Quarterly Report • May 16, 2023
Quarterly Report
Open in ViewerOpens in native device viewer
Report for the THREE MONTHS ended 31 March 2023 Q1
Orrön Energy AB (publ) company registration number 556610-8055
• Cash flow from operating activities amounted to MEUR 16.6 for the quarter, which represents an increase from MEUR 13.4 in the previous quarter
Orrön Energy owns renewables assets directly and through joint ventures and associated companies and is presenting proportionate financials to show the net ownership and related results of these assets. The purpose of the proportionate reporting is to give an enhanced insight into the Company's operational and financial results.
| 1 Jan 2023- | |
|---|---|
| 31 Mar 2023 | |
| Expressed in MEUR | 3 months |
| Consolidated financials | |
| Revenue | 11.4 |
| EBITDA | 4.6 |
| Operating profit (EBIT) | 1.6 |
| Net result | 0.0 |
| Earnings per share – EUR | 0.0 |
| Earnings per share diluted – EUR | 0.0 |
| Proportionate financials1 | |
| Power generation (GWh) | 214 |
| Revenue | 14.0 |
| EBITDA | 6.7 |
| Operating profit (EBIT) | 2.6 |
| Average price achieved per MWh – EUR | 66 |
1 Proportionate financials represent Orrön Energy's proportionate ownership (net) of assets and related financial results, including joint ventures. For more details see section Key Financial Data.
All numbers and updates in this report relate to the three-month period ending 31 March 2023 (the reporting period), unless otherwise specified. Amounts from the same period last year are presented in brackets. References to "Orrön Energy" or "the Company" pertain to the Group in which Orrön Energy AB (publ) is the parent company or to Orrön Energy AB (publ), depending on the context.
Orrön Energy is an independent, publicly listed (Nasdaq Stockholm: "ORRON") renewable energy company within the Lundin Group of Companies. Orrön Energy's core portfolio consists of high quality, cash flow generating assets in the Nordics, coupled with greenfield growth opportunities in the Nordics and Europe. With significant financial capacity to fund further growth and acquisitions, and backed by a major shareholder, management and Board with a proven track record of investing into, leading and growing highly successful businesses, Orrön Energy is in a unique position to create shareholder value through the energy transition.
Orrön Energy has continued to deliver on its strategy during the first quarter of 2023, adding material opportunities across new technologies and geographies in all stages of the renewable energy lifecycle. We have also welcomed some new and experienced teams into the Company, allowing us to further accelerate our growth ambitions. On top of the Nordic platform which we secured in 2022, the expansion and focus in the first quarter has given us a broader and stronger foundation from which to continue to build scale.
In the quarter, we saw electricity pricing stabilise and return to more normalised levels than we experienced last year, however, pricing still remains at high levels compared to the long-term historical average. Europe has not fundamentally resolved the challenges from the energy crisis in 2022, and I expect to see volatility returning to the markets during periods of instability in energy supply. Our power generation during the quarter was 27 percent higher than the fourth quarter 2022, and slightly higher than expected as a result of strong operational performance. On the cost front we delivered in line with our expenditure guidance. The cash generation of our core operations in the Nordics, together with our largely unutilised debt capacity, will continue to support the Company's ambitious expansion plans.
We have been busy on all fronts during the quarter to further develop our organic growth platforms and we are now maturing a pipeline of opportunities in areas where we see strong fundamentals for renewable energy growth. I believe that our experienced team, coupled with our financial resources, will enable us to execute on a number of current and future opportunities.
In the Nordics, we are progressing several opportunities in wind energy, solar and battery storage technologies, ranging from earlystage prospects, through to permitted projects which are ready to build. If successful, these projects will diversify our operational portfolio, while adding a longer-term growth pipeline to our business. We also further expanded our business in Finland and partnered with an experienced team, gaining access to a wider network in the local market.
We have continued strengthening our platforms for growth in Europe, and in addition to France and Germany, expanded into the UK where we see a lot of potential for future growth. I am pleased to share that we have already secured grid connections in the UK for solar and battery storage projects, which enables initiation of greenfield development activities. We are actively working on expanding this grid connection portfolio and securing access to land. There is always uncertainty in early-stage developments, and the size of the portfolio will become firmer once we have secured the required land and permits – that work is ongoing now for the first projects. It will take time to mature our growth pipeline, but there is no doubt in my mind, that the opportunities already secured have the potential to be transformational for Orrön Energy, adding long-term growth and scale to our business.
We are also working on crystallising further value from our operational portfolio in the Nordics, with the aim of extending the life of our assets and increasing power generation capacity by co-locating new solar and battery storage solutions alongside our existing wind assets. In many cases we have already secured the land and grid connections, and have embarked on the permitting and design processes to allow us to build out these projects.
Our proportionate power generation amounted to 214 GWh during the quarter, an increase from the previous quarter and slightly higher than expected as a result of strong operational performance across the Company's portfolio. Our key development project Karskruv, in the SE4 price region of southern Sweden, remains on track for completion by the end of 2023, increasing the Company's annual estimated power generation to 1,100 GWh from 2024 onwards.
During the quarter, electricity prices stabilised below the record-breaking levels experienced during the second half of 2022, but still remain higher than long-term historical levels. Proportionate revenues were MEUR 14.0, proportionate EBITDA generation was MEUR 6.7 and we achieved an average electricity price of EUR 66 per MWh for the quarter.
Cash flow from operating activities amounted to MEUR 16.6 for the quarter. We finished the quarter with a proportionate net debt position of MEUR 19.5 and coupled with over MEUR 250 of debt capacity from our existing asset base, we have significant financial capacity to fund further growth.
Our results for the quarter show that we have succeeded in establishing a solid foundation for the business with a highly competent and dedicated team in the Nordics and a dynamic development team leading our greenfield expansion across Europe. I am excited about the opportunities that lie ahead, where we aim to continue to deliver on our growth strategy with the goal of creating longterm value for shareholders. I am also very pleased to welcome our new Board members Peggy Bruzelius and William Lundin, adding further experience and competence to our highly skilled Board of Directors.
I would like to once again thank all our shareholders for your support as we continue building a renewables company of scale.
Daniel Fitzgerald
CEO
Orrön Energy's operating portfolio consists of high-quality, cash generating renewable energy assets in the Nordics with an estimated power generation of 800 GWh in 2023. The proportionate power generation amounted to 214 GWh for the first quarter, which was slightly ahead of expectation. The majority of the portfolio is made up of wind power assets, and the Company also has one operational hydropower plant in Norway. The wind farm Karskruv, which is under development in southern Sweden is expected to be completed at the end of 2023. Karskruv is set to increase the estimated annual power generation to 1,100 GWh from 2024 onwards, with 85 percent of the power generation in historically high-priced areas in the Nordics.
| 2023 | 20242 | |
|---|---|---|
| Estimated annual power generation1 | 800 GWh | 1,100 GWh |
1Proportionate power generation estimates assuming average long-term meteorological conditions and operational performance 2With the inclusion of the Karskruv project
The Company delivered in line with guidance for the reporting period. The 2023 guidance for operating expenses is between MEUR 12-14, where a portion of the operating expenses will vary based on electricity prices. The G&A expense guidance is MEUR 10, and guidance for legal costs in relation to the defence of the Company and its former representatives in the Sudan legal case is MEUR 8. Capital expenditure guidance is MEUR 80 and mainly relates to completion of the Karskruv project in southern Sweden, and capital allocated to commencing greenfield activities.
| Guidance1 | Q1 2023 | 2023 Guidance |
|---|---|---|
| Operating expenses | MEUR 3 | MEUR 12-14 |
| G&A expenses2 | MEUR 2 | MEUR 10 |
| Sudan legal costs3 | MEUR 2 | MEUR 8 |
| Capital expenditure | MEUR 13 | MEUR 80 |
1Guidance is presented based on proportionate (net) ownership in assets and related financial results.
2Excludes non-cash items and costs in relation to the Sudan legal case. 3
Legal costs in relation to the defence of the Company and its former representatives in the Sudan legal case. These costs are included in the G&A expenses line item in the consolidated income statement. More information about the case can be found in the section Contingent liabilities.
The proportionate power generation amounted to 214 GWh for the quarter, which was slightly ahead of expectation. Wind speeds in the Nordics during the first quarter were in line with expectations.
Realised electricity prices amounted to EUR 66 per MWh for the quarter, out of which EUR 4 per MWh related to income from guarantees of origin. The Company is awarded and sells guarantees of origin for all of its power generation, certifying that the electricity has been produced from renewable energy sources. The weighted average regional electricity price for the Company's power generation during the quarter amounted to EUR 73 per MWh, and the Nordic system price averaged EUR 85 per MWh. The variance to the Company's realised electricity price is explained by 'capture price discounts', which occur when in any given period a majority of power is generated during periods of low prices relative to the average spot price for the same period. The realised price for the quarter included EUR 2 per MWh positive impact from historical hedges linked to acquired companies. In 2023, less than five percent of the Company's estimated power generation will be affected by historical hedges related to acquired companies. None of the hedges continue beyond the fourth quarter of 2023.
Proportionate operating expenses amounted to MEUR 3.1 for the quarter, which was at the lower end of the guidance range and mainly due to lower costs relating to lower electricity prices.
The Company owns a diversified portfolio of operational wind power assets across Sweden, which have an estimated proportionate annual power generation in 2023 of around 500 GWh, with a total net installed capacity of about 190 MW. A majority of the assets are situated in the historically high-priced areas of SE3 and SE4. Power generation from the Swedish portfolio was in line with expectations during the quarter.
The Company owns 50 percent of the Metsälamminkangas (MLK) wind farm and 100 percent of a 9 GWh wind farm located in Hanko in Finland. MLK has an estimated gross annual power generation of around 400 GWh, which is generated from 24 turbines with a total installed capacity of 132 MW. The wind farm has an estimated operational life of around 30 years and has been in operation since the end of March 2022. An availability warranty is in place from GE Renewable Energy, which guarantees the availability of the turbines through their operational life and gives the Company protection against downtime and outages. Power generation from MLK was ahead of expectation during the quarter. Final commissioning work was completed in the quarter.
The Company owns 50 percent of the Leikanger hydropower plant in Norway, which is situated in the historically high-priced NO5 area. Leikanger has an estimated gross annual power generation of around 200 GWh per annum, which is generated from a single turbine with a total capacity of 77 MW. It has been operational since 2021 and has an estimated operational life of
approximately 60 years. As the asset is a run-of-river hydropower plant, the power generation is variable depending mainly on the rate of snow melt during the spring and summer months, and precipitation conditions during the autumn season. Power generation from Leikanger was in line with expectations during the quarter.
During the quarter, the Company has taken important steps on developing its growth platforms in the Nordics and Europe, aiming to create a long-term pipeline of new projects. This includes laying the foundation for greenfield project developments in onshore wind, solar and battery storage solutions, maturing growth opportunities in the operational portfolio and progressing construction activities at the Karskruv wind farm project. The Company has established a presence in all stages of the renewable lifecycle, and will continue to progress and advance its growth platforms.
Orrön Energy has a 100 percent interest in the Karskruv wind farm project in southern Sweden, which will add 290 GWh to the Company's estimated annual power generation once operational at the end of 2023. The Karskruv wind farm consists of 20 Vestas turbines with a total installed capacity of 86 MW. The wind farm was acquired from OX2, who is managing the construction and commissioning phase alongside the turbine supplier and contractor Vestas Wind Systems. The project has an availability warranty in place, which guarantees the availability of the turbines through their operational life of approximately 30 years and gives the Company protection against downtime and outages. The wind farm is situated in the SE4 price area and constitutes an important part of the Company's growth plans.
Construction activities at the Karskruv wind farm project in southern Sweden are ahead of schedule, with foundation casting and anchor tensioning completed in the first quarter. Since the reporting period ended, all main components have arrived in Sweden, with transportation to site ongoing. The first two tower sections have been installed for six turbines, and main installation is planned to commence mid-May. Connection to the grid is planned for the second and third quarters of 2023.
The Company is working on a wide range of opportunities to organically grow its portfolio and optimise power generation, which includes projects aimed at extending asset lifetimes, re-powering, co-location of complementary technologies and the addition of ancillary services to optimise utilisation of existing land rights and grid connections.
During the quarter, extensive work has been conducted to prioritise a number of co-location projects within the Company's existing portfolio. This includes undertaking studies to substantiate the technical and commercial potential for co-location of solar energy and battery storage solutions at existing wind farms. Discussions are currently ongoing with grid operators for co-location projects on several wind farms, where land has already been secured through existing operational assets. The Company's pilot project, a small scale solar installation adjacent to the Näsudden wind farm, is currently in late-stage planning, with land and grid access secured and permit application expected to be submitted in the second quarter.
In addition to growing the power generation capacity, the Company has evaluated opportunities to optimise revenues by taking part in the frequency and ancillary services markets. Investments in new battery storage units are being evaluated as well as opportunities to qualify existing wind turbines for these markets. Feasibility studies have been conducted to use the Company's largest wind farms, MLK and Karskruv, to provide grid stabilisation services and the expectation is that MLK will be qualified by the transmission system operator by end 2023, and Karskruv shortly after project completion in early 2024.
The Company is also continuously working on consolidating its ownership share in co-owned wind projects, and thereby increasing its power generation capacity through acquisition.
In the Nordics, the Company has identified a range of opportunities for greenfield project developments, ranging from early-stage projects through to assets at a ready-to-build stage. The identified project opportunities are across proven and low-cost onshore technologies, wind energy, solar energy and battery storage, which when realised will diversify the Company's power generation capacity and revenue streams. The Company is working on securing project rights and the necessary land, grid connections and environmental permits for identified projects.
In Finland, the Company has entered into a strategic collaboration with a partner with proven track record in delivering renewable projects, giving access to an extensive network of developers and other industry stakeholders. The Company plans to leverage this network in Finland to secure access to both brownfield and greenfield project opportunities.
The Company is progressing several standalone solar and wind projects in Sweden, with certain land rights already secured and work is ongoing to secure grid connections and permits. These project opportunities are at an early stage and the outcome will depend on fulfilment of various milestones, including obtaining access to required land, grid connections and permits.
During the first quarter, the Company expanded its geographical footprint in Europe and entered into agreements to establish a business, focusing on developing greenfield projects in France, Germany and the UK. The European expansion is led by an experienced development team, with a proven track-record in greenfield project origination and development in these markets.
In the UK, the Company has secured grid connections for large scale solar and battery storage projects. The grid connections will enable projects to connect to the electricity transmission network between 2032 for the earliest projects and 2037 for the subsequent projects. Further applications have been submitted to secure additional grid and co-located battery connections in strategically located areas, where the Company believes there are opportunities to secure the required land for these projects. Securing grid connections is the first step for the Company in building its own early-stage development pipeline of projects in the UK, and the outcome of the projects will depend on the success of various development milestones. The Company has furthermore initiated work on securing land and is now working to accelerate the development of projects in conjunction with expanding its existing grid connection portfolio.
In Germany and France, the Company is embarking on the early-stage activities to secure preliminary approval from key relevant authorities, land and grid positions in line with the Company's business plan in each country.
Orrön Energy's strategy is to invest in renewable energy projects and pursue value accretive opportunities in the energy transition to grow and optimise its portfolio.
In February 2023, the Company entered into an agreement to acquire an additional 15 percent ownership in the wind farm Långås, which takes the Company's interest to 32.5 percent. The transaction adds an estimated annual power generation of 3 GWh and 1.2 MW installed capacity in price area SE4.
In February 2023, the Company entered into agreements, focusing on developing brownfield and greenfield projects in Finland, France and Germany, further expanding operations in Europe.
In March 2023, the Company entered into an agreement, focusing on developing greenfield projects in the UK, and has secured grid connections enabling initiation of early-stage greenfield developments.
Sustainability is at the core of Orrön Energy's business as a pure play renewables company and constitutes an important cornerstone of the Company's long-term shareholder value creation. The Company owns and operates renewable assets in a safe and responsible manner, with a long-term horizon for the benefit of all its stakeholders.
Climate change is one of the biggest challenges of our time, and the world needs to transition to energy sources with lower greenhouse gas emissions, such as renewable energy, if we are to limit global warming in line with the Paris Agreement. The energy transition is backed by firm targets set by the EU, which will require a significant increase of renewable energy generation, with wind and solar power being highlighted as crucial to achieve these objectives. Orrön Energy is directly contributing to the achievement of these goals by investing in and increasing the supply of renewable energy in its countries of operation. The demand for clean energy is set to increase, and Orrön Energy is committed to continue investing in renewable power generation and technologies to drive the energy transition, for a clean and sustainable energy future.
Orrön Energy's approach to sustainability is aligned with the UN Sustainable Development Goals, in particular Goal 7 on Affordable and Clean Energy, Goal 13 on Climate Action and Goal 15 on Life on Land, which underpins the way in which the Company conducts its business. This ensures that the business delivers lasting value for all its stakeholders. The Company also actively supports the UN Global Compact's 10 Principles on human rights, labour standards, environment and anti-corruption.
Orrön Energy is developing biodiversity enhancement projects in areas around its renewable assets, such as targeted projects aiming to increase biodiversity, planting of wildflowers to stimulate the growth of bee populations, wildlife monitoring systems and grazing projects in collaboration with local farming communities. In addition, the Company considers strong community engagement as essential to its business success and is collaborating with several local organisations to support and contribute to the local communities around its assets. Environmental aspects and community engagements are key considerations throughout the assets' operational life.
Health and safety of people and the environment are core priorities for the business and the Company has procedures in place to identify and mitigate risks, including investigation and reporting of incidents and accidents. During the quarter, there were no recordable safety incidents or material environmental incidents.
The Company has from 1 January 2023 changed its presentation currency from US dollar to Euro to better reflect the economic environment in which the Company operates. Assets and liabilities, for each period presented, have been translated at closing rate of the respective balance sheet date. Income and expenses for each period presented have been translated at average rate for the period and all resulting exchange differences have been recognised in other comprehensive income.
In 2022, Orrön Energy Holding AB, a wholly-owned subsidiary of Orrön Energy AB (publ), made a public offer to acquire all shares in Slitevind AB (publ) ("Slitevind") for SEK 125 in cash per share. The offer was accepted by shareholders owning 96.5 percent of all shares and votes in Slitevind. The remaining shares have been acquired in 2023 through a compulsory buy-out procedure, in accordance with the Swedish Companies Act.
On 30 June 2022, Orrön Energy, then named Lundin Energy, completed a transaction to combine the Company's exploration and production ("E&P") business with Aker BP. The result of this transaction is shown as discontinued operations in the comparative income statement for 2022. In addition, the comparative cash flow statements show the cashflow from discontinued operations. Through this transaction, the shareholders of the Company received cash totalling USD 2.2 billion and 271,908,589 shares in Aker BP, and retained their shareholding in Orrön Energy. The combination was carried out as a statutory cross-border merger in accordance with Norwegian and Swedish law, through which Aker BP absorbed Lundin Energy MergerCo AB (publ), which at the time of the completion contained the Company's E&P business. Shortly before the merger and completion of the transaction, the shares in Lundin Energy MergerCo (publ) were distributed to the Company's shareholders as a so called lex asea dividend.
EBITDA for the reporting period amounted to MEUR 4.6 compared to MEUR -2.7 in the same period last year. The increase in EBITDA is explained mainly by the contribution of Slitevind, which has been fully consolidated since the acquisition on 1 September 2022.
Revenue from power generation amounted to MEUR 11.4 (MEUR –) for the reporting period and was in line with expectations. No revenue was reported in the comparative period as the results of the MLK wind farm and the Leikanger hydropower plant were consolidated through the equity method and reported as share in result from associates and joint ventures. The fully consolidated Slitevind started to contribute to the Group's result from 1 September 2022.
Operating expenses amounted to MEUR 3.5 (MEUR –) for the reporting period and was impacted by lower costs relating to lower electricity prices. No operating expenses were reported in the comparative period, in line with the explanation given in the section above on revenue.
General and administration expenses amounted to MEUR 4.3 (MEUR 4.3) for the reporting period, of which MEUR 1.9 (MEUR 2.0) related to legal and other fees incurred for the defence of the Company and its former representatives in the Sudan legal case.
Share in result from associates and joint ventures amounted to MEUR 0.8 (MEUR 1.6) for the reporting period and is further detailed in note 2. This represents mainly Orrön Energy's portion of the results in the 50 percent owned joint ventures, the MLK wind farm and the Leikanger hydropower plant. These investments are consolidated through the equity method and the net result of these entities is therefore recognised as a single line item in the income statement. The share in result from the MLK wind farm, which started to generate power in the second quarter of 2022, amounted to MEUR 0.8 (MEUR 1.4) for the reporting period. The result reported in the comparative period represented liquidated damages net of tax, due to late start-up of the wind farm in 2022. The share in result from the Leikanger hydropower plant represented a loss of MEUR 0.1 (MEUR 0.2 gain). The decrease compared to the same period last year was due to a combination of lower power generation and lower prices. In addition, a share of result of MEUR 0.1 (MEUR –) was related to other associated companies.
Finance income amounted to MEUR 1.9 (MEUR 0.4) for the reporting period and is further detailed in note 3. Interest income of MEUR 1.3 (MEUR 0.2) related to loans to joint ventures. Other finance income amounted to MEUR 0.6 (MEUR –) and represented a financial gain due to the variation in market value of historical hedges between 31 December 2022 and the balance sheet date. A foreign currency exchange gain of MEUR 0.2 was recognised in the comparative period.
Finance costs amounted to MEUR 3.6 (MEUR –) for the reporting period and are detailed in Note 4. The net foreign exchange loss for the reporting period amounted to MEUR 2.6 (MEUR –). Foreign exchange movements occur on the settlement of transactions denominated in foreign currencies and the revaluation of working capital and loan balances to the prevailing exchange rate at the balance sheet date where those monetary assets and liabilities are held in currencies other than the functional currencies of the Group's entities. Orrön Energy is exposed to exchange rate fluctuations relating to the relationship between Euro and other currencies. The net foreign exchange loss related mainly to the revaluation of intercompany loan balances, denominated in other currencies than the functional currency of the Group company providing the financing. Interest expenses amounted to MEUR 0.8 (MEUR –) and related to the Group's external loans. Other finance costs amounted to MEUR 0.2 (MEUR –) and represented mainly advisory fees and other costs in connection with acquisitions made during the reporting period.
In addition to the consolidated financial reporting in line with IFRS, the Group provides proportionate financial reporting which forms part of the alternative performance measures the Group presents. Proportionate reporting is aligned with the Group's internal management reporting, analysis and decision making.
Proportionate financials represent Orrön Energy's proportionate share of all the entities in which the Group holds an ownership.
This is different to the consolidated financial reporting under IFRS, where the results from entities in which the Group holds an ownership of 50 percent or less are not fully consolidated but instead reported on one line, as share of result in joint ventures. All entities in which the Group holds an ownership of more than 50 percent are fully consolidated in the financial reporting presented under IFRS.
| 1 Jan 2023- | 1 Jan 2022- | 1 Jan 2022- | |
|---|---|---|---|
| Proportionate financials | 31 Mar 2023 | 31 Mar 2022 | 31 Dec 2022 |
| MEUR | 3 months | 3 months | 12 months |
| Revenue | 14.0 | N/A2 | 40.0 |
| Other income | 0.1 | N/A2 | 4.0 |
| Operating expenses | -3.1 | N/A2 | -6.7 |
| G&A expenses1 | -4.3 | N/A2 | -16.6 |
| EBITDA | 6.7 | N/A2 | 20.7 |
| Depreciation | -4.1 | N/A2 | -6.0 |
| Operating profit/loss (EBIT) | 2.6 | N/A2 | 14.7 |
1 Includes legal and other fees of MEUR 1.9 incurred for the defence of the Company and its former representatives in the Sudan legal case and
a non-cash expense for incentive warrants of MEUR 0.5 for the reporting period. 2 Not applicable, proportionate financials are reported from 1 July 2022 only.
Proportionate revenues amounted to MEUR 14.0 for the reporting period. In addition to the revenue from the Leikanger hydropower plant, the Group's revenue included the MLK wind farm, which has been operational since 31 March 2022, the Slitevind portfolio which was acquired on 1 September 2022 and further acquisitions made since then.
EBITDA generation amounted to MEUR 6.7 for the reporting period.
Proportionate operating expenses relating to operating assets amounted to MEUR 3.1 for the reporting period, which was at the lower end of the guidance range, mainly due to lower costs relating to lower electricity prices.
The Group operates in various countries and fiscal regimes where corporate income tax rates are different from the regulations in Sweden. Corporate income tax rates for the Group vary between 13.7 and 20.6 percent for the majority of the business with the exception of Norway. Following a change to the hydropower tax regime in Norway in late 2022, the Leikanger hydropower plant is subject to a tax rate of 67 percent. This change consists of an eight-percentage point increase in ground rent tax, effective retroactively from 1 January 2022 and an additional 23 percent levy on electricity sold at a price exceeding NOK 700 per MWh (approx. EUR 70 per MWh), effective from 28 September 2022.
Net cash flow from operating activities amounted to MEUR 16.6 (MEUR -8.3) for the reporting period. The positive cash flow from operating activities included a full three-month period of operations from the Company's operational assets, and dividend payments from joint ventures.
Cash flow from investing activities amounted to MEUR -16.8 (MEUR -20.1), out of which MEUR 13.0 related to investments in the renewable energy business. The acquisition of the remaining 3.5 percent of the shares in Slitevind, which have been acquired in 2023, together with the acquisition of a subsidiary in Sweden, impacted the cash flow from investing activities with MEUR 3.8.
The Company's net debt amounted to MEUR 29.7 (MEUR 29.7), which was unchanged compared to year end 2022.
Cash and cash equivalents amounted to MEUR 36.9 (MEUR 26.9).
Interest bearing loans and borrowings amounted to MEUR 26.9 (MEUR 28.8) and related to long-term loans taken up by a subsidiary.
Other current financial liabilities amounted to MEUR 39.7 (MEUR 27.8) and related mainly to the revolving credit facility of MEUR 100 with Skandinaviska Enskilda Banken, which matures end of July 2023. This facility is used as a bridge loan, which the Company intends to re-finance during the first half of 2023. The Company has drawn an amount of MEUR 34.5 (MEUR 21.4) on the revolving credit facility. An additional short-term loan, with less than twelve months maturity, amounting to MEUR 5.2 (MEUR 6.4), is held by a subsidiary.
There are no subsequent events to report.
The business of the Parent Company is to invest in and manage operations within the renewable energy sector as of 1 July 2022. This is a change to the Company's previous business mainly conducted within the oil and gas sector.
The Parent Company reported a loss of MSEK 43.5 (MSEK 58.9) for the reporting period, including general and administration expenses of MSEK 43.2 (MSEK 62.7), of which MSEK 21.0 (MSEK 21.5) related to legal and other fees incurred for the defence of the Company and its former representatives in the Sudan legal case.
In November 2021, the Swedish Prosecution Authority brought criminal charges against the Company's former Chairman of the Board Ian H. Lundin and former CEO and Director Alex Schneiter in relation to past operations in Sudan from 1999 to 2003. The charges also include claims against the Company for a corporate fine of MSEK 3.0 and forfeiture of economic benefits of MSEK 1,391.8, which according to the Swedish Prosecution Authority represents the value of the gain of MSEK 720.1 that the Company made on the sale of the business in 2003. Any corporate fine or forfeiture of economic benefits would only be imposed after an adverse final conclusion of the case. The trial at the Stockholm District Court is planned to start on 5 September 2023. The Company refutes that there are any grounds for allegations of wrongdoing by any of its former representatives and sees no circumstance in which a corporate fine or forfeiture could become payable. The Company considers this to be a contingent liability and therefore no provision has been recognised.
As part of the IPC spin-off that was completed on 24 April 2017, the Company has indemnified IPC for certain legal proceedings related to the period before the spin-off concerning Indonesian land and building tax assessed for the fiscal years 2012 and 2013. The Company has not recognised any provision in relation hereto as it does not believe the proceedings will lead to any liability for the Company.
A portion of the Company's past operations was held through a Canadian holding structure when acquired back in 2006. The tax filings in Canada since 2006 in relation to both corporate income tax and withholding tax are under review by the Canadian Tax Office. All tax has been paid in relation to these tax filings and no provision has been recognised.
The Company's issued share capital amounted to SEK 3,478,713 represented by 285,924,614 shares with a quota value of SEK 0.01 each (rounded off).
The Policy on Remuneration and details of long-term incentive plans ("LTIP") are provided on www.orron.com.
In 2022, a new long-term share-related incentive plan was introduced in the form of a share option plan for members of Group management and other employees of the Company as approved by the 2022 EGM ("Employee LTIP 2022"). The reason for establishing a new long-term share related incentive plan was to align the interests of the members of Group management and other employees with the interests of the shareholders as well as to provide market appropriate reward for a new business reflecting continuity, commitment and share price appreciation.
The Employee LTIP 2022 was introduced as part of a new remuneration approach within the updated Policy on Remuneration for Group management, where base salaries and annual bonus opportunities have been set at the lower end of the market to create an overall remuneration approach that further emphasises the long-term sustainable growth and strategic success of the Company. The updated Policy on Remuneration was approved by the 2022 EGM.
In order to secure the delivery of shares to the participants and cover any costs (including taxes and social security charges) at exercise of options under the Employee LTIP 2022, the Company has issued 8,560,000 warrants, which were registered on 5 July 2022.
A similar plan was approved by the 2023 AGM ("Employee LTIP 2023").
In order to secure the Company's obligations under the Employee LTIP 2023, the 2023 AGM resolved to approve that the Company enters into an equity swap arrangement with a third party, whereby the third party in its own name shall be entitled to acquire and transfer shares (including to the participants) in accordance with the terms and conditions of Employee LTIP 2023.
The 2022 EGM resolved to approve a one-off long-term share-related incentive plan for members of the Board ("Board LTIP 2022") in the form of a share option plan.
The Company has secured its obligations under the Board LTIP 2022 by entering into an equity swap arrangement with a third party, whereby the third party in its own name shall be entitled to acquire and transfer shares (including to the participants) in accordance with the plan.
For the preparation of the financial statements, the following currency exchange rates have been used.
| 31 Mar 2023 | 31 Mar 2022 | 31 Dec 2022 | ||||
|---|---|---|---|---|---|---|
| Average | Period end | Average | Period end | Average | Period end | |
| 1 EUR equals SEK | 11.2017 | 11.2805 | 10.4795 | 10.3370 | 10.6274 | 11.1218 |
| 1 EUR equals NOK | 10.9847 | 11.3940 | 9.9327 | 9.7110 | 10.1015 | 10.5138 |
| 1 EUR equals USD | 1.0730 | 1.0875 | 1.1225 | 1.1101 | 1.0539 | 1.0666 |
The financial information relating to the three-month period ended 31 March 2023 has not been subject to review by the auditors of the Company.
Stockholm, 16 May 2023
Daniel Fitzgerald CEO
| 1 Jan 2023- 31 Mar 2023 |
1 Jan 2022- 31 Mar 2022 |
1 Jan 2022- 31 Dec 2022 |
||
|---|---|---|---|---|
| MEUR | Note | 3 months | 3 months | 12 months |
| Revenue | 11.4 | – | 13.8 | |
| Other income | 0.2 | – | – | |
| Operating expenses | -3.5 | – | -3.5 | |
| General and administration expenses | -4.3 | -4.3 | -16.7 | |
| Depreciation | -3.0 | – | -3.5 | |
| Share in result of associates and joint ventures | 2 | 0.8 | 1.6 | 10.9 |
| Operating profit/loss | 1.6 | -2.7 | 1.0 | |
| Finance income | 3 | 1.9 | 0.4 | 9.0 |
| Finance costs | 4 | -3.6 | – | -9.2 |
| Net financial items | -1.7 | 0.4 | -0.2 | |
| Profit/loss before income tax | -0.1 | -2.3 | 0.8 | |
| Income tax | 5 | 0.1 | – | 26.6 |
| Net result from continuing operations | 0.0 | -2.3 | 27.4 | |
| Discontinued operations | ||||
| Net result from E&P business | 6 | – | 419.7 | 12,823.3 |
| Net result | 0.0 | 417.4 | 12,850.7 | |
| Attributable to: | ||||
| Shareholders of the Parent Company | -0.6 | 417.4 | 12,850.4 | |
| Non-controlling interest | 0.6 | – | 0.3 | |
| 0.0 | 417.4 | 12,850.7 | ||
| Earnings per share – EUR1 | ||||
| From continuing operations From discontinued operations |
0.00 – |
-0.01 1.47 |
0.10 44,92 |
|
| Earnings per share diluted – EUR1 | ||||
| From continuing operations | 0.00 | -0.01 | 0.10 | |
| From discontinued operations | – | 1.47 | 44,75 |
1 Based on net result attributable to shareholders of the Parent Company.
| MEUR | 1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Net result | 0.0 | 417.4 | 12,850.7 |
| Items that may be subsequently reclassified to profit or loss: |
|||
| Exchange differences foreign operations | -6.4 | 5.8 | 410.5 |
| Cash flow hedges | – | 8.5 | 9.8 |
| Other comprehensive income, net of tax | -6.4 | 14.3 | 420.3 |
| Total comprehensive income | -6.4 | 431.7 | 13,271.0 |
| Attributable to: | |||
| Shareholders of the Parent Company | -7.0 | 431.7 | 13,270.7 |
| Non-controlling interest | 0.6 | – | 0.3 |
| -6.4 | 431.7 | 13,271.0 |
| MEUR | Note | 31 March 2023 | 31 December 2022 | 31 December 20211 |
|---|---|---|---|---|
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment | 244.5 | 235.8 | 27.9 | |
| Investment in associates and joint ventures | 40.2 | 51.5 | 95.9 | |
| Deferred tax assets | 27.1 | 27.5 | – | |
| Other non-current financial assets | 10 | 95.1 | 96.8 | 31.0 |
| 406.9 | 411.6 | 154.8 | ||
| Current assets | ||||
| Assets held for distribution | – | – | 6,480.4 | |
| Other current assets | 5.9 | 9.0 | 0.1 | |
| Trade receivables | 10 | 0.4 | 0.3 | – |
| Other current financial assets | 10 | 2.0 | 2.5 | 118.1 |
| Cash and cash equivalents | 10 | 36.9 | 26.9 | 114.8 |
| 45.2 | 38.7 | 6,713.4 | ||
| TOTAL ASSETS | 452.1 | 450.3 | 6,868.2 | |
| EQUITY AND LIABILITIES | ||||
| Equity | ||||
| Shareholders' equity | 353.6 | 359.7 | -1,253.1 | |
| Non-current liabilities | ||||
| Interest bearing loans and borrowings | 10 | 26.9 | 28.8 | – |
| Deferred tax liability | 16.5 | 16.9 | – | |
| Provisions | 1.2 | 1.1 | – | |
| 44.6 | 46.8 | – | ||
| Current liabilities | ||||
| Trade and other payables | 10 | 14.0 | 13.0 | 3.7 |
| Current tax liabilities | 0.3 | 0.5 | – | |
| Provisions | – | 2.5 | – | |
| Dividends payable | – | – | 113.5 | |
| Liabilities held for distribution | – | – | 8,004.1 | |
| Other current financial liabilities | 10 | 39.7 | 27.8 | – |
| 54.0 | 43.8 | 8,121.3 | ||
| TOTAL LIABILITIES | 98.6 | 90.6 | 8,121.3 | |
| TOTAL EQUITY AND LIABILITIES | 452.2 | 450.3 | 6,868.2 |
1 Following the change in presentation currency from US dollar to Euro in 2023, an additional comparative period is presented, corresponding to the beginning of the preceding period, in line with IAS 1.
| 1 Jan 2023- | 1 Jan 2022- | 1 Jan 2022- | ||
|---|---|---|---|---|
| Note | 31 Mar 2023 | 31 Mar 2022 | 31 Dec 2022 | |
| MEUR | 3 months | 3 months | 12 months | |
| Cash flows from operating activities | ||||
| Net result from continuing operations | 0.0 | -2.3 | 27.4 | |
| Net result from discontinued operations | – | 419.7 | 12,823.3 | |
| Adjustments for items not included in the Cash flow | 11 | 4.6 | 1,251.2 | -9,957.5 |
| Interest received | 1.2 | 0.3 | 1.0 | |
| Interest paid | -0.7 | -29.8 | -32.9 | |
| Income taxes paid | – | -453.2 | -1,402.2 | |
| Distributions received | 9.9 | – | 12.2 | |
| Changes in working capital | 1.6 | -286.6 | -310.8 | |
| Total cash flows from operating activities | 16.6 | 899.3 | 1,160.5 | |
| - of which relates to continuing operations | 16.6 | -8.3 | 7.1 | |
| - of which relates to discontinued operations | – | 907.6 | 1,153.4 | |
| Cash flows from investing activities | ||||
| Investment in oil and gas properties | – | -144.2 | -277.4 | |
| Investment in renewable energy business1 | -13.0 | -21.3 | -53.1 | |
| Acquisition of subsidiary net of cash | -3.8 | – | -102.6 | |
| Investment in other fixed assets | – | -0.6 | -0.8 | |
| Decommissioning costs paid | – | -0.8 | -1.3 | |
| Total cash flows from investing activities | -16.8 | -166.9 | -435.2 | |
| - of which relates to continuing operations | -16.8 | -20.1 | -154.3 | |
| - of which relates to discontinued operations | – | -146.8 | -280.9 | |
| Cash flows from financing activities | ||||
| Net drawdown/repayment of credit facility | 10.7 | -481.1 | -557.7 | |
| Repayment of lease commitments | – | -7.9 | -11.5 | |
| Sold treasury shares | – | – | 53.4 | |
| Dividends paid | – | -114.1 | -273.4 | |
| Total cash flows from financing activities | 10.7 | -603.1 | -789.2 | |
| - of which relates to continuing operations | 10.7 | -114.1 | -261.8 | |
| - of which relates to discontinued operations | – | -489.0 | -527.4 | |
| Change in cash and cash equivalents | 10.5 | 129.3 | -63.9 | |
| Cash and cash equivalents at the beginning of the period | 26.9 | 399.2 | 399.2 | |
| Currency exchange difference in cash and cash equivalents | -0.5 | 3.8 | 95.8 | |
| Change in consolidation - E&P business | – | – | -404.2 | |
| Cash and cash equivalents at the end of the period | 36.9 | 532.3 | 26.9 | |
| - of which relates to continuing operations | 36.9 | 115.7 | 26.9 | |
| - of which relates to discontinued operations | – | 416.6 | – |
1Includes incurred cost relating to the acquisition of the renewable energy business and funding of joint ventures.
| Attributable to owners of the Parent Company | ||||||
|---|---|---|---|---|---|---|
| Additional paid | Non | |||||
| Share | in- capital/Other | Retained | controlling | Total | ||
| MEUR | capital | reserves | earnings | Total | interest | equity |
| 1 January 2022 | 0.4 | -164.3 | -1,089.2 | -1,253.1 | – | -1,253.1 |
| Comprehensive income | ||||||
| Net result | – | – | 417.4 | 417.4 | – | 417.4 |
| Other comprehensive income | – | 14.3 | – | 14.3 | – | 14.3 |
| Total comprehensive income | – | 14.3 | 417.4 | 431.7 | – | 431.7 |
| Transactions with owners | ||||||
| Value of employee services | – | – | 1.3 | 1.3 | – | 1.3 |
| Total transactions with owners | – | – | 1.3 | 1.3 | – | 1.3 |
| 31 March 2022 | 0.4 | -150.0 | -670.5 | -820.1 | – | -820.1 |
| Comprehensive income | ||||||
| Net result | – | – | 12,433.3 | 12,433.30 | – | 12,433.3 |
| Other comprehensive income | – | 406.0 | – | 406.0 | – | 406.0 |
| Total comprehensive income | – | 406.0 | 12,433.3 | 12,839.3 | – | 12,839.3 |
| Transactions with owners Non-controlling interests on acquisition of |
||||||
| a subsidiary | – | – | – | – | 8.3 | 8.3 |
| Distributions | – | – | -11,724.4 | -11,724.4 | – | -11,724.4 |
| Sold treasury shares | – | 54.3 | – | 54.3 | – | 54.3 |
| Value of employee services | – | – | 2.3 | 2.3 | – | 2.3 |
| Total transaction with owners | – | 54.3 | -11,722.1 | -11,667.8 | 8.3 | -11,659.5 |
| 31 December 2022 | 0.4 | 310.3 | 40.7 | 351.4 | 8.3 | 359.7 |
| Comprehensive income | ||||||
| Net result | – | – | – | 0.0 | – | 0.0 |
| Other comprehensive income | – | -6.4 | – | -6.4 | – | -6.4 |
| Total comprehensive income | – | -6.4 | – | -6.4 | – | -6.4 |
| Transactions with owners | ||||||
| Non-controlling interests on acquisition of | ||||||
| subsidiary | – | – | 5.2 | 5.2 | -5.2 | – |
| Value of employee services | – | – | 0.3 | 0.3 | – | 0.3 |
| Total transaction with owners | – | – | 5.5 | 5.5 | -5.2 | 0.3 |
| 31 March 2023 | 0.4 | 303.9 | 46.2 | 350.5 | 3.1 | 353.6 |
This interim report has been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting.
The Company has from 1 January 2023 changed its presentation currency from US dollar to Euro to better reflect the economic environment in which the Company operate. Assets and liabilities, for each period presented, have been translated at closing rate of the respective balance sheet date. Income and expenses for each period presented have been translated at average rate for the period and all resulting exchange differences have been recognised in other comprehensive income.
The accounting policies adopted are in all other aspects consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2022.
The financial reporting of the Parent Company has been prepared in accordance with accounting principles generally accepted in Sweden, applying RFR 2 Reporting for legal entities, issued by the Swedish Financial Reporting Board and the Annual Accounts Act (SFS 1995:1554).
The Parent Company's financial information is reported in Swedish krona.
| Note 2 – Share in result of associates and joint ventures MEUR |
1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Metsälamminkangas Wind Oy (50%) | 0.8 | 1.4 | 7.8 |
| Leikanger Kraft AS (50%) | -0.1 | 0.2 | 3.0 |
| Other | 0.1 | – | 0.1 |
| 0.8 | 1.6 | 10.9 |
| Note 3 – Finance income MEUR |
1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Foreign currency exchange gain, net | – | 0.2 | – |
| Interest income | 1.3 | 0.2 | 2.6 |
| Other | 0.6 | – | 6.4 |
| 1.9 | 0.4 | 9.0 |
| Note 4 – Finance costs MEUR |
1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Foreign currency exchange loss, net | 2.6 | – | 1.6 |
| Interest expense | 0.8 | – | 0.7 |
| Other | 0.2 | – | 6.9 |
| 3.6 | – | 9.2 |
| Note 5 – Income tax MEUR |
1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Current tax | – | – | -0.1 |
| Deferred tax | 0.1 | – | 26.7 |
| 0.1 | – | 26.6 |
On 21 December 2021, the Company announced that it had entered into an agreement with Aker BP whereby Aker BP would absorb the E&P business through a cross-border merger in accordance with Norwegian and Swedish law. Before completion of the crossborder merger, the shares in the company holding the E&P business would be distributed to the shareholders of the Company, which occurred on 29 June 2022. The results of the E&P business are included in the financial statements until 29 June 2022 and are shown in the comparative columns as discontinued operations.
The financial performance of the discontinued operations and the gain on the distribution of the E&P business made in 2022 are described in detail in the financial statements of 2022.
Orrön Energy recognises the following related parties: associated companies, jointly controlled entities, key management personnel and members of their close family or other parties that are partly, directly or indirectly controlled by key management personnel or of its family or of any individual that controls, or has joint control or significant influence over the entity.
The Group has not entered into any material agreements with any related parties.
Orrön Energy pursues a business that is exposed to changes in energy prices, which in turn are dependent on macro-economic factors and geopolitical conditions. The Company's operations have an impact on the surrounding environment and operational processes are associated with occupational health and safety risks.
Risks and risk management relating to financial, operational and strategic risks are described in the 2022 Annual Report on pages 16– 17. Additional information on financial risks and information on how Orrön Energy manages these risks, including liquidity, credit and market risks are addressed in note 9 to the consolidated financial statements in the 2022 Annual Report.
Orrön Energy places risk management responsibility at all levels within the Company to continually identify, understand and manage threats and opportunities affecting the business. This enables the Company to make informed decisions and to prioritise control activities and resources to deal effectively with any potential threats and opportunities.
In 2022, Orrön Energy acquired 100 percent of the issued share capital of Siral Förvaltning AB and gained control of the company from 1 December 2022. This acquisition added estimated annual power generation of 44 GWh and 15 MW installed capacity, out of which 90 percent is situated in price areas SE3 and SE4. The purchase consideration amounted to MEUR 8.6. The valuation at fair value resulted in a surplus value of MEUR 4.6, which has been allocated to plant, property and equipment and no goodwill was recognised. The purchase price allocation is preliminary. The amounts have been translated from SEK to EUR at closing rate 30 November 2022.
In 2022, Orrön Energy acquired 96.5 percent of the issued share capital of Slitevind AB (publ) and gained control of the company from 31 August 2022. The remaining shares have been acquired in 2023.
Details of the purchase consideration, and the net assets acquired are as follows:
| Purchase consideration MEUR |
% of shares | Share price SEK |
Number of shares |
Value MEUR |
|---|---|---|---|---|
| Step 1 – Ownership 31 August 2022 | 91.0% | 125 | 6,476,654 | 75.8 |
| Step 2 – Ownership 13 September 2022 | 5.5% | 125 | 388,694 | 4.5 |
| Step 3 – Buy-out procedure | 3.5% | 125 | 249,102 | 2.9 |
| 100.0% | 7,114,450 | 83.3 |
The assets and liabilities recognised as a result of the acquisition were as follows:
| Fair value2 | |
|---|---|
| Assets and liabilities1 | MEUR |
| Non-current assets | |
| Property, plant and equipment | 144.1 |
| Investment in associates and joint ventures | 10.6 |
| Other financial assets | 0.7 |
| 155.4 | |
| Current assets | |
| Other current assets | 1.8 |
| Trade receivables | 0.4 |
| Deferred tax asset | 1.6 |
| Other current financial assets | 0.6 |
| Cash and cash equivalents | 1.4 |
| 5.8 | |
| Non-current liabilities | |
| Interest bearing loans and borrowings | -43.0 |
| Deferred tax liability | -15.9 |
| Provisions | -0.7 |
| -59.6 | |
| Current liabilities | |
| Trade and other payables | -1.2 |
| Other current financial liabilities | -12.4 |
| -13.6 | |
| Net identifiable assets acquired | 88.0 |
| Less Non-controlling interest | -4.7 |
| Net assets acquired | 83.3 |
2Translated from SEK to EUR at closing rate 31 August 2022.
The fair value of acquired trade receivables is MEUR 0.4, which corresponds to the book value.
The acquired business will contribute significantly to the Group's results and represented the totality of the Group's revenues at year end 2022.
| MEUR | |
|---|---|
| Cash consideration | 83.3 |
| Less cash balances acquired | -1.4 |
| Net outflow of cash – Investing activities | 81.9 |
The Group holds the following financial instruments:
| MEUR | Level | 31 March 2023 | 31 December 2022 |
|---|---|---|---|
| Financial assets | |||
| Financial assets at amortised cost | |||
| Other non-current financial assets | 95.1 | 96.8 | |
| Trade receivables1 | 0.4 | 0.3 | |
| Other current financial assets | 2.0 | 2.5 | |
| Cash and cash equivalents | 36.9 | 26.9 | |
| 134.4 | 126.5 | ||
| Financial liabilities | |||
| Financial liabilities at amortised cost | |||
| Interest bearing loans and borrowings | 26.9 | 28.8 | |
| Trade and other payables | 14.0 | 13.0 | |
| Other current financial liabilities | 39.7 | 27.8 | |
| 80.6 | 69.6 | ||
| Financial liabilities at fair value through profit or loss | |||
| Derivative financial instruments | 2 | – | 0.3 |
| – | 0.3 | ||
| 1The fair value of trade receivables and other receivables is a fair approximation of the book value. |
For financial assets and liabilities measured at fair value in the balance sheet, the following fair value measurement hierarchy is used:
– Level 1: based on quoted prices in active markets;
– Level 2: based on inputs other than quoted prices as within level 1, that are either directly or indirectly observable;
– Level 3: based on inputs which are not based on observable market data.
The Consolidated Statement of Cash Flows is prepared in accordance with the indirect method.
| Adjustments for items not included in the Cash flow MEUR |
1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Gain on distribution of E&P business | – | – | -12,823,3 |
| Exploration costs | – | 19.5 | 23.2 |
| Depletion, depreciation and amortisation | 3.0 | – | 3.5 |
| Current tax | – | 1,185.4 | 2,222.5 |
| Deferred tax | -0.1 | 100.2 | 319.2 |
| Long-term incentive plans | 0.5 | 5.2 | 10.2 |
| Foreign currency exchange gain/loss | 2.1 | 34.7 | 312.1 |
| Interest income | -1.3 | – | -2.6 |
| Interest expense | 0.8 | 11.5 | 25.8 |
| Amortisation of deferred financing fees | – | 1.7 | 4.5 |
| Ineffective hedging contracts | – | -111.4 | -57.2 |
| Result from associated companies and joint ventures | -0.8 | – | – |
| Other | 0.4 | 4.4 | 4.6 |
| 4.6 | 1,251.2 | -9,957.5 |
| MSEK | 1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Revenue | 0.6 | 7.5 | 13.4 |
| General and administration expenses | -43.2 | -62.7 | -200.0 |
| Operating profit/loss | -42.6 | -55.2 | -186.6 |
| Finance income | 0.0 | 0.4 | 10.9 |
| Finance costs | -0.9 | -4.1 | -720.7 |
| Net financial items | -0.9 | -3.7 | -709.8 |
| Profit/loss before income tax | -43.5 | -58.9 | -896.4 |
| Income tax | – | – | 306.0 |
| Net result | -43.5 | -58.9 | -590.4 |
| MSEK | 1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Net result | -43.5 | -58.9 | -590.4 |
| Other comprehensive income | – | – | – |
| Total comprehensive income | -43.5 | -58.9 | -590.4 |
| Attributable to: | |||
| Shareholders of the Parent Company | -43.5 | -58.9 | -590.4 |
| MSEK | 31 March 2023 | 31 December 2022 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Shares in subsidiaries | 3,780.8 | 3,780.8 |
| Other tangible fixed assets | 0.2 | 0.3 |
| Deferred tax assets | 306.0 | 306.0 |
| 4,087.0 | 4,087.1 | |
| Current assets | ||
| Receivables | 14.3 | 17.8 |
| Cash and cash equivalents | 38.9 | 24.6 |
| 53.2 | 42.4 | |
| TOTAL ASSETS | 4,140.2 | 4,129.5 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||
| Shareholders' equity including net result for the period | 4,035.7 | 4,078.0 |
| Non-current liabilities | ||
| Provisions | 1.3 | 1.3 |
| 1.3 | 1.3 | |
| Current liabilities | ||
| Other liabilities | 103.2 | 50.2 |
| 103.2 | 50.2 | |
| TOTAL LIABILITIES | 104.5 | 51.5 |
| TOTAL EQUITY AND LIABILITIES | 4,140.2 | 4,129.5 |
| 1 Jan 2023- | 1 Jan 2022- | 1 Jan 2022- | |
|---|---|---|---|
| 31 Mar 2023 | 31 Mar 2022 3 months |
31 Dec 2022 12 months |
|
| MSEK | 3 months | ||
| Cash flow from operating activities | |||
| Net result | -43.5 | -58.9 | -590.4 |
| Adjustment for items not included in the Cash flow | 1.2 | 0.4 | -312.6 |
| Changes in working capital | 28.1 | 1,223.8 | 2,989.7 |
| Total cash flow from operating activities | -14.2 | 1,165.3 | 2,086.7 |
| Cash flow from investing activities | |||
| Investments in subsidiaries | – | -0.5 | -0.5 |
| Total cash flow from investing activities | – | -0.5 | -0.5 |
| Cash flow from financing activities | |||
| Net drawdown/repayment of loan | 28.4 | – | – |
| Dividends paid | – | -1,163.9 | -2,672.1 |
| Sold treasury shares | – | – | 583.8 |
| Total cash flow from financing activities | 28.4 | -1,163.9 | -2,088.3 |
| Change in cash and cash equivalents | 14.2 | 0.9 | -2.1 |
| Cash and cash equivalents at the beginning of the period |
24.6 | 44.3 | 44.3 |
| Currency exchange difference in cash and cash equivalents |
– | 0.2 | -17.6 |
| Cash and cash equivalents at the end of the period |
38.8 | 45.4 | 24.6 |
| Restricted equity | Unrestricted equity | |||||
|---|---|---|---|---|---|---|
| MSEK | Share capital |
Statutory reserve |
Other reserves |
Retained earnings |
Dividends | Total equity |
| 1 January 2022 | 3.5 | 861.3 | 6,599.0 | 60,628.9 | -4,467.2 | 63,625.5 |
| Transfer of prior year dividends | – | – | – | -4,467.2 | 4,467.2 | – |
| Total comprehensive income | – | – | – | -58.9 | – | -58.9 |
| Transactions with owners | ||||||
| Value of employee services | – | – | – | – | – | – |
| Total transactions with owners | – | – | – | – | – | – |
| 31 March 2022 | 3.5 | 861.3 | 6,599.0 | 56,102.8 | – | 63,566.6 |
| Total comprehensive income | – | – | 583.7 | -531.5 | – | 52.2 |
| Transactions with owners Distributions |
– | – | – | – | -59,542.8 | -59,542.8 |
| Issuance of treasury shares to employees | – | – | – | 2.0 | – | 2.0 |
| Total transactions with owners | – | – | – | 2.0 | -59,542.8 | -59,540.8 |
| 31 December 2022 | 3.5 | 861.3 | 7,182.7 | 55,573.3 | -59,542.8 | 4,078.0 |
| Transfer of prior year dividends | – | – | – | -59,542.8 | 59,542.8 | – |
| Total comprehensive income | – | – | – | -43.5 | – | -43.5 |
| Transactions with owners | ||||||
| Value of employee services | – | – | – | 1.2 | – | 1.2 |
| Total transactions with owners | – | – | – | 1.2 | – | 1.2 |
| 31 March 2023 | 3.5 | 861.3 | 7,182.7 | -4,011.8 | – | 4,035.7 |
The alternative performance measures presented and disclosed in this interim report are used internally by management in conjunction with IFRS measures to measure performance and make decisions regarding the future direction of the business. The Group believes that these alternative performance measures, when provided in combination with reported IFRS measures, provide helpful supplementary information for investors.
In addition to the consolidated financial reporting in line with IFRS, the Group provides proportionate financial reporting which forms part of the alternative performance measures the Group presents. Proportionate reporting is aligned with the Group's internal management reporting, analysis and decision making.
Proportionate financials represent Orrön Energy's proportionate share of all the entities in which the Group holds an ownership.
This is different to the consolidated financial reporting under IFRS, where the results from entities in which the Group holds an ownership of 50 percent or less are not fully consolidated but instead reported on one line, as share of result in joint ventures. All entities in which the Group holds an ownership of more than 50 percent are fully consolidated in the financial reporting presented under IFRS.
Reconciliations of relevant alternative performance measures are provided on the following page. Definitions of the performance measures are provided under the key ratio definitions below.
| Financial data (Continuing operations) MEUR |
1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Consolidated financials | |||
| Revenue | 11.4 | 0.0 | 13.8 |
| EBITDA | 4.6 | -2.7 | 4.5 |
| Operating profit (EBIT) | 1.6 | -2.7 | 1.0 |
| Net result | 0.0 | -2.3 | 27.4 |
| Net cash (-) / Net debt (+) | 29.7 | -117.1 | 29.7 |
| Proportionate financials | |||
| Power generation (GWh) | 213.9 | N/A1 | 335 |
| Revenue | 14.0 | N/A1 | 40.0 |
| EBITDA | 6.7 | N/A1 | 20.7 |
| Operating profit (EBIT) | 2.6 | N/A1 | 14.7 |
| Net cash (-) / Net debt (+) | 19.5 | N/A1 | 12.3 |
| Average price achieved per MWh (EUR) | 66 | N/A1 | 120 |
1 Not applicable, proportionate financials are reported from 1 July 2022 only.
| 1 Jan 2023- | 1 Jan 2022- | 1 Jan 2022- | |
|---|---|---|---|
| 31 Mar 2023 | 31 Mar 2022 | 31 Dec 2022 | |
| Data per share | 3 months | 3 months | 12 months |
| EUR | |||
| Earnings per share | 0.00 | -0.01 | 0.10 |
| Earnings per share – diluted | 0.00 | -0.01 | 0.10 |
| EBITDA per share | 0.02 | -0.01 | 0.00 |
| EBITDA per share – diluted | 0.02 | -0.01 | 0.00 |
| Number of shares issued at period end | 285,924,614 | 285,924,614 | 285,924,614 |
| Number of shares in circulation at period end | 285,924,614 | 284,568,178 | 285,924,614 |
| Weighted average number of shares for the period |
285,924,614 | 284,568,178 | 285,458,805 |
| Weighted average number of shares for the period – diluted |
287,841,014 | 285,193,658 | 286,567,833 |
| Share price | |||
| Share price at period end in SEK | 13.59 | 399.30 | 22.46 |
| Share price at period end in EUR1 | 1.20 | 38.63 | 2.15 |
| Key ratios | |||
| Return on equity (%) | 0 | -0 | 8 |
| Return on capital employed (%) | 0 | -0 | 0 |
| Equity ratio (%) | 78 | 99 | 80 |
1 Share price at period end in EUR is calculated based on quoted share price in SEK and applicable SEK/EUR exchange rate at period end.
| EBITDA – Consolidated financials MEUR |
1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Operating profit/loss (EBIT) | 1.6 | -2.7 | 1.0 |
| Add: Depreciation | 3.0 | – | 3.5 |
| 4.6 | -2.7 | 4.5 | |
| Net debt/Net cash – Consolidated financials MEUR |
1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
| Interest bearing loans and borrowings – Non-Current | 26.9 | – | 28.8 |
| Interest bearing loans and borrowings – Current | 39.7 | – | 27.8 |
| Less: Cash and cash equivalents | -36.9 | -117.1 | -26.9 |
| 29.7 | -117.1 | 29.7 | |
| EBITDA – Proportionate financials MEUR |
1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
| Operating profit/loss (EBIT) | 2.6 | N/A1 | 14.7 |
| Add: Depreciation | 4.0 | N/A1 | 6.0 |
| 6.7 | N/A1 | 20.7 |
1 Not applicable, proportionate financials are reported from 1 July 2022 only.
| Net debt/Net cash – Proportionate financials MEUR |
1 Jan 2023- 31 Mar 2023 3 months |
1 Jan 2022- 31 Mar 2022 3 months |
1 Jan 2022- 31 Dec 2022 12 months |
|---|---|---|---|
| Net cash / Net debt – Consolidated financials | 29.7 | N/A1 | 29.7 |
| Less: Cash and cash equivalents of Associates and joint ventures |
-10.2 | N/A1 | -17.3 |
| Add: External interest bearing loans and borrowings of Associates and joint ventures |
– | N/A1 | – |
| 19.5 | N/A1 | 12.4 |
1 Not applicable, proportionate financials are reported from 1 July 2022 only.
| 1 Jan – 31 Mar 2023 – 3 months | Residual ownership for | Elimination of | ||
|---|---|---|---|---|
| MEUR | Proportionate financials |
fully consolidated entities1 |
equity consolidated entities2 |
Consolidated financials |
| Revenue | 14.0 | 1.2 | -3.8 | 11.4 |
| Other income | 0.1 | 0.1 | – | 0.2 |
| Operating expenses | -3.1 | -1.3 | 0.9 | -3.5 |
| General and administration expenses | -4.3 | – | – | -4.3 |
| Share in result of associates and joint ventures |
– | 0.1 | 0.7 | 0.8 |
| EBITDA | 6.7 | 0.1 | -2.2 | 4.6 |
| Depreciation | -4.1 | 0.0 | 1.1 | -3.0 |
| Operating profit (EBIT) | 2.6 | 0.1 | -1.1 | 1.6 |
| Net financial items | -2.6 | -0.1 | 1.0 | -1.7 |
| Tax | 0.0 | – | 0.1 | 0.1 |
| Net result | 0.0 | – | – | 0.0 |
1 Residual ownership interests share of the proportionate financials in fully consolidated subsidiaries where Orrön Energy does not have 100 percent economic interest.
2 Elimination of proportionate financials from equity consolidated entities adjusted for Orrön Energy's share of net income/loss.
Earnings per share: Net result attributable to shareholders of the Parent Company divided by the weighted average number of shares for the period.
Earnings per share – diluted: Net result attributable to shareholders of the Parent Company divided by the weighted average number of shares for the period after considering any dilution effect.
EBIT (Earnings Before Interest and Tax): Operating profit.
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation): Operating profit before depreciation.
Equity ratio: Total equity divided by the balance sheet total.
Net debt/Net cash – Consolidated: Interest bearing loans and borrowings less cash and cash equivalents.
Net debt/Net cash – Proportionate: Net cash / Net debt – Consolidated less cash and cash equivalents of associates and joint ventures plus external interest bearing loans and borrowings of associates and joint ventures.
Return on equity: Net result divided by average total equity.
Return on capital employed: Income before tax plus interest expenses plus/less currency exchange differences on financial loans divided by the average capital employed (the average balance sheet total less non-interest bearing liabilities).
Weighted average number of shares for the period: The number of shares at the beginning of the period with changes in the number of shares weighted for the proportion of the period they are in issue.
Weighted average number of shares for the period – diluted: The number of shares at the beginning of the period with changes in the number of shares weighted for the proportion of the period they are in issue after considering any dilution effect.
| CHF | Swiss franc | GWh | Giga Watt hours |
|---|---|---|---|
| EUR | Euro | MWh | Mega Watt hours |
| NOK | Norwegian Krone | ||
| SEK | Swedish Krona | ||
| USD | US dollar | ||
| TSEK | Thousand SEK | ||
| TUSD | Thousand USD | ||
| MEUR | Million EUR | ||
| MSEK | Million SEK | ||
| MUSD | Million USD | ||
| BUSD | Billion USD | ||
| Definitions and abbreviations | Industry related terms and measurements | ||||
|---|---|---|---|---|---|
| CHF | Swiss franc | GWh | Giga Watt hours | ||
Listen to Daniel Fitzgerald, CEO and Espen Hennie, CFO commenting on the report and presenting the latest developments in Orrön Energy and its future growth strategy together with members of Orrön Energy's management team at a webcast held on 16 May 2023 at 14.00 CEST. The presentation will be followed by a question-and-answer session.
Follow the presentation live on the below webcast link: https://us06web.zoom.us/webinar/register/WN_yTz5DG79S-a3NUtuUKjqaQ
Robert Eriksson Director Corporate Affairs and Investor Relations Tel: +46 701 11 26 15 [email protected]
Jenny Sandström Communications Lead Tel: +41 79 431 63 68 [email protected]
Statements in this report relating to any future status or circumstances, including statements regarding future performance, growth and other trend projections are forward-looking statements. These statements may generally, but not always, be identified by the use of words such as "anticipate", "believe", "expect", "intend", "plan", "seek", "will", "would" or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that could occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to several factors, many of which are outside the Company's control. Any forward- looking statements in this report speak only as of the date on which the statements are made and the Company has no obligation (and undertakes no obligation) to update or revise any of them, whether as a result of new information, future events or otherwise.
Corporate Head Office Orrön Energy AB (publ) Hovslagargatan 5 SE-111 48 Stockholm, Sweden T +46-8-440 54 50 W orron.com
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.