Financing
Pohjolan Voima Group's financial position is strong and liquidity is good.
Pohjolan Voima has a long-term equity ratio of approximately 38 % – 40 %. The Group’s equity ratio on 31 December 2023 was 45.0% (on 31 December 2022: 44.3%).
On 31 December 2023, cash and cash equivalents totalled €70 (36) million, and the Group had an unused binding credit facility agreement of €350 (350) million. The credit facility agreement will mature in June
2028 and includes a one-year extension option. The margin of the revolving credit facility is linked to the achievment of the company’s key sustinability targets of carbon neutrality in electricity and heat production.
For short-term funding, the Group had a domestic commercial paper programme of €300 (300) million, of which €132 (99) million had been used.
The Group’s interest-bearing liabilities amounted to €1,190 (1,181) million. There were no liabilities involving an exchange rate risk, and the Group’s loan agreements do not include any financial covenants.
On 18 November 2019, Pohjolan Voima Oyj issued an unsecured bond of €150 million. The bond will mature on 20 January 2025, and a fixed annual interest of 1.25 percent will be paid on it. The bond was listed on the Nasdaq Helsinki stock exchange list.
Japan Credit Rating Agency (JCR) has affirmed its previous long-term credit rating A+ for Pohjolan Voima Oyj, and outlook stable in its report, published on 29 March 2024.
Risk management
Risk management aims to ensure the realisation of the strategy and the achievement of the business goals, as well as to safeguard continuity and disturbance-free operations. Risk management is carried out in line with the Group’s risk management policy. The Group applies a decentralised risk management model: each subsidiary’s Board of Directors and the parent company’s units are responsible for the risks related to their operations, as well as the identification and analysis of these risks. Risks that may compromise the achievement of the objectives are estimated, and measures for their management are defined. The significance of the risks is estimated as the sum of their likelihood and impact.
Group-level risks and the significance of these risks are presented in a risk matrix in terms of consequences and likelihood. The Group-level risks are reported to the parent company’s Executive Group and Board of Directors in accordance with the annual management schedule.
All Pohjolan Voima companies are covered for risks of damage through measures related to maintenance, occupational health and safety, adequate training provided to the personnel and other necessary measures, as well as through insurance in line with the Group’s insurance policy.
The Group’s most significant risks involve the revenue generation capacity of TVO’s
OL3 plant unit. TVO is implementing several risk management measures to secure OL3’s profityielding
capacity