During the financial year, we continued to implement measures launched in 2010 to improve profitability in electricity sales. At the same time, we paid particular attention to the development of hedging activities and profitability reporting. These measures contributed to our good performance in 2012. Moreover, the weather conditions were favourable in 2012.
During the year, we carried out the greatest investment project in the company’s history to the value of EUR 47.1 million. We also built two bioenergy heating plants and completed the installation of remotely read meters.
The company’s Board of Directors proposes to distribute a dividend of EUR 16.50 per share for 2012, a total of EUR 9.5 million.
SAVON VOIMA OYJ is a wholly owned subsidiary of Savon Energiaholding Oy, which is owned by 22 municipalities. At the end of 2012, the company’s electricity network included 112,400 metering points, and its district heating network had approximately 2,880 customers.
The price of electricity in the Nordic spot market showed a falling trend almost throughout the year. This was due to the improved water supply situation in Norway and Sweden and the drop in the price of emission allowances caused by the economic crisis in the EU area. The average price of market electricity in the Finnish price area was 3.7c/kWh, which is over 25 per cent lower than the average price in 2011. The average price in the Finnish price area was over 17 per cent higher than the system price. The regional price differences were attributable to the high volume of hydropower production in Norway in view of the transmission capacity, the restrictions on electricity transmission in the cable connection between Finland and Sweden, and the strong fluctuations of Russian imports.
In Kuopio, the heating degree day describing the demand for energy needed to heat a building was 4,909, which is almost 13 per cent higher than in 2011, but about three per cent lower than the long-term average.
The net sales of Savon Voima Myynti amounted to EUR 110.6 million, a fall of 7.7 per cent on the previous year. The fall in net sales is caused by the reduced sales volumes of electric energy among unprofitable customer segments. A total of 2,016 GWh of electricity was sold, which is 9.8 per cent less than in the previous year. Operating profit stood at EUR 4.4 million, increasing by EUR 2 million on the previous year. Successful hedging measures in the falling market helped to considerably improve the company’s profitability.
The net sales of the Savon Voima Lämpö business unit came to EUR 41.1 million, which is 15 per cent more than in the previous year. The sale of thermal energy grew by 10 per cent to 661 GWh. The Suonenjoki and Tahkovuori bioenergy heating plants and the reserve heating plant in Kiviranta in Iisalmi were inaugurated in 2012. The Board of Directors of Savon Voima Oyj made a decision on the building of an 8 MW bioenergy heating plant in Leppävirta during 2013.
The electricity generation of Savon Voima Tuotanto business unit totalled 487 GWh, which is down by 11 per cent on the previous year. The production volume diminished especially in terms of coal condensate because the price of electricity stayed at a low level due to the general economic situation and the substantial amount of hydropower production in Norway. Due to the low market prices, the result of physical electricity generation was lower than expected, but the overall result improved considerably on the previous year owing to successful hedging measures. In hydropower production we achieved an all-time record: annual production amounted to 110.8 GWh despite the 6-month production outage caused by the power upgrade project at the Atro power plant. At 73.0 GWh, backpressure production was lower than the normal level. The main reason for this was the shortage of peat in the autumn, as a result of which it was necessary to limit electricity generation in order to save fuel. Production at the Ajos wind farm was at the previous year’s level.
The most significant production plant investment was the refurbishment of Atro, where the output of the hydropower plant was upgraded by about 1 MW by replacing an obsolete runner with a new one with better efficiency and capacity. As a result of the water hub solution of the new runner and the water-lubricated turbine bearing, the risk of any oil leaks into the waterways is considerably diminished.
The net sales of Savon Voima Verkko totalled EUR 68.2 million, up by 13.2 per cent on the previous year. Electricity distribution to consumers connected to the network increased by 5.2 per cent on the previous year, totalling 1,807 GWh. Operating profit stood at EUR 27.9 million, an increase of 29.2 per cent on the previous year. Operational costs were lower than usual because of fewer network faults than in the previous years. Although the number of faults in the medium-voltage network was at the normal level, the faults were mainly individual cases, which were quicker and cheaper to repair than major disturbances. The average outage time for customers was also shorter than before.
Total number of employees was 176 on average during the year and 178 at the end of the year, with 173 permanent employees. The company took on eight new permanent employees, including apprentices who were appointed into a permanent position. The average employee of Savon Voima will have worked for the company for almost 20 years.
At the end of the year, the Savon Voima Group introduced a process-based business system focusing on the customers’ needs. The system is used as a tool in the development of operational quality and cost effectiveness, the prevention of environmental damage and the improvement of occupational safety.
KEY FINANCIAL FIGURES FOR THE SAVON VOIMA GROUP