Sweden's Vattenfall reports slip in Q3 profit
27/10/2016 10:15
STOCKHOLM/OSLO, Oct 27 (Reuters) - Sweden's Vattenfall
VATN.UL , the Nordic's biggest utility, reported slightly lower
third-quarter underlying operating profit on Thursday from
continued operations after selling its German lignite mines and
power plants.
It said underlying operating profit for continuing
operations fell to 2.6 billion Swedish crowns ($291 million)
from 2.7 billion, mainly due to lower production volumes and
margins.
For the first nine months of the year underlying operating
profit was up 0.5 billion crowns to 14.6 billion crowns, helped
by cost cuts, it said. urn:newsml:reuters.com:*:nASN0003FN
Vattenfall completed the sale of its German lignite
operations to the Czech energy group EPH and its financial
partner PPF Investments on Sept. 30, after gaining clearance
from the European Commission. urn:newsml:reuters.com:*:nFWN1C60K7
"The (lignite) sale was an important step in adapting the
portfolio to new market conditions and a long-term sustainable
energy system," Chief Executive Magnus Hall said.
"We are now forming the new Vattenfall - a customer-oriented
company that combines efficient, large-scale production with
decentralised solutions and renewable forms of energy."
The sale of the lignite power plants will reduce
Vattenfall's carbon emissions to 24 million tonnes per year from
84 million tonnes.
As a result of the lignite sale, the company also said it
had changed its price hedging strategy, contracting its hedges
closer to the delivery date and reducing price hedges over the
long term.
Vattenfall's investments in wind power grew by 48 percent to
3.8 billion Swedish crowns in the third quarter and accounted
for 77 percent of its investment in electricity generation.
In September, Vattenfall won a tender to build two offshore
wind power parks with a combined capacity of 350 megawatts (MW)
in Denmark, but still requires the final approval from the
government, which has questioned the costs of subsidising the
farms.
As of end-September, the company had hedged 99 percent of
its Nordic power output and 82 percent of its continental power
output for 2017 at 29 euros and 45 euros per megawatt-hour (MWh)
respectively.
For 2018, it had hedged 65 percent of its expected Nordic
power output at 28 euros/MWh and 73 percent of its continental
power at 38 euros/MWh.
Vattenfall's electricity generation during the first-nine
months stood at 127.3 terrawatt-hours (TWh), steady from the
same period a year earlier, of which 86.4 TWh came from
continued operations.
($1 = 8.9318 Swedish crowns)
(Reporting by Nerijus Adomaitis; editing by Jason Neely)
((nerijus.adomaitis@thomsonreuters.com; +47 9027 6699; Reuters
Messaging: nerijus.adomaitis.thomsonreuters@reuters.net))
Keywords: VATTENFALL RESULTS/