1 Report of the board of directors

1.1 Financial result

Fingrid’s consolidated financial statements have been drawn up in accordance with the International Financial Reporting Standards (IFRS). Unless otherwise indicated, the figures in parentheses refer to the same period of the previous year.

Fingrid’s consolidated financial statements have been drawn up in accordance with the same accounting principles as in 2018, taking into account the changes brought about by IFRS 16 and the more detailed application of IAS16.

The Group’s turnover was EUR 789.4 (852.8) million. Grid service income declined to EUR 385.0 (423.2) million, due to the reduced grid service prices. Electricity consumption in Finland totalled 86.1 (87.5) terawatt hours during the year. Imbalance power sales amounted to EUR 346.7 (348.8) million, on a par with the previous year. Cross-border transmission income from the connection between Finland and Russia decreased to EUR 11.6 (35.5) million, as a result of the lower cross-border transmission tariff. The transmission tariff used in imports from Russia is based on the difference between Finland’s and north-western Russia’s area prices. Other operating income declined to EUR 4.2 (10.8) million. The decline resulted from a decrease in capital gains from the sale of fixed assets.

The Group’s total costs amounted to EUR 651.6 (659.0) million. Imbalance power costs remained on the previous year’s level and totalled EUR 323.5 (320.0) million. Loss power costs grew to EUR 53.9 (47.7) million. The volume of loss power grew slightly, and the price of loss power procurement increased somewhat. The realised average price of loss power procurement was EUR 39.57 (37.88) per megawatt hour. The cost of reserves to safeguard the main grid’s system security remained on the previous year’s level and amounted to EUR 55.9 (56.7) million. Depreciation totalled EUR 97.8 (99.7) million. Grid maintenance costs amounted to EUR 21.6 (21.2) million. 

Personnel costs declined to EUR 26.4 (32.2) million, mainly as a result of the capitalisation of personnel costs related to investment projects EUR 4,7 million. A total of EUR 3.4 (3.6) million was used for R&D projects.

Turnover and other operating income, € million
  Jan-Dec/19 Jan-Dec/18 July-Dec/19 July-Dec/18
Grid service revenue 385.0 423.2 175.7 193.8
Sales of imbalance power 346.7 348.8 171.6 184.1
Cross-border transmission income

11.6

35.5 6.2 15.3
Peak load capacity income* 14.1 14.0 4.8 4.7
ITC income 14.4 13.1 7.6 7.8
Other turnover 17.4 18.2 8.3 10.4
Other operating income 4.2 10.8 3.6 9.8
Turnover and other income total 793.6 863.6 377.7 425.7
Costs, € million
  Jan-Dec/19 Jan-Dec/18 July-Dec/19 July-Dec/18
Purchase of imbalance power 323.5 320.0 160.9 170.6
Cost of loss energy 53.9 47.7 28.2 22.3
Depreciation 97.8 99.7 49.1 50.4
Cost of reserves 55.9 56.7 29.3 27.1
Personnel costs 26.4 32.2 10.4 15.6
Maintenance management costs 21.6 21.2 13.8 13.2
Cost of peak load capacity* 13.7 13.7 4.4 4.6
ITC charges 15.0 13.8 7.3 7.2
Other costs 43.8 54.0 21.4 30.9
Costs total 651.6 659.0 324.7 342.0
Operating profit excluding the change in the fair value of commodity derivatives 142.1 204.6 53.1 83.7
Operating profit of Group, IFRS 115.5 241.6 48.7 91.2
* Peak load capacity income and costs are related to the securing of sufficient electricity supply during peak consumption hours in compliance with the Finnish Peak Load Capacity Act.

The Group’s operating profit was EUR 115.5 (241.6) million. To recognise changes in the fair value of electricity derivatives and the currency derivatives related to capital expenditure and other operating expenses, EUR -26.6 (37.1) million was recorded in operating profit. The Group’s profit before taxes was EUR 105.8 (229.0) million. The biggest differences year-on-year are explained by changes in the market value of electricity derivatives (EUR -63.5 million) and lower grid service income and cross-border transmission income (change totalling EUR -62.0 million). Profit for the financial year was EUR 84.6 (183.2) million. The equity ratio was 32.0 (36.6) per cent at the end of the year.

The parent company’s turnover was EUR 786.2 (844.6) million, profit for the financial year EUR 148.1 (194.6) million and distributable funds were EUR 199.0 million.

Based on the company’s own calculations, the result according to the regulatory model that governs grid operations amounts to a deficit of around EUR 15 million for 2019 and to a deficit of some EUR 30 million for the entire regulatory period 2016–2019.