Vattenfall sales and profits dip on lower European electricity prices
First half underlying profits are still looking good, but Swedish utility felt the pain of lower prices in the second quarter
Vattenfall's second-quarter profits dipped as the Swedish utility worked to implement streamlining measures amid a 16% fall in net sales due to falling electricity prices in key markets.
Net sales of SKr52bn ($4.9bn) in the first quarter compared with SKr61.75 in the corresponding quarter last year.
A quarterly net profit of SKr9.4bn compared favourably to losses in the same period last year but the underlying operating profit of Skr4bn was down 20%.
Vattenfall said lower fuel prices and increased availability from wind and solar power explained the price drop on the European continent and in southern Sweden.
In northern Sweden, electricity prices have also fallen due to warmer weather and lower demand, impacting the contribution from wind power, hydro power and nuclear power, but Vattenfall stated that the impacts were softened by its Nordic price hedges.
The company reported that the Skr17.93bn underlying operating profit for the first six months was still 23% higher than in 2023, and its net profit of SKr26.2bn was almost SKr20bn higher than last year.
These first half gains were helped by the sale of 49% of the German offshore wind farms Nordlicht 1 and 2 to chemicals group BASF in the quarter and the earlier sale of the UK’s Norfolk offshore wind projects to RWE.
First half availability of offshore wind dipped to 92% from 95% seen in the first half of 2023 due to bad weather conditions but also some unplanned standstills and some service work, according to Borg.
Vattenfall CEO Anna Borg said the results were described as “satisfactory for the first half year" but she pointed to ongoing "streamlining" efforts.
“While we are positive about our improved profit and key targets, the market trends show that joint efforts will be needed to safeguard profitability," she said.
"That is why we are actively working on streamlining initiatives in all parts of our operations. This includes to review common processes and how we can secure more synergies between operations. This will continue to strengthen Vattenfall's role in the energy transition by enabling more profitable investment."