1.1.1 Financial result
In preparing these consolidated financial statements, the Group has followed the same standards as in 2015.
The Group’s turnover was EUR 586.1 (600.2) million. Grid service income increased to EUR 382.4 (333.0) million, as a result of the change in grid pricing enacted at the start of the year and due to the growth in electricity consumption. Electricity consumption totalled 85.1 (82.5) terawatt hours. Fingrid transmitted 68.6 (67.9) terawatt hours of electricity in its grid, which represents 77.5 (77.1) per cent of all electricity transmitted in Finland. Imbalance power sales amounted to EUR 153.9 (137.1) million. The growth in imbalance power sales resulted from an increase in the volume of imbalance power and higher imbalance power prices. Cross-border transmission income from the connection between Finland and Russia increased to EUR 24.0 (11.2) million. This was due to the new dynamic tariff structure that was introduced as well as to increased imports from Russia. Fingrid’s congestion income from connections between Finland and Sweden declined to EUR 37.5 (86.8) million due to weakened hydrological conditions, which significantly decreased the number of congestion hours. Fingrid’s congestion income from the links between Finland and Estonia amounted to EUR 2.4 (4.2) million. Congestion income will no longer be reported in Fingrid’s turnover as of the beginning of 2016. Other operating income totalled EUR 12.7 (5.2) million. The growth in other operating income mainly resulted from the EUR 6.3 million in recognised congestion income, in compliance with the regulation concerning the costs from maintaining cross-border capacity and countertrade.
The Group’s total costs amounted to EUR 442.2 (418.6) million. Imbalance power costs increased from the previous year’s level to EUR 121.7 (98.2) million, due to the increase in the volume and price of imbalance power. Loss power costs amounted to EUR 57.6 (68.6) million. The declining loss power costs have been affected by the lower price of loss power procurement and the slightly lower volume of loss power. The average price of loss power procurement was EUR 43.87 (48.22) per megawatt hour. The cost of reserves to safeguard the grid’s system security decreased to EUR 50.5 (54.7) million. The reason for the decreased cost was an interruption in the procurement of the automatic frequency control reserve until August, as well as the lower procurement cost of frequency controlled reserves for normal operation and disturbances due to high availability on the markets. Depreciation amounted to EUR 99.2 (94.1) million. Grid maintenance costs grew to EUR 24.1 (19.2) million. The maintenance costs were increased by the periodical felling of trees around substations and the trimming of trees at the edges of transmission line right-of-ways. Personnel costs increased as the payroll expanded, due to new operations and increased statutory duties and due to higher employer contributions in additional personnel expenses, and amounted to EUR 28.6 (25.8) million.
|Turnover and other operating income, € million|
|Grid service revenue||382.4||333.0||113.1||100.8|
|Sales of imbalance power||153.9||137.1||47.4||37.9|
|Cross-border transmission income||24.0||11.2||10.0||2.9|
|Finland-Estonia congestion income*||0.0||4.2||0.0||0.8|
|Finland-Sweden congestion income*||0.0||86.8||0.0||22.0|
|Peak load capacity income**||7.0||7.6||1.8||1.8|
|Other operating income||12.7||5.2||2.0||3.0|
|Turnover and other income total||598.8||605.4||180.0||175.5|
|Costs, € million|
|Purchase of imbalance power||121.7||98.2||37.5||29.6|
|Cost of loss energy||57.6||68.6||12.8||17.8|
|Cost of reserves||50.5||54.7||13.8||12.6|
|Maintenance management costs||24.1||19.2||9.1||7.9|
|Cost of peak load capacity**||6.6||7.2||1.6||1.4|
|Estlink grid rents||0.0||0.0||0.0||0.0|
|Operating proﬁt excluding the change in the fair value of commodity derivatives||156.6||186.8||56.6||61.9|
|Operating profit of Group, IFRS||192.0||162.6||67.4||57.4|
|* Due to a change in congestion income reporting, congestion income is not reported in the turnover as of the beginning of 2016.|
|** Peak load capacity income and costs are related to the securing of sufficient electricity supply during peak consumption hours in compliance with the Finnish Peak Load Capacity Act.|
The Group’s operating profit was EUR 192.0 (162.6) million. To recognise changes in the fair value of electricity derivatives and the currency derivatives related to capital expenditure and other operating expenses, EUR 35.4 (-24.3) million was recorded in operating profit.
Net financial costs in accordance with IFRS were EUR 18.7 (33.7) million, including a change of EUR -0.3 (-13.3) million in the fair value of financial derivatives.
The Group’s profit before taxes was EUR 173.9 (129.3) million. The biggest differences from the last year are explained by changes in the market value of derivatives (EUR +72.7 million), the growth in grid service income (EUR +49.4 million), and a change in the reporting of congestion income (effect EUR -84.6 million). The profit for the year was EUR 138.7 (103.6) million. The equity to total assets ratio increased and was 36.4 (33.5) per cent at the end of the review period.
The parent company’s turnover was EUR 581.4 (592.4) million, profit for the financial year EUR 103.9 (123.7) million and the distributable funds EUR 176.0 million.
By the company’s own calculations, the return according to the regulatory model that governs grid operations amounts to a deficit of around EUR 40 million for 2016.