Vattenfall鈥檚 Q3 wind profits squeezed amid pandemic

Vattenfall experienced lower electricity prices as demand fell during the pandemic

by Craig Richard 27 October 2020

Vattenfall commissioned its 301MW Princess Ariane wind complex in the third quarter of 2020

Vattenfall鈥檚 underlying profits from wind power were squeezed in the third quarter of the year due to lower electricity prices amid the coronavirus pandemic and lower availability of offshore wind.

It recorded an SEK 235 million (鈧24.4 million) underlying operating profit in the segment in the July-September quarter 鈥 down 27% from one year ago.

The utility-developer explained that reduced electricity demand in Europe had depressed prices, hitting its profits in Q3.

However, it added that it had made progress on several investment projects, having inaugurated its 301MW Princess Ariane (formerly Wieringermeer) 听wind complex in the Netherlands and having completed installing foundations at its听604MW Kriegers Flak project in Danish waters.

The wider company also experienced large price declines in electricity markets across Europe due to low fuel prices and lower demand for electricity. This was particularly noted in the Nordic region, where high rainfall and warm weather pushed down prices even further, Vattenfall stated.

However, outgoing CEO Magnus Hall said there had been a 鈥渟light rebound in all markets鈥 in the third quarter.

He added that 鈥減rice hedging and a positive contribution from sales operations and trading had counterbalanced the negative effect of lower electricity prices鈥.

Nevertheless, Vattenfall鈥檚 net profit in Q3 was almost halved (down 46% from one year ago) to SEK 3.5 billion (鈧346 million), while its Q3 operating profit fell 45% to SEK 4.7 billion.

However, Vattenfall calculated that its underlying profit actually rose 34% to SEK 4.8 billion, as the operating profit in the quarter one year ago was inflated by capital gains on the sales of its Hamburg district heating operations and production rights for German nuclear power, it explained.

Leadership changes

Vattenfall鈥檚 outgoing CEO Magnus Hall announced his plans to leave the company in July.

He will be replaced by current chief financial officer Anna Borg from 1 November.

Meanwhile, Borg will be replaced by Vattenfall鈥檚 current senior vice president and head of human resources Kerstin Ahlfont.

Earlier this month, the head of Vattenfall鈥檚 business unit for wind Gunnar Groebler announced he would leave the company before May 2021.