Vattenfall Group A stable result, continued customer growth and a continued focus on operational excellence all point in the right direction, first half year result shows.

Vattenfall has done well so far this year and there are indications that the positive trend will continue.

The half year result shows an underlying operating profit of approximately SEK 13.2 billion , compared to SEK 12.0 billion for the same period last year. At the same time the number of customers grew by more than 100,000, and several steps were taken in line with Vattenfall’s purpose: to  power climate smarter living and become fossil-free within a generation. For example more than 280 MW wind power were added in the second quarter and new exciting collaborations to help industry become fossil independent were started. In addition Vattenfall has entered into a partnership with Accenture and Capgemini to improve the performance and modernize parts of the company’s services. The outsourcing will also contribute to cost reductions.

No time to relax
However, this doesn’t necessarily mean that problems are now gone,  Vattenfall’s CEO and President Magnus Hall says:

“I certainly think that things now look much better, but there is no time to relax. Instead we need to put more effort into things: our result and finances are more stable now and it is a good platform for us to go forward.”

Important changes
During the past year, Vattenfall has experienced important changes, the most important being the sale of the lignite business as well as the German decision on a nuclear waste fund and the Swedish energy agreement. Now these changes can also be seen in the numbers.

“Our finances are now more stable. This development has also been acknowledged by the rating agencies who have therefore changed their outlook from negative to stable in their recent rating reviews,” says Stefan Dohler, Vattenfall’s CFO. “In order to maintain that stability we also need to be selective in our investments besides the continued focus on our running cost.”

“Of course we still have a sizeable exposure to the electricity price, and as we have seen before it can always go further down. In that sense we are not in a real  financial ‘comfort zone’, but our future is now in our own hands to a large extent,” he says.

New market areas
Businesswise, the past six months have meant some exciting developments. For example, Vattenfall has entered the retail market in the UK and also several important industry partnerships aiming to replace fossil fuel with electricity, such as with Cementa, a large Swedish cement manufacturer.

 “It’s an interesting development where we see that electrification can be a solution to a lot of climate issues, and where Vattenfall is heavily involved in heat, in transportation and in helping industry to become climate friendly. We are entering an era where we will see new growth opportunities and a development where we will have to be much more active, both on the growth side but also on the cost and efficiency side,” Magnus Hall says.

If Vattenfall continues to perform as it has the first half of the year, there is a chance that the company could deliver a positive result for the full year, for the first time in a number of years.

“This is important in order for us to pay dividend to the owner, something we haven’t done for several years. But then we need to keep the costs down at the same time as we look at new opportunities,” Magnus Hall says.

Read the interim report

Webcast from the press conference

Business highlights, January–June 2017

  • Continued customer growth by more than 110,000 contracts
  • Strengthened presence in UK through the acquisition of iSupplyEnergy
  • Growth in renewables: Pen y Cymoedd (228 MW) and Ray (54 MW) wind farms fully operational and investment decision for Slufterdam (29 MW)
  • Further steps towards being fossil-free within one generation: Partnerships in Sweden for fossil-free industry processes, phase out of lignite in Berlin and investment decisions towards climate smarter heat-production
  • Positive developments in German nuclear operations
  • Continued focus on operational excellence and cost reductions by entering into new outsourcing service partnerships

Financial development, January–June 2017

  • Net sales decreased by 3% to SEK 69,413 million (71,666)
  • Underlying operating profit increased to SEK 13,197 million (12,001)
  • Profit for the period of SEK 5,901 million (1,002)

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