Energy group Vattenfall first-quarter operating profits increase

VattenfallStockholm - Swedish state-owned energy group Vattenfall on Wednesday reported a strong first-quarter 2009 with a rise in sales and operating profits. Operating profit before tax and interest was 12.8 billion kronor (1.55 billion dollars), up 12.6 per cent year-on-year.

First-quarter turnover increased by 15 per cent to 52 billion kronor, Vattenfall said, while net profit was up 12.6 per cent to 8 billion kronor.

"It is a strong result, a great result," chief executive Lars G Josefsson told analysts later.

Price hedging had helped protect Vattenfall earnings although demand for electricity had reduced in several markets, including the Nordic region, and there was a drop in electricity prices, he said.

Looking forward "the recession is a threat to our development," he said, adding that Vattenfall was preparing for "rougher seas."

Josefsson said the offer to buy Dutch group Nuon under review by regulators and being considered by shareholders would give the combined group a "strong position" in the European energy market. He expected Nuon shareholders to approve the deal.

Vattenfall's electricity production decreased 2.6 per cent in the quarter, with lower production from hydropower, wind power and nuclear power sources while fossil-based production increased.

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.

"When it comes to Kruemmel, our plan is to be back in operation at the end of the year," Josefsson said, while he could not say when Kruemmel would be back on line.

Costs for the standstill were estimated at 135 million euros.

The group, which has operations in the Nordic region, Germany and Poland, had some 33,100 employees at the end of March slightly up from the same period in 2008.(dpa)

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