EBITDA margin remains good
Historically, Statkraft has had very high EBITDA margins as a result of operating expenses in connection with hydropower production being generally low. Power prices can therefore be very low before having a critical impact on the EBITDA margin.
The reduction in the EBITDA margin from 2006 to 2007 was a result of lower prices and a larger share of the income being generated by the end-user activities as a result of the consolidation of Fjordkraft. Fjordkraft's activities have substantially lower margins than the hydropower production. In 2008, increased power prices were offset by increased activity within gas power, an activity which also has lower margins than hydropower production. The percentage of gas power production of the Group's total power production increased from 3 in 2007 to 10 in 2008, and further to 11 in 2009. The lower EBITDA margin in 2009 is primarily due to:
Increased operating expenses as a result of new assets from the asset swap with E.ON AG and the consolidation of SN Power.
Lower increase in revenues than expected. The actual production increase was 7 per cent in spite of the Group's production capacity increasing by 25 per cent as a result of the new activities. In addition, power prices in the Nordic region and Germany were significantly lower in 2009.
