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Name | Symbol | Market | Type |
---|---|---|---|
Fingrid 29 | LSE:38FE | London | Medium Term Loan |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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0.00 | 0.00% | 0 | - |
FINGRID GROUP – MANAGEMENT’S REVIEW 1.1.−30.9.2023
Stock Exchange Release 26 October 2023 at 12:15 EET
Fingrid follows a six-month reporting period as referred to in the Securities Markets Act and publishes Management’s Reviews for the first three and nine months of the year; the Management’s Reviews contain key information illustrating the company’s financial and other development.
The information presented in the Management’s Review relates to Fingrid Group’s performance in January–September 2023 and the corresponding period of 2022, unless otherwise indicated. The figures presented here have been drawn up in accordance with the International Financial Reporting Standards (IFRS). The Management’s Review is not an interim report in accordance with the IAS 34 standard. The figures are unaudited.
Review by the President & CEO: “A price rollercoaster accompanied by maintenance breaks, disturbances and fluctuating wind power”
Following a winter of crisis, the price of electricity has behaved in line with expectations. The average price of electricity has fallen to a “normal” level, while the price variations have been great. The price variations have been driven by the maintenance breaks and disturbances in production plants and transmission connections, and by fluctuating wind power. July and September prices were over EUR 30 per megawatt hour, but the price of electricity in August was double in comparison, as a result of many of the aforementioned factors. As renewable energy production increases, price variations are here to stay.
We prepared an estimate of the adequacy of electricity in the coming winter. We estimate that the adequacy of electricity will be good, with a low risk of electricity shortages. The situation is better than last winter, since Finland’s domestic production has increased and the availability of electricity imports from neighbouring countries has improved. The company’s ten-year plan for developing the main grid amounts to approximately EUR 4 billion. The implementation of the plan is progressing well. Behind the increase in grid investments is the electrification of society and the related construction of renewable electricity production. Fingrid’s strategy firmly supports the implementation of the Government Programme of Finland’s new government.
We plan to waive grid service fees for a total of six months in 2024. According to the plan, our customers’ grid service fees will decrease by some EUR 250 million. The plan is a reaction to the exceptionally large amount of congestion income. The company has already decided to waive the grid service fees for January, February and June 2024. The decision to waive grid service fees in the latter half of the year will be made in the summer of 2024.
We have established a Green Finance Framework and a Green Euro Commercial Paper Programme (ECP) that enable the company to cover its debt financing entirely with green financing. The new Green Finance Framework integrates Fingrid’s sustainable strategy, which enables Finland to reach its climate goals, further into the company’s financing activities. Fingrid’s goal is to significantly increase the share of green financing in the company’s debt financing.
Key figures
€M | 1−9/23 | 1−9/22 | change % | 1−12/22 |
Turnover | 806.1 | 1,243.4 | -35.2 | 1,815.2 |
Operating profit* | 112.7 | 86.5 | 30.3 | 149.8 |
Result before taxes | -101.2 | 376.9 | -126.8 | 257.4 |
Result before taxes ** | 111.8 | 75.5 | 48.0 | 136.4 |
Profit for the period | -80.8 | 301.4 | -126.8 | 205.8 |
Capital expenditure, gross | 208.4 | 194.4 | 7.2 | 276.1 |
Net cash flow from operations*** | -103.7 | 630.6 | -116.4 | 747.5 |
Interest-bearing net debt | 459.6 | 439.2 | 4.7 | 322.7 |
Balance sheet total | 2,927.6 | 3,312.5 | -11.6 | 3,216.6 |
Equity ratio % | 17.3 | 24.6 | 22.4 | |
* Operating profit excluding the change in the fair value of derivatives | ||||
** Result before taxes excluding the change in the fair value of derivatives | ||||
*** Net cash flow from operations, after capital expenditure |
Main business events
Legal proceedings and proceedings by authorities
Teollisuuden Voima Oyj (“TVO”) lodged a request for an investigation with the Energy Authority on 25 May 2022 related to the claims by TVO that Fingrid has neglected its obligation to develop the main grid as stated in the Finnish Electricity Market Act and/or other applicable legislation, and that, as a result, it has placed unlawful restrictions on connecting the Olkiluoto 3 nuclear power plant to the grid, and that Fingrid is in breach of its administrative obligations linked to carrying out its public administrative task. Fingrid’s view is that the claims made by TVO are unfounded. Fingrid lodged a statement of defence with the Energy Authority concerning the claims made by TVO in its request for an investigation. The Energy Authority’s resolution on the matter is expected in autumn.
The EU Agency for the Cooperation of Energy Regulators (ACER), on 14 September 2022, made a decision on long-term price risk hedging opportunities between Finland and Sweden. In its decision, ACER requested that the Finnish and Swedish TSOs ensure the availability of other long-term cross-zonal hedging products and develop the necessary arrangements for providing hedging products. Fingrid, on 14 November 2022, filed an appeal against the decision to ACER’s Board of Appeal.
Events after the review period
On 13 October 2023, the Energy Authority published for consultation a draft for a confirmation decision on the regulatory methods for monitoring reasonableness in the pricing of transmission grid operations during the regulatory periods 2024‒2027 and 2028‒2031. Fingrid will issue its response to the draft decision within the given timeframe, by 10 November 2023.
The company has not changed its earnings guidance from what is stated in the Financial Statements Bulletin of 2 March 2023.
Further information:Jukka Ruusunen, President & CEO+358 30 395 5140 or +358 40 593 8428
Jukka Metsälä, Chief Financial Officer +358 30 395 5213 or +358 40 563 3756
Fingrid is Finland’s transmission system operator. We secure reliable electricity for our customers and society, and shape the clean, market-oriented power system of the future.
Fingrid delivers. Responsibly. www.fingrid.fi
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