Quarterly Report • May 4, 2017
Quarterly Report
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• Arise decided to call for an early redemption of all unsecured green bonds 2014/2017 for a total amount of MSEK 350, including Arise's own holding of MSEK 50.
About Arise
Arise is one of Sweden's leading wind power companies, with the business concept of developing, building and managing onshore proprietary wind farms and on behalf of investors. The company is listed on Nasdaq Stockholm.
Halmstad, 4 May 2017
Daniel Johansson CEO
"The gravity of the loss of confidence in the system remains to be seen, but the clear and positive messages delivered compared with the original proposal from the Swedish Energy Agency are definitely positive."
In the first quarter, wind resources were normal for the season and production at our wholly-owned and partly-owned wind farms maintained budgeted levels. Electricity prices were held back due to milder than usual weather during the first months of the year.
The price of electricity certificates fell dramatically at the beginning of the year. Prices dropped to just below SEK 45 per MWh before starting to recover, which is the lowest level ever. The delayed decision on how extension of the electricity certificate scheme until 2030 will be designed was extremely unfortunate, and a major contributor to market uncertainty.
For Arise, the price drop for certificates entailed a negative nonrecurring effect on earnings in the first quarter because the value of our certificates in stock decreased. However, we also realise that our longterm hedging of electricity certificates at higher price levels is proving an asset for us.
After the end of the period, in mid-April, the Swedish government finally announced a linear expansion of the certificate scheme and a related quota curve for the 2022-2030 period. A proposal to advance the date for quotas was also presented, as a means of increasing demand for electricity certificates from as early as 2018. The gravity of the loss of confidence in the system remains to be seen, but the clear and positive messages delivered compared with the original proposal from the Swedish Energy Agency are definitely positive.
During the quarter, we signed an agreement with Bergvik Skog with a right to acquire the 100 MW wind power project Svartnäs. The planning stage is relatively advanced and we are now in an intensive phase of the process to prepare the site for construction, and to find a suitable investor. Our plan is that the farm will be fully operational by the end of 2018 or early 2019. At the same time, development of the 200 MW Kölvallen project has continued, which we hope to divest during the year provided that the necessary permits gain legal force.
The divestment of Mombyåsen to Allianz Capital Partners was finalised during the quarter and generated a positive impact on earnings in our development operations.
Last but not least, we announced an issue of convertible bonds at the beginning of the year, which has now been completed. The issue generated proceeds of about SEK 245 million before issuance costs, and the term to maturity of the loan is five years. Thank you for the confidence you have placed in us! We now have a stronger financial position for our business and a stronger underlying equity ratio, which will improve our ability to grow in both project development and asset management, which we believe hold major potential.
EBIT, MSEK
| Q1 | Q1 | FY | |
|---|---|---|---|
| MSEK | 2017 | 2016 | 2016 |
| Net sales | 44 | 136 | 594 |
| Operating profit/loss before depreciation (EBITDA) |
21 | 40 | 138 |
| Operating profit/loss (EBIT) | 2 | 17 | 33 |
| Profit/loss before tax | -20 | -7 | -52 |
During the quarter, winds were marginally weaker than normal. However, total production – including the company's share in the Jädraås project – rose to 185 GWh (164) due to very weak winds in the year-earlier period. Production from own farms rose 5 GWh to 93 GWh (88). Electricity prices remained low, while uncertainty about the future extension of the certificate scheme led to a sharp decline in certificate prices. The average price for the company's own production declined SEK 144 to SEK 339 (483) per MWh, including a negative effect from the revaluation of certificates in stock. Since no new projects were divested during the quarter, income from project sales declined year-on-year, while management income rose slightly. Overall, net sales declined MSEK 92.
Operating expenses amounted to MSEK 25 (98), of which cost of sold projects and contracts accounted for MSEK 2 (74) and other operating expenses for MSEK 23 (24). Own capitalised work amounted to MSEK 1 (1). Profit from associates was MSEK 0 (0).
Overall, operating profit before depreciation (EBITDA) declined MSEK 18. Operating profit/loss (EBIT) declined MSEK 16. Due to stronger net financial items, profit/loss before tax declined MSEK 12 to MSEK -20 (-7). The profit/loss after tax was MSEK -20 (-3), representing a profit/loss per share of SEK -0.58 (-0.08) before and after dilution.
Interim report 1 January-31 March 2017
Operating cash flow, MSEK
Despite a weak performance in the first quarter, operating cash flow was positive. Cash flow from operating activities before changes in working capital was MSEK 23 (40). Changes in working capital amounted to MSEK 24 (42), partly driven by finalisation of the Mombyåsen project. Total operating cash flow therefore amounted to MSEK 47 (82). During the quarter, investments were mainly focused on new and existing development projects. Cash flow from investing activities thus amounted to MSEK -13 (24). Due to an issue of convertible bonds during the quarter, net long-term and current interest-bearing liabilities increased cash flow by MSEK 244 (-41). Interest of MSEK -17 (-18) was paid, and interest of MSEK 1 (1) was received. Net payments to or from blocked accounts totalled MSEK 3 (-4), after which cash flow for the quarter amounted to MSEK 264 (44).
At the end of the period, net interest-bearing debt amounted to MSEK 964 (1,163). Cash and cash equivalents were MSEK 551 (247) and unutilised overdraft facilities amounted to MSEK 50 (50). In addition, Arise has a MSEK 50 holding in the company's senior unsecured bonds. At the end of the period, the equity/assets ratio was 38.0% (40.2). Under the assumption that all convertible bonds are converted and that existing cash is netted against interest-bearing debt, the equity ratio would correspond to 59.2%
Development and management income, MSEK
Divested projects, accumulated, MW
External management assignments, accumulated, MW
| Q1 | Q1 | FY | |
|---|---|---|---|
| MSEK | 2017 | 2016 | 2016 |
| Income | 14 | 96 | 448 |
| Cost of sold projects and | |||
| contracts | -2 | -74 | -367 |
| Other operating expenses and | |||
| capitalised work | -7 | -10 | -38 |
| Operating profit/loss before | |||
| depreciation (EBITDA) | 5 | 12 | 43 |
| Operating profit/loss (EBIT) | 5 | 12 | 36 |
| Profit/loss before tax | 0 | 7 | 21 |
Development and management income declined during the quarter. Mombyåsen was finalised and the construction of Solberg proceeded as planned. No new projects were sold during the quarter, unlike the yearearlier period when Solberg was divested. This accounts for the decline of MSEK 82 in income, and MSEK 71 in the cost of sold projects and contracts. Other operating expenses and capitalised work were lower year-on-year, which is why EBITDA declined MSEK 7 to MSEK 5 (12). Depreciation, amortisation and impairment amounted to MSEK 0 (0) and net financial items remained unchanged. Combined, this means that both EBIT and profit/loss before tax declined MSEK 7.
At the end of the period, the company had an extensive project portfolio of about 1,000 MW in Sweden. Fully developed, this would equate to an investment level of more than SEK 10 billion. The pre-planning of a 150 MW project is also underway in Scotland.
Interim report 1 January-31 March 2017
Production, GWh
| Q1 | Q1 | FY | |
|---|---|---|---|
| MSEK | 2017 | 2016 | 2016 |
| Income | 33 | 43 | 153 |
| Operating expenses Operating profit/loss before |
-13 | -12 | -48 |
| depreciation (EBITDA) | 20 | 31 | 105 |
| Operating profit/loss (EBIT) | 0 | 9 | 8 |
| Profit/loss before tax | -16 | -10 | -62 |
Production at the company's wholly-owned farms increased to 93 GWh (88) compared with the year-earlier quarter. Since the company had fewer farms in operation, the increase was solely attributable to almost normal winds during the period compared with significantly weaker than normal winds in the year-earlier period.
The company's average income for electricity was SEK 278 per MWh (353), which was 11% less than the market price (SE4) for the same period (SEK 313/MWh). Due to a sharp decline in the price of certificates, the company's average income for certificates decreased to SEK 61 per MWh (131), 18% less than the market price (SKM) for the same period (SEK 75/MWh). The sharp price drop meant that the value of certificates in stock was negatively impacted by revaluation effects during the quarter.
An approximate 5% increase in production led to an increase of MSEK 2 in net sales, while the lower average price led to a decrease of MSEK 13 in net sales, compared with the year-on-year quarter. Overall, net sales therefore declined MSEK 10 and EBITDA decreased MSEK 11, compared with the year-earlier quarter. Specific operating expense increased to SEK 136 per MWh (133), due to the replacement of some components. Lower depreciation due to completed divestments resulted in EBIT of MSEK 0 (9). Net financial items improved slightly and profit/loss before tax thus declined MSEK 6 to MSEK -16 (-10).
Production, GWh
Average prices, SEK per MWh
Specific operating expense, SEK per MWh
| Q1 | Q1 | FY | |
|---|---|---|---|
| MSEK | 2017 | 2016 | 2016 |
| Income | 46 | 37 | 154 |
| Operating expenses Operating profit/loss before |
-9 | -9 | -36 |
| depreciation (EBITDA) | 37 | 28 | 118 |
| Operating profit/loss (EBIT) | 21 | 12 | 53 |
| Profit/loss before tax | 10 | 0 | 6 |
The figures presented in the segment reporting refer to Arise's 50% stake, or 101.5 MW, in the Jädraås project. For the consolidated results, please refer to note 3. In the first quarter, electricity production totalled 92 GWh (76) which was normal for the season. Average income was SEK 503 per MWh (484), of which SEK 367 per MWh (354) pertained to electricity and SEK 135 per MWh (130) to electricity certificates.
An approximate 21% increase in production led to an increase of MSEK 8 in net sales, while the higher average price led to an increase of MSEK 2 in net sales, compared with the year-on-year quarter. Overall, the segment's net sales and EBITDA rose MSEK 10 and MSEK 9, respectively. Due to higher production, specific operating expense declined to SEK 100 per MWh (113). Depreciation remained unchanged, while net financial items improved, which meant that EBIT and profit/loss before tax increased MSEK 8 and MSEK 10, respectively.
The selected form of financing means that the project's cash flow will be paid to shareholders through the repayment of shareholder loans before any dividends are payable from the project. Due to current market conditions, cash flows are used for the repayment of external loans in the project.
In order to proactively develop Arise's position in the market and to strengthen its financial flexibility, a new issue of convertible bonds of approximately MSEK 245 was completed. The acquisition of Kraftö's up to 370 MW project portfolio was completed, and an option agreement to acquire the approx. 100 MW Svartnäs project was entered into.
No transactions with related parties took place during the period.
There were no changes to the Group's contingent liabilities. These contingent liabilities are described in more detail on page 77 under Note 21 in the 2016 Annual Report.
A decision was made to call for an early redemption of all unsecured green bonds 2014/2017 for a total amount of MSEK 350, including Arise's own holding of MSEK 50. On 19 April, the Swedish government introduced an electricity certificate bill, with the support of five parliamentary parties and approval by Norway, entailing a linear allocation of the additional 18 TWh over the 2022-2030 period. A proposal to advance the date for quotas was also presented, as a means of increasing demand for electricity certificates from as early as 2018.
Due to the low prices for electricity and electricity certificates, maintaining the profitability of the company's own and co-owned wind farms is challenging. Based on fundamental factors, we are cautiously optimistic about the future price trend for electricity. We are following these developments carefully and will take action in the market when we believe we can create value. In regard to the ownership of our windpower assets, we maintain an opportunistic approach and are continually evaluating different courses of action. We see good opportunities for strengthening our market position in wind farm development and management, primarily in the Swedish market.
Risks and uncertainties affecting the Group are described on pages 41- 42 of the 2016 Annual Report, and financial risk management is presented on pages 68-73. No significant changes have taken place that affect the reported risks.
A presentation of the company's ownership structure is available on the website (www.arise.se)
The Parent Company's operations comprise project development (project planning to identify suitable wind locations, signing leasehold agreements, producing impact assessments, preparing detailed development plans and permits), divesting projects to external investors, building new projects, managing both internal and external projects (technically and financially) and managing the Group's electricity and electricity-certificate trading activities.
The Parent Company manages the Group's production plans and electricity hedges in accordance with the adopted financial policy.
The electricity-producing subsidiaries sell their production to Arise at spot prices, which Arise then sells to the spot market. These intra-Group trading activities are recognised gross in profit or loss.
During the quarter, Parent Company income amounted to MSEK 57 (132) and purchases of electricity and certificates, the lease of wind power facilities, personnel and other external expenses, capitalised work on own account and depreciation of non-current assets totalled MSEK -66 (-139), resulting in an operating profit/loss (EBIT) of MSEK -9 (-8). Net financial expense of MSEK -19 (-34) and Group contributions of MSEK 0 (51) resulted in net profit/loss after tax of MSEK -29 (3). The Parent Company's net investments amounted to MSEK -9 (-6).
Arise applies the International Financial Reporting Standards (IFRS), as adopted by the EU, and the interpretations of these (IFRIC). The interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The Parent Company's financial statements have been prepared in accordance with the Swedish Annual Accounts Act and Recommendation RFR 2 of the Swedish Financial Reporting Board. The accounting policies are consistent with those applied in the 2016 Annual Report.
This report has not been reviewed by the company's auditor.
Interim report 1 January-31 March 2017
19 July 2017 10 November 2017 16 February 2018
Halmstad, 4 May 2017
ARISE AB (publ)
Daniel Johansson
Chief Executive Officer
Daniel Johansson, CEO, tel. +46 (0)702 244 133
Linus Hägg, CFO, tel. +46 (0)702 448 916
| 2017 | 2016 | 2016 | ||
|---|---|---|---|---|
| (Amounts rounded to the nearest MSEK) | Q 1 | Q 1 | Full year | |
| Net sales | Note 1 | 44 | 136 | 594 |
| Other operating income | 1 | 0 | 1 | |
| Total income | 45 | 136 | 594 | |
| Capitalised work on own account | 1 | 1 | 8 | |
| Personnel costs | -10 | -9 | -36 | |
| Other external expenses | Note 2 | -16 | -89 | -428 |
| Profit/loss from associates | Note 3 | - | - | - |
| Operating profit before depreciation (EBITDA) | 21 | 40 | 138 | |
| Depreciation and impairment of property, plant and equipment Note 4 | -20 | -22 | -105 | |
| Operating profit/loss (EBIT) | 2 | 17 | 33 | |
| Financial income | 1 | -1 | 1 | |
| Financial expenses | -22 | -24 | -86 | |
| Profit/loss before tax | -20 | -7 | -52 | |
| Tax on profit/loss for the period | 0 | 5 | 11 | |
| Net profit/loss for the period | -20 | -3 | -41 | |
| Earnings per share before dilution, SEK | -0.58 | -0.08 | -1.23 | |
| Earnings per share after dilution, SEK | -0.58 | -0.08 | -1.23 |
Treasury shares held by the Company have not been included in calculating earnings per share.
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| (Amounts rounded to the nearest MSEK) | Q 1 | Q 1 | Full year |
| Net profit/loss for the period | -20 | -3 | -41 |
| Other comprehensive income | |||
| Items that may be reclassified to the income statement | |||
| Translation differences for period | 1 | -1 | -1 |
| Cash flow hedges | 11 | -18 | -18 |
| Net investment in foreign currency | -1 | 1 | 3 |
| Share of other comprehensive income in associates | - | - | -17 |
| Income tax attributable to components of other comprehensive income | -2 | 4 | 3 |
| Other comprehensive income for the period, net after tax | 9 | -14 | -30 |
| Total comprehensive income for the period | -11 | -17 | -71 |
Comprehensive income is attributable in its entirety to the Parent Company's shareholders.
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| (Condensed, amounts rounded to the nearest MSEK) | 31 Mar | 31 Mar | 31 Dec |
| Property, plant and equipment | 1,557 | 1,789 | 1,565 |
| Non-current financial assets | 509 | 521 | 517 |
| Inventories | 8 | 35 | 19 |
| Other current assets | 43 | 81 | 72 |
| Cash and cash equivalents | 551 | 247 | 287 |
| TOTAL ASSETS | 2,669 | 2,673 | 2,460 |
| Equity | 1,015 | 1,073 | 1,020 |
| Non-current liabilities | 1,195 | 1,398 | 962 |
| Current liabilities | 459 | 201 | 477 |
| TOTAL EQUITY AND LIABILITIES | 2,669 | 2,673 | 2,460 |
| 2017 | 2016 | 2016 | ||
|---|---|---|---|---|
| (Amounts rounded to the nearest MSEK) | Q 1 | Q 1 | Full year | |
| Cash flow from operating activities before changes in working capital |
23 | 40 | 139 | |
| Cash flow from changes in working capital | 24 | 42 | 43 | |
| Cash flow from operating activities | 47 | 82 | 182 | |
| Investments in property, plant and equipment | -13 | -9 | -43 | |
| Sales of property, plant and equipment | - | 33 | 202 | |
| Cash flow from investing activities | -13 | 24 | 160 | |
| Change in interest-bearing liabilities | 244 | -41 | -195 | |
| Interest paid | -17 | -18 | -73 | |
| Interest received | 1 | 1 | 1 | |
| Net payment to blocked accounts | 3 | -4 | 9 | |
| New issue / warrants | - | - | 1 | |
| Cash flow from financing activities | 230 | -62 | -258 | |
| Cash flow for the period | 264 | 44 | 84 | |
| Cash and cash equivalents at the beginning of the period | 287 | 203 | 203 | |
| Cash and cash equivalents at the end of the period | 551 | 247 | 287 | |
| Interest-bearing liabilities at the end of the period | 1,524 | 1,434 | 1,291 | |
| Blocked cash at the end of the period | -9 | -24 | -12 | |
| Net debt | Note 7 | 964 | 1,163 | 992 |
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| (Condensed, amounts rounded to the nearest MSEK) | 31 Mar | 31 Mar | 31 Dec |
| Opening balance | 1,020 | 1,090 | 1,090 |
| Other comprehensive income for the period | -11 | -17 | -71 |
| New issue / warrants | 1 | - | 1 |
| Convertible loan | 5 | - | - |
| Closing balance | 1,015 | 1,073 | 1,020 |
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| Q 1 | Q 1 | Full year | |
| Operational key performance indicators | |||
| Installed capacity at the end of the period, MW | 240.7 | 253.5 | 240.7 |
| Own electricity production during the period, GWh | 92.8 | 88.2 | 352.8 |
| Co-owned electricity production during the period, GWh | 92.4 | 76.2 | 287.3 |
| Total electricity production during the period, GWh | 185.1 | 164.4 | 640.1 |
| Number of employees at the end of the period | 29 | 29 | 29 |
| Financial key performance indicators | |||
| EBITDA margin, % | 47.1% | 29.0% | 23.2% |
| Operating margin, % | 3.5% | 12.8% | 5.5% |
| Return on capital employed (EBIT), % | 0.9% | neg | 1.5% |
| Return on adjusted capital employed (EBITDA), % | 6.0% | 7.1% | 6.3% |
| Return on equity, % | neg | neg | neg |
| Capital employed, MSEK | 1,979 | 2,236 | 2,013 |
| Average capital employed, MSEK | 1,996 | 2,287 | 2,203 |
| Equity, MSEK | 1,015 | 1,073 | 1,020 |
| Average equity, MSEK | 1,018 | 1,082 | 1,048 |
| Net interest-bearing debt | 964 | 1,163 | 992 |
| Equity/assets ratio, % | 38.0% | 40.2% | 41.5% |
| Interest coverage ratio, times | 0.1 | 0.7 | 0.4 |
| Debt/equity ratio, times | 0.9 | 1.1 | 1.0 |
| Equity per share, SEK | 30 | 32 | 31 |
| Equity per share after dilution, SEK | 30 | 32 | 30 |
| No. of shares at the end of the period, excl. treasury shares | 33,373,876 | 33,373,876 | 33,373,876 |
| Average number of shares | 33,373,876 | 33,373,876 | 33,373,876 |
| Average number of shares after dilution | 33,933,876 | 33,376,876 | 33,793,876 |
Interim Report 1 January – 31 March 2017
| Note 1 - Net sales | 2017 | 2016 | 2016 |
|---|---|---|---|
| (Amounts rounded to the nearest MSEK) | Q 1 | Q 1 | Full year |
| Electricity income | 26 | 31 | 105 |
| Certificate income | 6 | 12 | 48 |
| Development income and management fees | 13 | 94 | 441 |
| 44 | 136 | 594 |
| Note 2 - Other external expenses | 2017 | 2016 | 2016 |
|---|---|---|---|
| (Amounts rounded to the nearest MSEK) | Q 1 | Q 1 | Full year |
| Cost of sold projects and construction work | 2 | 74 | 367 |
| Other items | 14 | 15 | 61 |
| 16 | 89 | 428 |
| Note 3 – Share of profits from associates | 2017 | 2016 | 2016 |
|---|---|---|---|
| (Amounts rounded to the nearest MSEK) | Q 1 | Q 1 | Full year |
| Share of profits in associates (net after tax, 22%) | 3 | -5 | -17 |
| Adjustment to consolidated value | -3 | 5 | 9 |
| Financial income from associates (gross before tax) | 7 | 6 | 27 |
| Less uncapitalised share | -7 | -6 | -20 |
| - | - | - |
Financial income from associates is attributable to granted shareholder loans.
| Quarter 1 | Develop. and management |
Own wind power operations |
Co-owned wind power operations |
Unallocated rev./exp. |
Eliminations | Group | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Amounts to the nearest MSEK) | Q1-17 | Q1-16 | Q1-17 | Q1-16 | Q1-17 | Q1-16 | Q1-17 | Q1-16 | Q1-17 | Q1-16 | Q1-17 | Q1-16 |
| Net sales, external | 13 | 94 | 31 | 43 | 46 | 37 | - | - | -46 | -37 | 44 | 136 |
| Net sales, internal | 2 | 2 | - | - | - | - | - | - | -2 | -2 | - | 0 |
| Other operating income | 0 | 0 | 1 | 0 | - | - | 0 | 0 | - | - | 1 | 0 |
| Total income | 14 | 96 | 33 | 43 | 46 | 37 | 0 | 0 | -48 | -40 | 45 | 136 |
| Capitalised work on own account |
1 | 1 | - | - | - | - | - | - | 0 | - | 1 | 1 |
| Operating expenses | -10 | -85 | -13 | -12 | -9 | -9 | -4 | -3 | 11 | 11 | -25 | -98 |
| Share of profits from associates |
- | 0 | - | - | - | - | - | - | - | - | - | - |
| Operating profit before depr./imp. (EBITDA) |
5 | 12 | 20 | 31 | 37 | 28 | -4 | -3 | -37 | -28 | 21 | 40 |
| Depr. and imp. Note 4 |
0 | 0 | -20 | -22 | -16 | -16 | 0 | 0 | 16 | 16 | -20 | -22 |
| Operating profit/loss (EBIT) | 5 | 12 | 0 | 9 | 21 | 12 | -4 | -4 | -21 | -12 | 2 | 17 |
| Net financial items Note 5 |
-5 | -5 | -17 | -19 | -10 | -12 | 1 | 0 | 10 | 12 | -21 | -25 |
| Profit/loss before tax (EBT) | 0 | 7 | -16 | -10 | 10 | 0 | -3 | -4 | -10 | 0 | -20 | -7 |
| Property, plant and equipment | 72 | 62 | 1,486 | 1,726 | 1,362 | 1,382 | 0 | 1 | -1,362 | -1,382 | 1,557 | 1,789 |
| 0 | 0 | -20 | -22 | -16 | -16 | 0 | 0 | 16 | 16 | -20 | -22 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Depreciation/amortisation | ||||||||||||
| Impairment and reversal of | - | - | - | - | - | - | - | - | - | - | - | - |
| impairment | ||||||||||||
| Depreciation and impairment | 0 | 0 | -20 | -22 | -16 | -16 | 0 | 0 | 16 | 16 | -20 | -22 |
| Total net financial income | -5 | -5 | -17 | -20 | -17 | -18 | 1 | 0 | 17 | 18 | -21 | -25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Less interest expenses on shareholder loans |
- | -1 | - | 1 | 7 | 6 | - | - | -7 | -6 | - | 0 |
| Net financial income/exp. excl. shareholder loans |
-5 | -5 | -17 | -19 | -10 | -12 | 1 | 0 | 10 | 12 | -21 | -25 |
The Own and Co-owned wind power operations segments are recognised excluding internal interest expenses on shareholder loans. The corresponding item has been eliminated from the Development and management segment.
All financial instruments that are measured at fair value belong to Level 2 of the fair value hierarchy. Derivatives comprise electricity futures, currency futures and interest-rate swaps. Measuring the fair value of currency futures is based on published forward rates in an active market. The measurement of interest-rate swaps is based on forward interest rates derived from observable yield curves. The discounting does not have any material impact on the valuation of derivatives in Level 2. The recognition of financial instruments is described on pages 68-73 of the 2016 Annual Report. The table below presents the Group's financial assets and liabilities measured at fair value at the balance-sheet date.
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| (Amounts rounded to the nearest MSEK) | 31 Mar | 31 Mar | 31 Dec |
| Assets | |||
| Derivatives held for hedging purposes | |||
| - Interests in associates | -2 | -2 | -2 |
| - Derivative assets | 0 | 12 | 1 |
| Liabilities | |||
| Derivatives held for hedging purposes | |||
| - Derivative liabilities | -67 | -77 | -75 |
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| (Amounts rounded to the nearest MSEK) | 31 Mar | 31 Mar | 31 Dec |
| Non-current liabilities | 1,195 | 1,398 | 962 |
| - of which interest-bearing non-current liabilities | 1,175 | 1,376 | 943 |
| Current liabilities | 459 | 201 | 477 |
| - of which interest-bearing current liabilities | 349 | 58 | 348 |
| Long and short term interest bearing debt | 1,524 | 1,434 | 1,291 |
| Cash and cash equivalents at the end of the period | -551 | -247 | -287 |
| Blocked cash at the end of the period | -9 | -24 | -12 |
| Net debt | 964 | 1,163 | 992 |
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| (Amounts rounded to the nearest MSEK) | Q 1 | Q 1 | Full year |
| Sales of electricity and electricity certificates | 48 | 39 | 154 |
| Leasing of wind farms | - | 43 | 39 |
| Development income and management fees | 8 | 50 | 215 |
| Other operating income | 0 | 0 | 0 |
| Total income | 57 | 132 | 409 |
| Capitalised work on own account | 1 | 1 | -2 |
| Purchases of electricity and electricity certificates | -52 | -41 | -160 |
| Rental of wind power facilities | - | -43 | -39 |
| Cost of sold projects and construction work | -2 | -41 | -169 |
| Personnel costs | -9 | -8 | -33 |
| Other external expenses | -4 | -6 | -22 |
| Operating profit/loss before depreciation (EBITDA) | -9 | -7 | -16 |
| Depreciation and impairment of property, plant and equipment | 0 | -1 | -10 |
| Operating profit/loss (EBIT) | -9 | -8 | -25 |
| Financial income | 1 | 1 | 36 |
| Financial expenses | -20 | -35 | -132 |
| Profit/loss after financial items | -28 | -42 | -121 |
| Group contribution | - | 51 | 119 |
| Profit/loss before tax | -28 | 9 | -2 |
| Tax on profit/loss for the period | 0 | -6 | -10 |
| Net profit/loss for the period | -29 | 3 | -12 |
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| (Condensed, amounts rounded to the nearest MSEK) | 31 Mar | 31 Mar | 31 Dec |
| Property, plant and equipment | 41 | 61 | 32 |
| Non-current financial assets | 2,210 | 2,272 | 2,216 |
| Inventories | 7 | 19 | 7 |
| Other current assets | 69 | 72 | 85 |
| Cash and cash equivalents | 400 | 113 | 187 |
| TOTAL ASSETS | 2,727 | 2,537 | 2,527 |
| Restricted equity | 3 | 3 | 3 |
| Non-restricted equity | 951 | 988 | 973 |
| Non-current liabilities | 1,175 | 1,287 | 943 |
| Current liabilities | 598 | 259 | 608 |
| TOTAL EQUITY AND LIABILITIES | 2,727 | 2,537 | 2,527 |
| 2017 | 2016 | 2016 | |
|---|---|---|---|
| (Condensed, amounts rounded to the nearest MSEK) | 31 Mar | 31 Mar | 31 Dec |
| Opening balance | 976 | 987 | 987 |
| Other comprehensive income for the period | -29 | 3 | -12 |
| New issue / warrants | 1 | - | 1 |
| Convertible loan | 5 | - | - |
| Closing balance | 953 | 990 | 976 |
EBITDA as a percentage of total income
EBIT as a percentage of total income
Return on capital employed
Rolling 12-month EBIT as a percentage of quarterly average capital employed for the period
Rolling 12-month EBITDA as a percentage of quarterly average capital employed for the period
Rolling 12-month net profit as a percentage of quarterly average equity for the period
Equity per share Equity divided by the average number of shares
Equity divided by the average number of shares after dilution
Financial income less financial expenses
Average equity Quarterly average equity for the period
Quarterly average capital employed for the period
Cash flow from operating activities after changes in working capital
Net interest-bearing debt Interest-bearing liabilities less cash and blocked cash and cash equivalents
Debt/equity ratio Net interest-bearing debt as a percentage of equity
Specific operating expenses, SEK per MWh Operating expenses for electricity production divided by electricity production during the period
Equity/assets ratio Equity as a percentage of total assets
Equity plus net interest-bearing debt
Interim Report 1 January – 31 March 2017
In its reporting, Arise applies key ratios based on the company's accounting. The reason that these key ratios are applied in the reporting is that Arise believes that it makes it easier for external stakeholders to analyse the company's performance.
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