Hafslund reports drop in Q3 opg profit, to list tech services arm UPDATE

Hafslund reports drop in Q3 opg profit, to list tech services arm UPDATE

	Published : Fri, 26 Oct 2007 08:11 By : Agencies Print this Story

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OSLO (Thomson Financial) - Norwegian electricity-to-home security group Hafslund ASA - which earlier announced spinning off its technical services business as a separate listing on the Olso Bors - posted an 11.8 pct drop in third quarter operating profit to 1.5 bln nkr.

That result, which the company blamed on lower power prices, compared with the 1.7 bln operating profit posted for the third quarter last year.

Revenues came in at 1.67 bln nkr, down from 2.3 bln previously.

The performance compares with estimates from Nordic investment bank Carngie, which projected that Hafslund would post Q2 EBITA of 1.489 bln nkr on sales 2.872 bln nkr.

Hafslund also posted profit before tax and discontinued operations of 1.39 bln nkr, against 1.6 bln previously.

'The comparatively lower operating profit is mainly attributable to poor profit performance by the group's power generation and district heating businesses that resulted from lower power prices,' Hafslund said in a statement.

It said that a new regulatory regime - introduced on January 1 this year and governing its power grid activities - also undermined the result.

Hafslund again acknowledged its gains from its investment in Renewable Energy Corporation, in which it has a sizeable stake.

In March this year Hafslund sold down its stake in REC to 14.3 pct from 21.3 pct.

Hafslund said on Friday that its of after tax profits of 1.346 bln - down from 1.454 bln the previously year - 1.302 bln was attributable to its REC investment.

Earlier, the group announced that it has decided to spin-off its Technical Services business operations and float it on the Oslo Bors under the new name 'Hafslund Infratek'.

The division specialises in the supply of services related to the development and operation of critical infrastructure for energy transport as well as telecoms and security systems.

No details were given on the planned timescale or likely price for the flotation, but Hafslund said it will retain majority ownership in the new company, and 'promote further development through active ownership'.

Looking ahead from its Q3 results, Hafslund said that earnings in the network business was expected to decrease as a result of the new regulatory regime, introduced in 2007, governing power distribution companies in Norway.

The group's other profit centres, it added, were 'well positioned' to continue to develop favourably.

patrick.mcloughlin@thomson.com

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