Fingrid Group's Interim Report 1 January - 30 September 2012
The Group’s revenue between July and September was 106 million euros (88 million euros during the corresponding period in 2011). Other operating income was 0.7 million euros (0.7 million euros). Grid service income was 46 million euros (36 million euros) and sales of imbalance power 28 million euros (34 million euros). The operating profit of the Group between July and September was 7 million euros (-4 million euros), which contains -3 million euros (-2 million euros) of changes in the fair value of electricity derivatives. IFRS profit before taxes was 11 million euros (-6 million euros) between July and September.
The Group’s revenue between January and September was 368 million euros (331 million euros) and other operating income was 2 million euros (2 million euros). The operating profit of the Group between January and September was 56 million euros (39 million euros), which contains -12 million euros (-3 million euros) of changes in the fair value of electricity derivatives. The consolidated IFRS profit before taxes was 53 million euros (26 million euros) between January and September. The profit for the review period was 40 million euros (19 million euros) and the consolidated total comprehensive income was 46 million euros (-4 million euros). Gross capital expenditure between January and September totalled 83 million euros (168 million euros). The cash flow from the operations of the Group deducted by capital expenditure was 26 million euros positive (-81 million euros). The equity ratio of the Group was 26.4 per cent (27.1 per cent) at the end of the review period.
The grid service income of the Group rose to 191 million euros (151 million euros) between January and September as a result of the tariff increase of 30 per cent carried out at the beginning of the year. Electricity consumption in Finland decreased by 1.3 per cent from the corresponding period in 2011. The sales of imbalance power decreased to 104 million euros (121 million euros) as a result of a lower price of electricity. Inter-TSO compensation income decreased by 7 million euros mainly due to reduced electricity exports from Finland to Sweden. Fingrid’s cross-border transmission income on the connection between Finland and Russia decreased by 10 million euros from the corresponding period in the previous year because of a significantly smaller volume of electricity imports from Russia. The congestion income on the interconnection between Finland and Estonia decreased as a result of fewer hours with a different price of electricity between the two countries. Fingrid’s congestion income on the interconnection between Finland and Estonia was 6 million euros (9 million euros), which was paid to the owners of the transmission connection. On the other hand, Fingrid’s congestion income on the interconnection between Finland and Sweden rose considerably due to the market situation and great differences in the area prices of electricity. Fingrid’s congestion income between Finland and Sweden was 36 million euros (12 million euros).
|Revenue and other income (million euros)||1-9/12||1-9/11||7-9/12||7-9/11|
|Grid service income||191||151||46||36|
|Sales of imbalance power||104||121||28||34|
|Cross-border transmission income||7||17||1||5|
|Finland-Estonia congestion income**||6||9||4||1|
|Peak load capacity income**||14||3||5||0|
|Finland-Sweden congestion income||36||12||21||10|
|Other operating income||2||2||1||1|
|Revenue and other income total||370||332||107||89|
The depreciation costs increased by 6 million euros as significant new capital investment projects were completed. The costs of reserves, which safeguard the system security of the power system, rose by 8 million euros during the period under review because the temporary purchases of frequency controlled reserves in the hourly market in Finland and from the other Nordic TSOs were more expensive than earlier. The personnel costs increased by 1 million euros from the previous year. The maintenance management costs rose by 3 million euros from 2011. This was particularly due to the high repair costs of the Fenno-Skan 2 cable. The inter-TSO compensation costs went up by 2 million euros, because electricity imports from Sweden to Finland increased considerably from 2011.
|Costs (million euros)||1-9/12||1-9/11||7-9/12||7-9/11|
|Purchase of imbalance power||93||109||25||30|
|Purchase of loss energy||48||47||16||17|
|Finland-Estonia grid rents**||6||9||4||0|
|Peak load capacity costs***||14||2||5||0|
|Maintenance management costs||15||12||4||4|
|ITC transmission costs||11||8||4||4|
|Operating profit of Group, IFRS||56||39||7||-4|
* Excluding the change in the fair value of derivatives
** Fingrid’s income from the congestion income between Finland and Estonia was 5.7 million euros. The costs (grid rents between Finland and Estonia) were 5.6 million euros, which was paid to the owners of the Estlink transmission connection. The difference of 0.1 million euros received by Fingrid was created during disturbances on the Estlink connection.
*** The peak load capacity income and costs are related to the securing of the sufficiency of electricity during peak consumption hours within the framework of the Finnish Peak Load Capacity Act.
The Group’s income flow is characterised by seasonal fluctuations, which is why the financial result for the entire year cannot be directly estimated on the basis of the nine-month result.
The EstLink 2 direct current interconnector being built between Finland and Estonia has been in an active construction and installation phase throughout the summer and autumn of 2012. At best, the project has had a total of 8 construction sites in progress, with up to a total of about 150 employees working at the sites simultaneously. The construction and installation work is progressing according to schedule in both Finland and Estonia. The total budget of the project is 320 million euros, which is divided between Fingrid and Elering.
ABB will renew and expand Fingrid’s 400/110/20 kilovolt substation in Ulvila. The Ulvila substation is one of the most important nodes in the transmission grid in Finland. Among other things, it supplies the energy produced by the Olkiluoto nuclear power plant to the transmission grid. This project is Fingrid’s biggest substation renovation project to date.
The Hyvinkää - Hikiä transmission line project is in an active construction stage. This project is the first to use Fingrid’s new field tower. Its benefits include a greater land area available for cultivation, improved level of safety, and a light visual appearance. The construction of the foundations of the field tower is commencing during the autumn. The first field tower will rise in the vicinity of the area of the housing fair arranged in Hyvinkää in 2013. The Hikiä substation project has proceeded as planned. During the autumn, work such as foundation work for the 400 kilovolt bay will be carried out within the substation.
The electricity transmissions between Finland and Estonia were dominated by exports from Finland to Estonia. The transmission capacity has been available to the market in the normal manner. The volume of electricity imported from Estonia from July to September was 0.1 TWh (0.1 TWh), and 0.5 TWh (0.2 TWh) were exported from Finland to Estonia between July and September. The volume of electricity imported from Estonia to Finland between January and September was 0.2 TWh (1.4 TWh), and 1.2 TWh (0.2 TWh) were exported from Finland to Estonia.
The electricity transmission capacity from Russia was limited in the summer by the annual maintenance work on the transmission connection, but at the same time the demand for transmission capacity has also been smaller than in the previous years. Between July and September, 0.4 TWh (2.3 TWh) of electricity were imported from Russia to Finland, and between January and September the import volume was 3.0 TWh (8.5 TWh).
|Power system operation||1-9/12||1-9/11||7-9/12||7-9/11|
|Electricity consumption in Finland TWh||61.9||62.7||18.3||18.2|
|Fingrid's transmission volume TWh||47.0||48.0||15.1||14.6|
|Fingrid's loss energy volume TWh||0.9||0.9||0.3||0.3|
|Electricity transmission Finland-Sweden|||||||||
|Exports to Sweden TWh||0.2||3.3||0.0||0.0|
|Imports from Sweden TWh||11.5||3.8||4.7||3.1|
|Electricity transmissions Finland-Estonia|||||||||
|Exports to Estonia TWh||1.2||0.2||0.5||0.2|
|Imports from Estonia TWh||0.2||1.4||0.1||0.1|
|Imports from Russia TWh||3.0||8.5||0.4||2.3|
Due to the great area price differences, Fingrid has accumulated considerable congestion income; this year a total of about 36 million euros between Finland and Sweden, and a total of about 6 million euros between Finland and Estonia.
|Nord Pool system price, average €/MWh||29.26||51.43||20.88||35.95|
|Area price Finland, average €/MWh||35.36||53.37||30.96||43.35|
|Congestion income between Finland and Sweden, million €*||72.5||23.0||42.0||19.0|
|Congestion hours between Finland and Sweden % *||41.2||24.5||48.7||46.6|
|Congestion income between Finland and Estonia, million €*||11.5||17.8||7.2||0.9|
|Congestion hours between Finland and Estonia %*||38.9||50.4||48.7||12.5|
The financial position of the Group continued to be satisfactory. The interest-bearing borrowings totalled 1,254 million euros (1,141 million euros), of which 1,059 million euros (707 million euros) were long-term and 194 million euros (434 million euros) were short-term.
The consolidated figures in this Interim Report are unaudited.
Jukka Ruusunen, President & CEO, tel. +358 (0)30 395 5140 or +358 (0)40 593 8428
Tom Pippingsköld, CFO, +358 (0)30 395 5157 or +358 (0)40 519 5041