Vattenfall’s 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 (€24.4 million) underlying operating profit in the segment in the July-September quarter – 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) Princess Ariane (formerly Wieringermeer) (301MW) OnshoreNorth Holland, Netherlands, Europe Click to see full details wind complex in the Netherlands and having completed installing foundations at its 605MW Kriegers Flak Kriegers Flak (605MW) Offshoreoff Møn, Zealand, Denmark, Europe Click to see full details 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 “slight rebound in all markets” in the third quarter.
He added that “price hedging and a positive contribution from sales operations and trading had counterbalanced the negative effect of lower electricity prices”.
Nevertheless, Vattenfall’s net profit in Q3 was almost halved (down 46% from one year ago) to SEK 3.5 billion (€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.
Vattenfall’s 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’s current senior vice president and head of human resources Kerstin Ahlfont.
Earlier this month, the head of Vattenfall’s business unit for wind Gunnar Groebler announced he would leave the company before May 2021.