Rabbalshede Kraft Annual Report 2016 CONTENTS
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Rabbalshede Kraft Annual Report 2016 CONTENTS This is Rabbalshede Kraft 3 Vision, Business Concept, Target 3 Performance during the year 4 CEO's statement 6 Rabbalshede Kraft's operations 8 Rabbalshede Kraft's net work 10 Rabbalshede Kraft's history and organisation 11 Glossary 77 Project portfolio 12 Operated wind farms and projects under development 12 Lyrestad - new wind farm under construction 14 Establishing wind farms with a focus on sustainability 16 The Market 18 Wind power 18 The Electricity market 20 Electricity certificates 23 The Share 24 Board of Directors 26 Senior Executives and Auditor 27 Administration report and financial statements Mulit-year review 30 Administration report 31 Consolidated income statement 36 Consolidated statement of comprehensive income 36 Consolidated balance sheet 37 Consolidated statement of changes in shareholders’ equity 38 Consolidated cash-flow statement 39 Parent Company income statement 40 Parent Company’s statement of comprehensive income 40 Parent Company balance sheet 41 Changes in Parent Company’s shareholders’ equity 43 Parent Company cash-flow statement 44 Notes to the financial statements 45 Auditors’ Report 75 This is a translation of the Swedish version of the annual report. In case of any inconsistency in relation to the Swedish version, the Swedish version shall prevail. 2 THIS IS RABBALSHEDE KRAFT RABBALSHEDE KRAFT ANNUAL REPORT 2016 This is Rabbalshede Kraft A leading player in wind power in Sweden, Offering of asset management services Rabbalshede Kraft’s strength lies in develop- Operating wind farms entails a long list of ing and operating wind farms. From when commitments in addition to the obvious Rabbalshede Kraft was founded in 2005 up aspect of producing electricity. Rab- until December 2016, the company has balshede Kraft manages the company’s invested nearly SEK 2,3 billion in proprietary operational wind farms and offers investors operational wind farms. and wind power owners a comprehensive The company ensures sound control of operational management solution. the entire value chain, from planning and The company’s professional operation Operates wind farms establishing wind farms to production and and maintenance organization, which sales of electricity. works in close cooperation with turbine with an annual suppliers, contributes to high opera- production capacity of Production of renewable electricity tional reliability. This creates a long- Production and sales of renewable electricity term, secure return and low operating from its own wind farms represent the com- risk for the company’s owners. 900 GWh pany’s largest source of revenue. Electricity of these is sold on the open electricity market, Nord The owners include the industrial com- Pool. pany Manor Group, which is the majority shareholder, the property company Ernst 500 GWh Sales of turnkey wind power projects Rosén, the Chalmers University of Tech- Project planning has been a fundamental nology Foundation, Nordea Investment in-house part of the company’s operations since it was Funds and approximately 1,000 addi- founded. Its focus is on delivering profitable, tional companies and private share- turnkey wind power projects for commission- holders. In February 2017, Sweden ing by the company itself or to be sold to its Holdco RK AB ("Greystone") became partners. The company has a development a significant owner. portfolio comprising 500 MW. Rabbalshede Kraft also procures and Rabbalshede Kraft makes a difference manages the construction of wind farms on In the move toward sustainable develop- behalf of its customers. The company is a ment, it is important that society increases major, independent player in the wind power the percentage of electricity derived from market, which creates economies of scale renewable energy sources. Wind is and bargaining power for its partners. one such energy source. Rabbalshede Kraft is certified in accor- dance with ISO 9001 and ISO 14001. VISION, BUSINESS CONCEPT OCH TARGET Vision Target To be a leading player in terms of developing renewable Rabbalshede Kraft’s overriding objective is to create value energy in the Nordic region growth for the Company’s shareholders by bring to the power market clean and efficient MWh while maintaining a Business concept strong balance sheet and delivering long-term result to • To plan and establish land-based wind farms in Sweden our shareholders. – for sales of renewable energy – for sales of wind farms Value growth is generated through the sale of proprietarily produced electricity and through divestments, when the • To offer asset management services, and procure and gain from invested capital is realized. manage the construction of wind farms 3 PERFORMANCE DURING THE YEAR RABBALSHEDE KRAFT ANNUAL REPORT 2016 SIGNIFICANT EVENTS DURING THE YEAR In late 2015, Rabbalshede Kraft Rabbalshede Kraft and Ardian conducted a preferential rights Infrastructure invested just over Q1 issue whereby the company raised Q2 SEK 1 billion in the Lyrestad wind SEK 312 M. The share issue was farm, comprising 22 wind turbines (76 MW) registered in January 2016. for commissioning in autumn 2017. The wind farm’s annual production, which is esti- mated at 234 GWh, will be purchased by Google under a long-term power purchase During the year, Rabbalshede agreement. Kraft reduced its bank liabili- Q4 ties for the Group’s wind An agreement was reached concerning farms by some 40%. This was the construction and sale of a wind turbine made possible by a shareholder loan from (2 MW) in Hällevadsholm to Mölndal Energi. Manor Group, the company’s principal Rabbalshede Kraft is responsible for pro- owner. curement and construction, and signed a two-year management agreement. A management agreement was signed with Dorotea Municipality and Kvarkenvin- den for two wind turbines (4 MW) at the Bliekevare wind farm. Rabbalshede Kraft concluded Annual production amounted to 500 GWh, a management agreement with approximately 3% below the expected level Q3 Gnosjö Energi. The agreement due to weaker winds during the first half of pertains to a four-year manage- the year. Availability at the company’s wind ment assignment involving operational man- farms over the year was 98.9%. agement and monitoring of the Kulltorp wind farm, comprising four wind turbines The environmental permit for the Sköl- (10 MW). lunga wind farm for three wind turbines (9 MW) gained legal effect. Håkan Frick was appointed as acting CEO. Electricity price (SEK/MWh) 2016 SEK 500 Electricity price (SEK/MWh) 2016 The lower curve indicates the Nord Pool energy 400SEK 500 market’s systemprice (a weighted spot price for all 300 participating countries). 400 200 Rabbalshede Kraft continuously hedges the sale of 300 electricity, which meant in 2016 that the company 100 200 mainly obtained a higher price per megawatt hour of 0 100 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec electricity than the daily Nord Pool power market pri- The Company’s The Nord Pool energy market’s ce. Electricity price hedging takes place through the 0 systemprice Jan sellingFeb priceMar Apr May Jun Jul Aug Sep Oct Nov Dec conclusion of contracts for the sale of future electricity The Company’s The Nord Pool energy market’s production at preestablished prices. selling price systemprice See “The electricity market” on page 20. Electricity certicates SEK/MWh 2016 SEK No. of sold electricity certicates Electricity certificates provide financial support for 200 000 250Electricity certicates SEK/MWh 2016 renewable electricity producers. The system has 200SEK No. of sold electricity certicates160 000 existed in Sweden since 2003 and been managed 250 200 000 150 120 000 jointly with Norway since 2012. Rabbalshede Kraft 160 000 200 and other approved renewable electricity produ- 100 80 000 150 120 000 cers receive a certificate for each MWh electricity 50 40 000 100 80 000 sold. Electricity certificates are traded in the same way 0 0 as electricity but much more infrequently. 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 40 000 Sold electricity Selling price Spot price electricity See “The electricity certificate market” on page 23. 0 0 certicates, SKM Jan certicatesFeb Mar (number)Apr May Jun Jul Aug Sep Oct Nov Dec Sold electricity Selling price Spot price electricity certicates (number) certicates, SKM 4 PERFORMANCE DURING THE YEAR RABBALSHEDE KRAFT ANNUAL REPORT 2016 PERFORMANCE DURING THE YEAR Key figures Year 2016 Year 2015 Year 2014 Year 2013 Year 2012 Electricity production, MWh 500 247 576 412 314 665 189 431 159 785 Net sale, KSEK 235 628 264 204 146 161 104 694 85 269 EBITDA, KSEK 143 299 169 655 81 270 77 821 43 215 EBIT, KSEK 44 263 -110 669 14 325 38 027 -7 619 Installed capacity at the close of the period, MW 190 190 190 89 66 Return on capital employed before taxes % 2,2 neg 0,7 2,6 neg Debt service ratio 1,0 1,1 1,4 0,7 1,0 Equity/assets ratio, % 46 45 37 58 45 Periodens kassaflöde, tkr -182 811 105 738 –14 134 46 218 22 037 500GWh 236MSEK 46% MSEK143 EBITDA production 2016 Net sale Equity/assets ratio Production Net sale 2016 2015 2014 2016 2015 2014 500GWh 576GWh 315GWh 236MSEK 264MSEK 146MSEK Production, GWh GWh The two graphs illustrate developments at Rabbalshe- 700 de Kraft. The Production and Installed 600 capacity graphs show figures from the start in 2008, 500 when the first wind farm was put into operation - Hud 400 in the Tanum Municipality. 300 Since 2008, Rabbalshede Kraft has installed 71 pro- 200 prietarily managed wind turbines. The total capacity, 100 190 megawatts (MW), is a measure of the capacity of 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 the company’s wind turbines. Together, they can pro- duce slightly more than half a terawatt hour (TWh) electricity. Year 2016 ended with two strong quarters of favor- Total eect, MW able winds, Due to somewhat weaker winds during the MW first half of the year, however, production at year-end 250 was about 3% lower than expected.