2016-10-28 11:30:01 CEST
2016-10-28 11:30:01 CEST
REGULATED INFORMATION
Fingrid Oyj - Interim report (Q1 and Q3)
Fingrid Group's Interim report 1 January - 30 September 2016
Helsinki, Finland, 2016-10-28 11:30 CEST (GLOBE NEWSWIRE) -- Fingrid Oyj
Interim report 28 October 2016 at 12.30 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–September 2016
-- The Group’s turnover in January–September was EUR 408.1 (427.7) million
-- The Group’s operating profit in January–September was EUR 124.6 (105.2)
million
-- The Group’s profit in January–September was EUR 92.3 (67.4) million
-- Cash flow from the Group’s operations, after capital expenditure, in
January–September was EUR 83.0 (65.7) million
-- Interest-bearing net borrowings amounted to EUR 1,030.5 (1,036.8) million
at the end of the review period
-- Capital expenditure in January–September amounted to EUR 106.6 (100.4)
million
-- The equity ratio at the end of the review period was 32.8 (32.5) per cent
-- Earnings per share in January-September were EUR 27,764 (20,278)
Financial development in July–September 2016
-- The Group’s turnover in July–September was EUR 110.8 (134.6) million
-- The Group’s operating profit in July–September was EUR 24.2 (23.1) million
-- The Group’s profit in July–September was EUR 14.9 (15.1) million
-- Cash flow from the Group’s operations, after capital expenditure, in
July–Septemberwas EUR 9.6 (19.6) million
-- Capital expenditure in July–September totaled EUR 31.2 (32.6) million
KEY 1-9/16 1-9/15 change 7-9/16 7-9/15 change 1-12/15
FIGUR % %
ES
--------------------------------------------------------------------------------
Turnov €M 408.1 427.7 -4.6 110.8 134.6 -17.7 600.2
er
--------------------------------------------------------------------------------
Capita €M 106.6 100.4 6.1 31.2 32.6 -4.4 147.5
l
expen
diture
,
gross
--------------------------------------------------------------------------------
- of % 26.1 23.5 28.1 24.2 24.6
turno
ver
--------------------------------------------------------------------------------
Resear €M 1.6 1.1 44.1 0.4 0.3 34.3 1.8
ch and
devel
opment
expen
ses
--------------------------------------------------------------------------------
- of % 0.4 0.3 0.4 0.2 0.3
turno
ver
--------------------------------------------------------------------------------
Averag 337 320 5.3 347 323 7.4 319
e
numbe
r of
emplo
yees
--------------------------------------------------------------------------------
Number 339 316 7.3 339 316 7.3 315
of
emplo
yees
at
end
of
perio
d
--------------------------------------------------------------------------------
Salari €M 16.3 15.7 3.6 4.8 4.6 4.8 21.3
es and
bonus
es,
total
--------------------------------------------------------------------------------
Operat €M 124.6 105.2 18.5 24.2 23.1 5.0 162.6
ing
profi
t
--------------------------------------------------------------------------------
- of % 30.5 24.6 21.9 17.1 27.1
turno
ver
--------------------------------------------------------------------------------
Profit €M 115.8 84.2 37.6 19.1 18.8 1.8 129.3
befor
e
taxes
--------------------------------------------------------------------------------
- of % 28.4 19.7 17.2 13.9 21.5
turno
ver
--------------------------------------------------------------------------------
Profit €M 92.3 67.4 36.9 14.9 15.1 -1.2 103.6
for
the
perio
d
--------------------------------------------------------------------------------
Compre €M 97.1 71.5 35.7 16.5 16.1 2.6 109.1
hensiv
e
incom
e for
the
perio
d
--------------------------------------------------------------------------------
Equity % 32.8 32.5 32.8 32.5 33.5
ratio
--------------------------------------------------------------------------------
Intere €M 1,030.5 1,036.8 -0.6 1,030.5 1,036.8 1,026.6
st-bea
ring
net
borro
wings
--------------------------------------------------------------------------------
Net 1.4 1.5 1.4 1.5 1.4
geari
ng
--------------------------------------------------------------------------------
Earnin € 27,763.73 20,278.08 36.9 4,478.43 4,534.04 -1.2 31,150.79
gs per
share
--------------------------------------------------------------------------------
Divide € 33,686.24
nd,
Serie
s A
share
s
--------------------------------------------------------------------------------
Divide € 16,038.49
nd,
Serie
s B
share
s
--------------------------------------------------------------------------------
Equity € 215,944 202,535 6.6 213,822
per
share
--------------------------------------------------------------------------------
Number
of
share
s
--------------------------------------------------------------------------------
– qty 2,078 2,078 2,078 2,078 2,078
Serie
s A
share
s
--------------------------------------------------------------------------------
– qty 1,247 1,247 1,247 1,247 1,247
Serie
s B
share
s
--------------------------------------------------------------------------------
Total qty 3,325 3,325 3,325 3,325 3,325
--------------------------------------------------------------------------------
CEO Jukka Ruusunen: “Import pressure from Sweden eased during the third quarter”
The Nordic system price for electricity nearly doubled in the third quarter of
2016 compared to the corresponding period a year ago. The increase was due to
the weakened hydrological situation in the Nordics. The higher price of
electricity in Sweden, as well as the increase in transmission connections
between the Baltics and Sweden resulted in a decrease of roughly one fifth in
imports to Finland from Sweden. However, exports from Finland to Estonia were
down nearly 70 per cent. The price of electricity in Finland was at the
previous year’s level.
Due to the market situation, situations between Finland and Sweden in the third
quarter where electricity transmission is constrained, i.e. congestion hours,
were only one third of the amount of the corresponding period. Congestion
income, which reflects the adverse economic impact caused by the limited
transmission capacity, on that border declined from EUR 81 million last year to
approximately EUR 11 million in 2016. Fingrid’s actions to improve the
reliability of DC connections have also produced results. We will continue with
this development work in the coming years.
Fingrid received positive attention in the international arena. We placed at
the top of the International Transmission Operations and Maintenance Study
(ITOMS). We are among the best transmission system operators in the world for
the 11th time in a row. In addition, we were nominated one of the top four
electricity network brands in the world at an international energy sector brand
seminar in Iceland. For a monopoly company like Fingrid, social reputation and
confidence are central elements in safeguarding our operating capabilities, now
and going forward. This helps us to serve our customers and Finnish society in
the best way possible.
Fingrid Group’s Interim Report 1.1.-30.9.2016
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 “other liabilities” balance sheet item. 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
booked 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 third quarter turnover was EUR 110.8 (134.6) million. Grid service
income in third quarter totalled EUR 71.3 (56.5) million. Other operating
income totalled EUR 2.5 (0.3) million. Costs during the third quarter amounted
to EUR 103.3 (99.5) million.
Fingrid’s congestion income from connections between Finland and Sweden
declined to EUR 35.6 (64.7) million as a consequence of the weaker hydrological
situation in the Nordic countries during the third quarter; this reduced the
differences in Finland’s and Sweden’s area prices. Fingrid’s congestion income
from the connections between Finland and Estonia amounted to EUR 2.3 (3.4)
million. Due to the change in the way congestion income is recognised, it will
no longer be reported in Fingrid’s turnover as of the beginning of 2016.
The Group’s turnover in January–September was EUR 408.1 (427.7) million. Grid
service income increased during the period under review to EUR 269.3 (232.2)
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 10.7 (2.2) million. The increase in other operating income
resulted from the capital gain of EUR 3.7 million on the sale of property,
plant and equipment and from EUR 5.4 million in recognised congestion income.
Total costs between January and September amounted to EUR 318.8 (304.9)
million.
Between January and September, electricity consumption totalled 61.8 (60.4)
terawatt hours. Imbalance power sales amounted to EUR 106.5 (99.2) million. The
growth in imbalance power sales resulted from an increase in the volume of
imbalance power and higher imbalance power prices. Cross-border transmission
income from the connection between Finland and Russia increased to EUR 14.0
(8.2) million. This was due to the new tariff structure that was introduced and
to increased imports from Russia.
Imbalance power costs increased from the previous year’s level to EUR 84.2
(68.6) million, due to the increase in the volume and price of imbalance power.
Loss energy costs amounted to EUR 44.8 (50.8) million. The declining loss
energy costs have been affected by the lower price of loss energy procurement
and the slightly lower volume of loss energy. At the end of September,
approximately 101 (101) per cent of Fingrid’s projected loss energy procurement
for the remainder of 2016 was hedged at an average price of EUR36.9 (39.7) per
megawatt hour.
The cost of reserves to safeguard the grid’s system security decreased to EUR
36.7 (42.0) million. The reason for the decreased cost was an interruption in
the procurement of the automatic frequency control reserve until the end of
August, as well as the lower procurement cost of frequency controlled reserves
for normal operation and disturbances due to high availability on the markets.
Depreciation amounted to EUR 73.8 (69.9) million. Grid maintenance costs grew
to EUR 15.0 (11.3) million, due to higher costs arising from maintenance
projects carried out as preventive maintenance on substations and from cutting
down trees along power line right-of-ways. Personnel costs increaced due to the
increased number of personnel and were EUR 20.2 (19.0) million.
Turnover and other income 1-9/16 1-9/15 change % 7-9/16 7-9/15 change %
(€M)
--------------------------------------------------------------------------------
Grid service income 269 232 16.0 71 57 26.2
--------------------------------------------------------------------------------
Imbalance power sales 107 99 7.3 32 29 8.1
--------------------------------------------------------------------------------
ITC income 9 11 -12.6 2 4 -60.9
--------------------------------------------------------------------------------
Cross-border transmission 14 8 70.0 3 1 190.1
income
--------------------------------------------------------------------------------
Finland-Estonia congestion 0 3 -100.0 0 0 -100.0
income*
--------------------------------------------------------------------------------
Finland-Sweden congestion 0 65 -100.0 0 40 -100.0
income*
--------------------------------------------------------------------------------
Peak load capacity income** 5 6 -9.7 2 2 -0.9
--------------------------------------------------------------------------------
Other turnover 4 3 10.5 1 1 -1.5
--------------------------------------------------------------------------------
Other operating income 11 2 383.3 2 0 654.7
--------------------------------------------------------------------------------
Turnover and other income 419 430 -2.6 113 135 -16.1
total
--------------------------------------------------------------------------------
Costs (€M) 1-9/16 1-9/15 change 7-9/16 7-9/15 change
% %
--------------------------------------------------------------------------------
Purchase of imbalance power 84 69 22.8 26 21 26.0
--------------------------------------------------------------------------------
Loss energy costs 45 51 -11.8 14 20 -29.2
--------------------------------------------------------------------------------
Depreciation 74 70 5.5 26 24 7.9
--------------------------------------------------------------------------------
Cost of reserves 37 42 -12.7 13 13 -0.3
--------------------------------------------------------------------------------
Personnel costs 20 19 6.1 6 6 6.2
--------------------------------------------------------------------------------
Peak load capacity costs** 5 6 -14.8 2 2 -15.2
--------------------------------------------------------------------------------
Maintenance costs 15 11 32.3 6 4 29.8
--------------------------------------------------------------------------------
ITC charges 8 7 14.3 3 3 7.0
--------------------------------------------------------------------------------
Other costs 31 30 2.5 9 8 10.4
--------------------------------------------------------------------------------
Costs total 319 305 4.5 103 100 3.7
--------------------------------------------------------------------------------
Operating profit, excl. the 100 125 -19.9 10 35 -71.8
change in the fair value of
commodity derivatives
--------------------------------------------------------------------------------
Consolidated operating profit, 125 105 18.5 24 23 5.0
IFRS
--------------------------------------------------------------------------------
*A change was made in how congestion income is reported, and it is not reported
in the turnover as of the be-ginning 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 third quarter was EUR 24.2 (23.1) million.
Profit before taxes was EUR 19.1 (18.8) million. Profit for the period was EUR
14.9 (15.1) million and comprehensive income was EUR 16.5 (16.1) million. The
Group’s net cash flow from operations, with net capital expenditure deducted,
was EUR 9.6 (19.6) million during the review period.
The Group’s operating profit during the period was EUR 124.6 (105.2) million.
Profit before taxes was EUR 115.8 (84.2) million. The biggest differences from
the corresponding period last year are explained by changes in the market value
of derivatives (change EUR +54.7 million), the growth in grid service income
(change EUR +37.1 million), and the elimination of congestion income from the
turnover (change EUR -68.1 million), due to the change in how congestion income
is reported. Profit for the period was EUR 92.3 (67.4) million and
comprehensive income was EUR 97.1 (71.5) million. The Group’s net cash flow
from operations, with net capital expenditure deducted, was EUR 83.0 (65.7)
million during the review period. The equity to total assets ratio was 32.8
(32.5) per cent at the end of the review period.
The Group’s profit for the review 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
The project to reinforce the grid in western Finland, an investment totalling
EUR 260 million, is progressing according to plan, and most of the projects
will be completed this year. There are a total of 17 projects under way in
2016. Co-ordinating these projects, as well as planning and implementing
outages, has been extremely challenging. The outages required for the
commissioning of the projects have, whenever possible, been scheduled on
weekends to minimise the impact on society.
Several new investment decisions were made during the period under review. The
electricity supply for Äänekoski’s new bioproduct mill will be secured with the
construction of a new 110 kilovolt transmission line between Äänekoski’s
Koivisto and Laukaa’s Vihtavuori substations. The investment costs for the new
transmission line are EUR 4.6 million and the project will be completed at the
end of 2017. Olkiluoto’s 400 kilovolt switching station, which is outdated and
has insufficient system security, will be modernised. The Olkiluoto substation
is one of the most important grid nodes, with three nuclear power plants
connected to it. The project, with an estimated cost of EUR 17 million, is due
for completion in 2019.
Fingrid has concluded an agreement with Siemens Osakeyhtiö on the modernisation
of Huutokoski’s 110 kilovolt switching station near Varkaus. The agreement is
valued at approximately EUR 9.5 million, and the project will be completed in
summer 2018. It will secure eastern Finland’s electricity supply. Fingrid has
also made a procurement decision on the modernisation of the 110 kilovolt
transmission line between Vanaja in Hämeenlinna and Tikinmaa in Valkeakoski, to
be supplied by TLT Building Oy. The agreement is valued at roughly EUR 8
million and the project will be completed in autumn 2018.
Fingrid’s maintenance management is, by international standards, still
world-class. Fingrid has placed at the top of the International Transmission
Operations and Maintenance Study (ITOMS) for the 11th consecutive time now.
This serves as a guarantee to Fingrid’s customers of high-quality electricity
transmission at low costs.
The massive ERP and asset management IT system ELVIS, which integrates eight
systems into one application, was launched in the summer and further improves
Fingrid’s maintenance management. The unique system entity has sparked wide
interest: representatives from close to 20 countries attended an event to
introduce the project in September.
Power system
Between July and September, electricity consumption in Finland totalled 18.2
(18.1) terawatt hours. Inter-TSO transmission in the same period amounted to
0.5 (1.3) terawatt hours. The total electricity transmission in Finland was
18.7 (19.3) terawatt hours. Fingrid transmitted a total of 15.9 (16.3) terawatt
hours in its grid, representing 85.2 (84.3) per cent of the total electricity
transmission in Finland. During this period, the volume of electricity Fingrid
transmitted to its customers amounted to 15.5 (15.0) terawatt hours, which
represents 85.1 (82.9) per cent of Finland’s total consumption.
In January–September, electricity consumption in Finland amounted to 61.8
(60.4) terawatt hours. Inter-TSO transmission in the same period amounted to
3.1 (4.2) terawatt hours. The total electricity transmission in Finland was
64.9 (64.5) terawatt hours. Fingrid transmitted a total of 51.3 (50.2) terawatt
hours in its grid, representing 79.0 (77.8) per cent of the total electricity
transmission in Finland. During this period, the electricity Fingrid
transmitted to its customers amounted to 48.2 (46.0) terawatt hours, which
represents 78.0 (76.2) per cent of Finland’s total consumption.
Between July and September, 4.0 (4.9) terawatt hours of electricity were
imported from Sweden to Finland, and 0.2 (0.0) terawatt hours were exported
from Finland to Sweden. In January–September, 12.9 (13.2) terawatt hours of
electricity were imported from Sweden to Finland and 0.2 (0.2) terawatt hours
were exported from Finland to Sweden. Transmission capacity between the
countries was partly limited in August and September for about a month due to
construction of the new 400 kilovolt power line and substations in northern
Finland.
In July–September, 0.4 (1.2) terawatt hours were exported to Estonia. In
January–September, 2.9 (3.8) terawatt hours were exported to Estonia.
Transmission capacity between the countries was partly limited between 7–15
September, due to maintenance work carried out on Estonia’s internal network.
Between July and September, 1.0 (0.3) terawatt hours of electricity were
imported from Russia to Finland and between January and September imports
totalled 4.0 (2.9) terawatt hours. Transmission capacity from Russia to Finland
was fully available during the reporting period, except for the period from 1–9
September, when it was partly limited due to scheduled maintenance work on the
Russian side. Electricity imports from Russia were relatively low, as in the
previous years. There are major intraday variations in import volumes, however.
According to Fingrid’s measurements and assessments, Finland’s total wind power
production exceeded for the first time the hourly average production of 1,000
megawatts on the 27th of August. During that measured peak production hour,
wind power made up some 16 per cent of Finland’s electricity production and was
used to cover roughly 14 per cent of the total consumption. Finland currently
has installed wind power production of more than 1,300 megawatts.
There were no major disturbances with extensive consequences in the grid during
the period under review.
Power system operation 1-9/16 1-9/15 7-9/16 7-9/15
--------------------------------------------------------------------------------
Electricity consumption in Finland, TWh 61.8 60.4 18.2 18.1
--------------------------------------------------------------------------------
TSO transmission in Finland, TWh 3.1 4.2 0.5 1.3
--------------------------------------------------------------------------------
Transmission within Finland, TWh 64.9 64.5 18.7 19.3
--------------------------------------------------------------------------------
Fingrids electrity transmission volume, TWh 51.3 50.2 15.9 16.3
--------------------------------------------------------------------------------
Fingrid's electricity transmission to customers, 48.2 46.0 15.5 15.0
TWh
--------------------------------------------------------------------------------
Fingrid's loss energy volume, TWh 1.0 1.0 0.3 0.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Electricity transmission Finland - Sweden
Exports to Sweden TWh 0.2 0.2 0.1 0.0
--------------------------------------------------------------------------------
Imports from Sweden, TWh 12.9 13.2 4.0 4.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Electricity transmission Finland - Estonia
Exports to Estonia, TWh 2.9 3.8 0.4 1.2
--------------------------------------------------------------------------------
Imports from Estonia, TWh 0.2 0.0 0.1 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Electricity transmission Finland - Russia
Exports to Russia, TWh 0.02
--------------------------------------------------------------------------------
Imports from Russia, TWh 4.0 2.9 1.0 0.3
--------------------------------------------------------------------------------
Electricity market
In the third quarter of the year, the average day-ahead Nordic market price
(system price) of electricity between July and September was EUR25.23 (13.31)
per megawatt hour and the area price for Finland was EUR 31.62 (30.13) per
megawatt hour. In January-September, the average day-ahead market price for the
Nordics was EUR 24.39 (20.66) per megawatt hour and Finland’s area price was
EUR 30.76 (29.35) per megawatt hour.
Between July and September, congestion income between Finland and Sweden
totalled EUR 11.3 (80.9) million. The substantial decrease in congestion income
was affected by the lower area price difference between Finland and Sweden.
This was partly due to the weakening hydrological situation in the Nordics and
to the completion of the NordBalt transmission link between Sweden and
Lithuania earlier in the year. Electricity transmission from Sweden to Finland
declined by roughly one fifth in the third quarter of the year compared to the
same period in 2015.
Roughly half of the cross-border transmission capacity between Finland and
Sweden is generated by the Fenno-Skan high-voltage DC connections. They
provided the electricity markets with almost their full capacity during the
third quarter of 2016. Thanks to measures initiated at the start of 2016 to
develop the reliability of cross-border transmission connections, the duration
of three interruptions during the third quarter were kept very brief, and the
availability of the connections has been clearly better compared to the
corresponding periods in 2013–2015.
In September, the Ministry of Economic Affairs and Employment set up a working
group to look into the opportunities of smart grids for the electricity market.
The aim of the working group is to forge a common vision of future smart grids
and to propose concrete measures for using smart grids as a means of increasing
customers’ opportunities to participate in the electricity market and
contribute to maintaining a secure supply of electricity. The members of the
working group broadly represent the stakeholders in the sector. Fingrid
actively participates in the group.
Electricity market 1-9/16 1-9/15 7-9/16 7-9/15
--------------------------------------------------------------------------------
Nord Pool system price, average €/MWh 24.39 20.66 25.23 13.31
--------------------------------------------------------------------------------
Area price Finland, average €/MWh 30.76 29.35 31.62 30.13
--------------------------------------------------------------------------------
Congestion income between Finland and Sweden, 71.1 129.5 11.3 80.9
€M*
--------------------------------------------------------------------------------
Congestion hours between Finland and Sweden %* 40.0 46.9 27.6 70.4
--------------------------------------------------------------------------------
Congestion income between Finland and Estonia, 4.6 6.8 0.1 0.4
€M*
--------------------------------------------------------------------------------
Congestion hours between Finland and Estonia %* 12.0 13.0 0.5 2.5
--------------------------------------------------------------------------------
* The congestion income between Finland and Sweden and between Finland and
Estonia is divided equally between the relevant TSOs. The income and costs of
the transmission connections are presented in the tables in the financial
result section.
In the third quarter of the year, Fingrid used EUR 0.6 (0.2) million for
countertrade. The majority of the countertrade costs was caused by the
countertrade carried out to safeguard system security in connection with
investment projects requiring interruptions in the power supply, but costs also
arose due to several cross-border transmission disturbances.
Fingrid used EUR 3.2 (2.9) million for countertrade during the review period.
Countertrade 1-9/16 1-9/15 7-9/16 7-9/15
--------------------------------------------------------------------------------
Countertrade between Finland and Sweden, €M 1.0 0.5 0.0 0.0
--------------------------------------------------------------------------------
Countertrade between Finland and Estonia, €M 0.1 0.8 0.0 0.0
--------------------------------------------------------------------------------
Countertrade between Finland's internal 2.1 1.6 0.6 0.2
connections, €M
--------------------------------------------------------------------------------
Total countertrade, €M 3.2 2.9 0.6 0.2
--------------------------------------------------------------------------------
Financing
The company’s credit rating remained high. This reflects the company’s strong
overall financial situation and debt service capacity. The Group’s net
financial costs between July and September were EUR 5.2 (4.3) million. Between
January and September the Group’s net financial costs amounted to EUR 9.2
(21.1) million, including the change in the fair value of derivatives of EUR
4.6 million positive (EUR 5.8 million negative).
Interest-bearing borrowings totalled EUR 1,202.7 (1,138.5) million, of which
non-current borrowings accounted for EUR 878.1 (939.5) million and current
borrowings for EUR 324.6 (199.0) million.
The company’s liquidity remained good. Financial and cash assets recognised at
fair value through profit or loss on 30 September 2016 were EUR 172.2 (101.7)
million. The company’s liquidity was strengthened in September with bond issues
totalling EUR 80 million, which will be used to repay long term borrowings
maturing in the fourth quarter. 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 5.4 million from a dismantled hedge reserve 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 15 (16) million. Fingrid’s foreign exchange and commodity price risks
are mainly hedged.
Personnel
The total number of personnel employed by the Group averaged 337 (320), of
which 285 (283) were in a permanent employment relationship.
Auditing
The consolidated figures in this Interim Report are unaudited.
Events after the review period and outlook for the rest of the year
Fingrid Oyj announced on 17 October 2016 that it will raise grid service fees
at the start of 2017 by an average of seven per cent. The increase will be used
to cover the company’s future investments and operating costs. Grid pricing is
expected to remain stable in the future.
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 as well as changes in precipitation and hydrological situation,
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.-30.9.2016
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 1.1.-30.9.2016
CONSOLIDATED STATEMENT
OF
COMPREHENSIVE INCOME
€M 1-9/20 1-9/20 Change 7-9/20 7-9/20 Change 1-12/2
16 15 16 15 015
--------------------------------------------------------------------------------
Turnover 408.1 427.7 -19.6 110.8 134.6 -23.8 600.2
--------------------------------------------------------------------------------
Other operating income 10.7 2.2 8.5 2.5 0.3 2.1 5.2
--------------------------------------------------------------------------------
Depreciation -73.8 -69.9 -3.8 -25.6 -23.7 -1.9 -94.1
--------------------------------------------------------------------------------
Operating expenses -220.4 -254.8 34.3 -63.4 -88.1 24.7 -348.7
--------------------------------------------------------------------------------
Operating profit 124.6 105.2 19.4 24.2 23.1 1.1 162.6
--------------------------------------------------------------------------------
Finance income and costs -9.2 -21.1 11.9 -5.2 -4.3 -1.0 -33.7
--------------------------------------------------------------------------------
Share of profit of 0.4 0.1 0.3 0.1 0.0 0.1 0.4
assoc. companies
--------------------------------------------------------------------------------
Profit before taxes 115.8 84.2 31.6 19.1 18.8 0.3 129.3
--------------------------------------------------------------------------------
Income taxes -23.5 -16.8 -6.7 -4.2 -3.7 -0.5 -25.7
--------------------------------------------------------------------------------
Profit for the period 92.3 67.4 24.9 14.9 15.1 -0.2 103.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive
income
--------------------------------------------------------------------------------
Cash flow hedges 4.3 4.3 0.0 1.4 1.4 0.0 5.8
--------------------------------------------------------------------------------
Translation reserve 0.4 -0.2 0.6 0.2 -0.4 0.6 -0.3
--------------------------------------------------------------------------------
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 97.0 71.5 25.5 16.5 16.1 0.4 109.1
income for the review
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit attributable to:
--------------------------------------------------------------------------------
Shareholders of the 92.3 67.4 24.9 14.9 15.1 -0.2 103.6
company
--------------------------------------------------------------------------------
Comprehensive income
attributable to:
--------------------------------------------------------------------------------
Shareholders of the 97.1 71.5 25.5 16.5 16.1 0.4 109.1
company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share on
profit attributable to
--------------------------------------------------------------------------------
shareholders of the 27,764 20,278 7,486 4,478 4,534 -56 31,151
parent company (EUR)*:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
* no dilution effect
CONDENSED CONSOLIDATED BALANCE SHEET,
€M 1-9/201 1-9/201 Change 1-12/201
6 5 5
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Goodwill 87.9 87.9 0.0 87.9
--------------------------------------------------------------------------------
Intangible assets 96.0 95.4 0.6 95.4
--------------------------------------------------------------------------------
Property, plant and equipment 1,709.3 1,656.4 52.9 1,677.0
--------------------------------------------------------------------------------
Investments 10.2 9.9 0.3 10.2
--------------------------------------------------------------------------------
Derivatives 35.3 34.9 0.4 32.1
--------------------------------------------------------------------------------
Receivables 13.6 14.6 -1.0 19.0
--------------------------------------------------------------------------------
Total non-current assets 1,952.4 1,899.2 53.2 1,921.6
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Inventories 11.9 12.7 -0.8 12.7
--------------------------------------------------------------------------------
Derivatives 2.1 5.8 -3.8 3.4
--------------------------------------------------------------------------------
Receivables 52.4 51.0 1.5 69.9
--------------------------------------------------------------------------------
Financial assets recognised in income
--------------------------------------------------------------------------------
statement at fair value 73.7 79.8 -6.1 93.5
--------------------------------------------------------------------------------
Cash and cash equivalents and financial 98.5 21.9 76.6 23.4
assets
--------------------------------------------------------------------------------
Total current assets 238.6 171.1 67.5 202.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 2,191.0 2,070.3 120.7 2,124.4
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
Equity attributable to shareholders of the
parent Company
--------------------------------------------------------------------------------
Shareholders' equity 718.0 673.4 44.6 711.0
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Interest-bearing 878.1 939.5 -61.4 907.2
--------------------------------------------------------------------------------
Derivatives 33.6 68.1 -34.5 47.0
--------------------------------------------------------------------------------
Non-interest-bearing 130.3 124.0 6.3 126.9
--------------------------------------------------------------------------------
Total non-current liabilities 1,041.9 1,131.5 -89.6 1,081.1
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Interest-bearing 324.6 199.0 125.6 236.2
--------------------------------------------------------------------------------
Derivatives 13.4 9.5 4.0 30.3
--------------------------------------------------------------------------------
Non-interest-bearing 93.0 56.9 36.1 65.8
--------------------------------------------------------------------------------
Total current liabilities 431.0 265.4 165.7 332.4
--------------------------------------------------------------------------------
Total shareholders' equity and liabilities 2,191.0 2,070.3 120.7 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 review period
--------------------------------------------------------------------------------
Profit or loss 67.4 67.4
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Cash flow hedges 4.3 4.3
--------------------------------------------------------------------------------
Translation reserve -0.2 -0.2
--------------------------------------------------------------------------------
Items related to long-term 0.0 0.0
asset items available for
sale
--------------------------------------------------------------------------------
Total other comprehensive 4.4 -0.2 4.1
income adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive income 4.4 -0.2 67.4 71.5
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Dividend relating to 2014 -65.0 -65.0
--------------------------------------------------------------------------------
Balance on 30 September 55.9 55.9 -7.2 -0.7 569.4 673.4
2015
--------------------------------------------------------------------------------
Comprehensive income for
the review period
--------------------------------------------------------------------------------
Profit or loss 36.2 36.2
--------------------------------------------------------------------------------
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 1.4
income adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive income 1.4 -0.1 36.2 37.5
--------------------------------------------------------------------------------
Balance on 1 January 2016 55.9 55.9 -5.7 -0.7 605.6 711.0
--------------------------------------------------------------------------------
Comprehensive income for
the review period
--------------------------------------------------------------------------------
Profit or loss 92.3 92.3
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Cash flow hedges 4.3 4.3
--------------------------------------------------------------------------------
Translation reserve 0.4 0.4
--------------------------------------------------------------------------------
Items related to long-term 0.0 0.0
asset items available for
sale
--------------------------------------------------------------------------------
Total other comprehensive 4.4 0.4 4.7
income adjusted by tax
effects
--------------------------------------------------------------------------------
Total comprehensive income 4.4 0.4 92.3 97.1
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Dividend relating to 2015 -90.0 -90.0
--------------------------------------------------------------------------------
Balance on 30 September 55.9 55.9 -1.4 -0.3 607.9 718.0
2016
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, €M 1-9/201 1-9/201 Change 1-12/201
6 5 5
--------------------------------------------------------------------------------
Cash flow from operating activities
--------------------------------------------------------------------------------
Profit for the review period 92.3 67.4 24.9 103.6
--------------------------------------------------------------------------------
Adjustments 77.9 127.2 -49.3 175.2
--------------------------------------------------------------------------------
Changes in working capital 49.5 -6.8 56.3 -19.7
--------------------------------------------------------------------------------
Interest paid -15.5 -16.9 1.3 -23.7
--------------------------------------------------------------------------------
Interest received 0.4 0.8 -0.4 0.8
--------------------------------------------------------------------------------
Taxes paid -28.7 -16.1 -12.6 -20.5
--------------------------------------------------------------------------------
Net cash flow from operating activities 175.9 155.6 20.2 215.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investing activities
--------------------------------------------------------------------------------
Purchase of property, plant and equipment -94.9 -102.4 7.5 -150.4
--------------------------------------------------------------------------------
Purchase of intangible assets -2.8 -2.7 -0.2 -3.4
--------------------------------------------------------------------------------
Purchase of other assets
--------------------------------------------------------------------------------
Proceeds from sale of other assets 0.2 0.5 -0.3 0.8
--------------------------------------------------------------------------------
Proceeds from sale of property, plant and 5.9 0.2 5.6 5.1
equipment
--------------------------------------------------------------------------------
Loans granted -0.9
--------------------------------------------------------------------------------
Dividend received 0.6 0.6 0.0 0.6
--------------------------------------------------------------------------------
Contributions received 15.0 -15.0 15.0
--------------------------------------------------------------------------------
Interest paid -1.8 -1.2 -0.6 -1.7
--------------------------------------------------------------------------------
Net cash flow from investing activities -92.9 -89.9 -3.0 -135.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing activities
--------------------------------------------------------------------------------
Proceeds from non-current financing 80.0 80.0 107.4
(liabilities)
--------------------------------------------------------------------------------
Payments of non-current financing -17.6 -67.1 49.5 -104.2
(liabilities)
--------------------------------------------------------------------------------
Change in current financing (liabilities) 0.0 -11.2 11.2 -81.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid -90.0 -65.0 -25.0 -65.0
--------------------------------------------------------------------------------
Net cash flow from financing activities -27.7 -143.3 115.7 -142.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in cash and cash equivalents and 55.3 -77.6 132.9 -62.0
financial assets
--------------------------------------------------------------------------------
Cash and cash equivalents 1 Jan 116.9 179.3 -62.4 179.3
--------------------------------------------------------------------------------
Cash and cash equivalents 31 Mar. 172.2 101.7 70.5 117.2
--------------------------------------------------------------------------------
QUARTERLY FIGURES
--------------------------------------------------------------------------
Q3/2016 Q2/2016 Q1/2016 Q4/2015 Q3/2015 Q2/2015
--------------------------------------------------------------------------
Turnover €M 110.8 113.4 183.9 172.5 134.6 113.2
--------------------------------------------------------------------------
Operating profit €M 24.2 26.3 74.2 57.4 23.1 9.3
--------------------------------------------------------------------------
Operating profit % 21.9 23.1 40.3 33.3 17.1 8.2
--------------------------------------------------------------------------
INVESTMENTS, €M 1-9/2016 1-9/2015 Change 1-12/2015
------------------------------------------------------------------
Grid investments 99.1 93.7 5.4 138.4
------------------------------------------------------------------
Substations 63.6 51.4 12.2 77.1
------------------------------------------------------------------
Transmission lines 35.5 42.3 -6.8 61.3
------------------------------------------------------------------
------------------------------------------------------------------
Gas turbine investments 1.7 0.5 1.3 0.7
------------------------------------------------------------------
Existing gas turbine plants 1.7 0.0 1.7 0.3
------------------------------------------------------------------
New gas turbine plants 0.4 -0.4 0.4
------------------------------------------------------------------
------------------------------------------------------------------
Other investments 5.8 6.3 -0.5 8.4
------------------------------------------------------------------
ICT 5.8 6.3 -0.5 8.4
------------------------------------------------------------------
------------------------------------------------------------------
Total investments 106.6 100.4 6.1 147.5
------------------------------------------------------------------
RESEARCH AND DEVELOPMENT EXPENSES, €M 1-9/2016 1-9/2015 Change 1-12/2015
----------------------------------------------------------------------------
Research and development expenses 1.6 1.1 0.5 1.8
----------------------------------------------------------------------------
DERIVATIVE CONTRACTS, €M
--------------------------------------------------------------------------------
-----------------------
30 Sept 2016 30 Sept 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 12 -21 -8 331 25 -23 2 258 15
-20 -5 341
cy
swaps
--------------------------------------------------------------------------------
----------------------
Forwar 0 0 3 0 0 1
0 0 5
d
contr
acts
--------------------------------------------------------------------------------
----------------------
Intere 31 -8 23 360 24 -10 14 430 24
-9 15 430
st
rate
swaps
--------------------------------------------------------------------------------
----------------------
Call 1 1 454 0 0 150 1
1 359
optio
ns.
bough
t
--------------------------------------------------------------------------------
----------------------
Total 44 -29 15 1,148 49 -33 16 839 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 1 -20 -19 4.06 0 -47 -46 4.27
-49 -49 4.22
icity
forwa
rd
contr
acts,
NASDA
Q OMX
Commo
dities
--------------------------------------------------------------------------------
----------------------
Total 1 -20 -19 4.06 0 -47 -46 4.27
-49 -49 4.22
================================================================================
===============-------
The Group terminated hedge accounting for electricity 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 30 Sept 2016
--------------------------------------------------------------------------------
Level 1 Level 2 Level 3
--------------------------------------------------------------------------------
Financial assets recognised at fair value
--------------------------------------------------------------------------------
Available-for-sale investments 0
--------------------------------------------------------------------------------
Interest and currency derivatives 44
--------------------------------------------------------------------------------
Electricity forward contracts. NASDAX OMX Commodities 1
--------------------------------------------------------------------------------
Financial assets recognised at fair value 45 29
--------------------------------------------------------------------------------
Financial assets recognised in the income statement 46 73
at fair value
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial liabilities held at fair value
--------------------------------------------------------------------------------
Interest and currency derivatives, liabilities 29
--------------------------------------------------------------------------------
Electricity forward contracts. NASDAX OMX Commodities 20
--------------------------------------------------------------------------------
Total financial liabilities held at fair value 20 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, 30 Sept 30 Sept Change 31 Dec
€M 2016 2015 2015
--------------------------------------------------------------------------------
Pledged cash assets 0 1 -1 1
--------------------------------------------------------------------------------
Rental liabilities 33 27 7 26
--------------------------------------------------------------------------------
Right-of-use agreements for reserve 82 93 -11 89
power plants
--------------------------------------------------------------------------------
Credit facility commitment fees 1 1 0 1
--------------------------------------------------------------------------------
Total 116 121 -5 118
--------------------------------------------------------------------------------
Investment commitments 99 127 -28 124
--------------------------------------------------------------------------------
Other financial liabilities
--------------------------------------------------------------------------------
Changes in property, plant and 30 Sept 30 Sept Change 31 Dec
equipment, €M 2016 2015 2015
--------------------------------------------------------------------------------
Carrying amount at beginning of 1,677 1,640 37 1,640
period
--------------------------------------------------------------------------------
Increases 103 84 19 133
--------------------------------------------------------------------------------
Decreases 2 1 2 -3
--------------------------------------------------------------------------------
Depreciation and amortisation -73 -69 -4 -93
expense
--------------------------------------------------------------------------------
Carrying amount at end of period 1,709 1,656 53 1,677
--------------------------------------------------------------------------------
Transactions with associated 30 Sept 30 Sept Change 31 Dec
companies, €M 2016 2015 2015
--------------------------------------------------------------------------------
Sales 0 6 -5 1
--------------------------------------------------------------------------------
Interest income 0 0 0 0
--------------------------------------------------------------------------------
Purchases 29 29 -1 40
--------------------------------------------------------------------------------
Trade receivables 0 2 -2 3
--------------------------------------------------------------------------------
Trade payables 0 0 0
--------------------------------------------------------------------------------
Loan receivables 3 2 1 3
--------------------------------------------------------------------------------
Transactions with owners, €M 30 Sept 2016 30 Sept 2015 Change 31 Dec 2015
-----------------------------------------------------------------------------
Owners
-----------------------------------------------------------------------------
Purchases 5 6 -1 6
-----------------------------------------------------------------------------
Trade payables 0 0 0
-----------------------------------------------------------------------------
Other related parties
-----------------------------------------------------------------------------
Sales 41 21 20 29
-----------------------------------------------------------------------------
Purchases 44 41 3 70
-----------------------------------------------------------------------------
Trade receivables 3 1 1 1
-----------------------------------------------------------------------------
Trade payables 1 2 -1 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 the reasonableness of Fingrid’s grid pricing, the company will
include the congestion income received after 1 January 2016 as accruals in the
“other liabilities” balance sheet item. 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.
© 2024 Nasdaq, Inc. All Rights Reserved |