AFK: Third quarter financial results
Arendals Fossekompani (OSE:AFK) reported revenues of NOK 876 million in the third quarter of 2020. An operating profit of NOK 68 million is 28 percent higher than in the same quarter of 2019.
“In the midst of a pandemic and a period of record-low energy prices, Arendals Fossekompani is pleased to report a solid third quarter, although there is continued market uncertainty,” says Ørjan Svanevik, Chief Executive Officer at AFK.
Based on the third quarter results, and a very strong balance sheet, Arendals Fossekompani will pay 16 kroner per share in quarterly dividend in November.
Third quarter revenues of NOK 876 million are down from NOK 1.077 million in 2019, mainly due to lower energy prices and the termination of an unprofitable Cogen Energia customer relationship, which generated an annual turnover of NOK 600 million.
Green-tech company Volue, which was successfully listed on Merkur Market in October, reported revenues of NOK 209 million (2019: 189) and an operating profit of NOK 23 million (15) in the quarter.
“We are pleased to see that our portfolio companies are performing well. Volue, NSSLGlobal and EFD Induction had a strong third quarter, and both Tekna and Cogen Energia greatly improved the third quarter results in 2020 compared to 2019,” says Svanevik.
The financial result of the parent company, which includes AFK Hydro Power, was again impeded by exceptionally low energy prices. In periods with negative or close-to-zero prices, AFK has temporarily shut down power production at its hydro power plants outside of Arendal. Prices remain low but are expected to rise as temperatures drop.
“Energy prices are, of course, beyond our control. We focus on the development of our portfolio companies and strategic transactions,” says Svanevik.
Arendals Fossekompani recently signed an agreement to buy 71 percent of Kontali Analyse, a leading data provider for aquaculture and fisheries. Kontali is the first company in the portfolio of Alytic. Initially wholly owned by Arendals Fossekompani, Alytic is set up to transform a wide range of data-driven companies and is expected to rapidly expand its portfolio.
One share of Arendals Fossekompani is proposed split into 25 shares. An extraordinary general meeting in November will make the final decision in a move expected to increase the liquidity of the share.
“The Covid-19 pandemic continues to install uncertainly in the market, but AFK has the financial strength to handle most unexpected events. AFK remains net cash positive, with a substantial financial capacity,” says Svanevik.
The official third quarter report is available in Norwegian only.
For additional comments, please contact:
Ørjan Svanevik, CEO of Arendals Fossekompani, +47 414 51 560