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 2022 was 44.3% (on 31 December 2021: 40.6%).
At the end of December 2022, the Group’s interest-bearing debts totalled €1,181 (1,198) million, and cash and cash equivalents totalled €36 (38) million. Furthermore, the Group had €350 (329) million of unused committed credit facility agreements and €238 (238) million of unused shareholder loan commiments.
On 29 June 2022, Pohjolan Voima Oyj signed a new €350 million revolving credit facility to refinance previous facilities totalling €329 milllion. The new facility has a maturity of five years, and it also includes two one-year extension options. For the first time, 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 €99 (100) million was used.
The Group companies’ loan agreements do not include any financing covenants.
In June 2018, Pohjolan Voima Oyj issued an unsecured bond of €125 million. The bond will mature on 8 June 2023 and a fixed annual interest of 1.75 percent will be paid on it. The bond was listed on the Nasdaq Helsinki stock exchange list.
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 revised outlook from negative to stable in its report, published on 28 March 2023.
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.
Key risks and uncertainty factors involved in Pohjolan Voima’s operation are presented in the 2022 report of the Board of Directors. The Group’s most significant risks are related to the schedule of TVO’s OL3 project, as well as the sufficient financial capacity of the consortium company Areva to fulfil its responsibilities until the end of the guarantee period and the profit-yielding capacity of the plant unit.