7 -41.8 -12.0 -111.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing activities
--------------------------------------------------------------------------------
Proceeds from non-current financing 110.0 -110.0 110.0
(liabilities)
--------------------------------------------------------------------------------
Payments of non-current financing -65.1 -20.7 -44.4 -103.0
(liabilities)
--------------------------------------------------------------------------------
Change in current financing (liabilities) 13.8 -118.4 132.2 -58.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid -65.0 -81.9 16.9 -81.9
--------------------------------------------------------------------------------
Net cash flow from financing activities -116.3 -111.0 -5.3 -132.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in cash and cash equivalents and -70.3 -13.9 -56.4 -38.0
financial assets
--------------------------------------------------------------------------------
Cash and cash equivalents 1 Jan 179.3 217.3 -38.1 217.3
--------------------------------------------------------------------------------
Cash and cash equivalents 31 Mar. 109.0 203.4 -94.4 179.4
--------------------------------------------------------------------------------
QUARTERLY FIGURES
---------------------------------------------------------------------------
Q2/2015 Q1/2015 Q4/2014 Q3/2014 Q2/2014 Q1/2014
---------------------------------------------------------------------------
Turnover €M 113.2 179.9 148.2 113.6 114.1 191.3
---------------------------------------------------------------------------
Operating profit €M 9.3 72.8 26.5 17.3 19.7 79.3
---------------------------------------------------------------------------
Operating profit % 8.2 40.5 17.9 15.2 17.2 41.5
---------------------------------------------------------------------------
INVESTMENTS, €M 1-6/2015 1-6/2014 Change 1-12/2014
------------------------------------------------------------------
Grid investments 62.6 53.5 9.1 117.5
------------------------------------------------------------------
Substations 32.5 30.1 2.5 63.0
------------------------------------------------------------------
Transmission lines 30.0 23.4 6.6 54.6
------------------------------------------------------------------
------------------------------------------------------------------
Gas turbine investments 0.4 0.4 0.1 0.8
------------------------------------------------------------------
Existing gas turbine plants 0.0 0.0 -0.2
------------------------------------------------------------------
New gas turbine plants 0.4 0.4 0.1 1.0
------------------------------------------------------------------
------------------------------------------------------------------
Other investments 4.8 3.6 1.2 11.2
------------------------------------------------------------------
ICT 4.8 3.6 1.3 11.1
------------------------------------------------------------------
------------------------------------------------------------------
Total investments 67.8 57.5 10.4 129.5
------------------------------------------------------------------
RESEARCH AND DEVELOPMENT EXPENSES, €M 1-6/2015 1-6/2014 Change 1-12/2014
----------------------------------------------------------------------------
Research and development expenses 0.8 0.9 -0.1 1.7
----------------------------------------------------------------------------
DERIVATIVE CONTRACTS, €M
--------------------------------------------------------------------------------
-----------------------
30 June 2015 30 June 2014
31 Dec 2014
--------------------------------------------------------------------------------
----------------------
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 25 -12 13 249 34 -9 25 342 29
-20 9 321
cy
swaps
--------------------------------------------------------------------------------
----------------------
Forwar 0 0 1 1 1 -79 3 3 55
d
contr
acts
--------------------------------------------------------------------------------
----------------------
Intere 21 -12 10 460 20 -13 7 471 27
-12 16 365
st
rate
swaps
--------------------------------------------------------------------------------
----------------------
Call 0 0 130 0 0 350
310
optio
ns.
bough
t
--------------------------------------------------------------------------------
----------------------
Total 47 -24 23 840 55 -22 33 1,084 59
-32 28 1,052
================================================================================
======================
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 -36 -36 4.13 -35 -35 4.22
-32 -32 4.19
icity
forwa
rd
contr
acts,
NASDA
Q OMX
Commo
dities
--------------------------------------------------------------------------------
----------------------
Total -36 -36 4.13 -35 -35 4.22
-32 -32 4.19
================================================================================
======================
At the start of 2014, the Group terminated hedge accounting for derivatives. As
a result, the entire change in the fair value of the deriva-tives 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 30 June 2015
--------------------------------------------------------------------------------
Level 1 Level 2 Level 3
--------------------------------------------------------------------------------
Financial assets recognised at fair value
--------------------------------------------------------------------------------
Available-for-sale investments 0 0
--------------------------------------------------------------------------------
Interest and currency derivatives 47
--------------------------------------------------------------------------------
Financial assets recognised at fair value 39 53
--------------------------------------------------------------------------------
Financial assets recognised in the income statement 40 100
at fair value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial liabilities held at fair value
--------------------------------------------------------------------------------
Interest and currency derivatives, liabilities -24
--------------------------------------------------------------------------------
Electricity forward contracts. NASDAX OMX Commodities 36
--------------------------------------------------------------------------------
Total financial liabilities held at fair value 36 -24
--------------------------------------------------------------------------------
In the presentation of fair value, assets and liabilities recognised at fair
value are categorised into a three-level hierarchy. The appropri-ate 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 instru-ment in its entirety that is
significant to the 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, 30 June 30 June Change 31 Dec
€M 2015 2014 2014
--------------------------------------------------------------------------------
Pledged cash assets 1 1 0 1
--------------------------------------------------------------------------------
Rental liabilities 27 32 -5 27
--------------------------------------------------------------------------------
Right-of-use agreements for reserve 95 106 -11 100
power plants
--------------------------------------------------------------------------------
Credit facility commitment fees 1 2 -1 1
--------------------------------------------------------------------------------
Total 124 141 -17 129
--------------------------------------------------------------------------------
Investment commitments 147 119 28 144
--------------------------------------------------------------------------------
Other financial liabilities 2 -2 2
--------------------------------------------------------------------------------
Changes in property, plant and 30 June 30 June Change 31 Dec
equipment, €M 2015 2014 2014
--------------------------------------------------------------------------------
Carrying amount at beginning of 1,640 1,623 17 1,623
period
--------------------------------------------------------------------------------
Increases 52 40 13 107
--------------------------------------------------------------------------------
Decreases 1 -2 3 0
--------------------------------------------------------------------------------
Depreciation and amortisation -46 -45 -1 -90
expense
--------------------------------------------------------------------------------
Carrying amount at end of period 1,648 1,616 32 1,640
--------------------------------------------------------------------------------
Transactions with associated 30 June 30 June Change 31 Dec
companies, €M 2015 2014 2014
--------------------------------------------------------------------------------
Sales 3 5 -2 9
--------------------------------------------------------------------------------
Purchases 18 21 -3 42
--------------------------------------------------------------------------------
Trade receivables 4 2 2 2
--------------------------------------------------------------------------------
Trade payables 0 0 0 1
--------------------------------------------------------------------------------
Loan receivables 2 2 2
--------------------------------------------------------------------------------
Transactions with owners, €M 30 June 2015 30 June 2014 Change 31 Dec 2014
-----------------------------------------------------------------------------
Owners
-----------------------------------------------------------------------------
Purchases 6 6 0 6
-----------------------------------------------------------------------------
Trade payables 0 0 0
-----------------------------------------------------------------------------
Other related parties
-----------------------------------------------------------------------------
Sales 13 43 -30 29
-----------------------------------------------------------------------------
Purchases 29 23 6 62
-----------------------------------------------------------------------------
Trade receivables 2 5 -3 2
-----------------------------------------------------------------------------
Trade payables 2 5 -4 4
-----------------------------------------------------------------------------
Accounting principles
This Interim Report has been drawn up in accordance with the standard IAS 34
Interim Financial Reporting. In preparing this Interim Report, Fingrid has
applied the same accounting principles as those used for its 2014 financial
statements.
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 essential 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
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.
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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