Vattenfall was in the red for the third year in a row. 2015 ended with a loss of SEK 19.8 billion.
The main challenge in 2015 was still the impact the very low electricity prices that we're currently experiencing are having on Vattenfall's profitability and the value of our assets. Unfortunately, combined with new regulatory requirements, this led to further writedowns, mainly on the values of Swedish nuclear power and German lignite in the summer," says CEO Magnus Hall.
If you look at the underlying business and ignore writedowns and provisions, Vattenfall's business is still profitable. The underlying operating profit for the year as a whole was SEK 20.5 billion.
"In terms of our operations, 2015 was a fairly good year, particularly given the challenging energy prices we saw in Scandinavia. In this context, we should still be proud and pleased that we managed to adapt successfully on the operations side, reducing our costs, identifying new business models, and, as a result, making significant progress in the day-to-day transformation of the business. But clearly this is overshadowed by the fact that we can't guarantee the electricity price in Scandinavia and that we've had major writedowns," explains CFO Ingrid Bonde.
The negative result means that, in line with the proposal by Vattenfall's Board of Directors, the owner, the Swedish government, will not receive a dividend from Vattenfall for 2015.
"If our results are positive, we automatically give our owner a dividend. We want to pay a dividend but, to do so, we have to be profitable and at the moment we just aren't," says Magnus Hall.
Ultimately, it's the owner that decides whether a dividend will be paid or not.
Vattenfall's CO2 emissions increased in 2015. Preliminary figures indicate that CO2 emissions amounted to 83.5 million tonnes, compared with 82.3 million in 2014.
The reason for this is that the German coal-fired power plant in Moorburg, Hamburg, came into operation during the course of the year.
The process of selling the German lignite operations, which is expected to reduce Vattenfall's CO2 emissions by around 60 million tonnes, is still ongoing.
"As we said before, we expect to be able to present a proposal to the owner during the first half of 2016," says Magnus Hall.
New business opportunities
Work on reviewing investments and cutting costs, which have decreased by almost 30 per cent compared with 2010, continued in 2015. At the same time, the transition to more sustainable generation and more electricity and heat customers continued.
"The ongoing transformation of the energy system is radical but it's also very exciting and brings with it brand new business opportunities for Vattenfall. I'm confident that our strategy, together with the adjustments we're making, will prepare us well for securing our position as a reliable partner for our customers and society," says Magnus Hall.
Footnote: Financial statement’s rate of exchange is 9.1895.
SEK 20 billion = EUR 2.17 billion (exact figure: 2,176,396,974)
SEK 19.8 billion = EUR 2.15 billion (exact figure: 2,154,633,005)
SEK 20.5 billion = EUR 2.23 billion (exact figure 2,230,806,899)
Watch the video
Magnus Hall and Ingrid Bonde discuss the results, summarize the full year, and talk about their expectations for 2016