Stockholm - Swedish state-owned energy group Vattenfall on Thursday posted a drop in operating profits for the fourth quarter of 2008, and a slight decrease of its full-year electricity production.

Operating profit before tax and interest was 6.5 billion kronor (796 million dollars), down 2.8 per cent year-on-year.

Fourth-quarter turnover increased by 22 per cent to 46 billion kronor while a lower Swedish tax charge contributed to the 10 per cent net profit increase to 4 billion kronor, Vattenfall said.

For the full-year 2008, the group reported a 14 per cent increase in turnover to 164.5 billion kronor, generating an operating profit of 29.8 billion kronor, up 4.6 per cent on 2007.

Net profit for 2008 fell 14 per cent to 17.4 billion kronor, mainly due to higher corporate taxes in Germany.

The sharp fall in electricity prices during the autumn "had only limited impact on earnings," chief executive Lars G Josefsson said, citing the group's price hedging.

The average spot and forward price for electricity remained higher year-on-year.

The group's electricity production decreased 2.7 per cent in 2008 although production from hydropower increased almost 8 per cent. Nuclear power production declined some 10 per cent while fossil-based production was down over 3 per cent.

Vattenfall's Central Europe business was affected by the standstill of the Brunsbuettel and Kruemmel nuclear plants in Germany, which have been off-line since June 2007. Higher fees for carbon-dioxide emissions also affected the bottom line.

The group, which has operations in the Nordic region, Germany and Poland, had some 32,8000 employees at the end of December, slightly up from the same period in 2007. (dpa)