Fjordkraft continues to grow in the ‘challenging market’ – E24

Fjordkraft continues to grow in the 'challenging market' - E24

Fjordkraft grew its sales further in the third quarter, but described rising electricity prices as a challenge. Margins are falling in the private market, and large depreciation in acquired client portfolios has reduced profits.

Fjordkraft Director Rolf Barmen


Fjordkraft generated net revenue of NOK 367 million in the third quarter, up 29 percent from NOK 284 million in the same period last year. Meanwhile, adjusted operating profit ended at NOK 89 million, up 13 percent from NOK 79 million in the third quarter of 2020.

It appears from the stock exchange announcement from the company on Friday morning. Sales growth is primarily due to Fjordkraft’s purchase of other electrical companies and customer portfolios.

At the same time, real operating profit ended at 37.3 million, down from 56.6 million in the previous year, after writing off client portfolios earned at 46.3 million in the period. In the same period last year, the same level of depreciation was 7.9 million.

While the third quarter and 2020 as a whole was a year that saw unusually high electricity prices in Norway, 2021 delivered unusually high prices.

Negative price hike

Fjordkraft, Norway’s largest electricity supplier, lives on the margins between what they buy electricity for and what they are able to resell to customers for.

Thus, higher electricity prices are mainly negative for the company, as they lead to more dissatisfied customers. Fjordkraft’s adjusted operating margin was 24 percent in the third quarter, down four percentage points from the third quarter of last year.

Margin pressure is most evident in the retail customer segment, where adjusted operating margin declined from 28 to 18 percent during the period. For corporate clients, the corresponding margin decreased from 47 to 44 percent.

“High electricity spot prices represent a more challenging market climate for Fjordkraft. Despite this challenging market, Fjordkraft has been able to increase net revenue, among other things, by hedging strategy on variable contracts while at the same time offering clients a strong value proposition at below market rates,” the report states.

Multiple power supplies

In mid-October, the company announced that the number of electricity connections in the Norwegian part of the business increased by 1,753 in the third quarter of 2021, compared to the previous quarter.

At the same time, the Nordic segment decreased by 1,584 deliveries, and mobile operator Fjordkraft left the quarter with 3,495 subscribers less than in the previous quarter.

The Fjordkraft Group made just over 1 million power connections during this period, up from 865,545 in the same period last year. The growth is mainly due to the acquisition of customer portfolios from competitors.

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Dalila Awolowo

Dalila Awolowo

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