Despite a year characterised by falling electricity prices, Vattenfall reports a higher operating profit for the first nine months of the year, mainly due to higher achieved prices in the Nordics and increased generation. The profit for the period was also strengthened by both capital gains and by changes in market value for energy derivatives. Among the quarter’s more important strategic events are the inauguration of the offshore wind farms Vesterhav Nord and Syd in Denmark, the decision to pause the Swedish Kriegers Flak offshore wind farm project, and new partnerships with industrial companies in Sweden and Germany.
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Vattenfall’s President and CEO Anna Borg comments on the interim report for January–September 2024:
Electricity prices on Vattenfall's markets fell by an average of 30% compared to the corresponding period last year. On the continent, the price decline was driven by lower gas and coal prices along with increased generation from wind and solar power. This development also put a downward pressure on the electricity prices in southern Sweden, which are closely interlinked with the continental price development. In the Nordic region, prices were further affected by higher water inflows and increased wind power generation.
Higher achieved prices in the Nordics boost the development of the underlying profit
The underlying operating profit for the first nine months increased by SEK 3.7 billion to SEK 19.3 billion. This improvement was primarily driven by higher achieved prices in the Nordics and increased hydro, nuclear and wind power generation.
Profit for the period rose to SEK 28.3 billion from SEK 4.7 billion. The increase is partly due to the improved underlying operating profit, but it is mainly affected by positive changes in market value for energy derivatives and positive one-off effects related to the sale of offshore wind power projects earlier this year. The comparison is also impacted by the result in 2023 that was affected by impairments and provisions in the second quarter, these where largely reversed during the fourth quarter of 2023.
New steps towards fossil freedom
During the quarter Vattenfall continued to drive the development to enable fossil freedom. For example, we inaugurated the offshore wind farms Vesterhav Nord and Syd, which together have an installed capacity of 344 MW. This is equal to the annual electricity consumption of 350,000 Danish households. We also welcome the government's proposal on risk-sharing for new nuclear power, and we look forward to a model that allows us and others to invest in new nuclear power in a commercially viable way.
We continue to collaborate with the industry in order to contribute to lower carbon dioxide emissions. During the quarter, we entered into a 15-year power purchase agreement with the German steel producer Salzgitter. Vattenfall will deliver fossil-free electricity from the Nordlicht I wind farm, thereby assisting Salzgitter's transition to a production process with lower carbon dioxide emissions. In August, we signed an agreement with the newly established Industrikraft consortium to identify and evaluate the conditions for joint investments in new fossil-free power generation in Sweden.
In order to continue to work for a fossil-free future, it is crucial for Vattenfall to remain a stable and competitive player that only invests in profitable projects. We therefore decided in September 2024 to pause the development of the Swedish Kriegers Flak offshore wind power project. By carefully selecting our investments and driving further efficiencies in our operations, we can capitalise on the opportunities presented by the energy transition and continue to strengthen our business.
Business highlights, July–September 2024
- Inauguration of the Vesterhav Nord and Syd offshore wind farms in Denmark and the Windplanblauw onshore wind farm in the Netherlands
- Decision to pause the development of the Swedish Kriegers Flak offshore wind power project
- New power purchase agreement for wind power has been signed with the steel producer Salzgitter in Germany
- Partnership with Industrikraft initiated to evaluate opportunities for co-investment in new fossil-free power generation in Sweden
- Final decision from the Energy Market Inspectorate on revenue frames for the regulatory period 2020-2023
Financial highlights, January–September 2024
- Net sales decreased by 18% (-18% excluding currency effects) to SEK 177,082 million (216,876)
- Underlying operating profit of SEK 19,297 million (15,550)
- Operating profit of SEK 33,828 million (10,930)
- Profit for the period of SEK 28,296 million (4,737)
Financial highlights, July–September 2024
- Net sales decreased by 17% (-15% excluding currency effects) to SEK 48,573 million (58,337)
- Underlying operating profit of SEK 1,372 million (946)
- Operating profit of SEK 1,213 million (-2,611)
- Profit for the period of SEK 2,053 million (-2,186)
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