Robust Performance Amid Changing Energy Landscape
Statkraft has showcased its capacity for resilience with strong results in 2024, boosted by effective energy management and robust operational strategies. Even with the decline in power prices, the underlying EBIT remains one of the highest in the company's history.
In 2024, Statkraft reported net operating revenues of NOK 53.7 billion, reflecting a drop from NOK 65.3 billion in 2023. The underlying EBIT decreased to NOK 26.5 billion from NOK 41.4 billion, attributed mainly to falling power prices.
The average system price in the Nordic region saw a reduction, decreasing by 21 EUR/MWh to reach 36 EUR/MWh. Similarly, the base price for German electricity also fell, down 15 EUR/MWh to 80 EUR/MWh during the same period.
Increase in Power Generation
Statkraft's overall power generation climbed to 66.3 TWh in 2024, compared to 61.9 TWh the previous year. This 7% annual increase was largely due to new wind power assets coming online in diverse markets including Brazil and Spain, along with enhanced outputs from gas-fired power facilities in Germany. However, hydropower production in the Nordics was reduced by 0.7 TWh compared to 2023.
Financial highlights include:
- Reported EBIT at NOK 24.7 billion, down from NOK 48.5 billion.
- Net financial items reported at NOK -5.5 billion primarily because of currency fluctuations amounting to NOK -4.6 billion.
- Profit before tax registered at NOK 20.6 billion, contrasting with NOK 51.0 billion.
- Net profit decreased to NOK 7.0 billion, down from NOK 26.1 billion.
- The Board has proposed a dividend of NOK 8.8 billion for 2024.
Strategic Investments and Growth
2024 was marked by significant strategic movements:
- Statkraft set a record by signing numerous power purchase agreements (PPAs) across multiple countries, including Spain and Germany.
- Key divestitures included several wind and solar projects, totaling NOK 4.5 billion.
- Significant investments were announced for hydro and wind projects in Norway, alongside upgrade initiatives.
- Birgitte Ringstad Vartdal was appointed as CEO on April 1, leading Statkraft's renewed strategies.
- The acquisition of Enerfin, a Spanish renewable energy firm, was finalized for NOK 18 billion in May.
- October saw a strategic refocus, placing emphasis on investments in Norway, Europe, and South America.
Birgitte Ringstad Vartdal, Statkraft's President and CEO, commented on the results, stating, “This year ranks among our top performances, especially considering the impact of lower power prices. We are consistently investing in our Norwegian hydropower assets while also diversifying our portfolio globally, ensuring sustained profitability.”
Challenges and Future Outlook
The dynamics within the energy market are evolving, prompting Statkraft to refine its strategies. With rapid changes and geopolitical uncertainties, the company is prioritizing projects from its expansive portfolio. Despite challenges, the driving forces behind the energy transition remain supportive of Statkraft's goals.
Operating expenses amplified due to the integration of new generation assets and expanded business development activities, reinforcing the company's commitment to scaling its renewable energy offerings. The strong cash position stood at NOK 31 billion at the end of 2024, though substantial tax obligations and dividends have impacted cash inflows.
In terms of geographical performance, the Nordics generated an underlying EBIT of NOK 24.0 billion, showcasing strength despite lower electricity prices. However, Europe experienced a negative EBIT of NOK -0.9 billion, largely due to decreased contributions from financial hedging and rising business costs.
International operations saw an increase to NOK 0.6 billion, spurred by new wind power ventures in Brazil and Chile. The markets segment performed admirably, delivering NOK 4.5 billion, driven by strong origination activities.
Review of Fourth Quarter Performance
In the fourth quarter, underlying EBIT was NOK 5.1 billion, showcasing a decline from NOK 11.6 billion recorded in the previous year's final quarter, primarily impacted by reduced power prices. Net profit for this period stood at NOK 1.5 billion with cash flow from operations hitting NOK 2.0 billion.
Prices in the Nordic market experienced volatility, with the average system price reporting at 31.1 EUR/MWh—down 26.8 EUR/MWh year-on-year yet up from the previous quarter. German base prices reflected an upward trend due to reduced wind production and rising gas prices.
Statkraft's generation for the last quarter was recorded at 19.3 TWh, an increase from the year prior, thanks to enhancements in Brazilian wind power generation, although this was counteracted by decreased hydropower outputs in Scandinavia.
During this quarter, noteworthy events included the initiation of construction on a new hydropower plant in Central Norway and several strategic investment decisions for wind farms in Spain and Ireland. Additionally, energy management capabilities reached new highs in hydropower operations.
Frequently Asked Questions
What are the key financial results for Statkraft in 2024?
Statkraft recorded net operating revenues of NOK 53.7 billion and an underlying EBIT of NOK 26.5 billion in 2024.
How did Statkraft's power generation change in 2024?
Statkraft’s total power generation increased to 66.3 TWh, with significant contributions from new wind assets in Brazil and Spain.
What strategic initiatives did Statkraft implement in 2024?
Statkraft focused on signing numerous PPAs, made strategic divestitures, and initiated record investments in renewable energy.
Who is Statkraft’s current CEO, and when did they assume the role?
Birgitte Ringstad Vartdal became the CEO of Statkraft on April 1, 2024.
How does Statkraft plan to navigate market challenges in the future?
Statkraft will prioritize investment projects while adapting to geopolitical and market uncertainties to continue driving the energy transition.
