High electricity prices, new capacity push up Vattenfall's H1 profit

Image by Vattenfall AB (group.vattenfall.com)

July 21 (Renewables Now) - Swedish utility Vattenfall AB on Tuesday reported improved earnings and sales in the first half of 2021 thanks to increased production and sales of heat and electricity from nuclear, hydropower and renewable power plants.

The state-owned company posted a 33.3% year-on-year improvement in underlying operating profit (EBIT) for January-June 2020, to SEK 17.3 billion (USD 1.99bn/EUR 1.69bn), thanks to the higher contribution of all operating activities. The overall result was supported by the high availability of nuclear power and favourable hydropower reservoir levels, coupled with rising electricity prices in the Nordic countries and new capacity additions in the renewables field. A positive development for both the sales and heat businesses and broader realised profit from trading were also among the progress drivers, Vattenfall noted.

After a negative result a year back, a first-half net profit of SEK 23.6 billion was registered. The result was helped by a SEK-11.1-billion compensation for nuclear power phase-out in Germany in the second quarter but a negative impact occurred due to higher net financial items in Sweden and increased tax costs. More details about the company’s first-half financial performance are available in the table.

Amounts in SEK billions H1 2021 H1 2020 Q2 2021 Q2 2020
Net sales 80.47 79.44 34.55 31.28
Underlying operating profit 17.31 12.98 5.26 2.79
Operating profit (EBIT) 29.6 5.29 16.21 (7.03)
EBITDA 38.27 25.15 20.53 8.25
Profit (loss) for the period 23.64 (1.59) 13.21 (8.5)
Electricity generation (TWh) 58.8 57.1 26 24.1
-- of which wind power 5.2 5.6 2.2 2.1
ROCE (%) 14.5 6.1 14.5 6.1
FFO/adjusted net debt (%) 38.1 25.5 38.1 25.5

WIND BUSINESS

Vattenfall’s wind business area, despite its name, is responsible for the development, construction and operation of wind farms, large-scale and decentralised solar power and batteries. The segment boosted both its underlying EBIT thanks to higher prices for renewable energy certificates in the UK and better electricity prices. In spite of the lower wind speeds, power generation climbed by 5% as fresh capacity was brought online.

Among the newly-commissioned plants are the Princess Ariane onshore wind farm in the Netherlands and the Kriegers Flak offshore wind farm in Danish waters.

In June, Vattenfall agreed to sell a 49.5% stake in the 1.5-GW Hollandse Kust Zuid (HKZ) offshore wind farm project in Dutch waters to German chemicals producer BASF SE.

(SEK 1.0 = USD 0.115/EUR 0.098)

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