Statkraft Swallows Heavy Loss, Charts Leaner Course Amid Market Volatility

• Statkraft posts NOK 6.5 bn Q2 loss on impairments and FX; new CEO retreats from non-core bets, trims spending and targets NOK 2.9 bn cost savings.

Statkraft’s latest earnings release makes for difficult reading. Europe’s biggest producer of renewable power booked a NOK 6.5 billion net loss for the second quarter, deepening the NOK 1 billion red ink it spilled a year ago. The headline figure was dragged down by NOK 6.3 billion of impairments, chiefly on older Swedish wind farms, early-stage battery assets in the UK and several Latin-American hydro joint ventures. Those write-downs reflect a sharply lower long-term power-price outlook and higher discount rates—an accounting reality hitting utilities across the continent.

Currency swings added to the pain. The Norwegian krone weakened noticeably against the euro during the quarter, inflating the book value of euro-denominated debt and derivatives. That moved Statkraft’s net financial items deep into negative territory, more than offsetting a solid operational showing. Hydro-electric output climbed six percent to 15.2 TWh thanks to healthy reservoir levels, while energy trading desks continued to post steady margins. Underlying EBITDA, however, slipped to NOK 4.5 billion from NOK 6.5 billion as Nordic spot prices fell to their lowest spring average in four years.

New chief executive Birgitte Ringstad Vartdal is wasting little time in her pivot toward discipline. Out goes the previous strategy’s scatter-gun expansion into district heating, advanced biofuels and green hydrogen. Instead, Statkraft will focus on core strengths: Norwegian hydro upgrades, on-shore wind in the Nordics, and quicker-payback solar or storage projects in select European and South-American markets. Development activities in Portugal, Australia and Croatia have already been shelved; the company is now looking to sell minority stakes in wind or solar pipelines in Poland, India and Canada.

Cost control is the second pillar. Management has set a target of trimming operating expenses by roughly NOK 2.9 billion a year by 2027—about 15 percent of today’s run-rate. Capital expenditure, previously racing toward NOK 25 billion annually, is now capped between NOK 16 billion and NOK 20 billion. Funding will come from asset disposals, project-level debt and, if needed, new hybrid securities designed to protect the firm’s investment-grade credit ratings.

Investors took the sobering update in stride. The shares, already down more than 20 percent year-to-date, moved only marginally in Oslo trading. With Nordic electricity prices showing signs of stabilising and a leaner roadmap taking shape, Statkraft is betting that a tighter focus today will lay the groundwork for steadier returns tomorrow.