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 30 June 2020 was 39.4%.

At the end of June 2020, the Group’s interest-bearing debts totalled EUR 1,200 (1,225) million, and cash and cash equivalents totalled EUR 75 (63) million. Furthermore, the Group had EUR 350 (300) million of unused committed credit facility agreements and EUR 90 (90) million of unused shareholder loan commitments. Of the credit facility agreements, €21 million will mature in June 2021 and €279 million in June 2022.

For short-term funding, the Group had a domestic commercial paper programme of €300 (300) million, of which €100 (85) million was used.

Pohjolan Voima’s consolidated cash and other liquidity as of 30 June 2020

Pohjolan Voima aims to decrease the refinancing risk by diversifying the interest bearing debt portfolio both in terms of maturities and funding sources.The uncertainty in the financial market caused by the coronavirus pandemic has not significantly affected Pohjolan Voima’s financing. If the uncertainty persists for long, the situation may also negatively influence Pohjolan Voima’s business and operating environment.

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 announced a rating of A+ , outlook stable, for Pohjolan Voima Oyj in its report, published on 24 December 2019.

Key risks are connected to the OL3 EPR project

Risk management is carried out in line with the Group’s risk management
policy. The Group applies a decentralised risk management model. 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 of occurrence and impact.

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 are related to the schedule and profit-yielding capacity of the OL3 EPR project of the joint venture TVO.

As a consequence of the coronavirus pandemic, exposure to risks and uncertainty factors has increased compared to year-end. Even though the impact of the coronavirus pandemic on Pohjolan Voima’s business has so
far been minor, the situation may also negatively influence Pohjolan Voima’s business and operating environment if the pandemic continues for long.

See also