English summary – fiscal year 2022

Salten Kraftsamband AS (SKS) is a private limited company, at year end 2022 owned by Bodø kommune, Fauske kommune, Nordlandskraft AS, Jämtkraft AB, Bodø Energi AS, and Bodø Pensjonskasse. NTE Energi AS became one of the owners at March 16th 2023. 

SKS mission is to run power-related business based on natural resources in the region of Northern Norway. SKS is the largest power producer with corporate headquarter located in the region of Northern Norway. The main office is located at Fauske, and its hydroelectric power production stations are located in the municipalities of Fauske, Gildeskål, Beiarn, Bodø, Rødøy and Hemnes. 

SKS aims to be an active contributor to the development of a sustainable society. By using new technology and knowledge, and by strengthening our competence within hydropower, SKS will be an attractive partner in the energy market development. Through internal efficiency and reinvestment in the organization SKS wish to create further activity and build long term values for the region, the society and our stakeholders. 

SKS holds the wholly owned subsidiaries SKS Produksjon AS and SKS Handel AS. SKS partly owns the subsidiary Rødøy-Lurøy Kraftverk AS (73,1 %). SKS provides the subsidiaries with financial and administrative services such as management, accounting, IT, HR, communication, public relations, strategic planning, and business development. 

SKS PRODUKSJON AS

SKS Produksjon AS is the largest energy production company in Northern Norway, owning 20 hydroelectric power stations. The annual production of SKS Produksjon is about 2 061 GWh. 

SKS Produksjon AS holds 50 percent of the shares in Smisto Kraft AS. After delays and a legal dispute Smisto Kraft now has two out of three power aggregates in operation and the construction period is coming to an end. The last aggregate is expected to be ready during 2023.  

SKS Produksjon AS holds 50 percent of the shares in Vakinn AS, 72 percent of shares in Krutåga Kraft AS and 67 percent of the shares in Hattfjelldal Kraft AS. Vakinn AS run an operation center for power production. Krutåga Kraft AS and Hattfjelldal Kraft AS aims to produce power. 

SKS Produksjon AS experiences risk exposure through fluctuations in electricity prices. To hedge against such exposure the company engages in forward- and future contracts and contracts for difference according to a defined risk strategy. 

SKS HANDEL AS

SKS Handel AS engages in the power market, offering a wide range of products and services, including energy trading of both physical and financial contracts, portfolio management, and settlement services. 

Well-built systems and employees with years of experience make the company able to efficiently manage, and increase the value of, energy resources owned by partners and municipalities. 

The department of Portfolio Management is managing energy portfolios for external customers, creating significant value for its clients. It has also become a player in the renewable energy certificate market, providing certificates to buyers both domestically and internationally.

RØDØY-LURØY KRAFTVERK AS
Rødøy-Lurøy Kraftverk AS (RLK) is a power production company with an annual production of about 75 GWh.

FISCAL YEAR 2022

The war in Ukraine and geopolitical instability led to fear of energy shortage, increased gas prices in Europe, and an all-time high average power price in Norway; 1.34 NOK per kWh.  

Despite a high system-price in the Nordic region the power prices of SKS’ price area NO4, were lower than in 2021. Average spot price of NO4 was 0.25 NOK per kWh in 2022. This is a decrease of 0.11 NOK per kWh compared to 2021. During the year prices were quite stable on a lower level than other Norwegian areas. Water reservoirs in NO4 were above normal level and there was more snow than normal in the mountains. At the end year end the NO4 price increased, but the price gap between Norwegian price areas continues as power exchange capacity between northern and southern regions are limited.  

Total precipitation in our production area was slightly above normal level in 2022. Total water inflow in our area corresponded to a production of 2,580 GWh. Total hydropower production in 2022 amounted to 2,577 GWh, while the corresponding figure for 2021 was 2,063 GWh. The filling of water reservoirs were 79 percent as we entered 2022 and 67 percent at year end. Normal reservoir level by year-end is 68 percent. Snow reservoirs were calculated to 241 GWh by year end, about 90 GWh less than normal level. 

Hydropower plants with generators rated at more than 10 MVA pays tax on resource rent (ground rent). The ground rent increased from 47.4 to 57.7 percent in 2022. In addition, an excise duty on electricity sold at high prices were introduced in September 2022. This entails an increased marginal tax rate for hydro power, and it will be the highest taxed industry in Norway. 

NET PROFIT OF THE YEAR 2022

The Annual Statement for the SKS group is compiled according to IFRS. The subsidiaries and the parent company Salten Kraftsamband AS reports its result according to NRS (Norwegian reporting standards). Parent company had a net profit of 61.2 MNOK in 2022.

SKS Produksjon AS had a power production of 2 536 GWh in 2022. SKS Produksjon delivered an operating profit of 412 MNOK in 2022. Net income after taxes was 157 MNOK.

Rødøy-Lurøy Kraftverk AS (RLK) had a power production of 40,5 GWh. This is less than normal, due to paused production for maintenance. Operating profit were 8.6 MNOK in 2022. Net profit was 7.2 MNOK.

SKS Handel AS’ level of activity in 2022 was high due to volatile market prices of power and guaranties of origin. The operation profit in 2022 was 96.1 MNOK. Net profit was 74.9 MNOK in 2022.

Gross Operating Income of SKS company group according to IFRS was 820.3 MNOK in 2022, compared to 784.9 MNOK in 2021. Operating Profit was 439.4 MNOK and Result Before Taxes 339.2 MNOK. Taxes was 251.4 MNOK, compared to 135.9 MNOK in 2021. Net Profit was 86.9 MNOK compared to 282,1 MNOK in 2021.