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Introduction & Market Context
Elmera Group ASA (OB:ELMRA) reported its first quarter 2025 results on May 13, showing the impact of abnormally high temperatures on electricity consumption across its markets. The company’s adjusted net revenue fell to NOK 502 million from NOK 550 million in the same period last year, while adjusted EBIT declined to NOK 174 million from NOK 230 million.
Despite these challenges, Elmera highlighted positive customer growth trends, particularly in its Norwegian operations, and continued progress on strategic initiatives including expansion into the Swedish B2B market. The company’s share price has declined 1.83% to NOK 34.85 following the presentation.
As shown in the following chart of market development, elspot prices remained relatively stable compared to previous periods, while supplier changes in Norway showed seasonal patterns:
Quarterly Performance Highlights
Elmera’s Q1 2025 performance was significantly impacted by abnormally high temperatures, resulting in a 9% year-over-year reduction in electricity volumes sold. This volume decrease directly affected the company’s financial results, with adjusted net revenue declining by 9% compared to Q1 2024.
The key financial metrics for the quarter illustrate these challenges:
Operating expenses (Opex adjusted) increased slightly to NOK 327 million from NOK 320 million in Q1 2024, though the company reconfirmed its guidance for stable nominal operating expenses for the full year 2025. Net financial costs decreased to NOK 49 million from NOK 54 million, benefiting from moderate elspot price levels and reduced volumes.
The company’s working capital position has improved significantly year-over-year, with net working capital decreasing to NOK 451 million from NOK 703 million in Q1 2024. This improvement was driven by lower volumes and reduced elspot prices.
Segment Analysis
Elmera Group operates across four main segments: Consumer, Business, Nordic, and New Growth Initiatives. All segments were affected by the mild weather conditions, but showed varying performance in other metrics.
The Consumer segment saw customer growth in both the Fjordkraft and Gudbrandsdal Energi brands during the quarter. However, volume sold decreased by 8% year-over-year due to higher temperatures reducing average consumption, which directly impacted EBIT.
The Business segment reached a milestone of 130,000 deliveries during the quarter, continuing its customer growth trend. Despite a 9% reduction in volume sold year-over-year, the segment benefited from increased average net revenue margin per kWh, which partially mitigated the volume impact.
The Nordic segment faced challenges with deliveries affected by a revised product strategy and seasonal demand for spot products. The company has phased out external sales partners following expansion of in-house sales capacity, which should reduce commission expenses going forward. Volume decreased by 13% year-over-year, primarily due to higher temperatures.
New Growth Initiatives showed a positive trend reversal in Mobile subscribers, with growth of approximately 2,000 subscribers in the quarter. However, volume sold through Alliance decreased by 3% year-over-year, and net revenue was affected by reduced credit compensation due to lower prices.
Strategic Initiatives
Elmera Group outlined several strategic initiatives aimed at driving future growth and operational improvements. Key among these is the planned launch of Fjordkraft Företag in the Swedish B2B market in May 2025, with the first distribution partner already secured. This expansion provides significant opportunities within the B2B retail sector in Sweden.
The company also announced the insourcing of its Power Trading function from May 2025, which will enable intraday trading and improved accuracy on consumption forecasting. This move aims to mitigate increased system and balancing costs in the Nordic power market.
Additionally, Elmera noted that the proposed "Norgespris" addition to the Norwegian power support scheme is expected to increase electricity consumption by reducing consumers’ sensitivity to price fluctuations.
Financial Outlook
Elmera Group has extended its financial guidance to include 2026, while acknowledging that its 2025 targets for net revenue growth and adjusted EBIT are likely to be below expectations due to the high temperatures and correspondingly low volumes in Q1 2025.
The company’s financial targets include net revenue growth in all segments, stable nominal adjusted operating expenses in line with 2023 levels, and adjusted EBIT in the range of NOK 550-600 million for both 2025 and 2026. Elmera also targets a dividend payout ratio of at least 80% of net income, adjusted for certain cash and non-cash items.
Despite the challenging start to 2025, Elmera Group remains focused on its strategic initiatives and customer growth. The company’s improved net cash position and working capital management provide a solid foundation for its expansion plans, particularly in the Swedish B2B market. However, the impact of mild weather on electricity consumption volumes presents an ongoing challenge that may continue to affect financial performance in the near term.
Full presentation:
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