Full-year report: 2022 – a challenging year

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Vattenfall’s President and CEO Anna Borg comments on the full-year report for 2022:

“The weather was relatively mild throughout the fourth quarter and gas storage on the Continent remain at good level, which means that the risk of winter rationing has decreased significantly. As a result, fuel and electricity prices have declined on the Continent and average gas prices have halved compared with Q3. In the Nordic countries, the prices started out low in the beginning of the quarter but then rose, primarily in December, because of dry weather with less wind as well as impediments to nuclear power output. Higher transmission capacity between price areas SE2 and SE3 resulted in a dramatic narrowing of price area differences in Sweden.

Strong result from the business operations

Underlying operating profit increased by SEK 6.1 billion to SEK 37.3 billion. Wind power doubled its contribution, in part owing to new capacity from Kriegers Flak in Denmark. We are also seeing the positive impact of more customers choosing Vattenfall in these uncertain times. Over the course of the year, the number of customers has increased by 400,000 with growth across all markets, especially in Germany. Despite the enormous strain on our customer service caused by the turbulent market situation - which occasionally resulted in long wait times - customer satisfaction measured in Net Promoter Score (NPS) rose from +10 last year to +16 this year.

Major accounting effects on profit for the period

Reported profit for the period was brake-even for the full year and SEK -17.0 billion for the quarter. This was mainly attributable to the realisation and valuation of electricity and fuel contracts that had been entered into in previous years. These are recognised in the accounts at their current market value on an ongoing basis which causes temporary distortions in our reported results. This effect has historically been low, but as a result of the major price fluctuations we have experienced since the second half of 2021, the impact of changes in fair value totaled SEK -34.9 billion for the quarter and SEK -20.1 billion for the full year. In contrast, in 2021 we had exceptional positive one-off effects of SEK 29.1 billion, among other things from compensation for early closure of German nuclear power.

Vattenfall continues to have a strong financial position and good liquidity. The Board of Directors proposes a dividend of SEK 4 billion.

Pace of investments accelerating with energy transition

Today we present our investment plan for the next two years. It amounts to SEK 77 billion, of which SEK 50 billion are earmarked for growth investments.

In the quarter, we announced a partnership to build Finland’s first offshore wind farm. The 1.3 GW-capacity project is scheduled to enter into service in the early 2030s. We are also continuing work on decarbonising our heat business. In December, we decided to invest in a Power-to-Heat e-boiler with a capacity of 150 MW at our heating plant in Diemen, Amsterdam.

Time to break Europe’s fossil-fuel dependency

Russia's invasion of Ukraine resulted in an awakening at multiple levels regarding the consequences of Europe's dependence on fossil fuels. We welcome the fact that the energy issue is given high priority on the public agenda and that nuclear power is once against viewed as a natural part of the Swedish energy mix. All fossil-free energy sources are needed, and we are looking forward to participating in bridging the existing gap between supply and demand in fossil-free energy. We are crossing the threshold into 2023 with major uncertainties in the world around us, and we all need to focus on increasing our efforts to break Europe’s fossil fuel dependence.”