By Kjetil Malkenes Hovland
OSLO--Norwegian state energy company Statkraft Wednesday said it has mothballed a gas power plant in Germany and sold its shares in E.ON AG (EONGY) to raise money for investments after first-quarter net profit fell 87% on the year.
Net profit was 333 million kroner ($57 million) in the first quarter, compared to NOK3.22 billion a year ago, mainly due to unrealized currency losses in the quarter.
Statkraft said in a statement the challenges in the European gas-fired power market "continue to be considerable," with low production margins and stronger competition from coal power due to low coal and carbon prices.
"As a consequence, Statkraft has decided to put the German gas-fired power plant Robert Frank in cold reserve," the company said.
Statkraft said it had sold its 83.4 million E.ON shares for a total price of NOK8.5 billion, to raise money for further expansion, and also to maintain its credit rating. Out of this, 23.4 million shares were sold in the first quarter and the remaining 60 million were sold after the quarter had ended.
"The Group has released capital for own investments by selling all shares in E.ON," said Statkraft chief executive Christian Rynning-Tonnesen.
The company said its operating profit was boosted by 9% higher power prices on the year in the Nordics and added production capacity from the U.K. Sheringham Shoal offshore wind farm, but was offset by a lower contribution from market activities and somewhat higher property taxes. Underlying earnings before interest, taxes, depreciation and amortization, or Ebitda, were about in line with the same quarter a year earlier.
"We will adapt investment plans to market outlook and financial capacity," said Mr. Rynning-Tonnesen.
Write to Kjetil Malkenes Hovland at email@example.com