Statkraft's expenses
Statkraft greatly emphasises efficiency improvements and cost control. Through management by objectives, the costs related to operation of power plants and other parts of the value chain are monitored continuously, both as regards internal scorecard follow-up and systematic comparison with other energy companies. Achieving cost synergies is emphasised, not least in connection with the integration of new activities in the Group. The operating expenses, excluding depreciation, amortisation and impairments, amounted to 28 per cent of the gross operating revenues in 2009 – somewhat higher than the average for the years 2005-2008, which was 23 per cent. Slightly more than 60 per cent of the increase is related to the asset swap with E.ON AG and the consolidation of SN Power.
Operating expenses which can be influenced
Salaries and payroll costs
Wage costs have grown in recent years as a result of a higher activity levels in the Group and new activities. Of the increase of NOK 664 million from 2008 to 2009, about 57 per cent is in connection with new activities, mainly as a result of the asset swap with E.ON AG, which added 183 full-time equivalents, and the consolidation of SN Power, which added 468 full-time equivalents. About one-fifth of the increase is in connection with wage growth and increased provisions for pension liabilities in the existing activities, while the remaining increase mainly relates to increased staffing in existing activities. Wage costs amount to slightly less than 10 per cent of the gross operating revenues.
Other operating expenses
Other operating expenses have, like wage costs, increased as a result of higher activity levels and new activities in recent years. Of the increase of NOK 1030 million from 2008, about 55 per cent relates to new assets from the asset swap with E.ON AG and the consolidation of SN Power, and about 13 per cent relates to increased operating expenses for power plants operated by others, mainly as a result of an increased ownership interest in AS Tyssefaldene. Other operating expenses is relatively low compared with the revenues, and amounts to slightly less than 14 per cent of gross operating revenues.
See graph Influencable operating expenses
Operating expenses which cannot be influenced
Property tax and licence fees
License fees are adjusted in line with the Consumer Price Index, with the first adjustment taking place on 1 January five years after the licence was granted and every fifth year thereafter. The calculation basis for property tax on power plants is based on an average of the results for the power plant over the last five years, and high power prices will therefore influence tax costs. Statkraft's license fees are relatively stable. Property tax has increased in recent years as a result of an increase in the calculation basis. In 2009, the property tax fell somewhat in Norway due to a lower calculation basis. However, new assets in Sweden resulted in an increase in the Group's total property tax.
Depreciation and amortisation
Hydropower plants generally have a long technical life, and with the right maintenance investments and absence of major technological changes, the Group's plants are considered to have a long remaining lifetime. The major increase in depreciation and amortisation for 2008 is primarily related to new assets and the consolidation of SN Power. In total, this amounts to 63 per cent of the increase. In recent years, the Group has added both wind and gas power assets to the portfolio. These are plants with a substantially shorter lifetime than hydropower plants, and this has contributed to an increase in depreciation. At the end of 2009, wind and gas power amounted to 2 and 14 per cent, respectively, of the Group's total installed capacity.
