Vattenfall, the Swedish energy company, has disclosed a decrease in underlying operating profit for the fourth quarter, largely attributed to negative contributions from its power generation and customer solutions business.
The company reported Skr4.45 billion (€390 million) in underlying earnings before interest and tax (EBIT) for the fourth quarter of 2023, compared with Skr12.5 billion in the corresponding period of 2022.
The decline in profits was influenced by a substantial decrease in electricity prices, averaging 60% lower in Vattenfall's markets throughout 2023 compared to the previous year. Factors contributing to this included increased precipitation and warmer weather affecting prices in the Nordics, while prices in continental Europe experienced sharp declines due to lower gas and coal prices.
In a strategic move, Vattenfall finalized an agreement for the sale of its wind power projects off the coast of Norfolk in the UK. CEO Anna Borg highlighted that this divestment enhances the company's capacity to invest in fossil-free projects aligning with its overall portfolio and risk appetite, while ensuring the sustainability of the projects involved. The sale, valued at £1 billion, resulted in the reversal of previous impairments and provisions.
Borg further outlined Vattenfall's investment plan for the next two years, totaling Skr65 billion (net), with Skr41 billion dedicated to growth investments. Notable allocations include significant investments in fossil-free electricity generation, the electricity grid, and electric vehicle charging infrastructure.