Hafslund - Annual result 2022: Strong result and high tax charge

30 Mar 2023 18:05 CEST

High power prices and good operations produced a strong result for the Hafslund
Group in 2022. Annual profit before tax was NOK 18,879 million. The Group had a
tax expense of NOK 14,535 million and profit after tax was NOK 4,344 million
compared to NOK 2,611 million in 2021.

The war in Ukraine, lack of gas in Europe, challenges at central nuclear power
plants and drought led to very high energy prices on the Continent and in South
Norway in 2022.

- The extreme price situation has been very demanding for both private consumers
and businesses. Hafslund is positive about the authorities' measures to
introduce electricity subsidies and facilitate more predictability for the
business world by facilitating fixed price agreements, says CEO Finn Bjørn
Ruyter.

Hafslund had an operating profit before depreciation (EBITDA) of NOK 20,087
million in 2022 (2021: NOK 8,979 million). The increased operating profit is
mainly due to significantly higher power prices, while 25 per cent lower
production than the previous year and result from hedging activities contributed
negatively.

The tax expense of NOK 14,535 million (NOK 5,291 million) corresponds to an
effective tax expense of 80 per cent (67 per cent) of the profit before tax,
adjusted for results from associated companies and joint ventures. The very high
tax expense must be seen in light of the government's decision to increase the
resource rent tax rate from 37 per cent to 45 per cent with effect from 1
January 2022 and a high price tax of 23 per cent on prices above 70 øre/kWh.

Profit after tax for 2022 ended at NOK 4,344 million (NOK 2,611 million). A
dividend of NOK 1,500 million to the City of Oslo has been proposed.

- The result gives the Group a good basis for building more renewable energy and
developing good energy solutions despite great uncertainty related to framework
conditions and developments in the energy markets, says Ruyter.

New power taxes with adverse effects

The long-term solution for stable and lower power prices is increased
development of renewable energy. In 2022, Hafslund has continued to invest in
hydropower, started companies in large-scale solar power, rooftop solar cells
and continued its work within offshore wind.

To succeed in developing more renewable energy, we need stable, predictable
framework conditions. New Norwegian taxes on power production are demanding both
for the renewable industry and power consumers who depend on competitive and
stable power prices.

- We understand that historically high power prices provide grounds for higher
taxation. However, we believe the arrangement of the new power taxes is
unfortunate, with implications for the price level for long-term contracts,
investments in renewable power and for financial hedging and risk management,
says Ruyter.

The biggest event of the year was the acquisition of Hafslund Oslo Celsio,
Norway's largest supplier of district heating.

- The acquisition strengthens the Group's basis for future dividend capacity and
contributes to more stable results. Flexible district heating and cooling
solutions are very important to alleviate the power capacity challenge in Oslo
and contribute to green and energy-efficient urban development, says Ruyter.

Hafslund AS
Oslo, 30 March 2023

For further information:

Andreas Wik, Head of Treasury, tel.: +47 924 97 255 or e-mail:
andreas.wik@hafslund.no

Per Storm-Mathisen, Head of Communications, tel.: +47 982 55 406 or e-mail:
per.storm-mathisen@hafslundeco.no

More information:
Access the news on Oslo Bors NewsWeb site

586742_Hafslund Annual Report 2022_EN.pdf