Vattenfall Sees Q1 Earnings Double on Higher Power Output and Rising Prices
Vattenfall's First Quarter Performance and Market Context
By Nora Buli
Financial Results Overview
OSLO, April 29 (Reuters) - Earnings at Swedish state-owned power utility Vattenfall doubled in the first quarter from a year earlier, helped by higher power production and sharply higher Nordic power prices, the company said on Wednesday.
Vattenfall reported an underlying profit before interest and tax of 17.2 billion Swedish crowns ($1.85 billion) for January to March, up from 8.5 billion crowns a year earlier.
Nordic Power Prices Surge
Prices for Nordic power generation rose as average day-ahead prices in the region surged to 90 euros per megawatt hour (MWh), from 45.5 euros/MWh a year ago, the company said.
Factors Influencing Price Increases
Cold weather, low wind output and low reservoir levels lifted prices, while Vattenfall's total electricity generation rose by 2.8 terawatt hours (TWh) year-on-year to 29.9 TWh.
CEO Insights and Geopolitical Impact
"It is a strong result. However, we also see that the geopolitical turmoil is clearly not good for the sort of long-term investment prerequisites in the market. The uncertainty and volatility are problematic," CEO Anna Borg said in an interview.
Global Events Affecting Energy Markets
The Iran war and the closure of the Strait of Hormuz have hit oil and liquefied natural gas exports from the Gulf, which accounts for around a fifth of global supplies, pushing prices higher.
Strategic Response and Future Outlook
Focus on Self-Sufficiency and Investment
The latest energy market shock underlines the need for Europe to become more self-sufficient and expand domestic energy production, Borg said.
Vattenfall's Generation Portfolio and Investments
Vattenfall already operates a largely fossil fuel-free generation portfolio, including nuclear plants, hydropower and wind farms in Sweden and elsewhere in Europe, limiting its exposure to the crisis, the CEO added.
This has allowed the company to press ahead with its 165-billion-crown five-year investment programme, half of which will focus on new power generation and grids.
($1 = 9.2648 Swedish crowns)
(Reporting by Nora Buli. Editing by Terje Solsvik and Mark Potter)
