second-quarter 2011 analytikerpresentasjon …...hafslund asa 15. juli 2010 christian berg, ceo...
TRANSCRIPT
Hafslund ASA
15. juli 2010
Christian Berg, CEO
Analytikerpresentasjon 2. kvartal 2010
Second-quarter 2011 presentation to analysts
Hafslund ASA
8 July 2011
Christian Berg, CEO
s.2
Highlights ─ second-quarter 2011
• High cash flow and Q2 2011 EBITDA of NOK 708 million (exclusive of REC profit effect).
• Hydropower sales price: NOK 0.39 per kWh, up 11 percent from Q2 2010.
• Hydropower production: returns to normal for the quarter.
• Hydropower reservoir content in south-central Norway improves dramatically: now at normal
levels for the season.
• Network business: stable profit continues.
• Effect of REC investment’s share price development on operating profit: minus NOK 564
million (Q2 2010: minus NOK 747 million).
• New NOK 3.6 billion revolving credit facility strengthens liquidity reserve.
s.3
EBITDA ─ second quarter 2011
14442
3237
264
26308
564
0
100
200
300
400
500
600
700
MNOK
EBITDAOther
Activities
VenturePower SalesNetworkDistrict
Heating
Hydropower REC
s.4
Stable cash flow from operations
2 655
2 7832 842
2 655
2 476
2 246
2 130
2 007
0
500
1 000
1 500
2 000
2 500
3 000
NOK/kWh
0.5
0.4
0.4
Q2 10
0.3
Q1 10
0.3
Q4 09
0.3
Q3 09
0.3
Q2 09
1 977
0.3 0.3
0.2
0.1
0.0
MNOK
+34%
Q2 11
0.4
Q1 11
0.4
Q4 10
0.4
Q3 10
• Cash flow from operations up 34 percent over the past two years:
• Renewable energy, infrastructure and Power Sales (NOK 412 million)
• Expansion costs and Bioenergy
(NOK -88 million)
• Other business activities and support (NOK 172 million)
• One time effects (NOK 160 million)
• EBITDA sensitivity: a NOK 0.10 per kWh change in wholesale power prices results in an approximately NOK 340 million change in EBITDA
EBITDA development12-month rolling EBITDA vs. wholesale power prices
Power prices – rolling 12-month average**EBITDA*
* EBITDA = rolling 12-month EBITDA excluding effect from financial investments and interest and currency derivatives (in NOK million).** Power prices for Hafslund Hydropower – rolling 12 month
s.5
Development interest-bearing debt and equity ratio
1010
13
1111
3
4
5
6
7
8
9
10
11
12
13
14
0
10
20
30
40
50
60
Equity ratio %NOK billion
Q2 11
33
Q1 11
37
Q4 10
35
Q3 10
35
Q2 10
33
Equity ratioNet interest-bearing debt
Net interest-bearing debt and equity ratio Change in interest-bearing debt in Q2 11
Amounts in NOK million
Net interest-bearing debt 31.03.2011 -10 139
EBITDA 144
Interest paid -142
Tax paid -94
Change in market value of financial instruments 569
Change in working capital 899
Investments -256
Net loan portfolio adjustments 312
Payment of dividend -1 461
Net interest-bearing debt 30.06.2011 -10 168
•s.6
Working capital requirements- seasonal variation
-1 000
0
1 000
2 000
3 000
4 000
0.1
0.3
0.4
0.5
0.6
0.7
NOK/kWhNOK mill
jun.11mar.11dec.10sep.10jun.10mar.10dec.09sep.09jun.09
0.2
0
1 500
3 000
4 500
6 000
GWh
Q1 11
5 453
Q4 10
5 246
Q3 10
2 613
Q2 10
3 007
Q1 10
5 001
Q4 09
4 105
Q3 09
2 162
Q2 09
2 602
Q2 11
3 014
Average power pricesWorking capital
Working capital and power prices
Power sales - sold volume
• Seasonal variation in working capital driven by both volume sold and prevailing power prices.
• Strong demand for energy in the first and fourth quarters of the year.
• June through September is typically the least working-capital intensive period.
• Working capital decreased a further NOK 0.9 billion in Q2 2011 to NOK 0.3 billion as of 30 June 2011.
s.7
Hydropower
996
827
0
100
200
300
400
0
200
400
600
800
1 000
1 200
quarter 12 months
303
Q2 11
308
Q2 10
240
Q1 10
252
134
Q3 10 Q1 11Q4 10Q3 09
154
Q4 09
178186
Q2 09
219
EBITDA per quarter EBITDA rolling 12-month
• Profit and operating revenue figures reflect higher power production and power prices than in Q2 2010.
• Production: 11 percent greater than in Q2 2010.
• Nasdaq OMX (NO1) spot price: NOK 0.41 per kWh (Q2 2010: NOK 0.37 per kWh).
• New aggregate in continuous operation since start-up in late April 2011.
• Projected third-quarter 2011 generation: approximately 940 GWh; anticipated volume is 60 GWh or 7% above normal for the third quarter.
NOK million Q2 11 Q2 10 YTD 11 YTD 10
Operating revenue 359 289 536 527
EBITDA 308 240 441 417
Operating profit 296 229 419 396
Sales price (NOK/kWh) 0.39 0.35 0.41 0.39
Production volume (GWh) 923 829 1294 1349
Investments 8 31 32 71
s.8
Hydropower production profile
156142
210
286
333 335 342
313 314
214
174
221
0
50
100
150
200
250
300
350
340
GWh
DecNovOctSepAugJulJunMayApr
277
Mar
99
Feb
113
Jan
158
306
20112010 Normal
*Normal annual production = 3,100 GWh based on 10-year average of production adjusted for capacity improvements.
s.9
District Heating
254250
- 50
0
50
100
150
200
0
50
100
150
200
250
300
quarter 12 months
Q1 11
130
Q4 10
93
Q3 10
6
Q2 11
26
Q2 10
32
Q1 10
152
Q4 09
58
Q3 09
-11
Q2 09
25
EBITDA rolling 12-monthEBITDA per quarter
• Q2 is a seasonally weak quarter; deliveries are typically 16 percent of normal annual production.
• Lower district heating deliveries due to low market demand during early Q2.
• Contribution margin per kWh: up 6 percent.
• New delivery contracts signed in Q2 2011: 64 GWh annual energy outtake.
• Investing in renewable energy sources:
o 50 MW bio-oil boiler in Q1 2012
o 56 MW wood powder-fired boiler
scheduled for start-up in 2012/2013.
NOK million Q2 11 Q2 10 YTD 11 YTD 10
Operating revenue 133 136 643 603
EBITDA 26 32 156 184
Operating profit -5 2 96 125
Gross margin (NOK/kWh) 0.42 0.39 0.36 0.36
Production volume (GWh) 208 234 925 954
Investments 95 64 185 110
s.10
District Heating — energy sources and unit cost
Ratio Electricity and renewable energy sources rolling 12
Waste and biomasse
Heatpumps
Electricity
Oil and natural gas
Biooil og biodiesel
0
100
200
300
400
500
600
700
800
50
60
70
80
90
%GWh
Q2 11
207
Q1 11
716
Q4 10
694
Q3 10
134
Q2 10
234
Energy prices (NOK/kWh) Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
Waste & biofuel 0.18 0.19 0.18 0.20 0.20
Heat pumps 0.15 0.12 0.22 0.21 0.18
Biooil and biodiesel 0.77 0.68 0.62
Electricity 0.48 0.58 0.61 0.57 0.60
Oil/natural gas 0.43 0.58 0.53 0.55 0.71
Total production cost 0.26 0.25 0.48 0.46 0.30
District Heating incl. Distribution 0.65 0.66 0.75 0.80 0.72
Gross contribution margin 0.39 0.41 0.27 0.34 0.42
• Q2 has a seasonally low production cost per kWh due to high proportion of less-costly base-load energy inputs.
• Production costs depend on energy sources used and price differentials.
• Bio-oil implemented as a peak-load energy source in three most recent quarters.
• Proportion of electricity and renewable energy sources up 4 percentage points to 80 percent in last 12 months.
• Higher wholesale power prices result in increased district heating prices and production costs.
s.11
District Heating ─ production profile
280
250
190
116
7345
30 37
67
130
228
336
0
50
100
150
200
250
300
350
GWh
DecNovOctSepAugJulJunMayAprMar
203
Feb
246
Jan
268
101
72
35
Normal*20112010
* Normal = projected 2011 production, given normal temperatures (10-year average) and current and planned customer tie-ins to the grid.
s.12
Network
1 052
917
0
50
100
150
200
250
300
350
0
200
400
600
800
1 000
1 200
quarter 12 months
Q1 11
260
Q4 10
246
Q3 10
282
Q2 11
264
Q2 10
275
Q1 10
274
Q4 09
314
Q3 09
243
Q2 09
247
EBITDA rolling 12-monthEBITDA per quarter
• Stable profit for Network business.
• Excellent supply reliability — somewhat higher frequency of thunderstorms raised the number of service interruptions compared with Q2 2010.
• Profit projection for 2011 on a par with 2010.
• Sale of Network’s central grid infrastructure completed.
• Advanced Metering System (AMS) implementation regulations adopted:
o 80 percent of all installed meters to be
AMS by 1 January 2016.
o All customers’ electric meters to be
replaced by 1 January 2017.
NOK million Q2 11 Q2 10 YTD 11 YTD 10
Operating revenue 967 1 050 2 285 2 446
EBITDA 264 275 524 549
Operating profit 132 138 263 275
Investments 99 119 161 175
s.13
Power Sales
236
0
50
100
150
200
0
100
200
300
400
500
quarter 12 months
Q2 11
279
37
Q1 11
121
Q4 10
86
Q3 10
34
Q2 10
187
Q1 10
52
Q4 09
51
Q3 09
22
Q2 09
45
EBITDA rolling 12-monthEBITDA per quarter
• Revenue figure reflects increased prices for wholesale (spot) power contracts traded via Nasdaq OMX.
• 855 000 customers via wholly and partly owned companies.
• Satisfactory profit performance in a seasonally weak quarter; however, value decline on power derivatives results in NOK 21 million charge to Q2 2011 profit.
• Power Sales had Q2 2011 after-tax profit of NOK 30 per customer.
• Working capital down NOK 1.4 billion in 2Q 2011.
NOK million Q2 11 Q2 10 YTD 11 YTD 10
Operating revenues 1 528 1 391 4 571 4 012
EBITDA 37 187 158 239
Operating profit 37 185 154 234
Sold volume (GWh) 3 014 3 007 8 467 8 008
s.14
Heat and Bioenergy
Heat (energy recovery facilities):
• EBITDA: NOK 10 million, double the Q2 2010 figure.
• Higher energy prices and increased use of waste-derived fuel.
• High steam delivery volumes at Borregaard plant.
• 10-week planned maintenance shutdown at Fredrikstad facility.
Bioenergy (wood pellets production):
• Improvements to rock debris extractors and raw materials mills on schedule.
• Pilot operation and start-up expected in the third quarter of 2011.
NOK million Q2 11 Q2 10 YTD 11 YTD 10
Operating revenue 31 26 77 56
EBITDA 0 (7) 10 (1)
Operating profit (9) (15) (8) (18)
Energy production (GWh) 62 62 136 128
Sales price (NOK/kWh) 0.26 0.23 0.26 0.24
Used waste (thousand tonns) 31 27 66 54
Investments 19 32 26 97
s.15
Venture
21%
7%
Renewable energi
12%
AMS (Advanced metering system)
Energy efficiency and other investments
Telecom 59%
Capital employed:
• Venture portfolio value growth: NOK 25 million in Q2 2011.
• Capital employed, excluding REC: NOK 812 million.
• REC investment value decline: NOK 903 million, of which NOK 564 million (Q2 2010: NOK 747 million) charged to operating profit.
• REC investment: 89.0 million shares or 8.93 percent of stock — market value: NOK 0.8 billion (at NOK 9.28 per share).
NOK million Q2 11 Q2 10 YTD 11 YTD 10
Operating revenue 98 128 212 258
EBITDA 32 43 51 88
Operating profit excl. REC 24 (8) 33 17
REC effect on EBITDA (564) (747) (564) (1 991)
s.16
Group profit and loss account
NOK million Q2 11 Q2 10 ∆∆∆∆ YTD 11
Operating revenue 3 118 3 026 92 8 324
Gain/loss financial items (527) (723) 196 (534)
Cost og energy (1 900) (1 705) (194) (5 921)
Gross margin 691 597 94 1 869
Operating expenses (547) (558) 11 (1 069)
EBITDA 144 39 105 800
Depreciation (200) (245) 45 (401)
Operating profit (56) (206) 150 399
Interest expences (136) (124) (12) (258)
Market value change loan portfolio (74) (37) (37) (48)
Financial expenses (210) (161) (49) (306)
Pre-tax profit (266) (367) 101 93
Tax (150) (179) 29 (280)
Profit after tax (416) (546) 130 (188)
Earnings per share (EPS) in NOK (2.13) (2.80) 0.67 (0.96)
s.17
Group balance sheet
NOK million 30.06.2011 31.03.2011 ∆∆∆∆ 31.12.2010
Intangible assets 2 379 2 388 (9) 2 389
Fixed assets 18 342 18 580 (238) 18 557
Financial assets 1 792 2 674 (883) 2 831
Accounts receivables and inventory 2 375 4 311 (1 936) 5 625
Cash and cash equivalents 911 1 456 (544) 211
Assets 25 799 29 408 (3 609) 29 613
Equity (incl. Min. int.) 8 621 10 849 (2 228) 10 464
Allocation for liabilities 3 170 3 103 68 3 046
Long-therm debt 10 520 10 346 174 11 321
Other currently liabilities 1 295 1 903 (609) 2 338
Short-term debt 2 193 3 208 (1 014) 2 444
Equity and liabilities 25 799 29 408 (3 609) 29 613
Net interest-bearing debt 10 168 10 139 29 13 067
Equity ratio 33 % 37 % -4 % 35 %
We deliver tomorrow's energy and infrastructure solutions
Additional analytic information
s.20
Earnings per share (excluding REC)
1.71 8.12 1.90
2009 2010 2011
0.76
1.00
1.34
0.22
-0.38
0.86
1.01
1.17
5.02
0.73
By quarterNOK
s.21
Group cash flow statement
NOK million Q2 11 Q2 10 ∆∆∆∆ YTD 2011
EBITDA excluding REC 144 39 105 800
Interest paid (142) (130) (12) (332)
Tax paid (94) (20) (74) (192)
Market value changes and other liquidity adjustments 569 787 (218) 591
Change in working capital 899 809 90 1 822
Cash flow from operations 1 376 1 485 (109) 2 689
Investments in operations and expansion (256) (423) 167 (488)
Sale of operating assets and business activities 325 5 320 325
Portfolio changes Venture, etc (23) 292 (315) 1 517
Cash flow, investment activities 46 (126) 172 1 354
Cash flow for debt repayment and dividends 1 422 1 359 63 4 043
s.22
Capital employed and return on capital employed
2011**
11.2%
2010*
11.5%
9.0 %
2.5 %
2009
6.0%
2.5%
8.6%40%
21%
5%
District Heating
Market
9%
Network
Heat and Bioenergy
Venture3%
Hydropower
20%
REC
4%
Capital employed Return on capital employed (ROCE) excluding REC
* Return on capital employed (ROCE), of which 9.0% is exclusive of the Hafslund Fibernett sales gain and the Biowood Norway write-down.
** Rolling 12-month return on capital employed, of which 8.6% is exclusive of the Hafslund Fibernett sales gain and the Biowood Norway write-down.
s.23
Capital structure development
0
2
4
6
8
10
12
14
0
10
20
30
40
NOK billion
Q2 09
40.0
35.0
Q3 10
35.0
Q2 10
33.1
Q1 10
34.3
Q2 11Q4 09
33.4
38.1
10.3
Q3 09
40.0
Equity ratio %
Q4 10 Q1 11
37.0
10.7 11.210.2
11.6 11.911.3 11.1
13.1
Equity ratio Net interest-bearing debt
s.24
Loans — portfolio data
700
1 000
0
1 000
2 000
2021
319
202020192018
1 059
2017
860
20162015
1 909
2014
1 909
2013
1 772
2012
1 556
2011
530
Other loansBondsCertificate loans
256
0
400
800
MarFebJanDecNov
327
OctSep
77
AugJul Apr May Jun
Other loansBondsCertificate loans
Debt maturity profileNOK million
Loans at maturity, next 12 monthsNOK million
Portfolio data
Q2 11 Q1 10 ∆∆∆∆
Bonds 47 % 47 % 0 %
Certificate loans 6 % 8 % -2 %
Other loans 47 % 45 % 2 %
Q2 11 Q1 10 ∆∆∆∆
Nominal value - market value
of loans-184 -110 -74
Market value interest rate
swaps-8 -11 3
Average interest incl.
derivatives4,4 % 4,2 % 0,2 %
Proportion of loan portfolio
with fixed interest45 % 37 % 8 %
Loans at maturity next quarter
(NOK million)127 1 289 -1 162
Unused drawing facilities (NOK
million)5 194 4 677 517
s.25
Power and CO2 price development
EUR/MWh
EUR/tCO2
Source: www.nasdaqomxcommodities.com per 30 June 2011
0
15
30
45
60
75
90
105
120
135
jun.09 jul.11okt.09aug.09 mai.10 jul.10 aug.10 apr.11des.09 nov.10mar.10 des.10sep.10
EUR
mar.11sep.09 apr.10jan.10 jun.11mai.09 jan.11
Nordic spotmarketFWD 2014 FWD 2012 CO2 2011
s.26
Hydropower — Glomma waterway flow
0
500
1 000
1 500
2 000
2 500
3 000
decnov
m3/sek.
octsepaugjuljunmayaprmarfebjan
Max. capacity utilization20102011
• Q2 2011 production: 3% below normal for the reporting period.
• Maximum capacity utilization: 1,000 m³.• Projected Q3 2011 production: about 940 GWh (approx. 60 GWh below normal for the reporting period)
provided normal reservoir levels and precipitation.
s.27
Other Activities
NOK million Q2 11 Q2 10 YTD 11 YTD 10
Support (31) (27) (71) (59)
Power trading (2) 9 (19) 6
Real estate 7 8 9 13
Billing and customer service 26 19 45 43
Financial derivatives, ass. comp. 32 3 41 20
Other (1) 0 (1) 0
Operating profit other 33 11 5 23
s.28
Shareholders as of 30 June 2011
Note: Shareholdings in thousand shares.
# ShareholderClass A shares
held
Class B shares
heldTotal Ownership
Share of
voting rights
Shareholding in thousands
1 City of Oslo 67 525 37 343 104 868 53.7 % 58.5 %
2 Fortum Forvaltning AS 37 853 28 706 66 559 34.1 % 32.8 %
3 Østfold Energi AS 5 201 4 5 205 2.7 % 4.5 %
4 Odin Norden 2 447 2 447 1.3 % 0.0 %
5 MP Pensjon PK 1 579 1 579 0.8 % 0.0 %
6 Odin Norge 1 224 1 224 0.6 % 0.0 %
7 Folketrygdfonet 85 494 579 0.3 % 0.1 %
8 Hafslund ASA 397 397 0.2 % 0.0 %
9 AS Herdebred 107 276 383 0.2 % 0.1 %
10 New Alternatives Fund, Inc 328 - 328 0.2 % 0.3 %
Total, 10 largest shareholders 111 099 72 470 183 569 94.0 % 96.2 %
Other shareholders 4 329 7 288 11 617 6.0 % 3.8 %
Total 115 428 79 758 195 186 100 % 100 %
s.29
Key figures
Group YTD 2011 YTD 2010
Capital matters
Total assets 25 799 27 653
Captial employed 22 342 23 835
Equity 8 621 9 140
Market capitalization 12 275 11 440
Equity ratio 33 % 33 %
Net interest-bearing debt 10 168 11 275
Profitability excl. REC
Profit after tax (188) (1 518)
Earnings per share (EPS) (0.96) (7.78)
Cash flow per share 13.78 7.61
Network YTD 2011 YTD 2010
Capital employed 8 830 8 966
Annual Income ceiling 2 490 2 891
NVE-capital (regulatory) 6 233 6 166
Power Sales YTD 2011 YTD 2010
Capital employed 1 601 1 836
- of this working capital 373 641
Total volume (GWh) 8 467 8 008
Venture YTD 2011 YTD 2010
Capital employed exl REC 812 1 514Market value REC 826 1 390
Power Generation YTD 2011 YTD 2010
Capital employed 4 433 4 350
Sales price (NOK/kWh) 0.41 0.39
Production volume (GWh) 1 294 1 349
District Heating YTD 2011 YTD 2010
Capital employed 4 605 4 251
Sales price (NOK/kWh) 0.78 0.71
Gross margin (NOK/kWh) 0.36 0.36
Sales volume (GWh) 925 954
Definitions
Items Definition
Group
Capital employed Equity + Net interest-bearing debt + Net tax positions
Equity ratio (in%) (Equity incl. Minority interests / Total assets) X 100
Earnings per share Profit after tax / Average no. of shares outstanding
Cash flow per share Net cash from operations / Average no. of shares
Return on equity Result after tax / Average equity (incl. Minority interests)
Return on capital employed Operating profit / (Average equity + Net interest-bearing debt + Net tax positions)
Power generation
Mean production Average power generation over the past 10 years.
Investor information
• Additional information is available from Hafslund’s website:– www.hafslund.no
– You can subscribe to Hafslund press releases
• Group SVP & CFO, Finn Bjørn Ruyter
– tel: +47 911 38 199
• SVP Communications and Corporate Social Responsibility, Karen Onsager
– tel: +47 920 87 007
• Financial Director and Investor Relations contact, Morten J. Hansen
– tel: +47 908 28 577
www.hafslund.no
w
w
w
.
h
a
f
s
l
u
n
d
.
n
o