With reference to the stock exchange notice from 13 January 2022, where The Group provided an update on Q4 2021 results and customer development. Please find further details below.
Q4 Highlights:
•Strong financial performance in the Norwegian operations in a challenging market environment
-Consumer EBIT adj. (+24% YoY)
-Business EBIT adj. (+22% YoY)
-First quarter with profitability in the New Growth initiatives segment
• The Nordic segment has been significantly affected by the extraordinary situation in the Nordic power market in Q4 – loss of 71 NOKm in the quarter from hedging inefficiencies
• Loss of 34’ customers in the Consumer segment in Q4 due to intense competition and termination of “price match” service
• Proposed dividend of 3.5 NOK per share for 2021
Strong financial performance in the Norwegian operations. Nordic segment affected by extremities
In the fourth quarter of 2021 we experienced market extremities without historical comparison. Elspot prices were record high, driven by geopolitical tension, high gas prices and a weak hydrological situation. During December, the daily elspot price in Finland and Southern Sweden passed 4 NOK/kWh on several occasions, and on average the price level and peak/off-peak price differences were around four times the normal level. The fixed price contracts in the Nordic segment are hedged according to our best estimated volume and the associated profile and volume risks are covered in the markup when these contracts are initiated. However, the market extremities that occurred in Q4, in combination with very cold weather in Sweden and Finland, especially in December, led to losses from hedging inefficiencies in the Nordic segment. The Group has initiated a process of aligning the business customers’ contract structure and product portfolio with the Norwegian model in order to reduce the associated volume risk on the fixed price contracts going forward. Thus far, the consumption volumes in Sweden and Finland in Q1 have been in line with expectations and we have no indication of under-hedging in January. However, the increased peak/off-peak difference is likely to continue throughout Q1, which will negatively affect the segment’s profitability in the quarter.
In Norway, the market situation has also been extraordinary, albeit not as extreme as in Sweden and Finland. The financial performance in the Norwegian segments is strong, with tailwind from good hedges. All segments show significant YoY growth and New Growth Initiatives is reaching its first quarter with profitability since the launch of Mobile in 2017. However, the Group’s net revenue adj. decrease 6% YoY and EBIT adj. decrease 16% YoY due to the losses in the Nordic segment.
Please find attached the quarterly report and quarterly presentation.
The presentation will be webcasted live on 10 February 2022 at 08.00 CET: https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20220210_20
For further information, please contact: Morten A. W. Opdal, Head of Controlling and Investor Relations, +47 970 62 526