Brief: Aker Horizon Cuts Production Estimates Due To Constraints In Chile

Aker Horizons ASA

15/11/2023 07:38

Nov 15 (Reuters) - Aker Horizon ASA  AKH.OL :
    * SAID ON TUESDAY CHALLENGES IN H1 OF 2023 RELATED TO
HYDROLOGY
AND GRID CONSTRAINTS IN CHILE TRIGGERED SHIFT IN THIRD-PARTY
ESTIMATES
    * MARKET CHALLENGES ALSO TRIGGERED NEW IMPAIRMENT TEST FOR
ANDES
RENOVABLES AS OF 30 JUNE, REFLECTING THAT OVERALL UNCERTAINTY IS
ASSUMED TO BE HIGHER
    * TO REFLECT HIGHER PERCEIVED RISK, MANAGEMENT MOVED
ESTIMATES FOR
DIFFERENT ASSUMPTIONS FROM THIRD PARTIES IN MORE CONSERVATIVE
DIRECTION
    * DUE TO UNDERESTIMATED CONSTRAINTS IN GRID CAPACITY IN
CHILE,
PARTICULARLY IN NORTH, NEW IMPAIRMENT TEST REFLECTS HIGHER LEVEL
OF CURTAILMENT
    * ESTIMATED PRODUCTION VOLUME REALIZED HAS BEEN REDUCED BY
ABOUT
8%, VS IMPAIRMENT TEST CARRIED OUT AS OF DEC 31 2022
    * IMPAIRMENT TEST REFLECTS EXPECTATION THAT ADDITIONAL
TRANSMISSION CAPACITY WILL COME ONLINE IN 2030 WHICH WILL REDUCE
CURTAILMENT CHALLENGES
    * INTERNODAL PRICE DIFFERENCES HAVE INCREASED DUE TO
UNDERESTIMATED CONSTRAINTS IN ELECTRICITY GRID CAPACITY AND
INCREASED PORTION OF RENEWABLE ENERGY IN OVERALL ENERGY MIX IN
CHILE
    * IN PERIOD UP TO 2030, OVERALL INTERNODAL PRICE DIFFERENCES
ARE
INCREASED BY AVERAGE OF 33% COMPARED TO IMPAIRMENT TEST IN DEC
2022
    * DURING H1 2023, SYSTEM COSTS INCREASED DUE TO MORE
RENEWABLE
ENERGY BEING INTRODUCED INTO GRID, COUPLED WITH WEAK HYDROLOGY,
AND HIGH ALTERNATIVE FUEL COSTS
    * TOTAL ESTIMATED LEVEL OF SYSTEM COSTS HAS ON AVERAGE BEEN
DOUBLED VS ESTIMATES USED IN IMPAIRMENT TEST AS OF DEC 31 2022
    * APPLIED A CONTINGENCY ON TOP OF ESTIMATED CASH FLOWS,
WHICH
REDUCES ESTIMATED FAIR VALUE ACROSS THREE PORTFOLIOS BY
APPROXIMATELY NOK 900 MILLION


        
 Source text for Eikon:  urn:newsml:reuters.com:*:nWkr6LW7b6
 Further company coverage:  AKH.OL  

 (Gdansk Newsroom)
 ((gdansk.newsroom@thomsonreuters.com; +48 58 769 66 00;))