Full-year report: Strategic divestments strengthen Vattenfall's preparedness for the future

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Vattenfall’s President and CEO Anna Borg comments on the full-year report for 2023:

“The electricity price was on average 60 per cent lower in Vattenfall's markets during 2023. Prices in the Nordics have been influenced by more precipitation and warmer weather. In continental Europe, prices have fallen sharply as a result of lower gas and coal prices. Europe's gas stocks have been well-filled and, in addition, the availability of French nuclear power has improved compared to 2022.

Improved profit for the period, but lower electricity prices and volumes contributed to reduced underlying operating profit

The profit for the period for the full year 2023 increased to SEK 10.4 billion (0.0). Last year's result was strongly negatively affected by temporary effects from realisation and valuation of electricity and fuel contracts. Vattenfall continues to have a strong financial position and the key ratio FFO/adjusted net debt amounted to 21.5%. Adjusted for margin calls, the key ratio was 25.6%. The Board of Directors proposes a dividend of SEK 4 billion for 2023.

The underlying operating profit decreased by SEK 15.1 billion to SEK 20.0 billion. We see an improved result from both the heat and the customer operations, where it is gratifying to see that more and more customers are choosing Vattenfall and our fossil-free electricity contracts. However, the result was negatively affected by lower electricity prices, lower volumes from hydro power and lower availability for nuclear power.

Vattenfall partly hedges the electricity generation and here we have seen a positive contribution from our Nordic price hedges, which contributed to a higher achieved electricity price in the Nordics. However, this was offset by a negative contribution from price hedges on the Continent, as these have not been as effective as in the Nordics.

Divestments ensure continued progress in the energy transition

After a strategic review, Vattenfall has decided to sell the heat operations in Berlin to the state of Berlin. We have thereby ensured that the heat business will continue to be run responsibly with a focus on reduced carbon dioxide emissions. The purchase price amounts to EUR 1.6 billion. Vattenfall will continue to be an important player in the German energy transition. In addition to a sales business with more than 5 million private customers and sales to large business customers we also have electricity generation and trading operations in the country. We also have important projects such as the wind farms Nordlicht 1 and 2 where we have signed a letter of intent for cooperation with BASF.

Vattenfall has also entered into an agreement for the sale of our wind power projects off the coast of Norfolk in the UK. The divestment increases Vattenfall's opportunities to invest in fossil-free projects that better suit our overall portfolio and risk appetite, while securing the future of the projects. The purchase price amounts to GBP 1.0 billion and, as a result of the sale, previous impairments and provisions are reversed.

Continued high rate of investment

The energy transition brings great investment opportunities and Vattenfall's investment plan for the next two years amounts to a total of SEK 65 billion (net), of which SEK 41 billion is dedicated to growth investments. Significant investments are planned in fossil-free electricity generation, the electricity grid and charging infrastructure for electric vehicles. Major projects include the completion of the Vesterhav offshore wind farm in Denmark and the construction of the onshore Bruzaholm wind farm in Sweden.

It is gratifying that at the end of the year the government launched a roadmap for new nuclear power in Sweden and has now appointed a national coordinator. Clarifying the conditions for new nuclear power from a political perspective is crucial so that Vattenfall and other actors can continue the work to ensure that this energy source contributes further to Sweden's future energy supply.

In 2024, we will continue on the path towards fossil freedom for our customers, in our operations and for our suppliers and partners. We will do this by focusing on financial stability and prioritising profitable business opportunities.”