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Vattenfall wind profits increase despite group loss

SWEDEN: Swedish utility Vattenfall's wind unit has posted an increased earnings in the first half of 2015, despite the group recording a SEK 29.7 billion (€3.2 billion) loss.

Vattenfall's 288MW DanTysk project came online in the first half of 2014 (pic: Vattenfall)
Vattenfall's 288MW DanTysk project came online in the first half of 2014 (pic: Vattenfall)
EBIT for the wind segment of Vattenfall's overall figures grew to SEK 727 million (€77.6 miilion) for the first six months of 2015 – up from SEK 557 million (€59.5 million) the same period last year.

The increase was attributed to higher revenue and greater output, with the addition of the 288MW DanTysk and 36.9MW Clashindarroch project, which were brought online in the period.

Overall, Vattenfall's wind output totalled 2.7TWh in the first half of 2015, up from 2.1TWh in 2014. In the last 12 months, the report added, the utility has produced 4.7 TWh of wind power generation.

The growth in the wind unit's earnings was also helped by an increase in net sales. In the first half of 2015 net sales reached SEK 3.2 billion (€342 million) up from SEK 2.2 billion (€235 million) year-on-year.

Investment in wind also grew in the first half of the year from SEK 2.6 billion (€278 million) in 2014 to SEK 4.1 billion (€438 million) – meaning more than half of the group's SEK 7.9 billion (€844 million) investment outlay in the H1 was in to wind power.

The company strategy is for a greater focus on renewable energy. In April, a restructure created six new divisions, including one for wind exclusively. It is the first time full quarter figures have been reported for the new wind division. Underlying profit for wind was reported in Q2 at SEK 152 million (€16.2 miilion), up from SEK 131 million (€14 million) in Q2 a year before.

The positive earnings from the wind division strike a contrast to the group's overall performance. Vattenfall posted a pre-tax loss of SEK 29.7 billion (€3.2 billion), down from positive earnings of SEK 10.2 billion (€1 billion) a year earlier.

Vattenfall CEO Magnus Hall blamed the loss on low electricity demand in Europe, which has failed to recover from the 2009 financial crisis. He said the solar and wind capacity added to the system has also caused electricity prices to fall, which put pressure on traditional electricity sources' margins.

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