State-owned Swedish energy company Vattenfall A.B. has reported lower earnings for the third quarter of 2009, confirming the impact of the global financial crisis on the energy sector.
According to the company’s interim report for the third quarter of 2009, operating profit decreased by 37 percent to 3.524 billion Swedish kronor ($498 million), and by 4.6 percent to 22.265 billion Swedish kronor in the nine months to September.
The lower operating profit may be a result of lower electricity generation volumes, higher operating and maintenance cost, as well as elevated level of depreciation.
Meanwhile, net sales rose by 22.5 percent during the third quarter to 45.346 billion, and by19 percent for the nine-month period, to 140 billion Swedish kronor.
Profit after tax decreased by 74.9 percent to 622 million Swedish kroner for the third quarter, and by 17.3 percent to 11.338 billion Swedish kroner from January to September.
“Nine months into 2009 we can confirm that the effects of the current recession have been clear also for the energy sector,” said Lars G. Josefsson, Vattenfall’s chief executive.
Mr. Josefsson is not optimistic of a swift recovery to pre-crisis levels, adding, “Due to the high share of electricity-intensive industry in the Nordic countries, the recovery will most likely take place faster in the Central European market.”
As earnings fell below expectations, Vattenfall plans to intensify measures focused on value creation that entail diverging low-yielding assets outside the core businesses, sharpening demands on efficiency improvement, and cutting cost across the organization.
“We are also looking over and scaling back our investment program as an adjustment to the current situation,” Mr. Josefsson added.
In the third quarter, Vattenfall acquired Netherland energy company N.V. Nuon Energy, shut down the Krummel nuclear power plants and sold its stake in German electricity trading and grid company Wemag.
Vattenfall supplies energy to 4.8 million customers in the Nordic countries and Northern Europe via fossil fuels, nuclear power, hydropower, wind power, biofuel and waste. It is Europe’s fifth largest generator of electricity and the largest generator of heat.
Vattenfall has been attempting to utilize more carbon dioxide neutral sources in their electricity generation. As of the third quarter of 2009, 55 percent of their electricity generation was still based on fossil fuels, 23 percent came from nuclear power, 21 percent sourced from hydropower and 1 percent generated from wind, biomass and waste.
Vattenfall bears out crisis' impact on energy
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