Svenska Vattenfall sees increased profits at high prices, strong trading results
OSLO, October 28 (Reuters) – Vattenfall (VATN.UL) reported on Thursday a twenty-fold increase in its net profit, driven by one-time payments and unrealized gains from trading in derivatives, it is said.
Net profit for the first three quarters of this year rose to SEK 41.9 billion ($ 4.88 billion) from SEK 2 billion a year ago.
“The sale of Stromnetz Berlin had a positive effect on the quarter’s profit of SEK 8.4 billion before tax, and in addition the value of our energy derivatives grew by SEK 10.5 billion due to the sharp rise in the market.” This is what Vattenfall says in its report.
The underlying profit before interest and tax (EBIT) for January-September rose by 24% to SEK 22.1 billion (USD 2.57 billion) from SEK 17.8 billion a year earlier, driven by higher prices and a strong contribution from its trading division, said Vattenfall.
“Higher electricity and gas prices resulted in temporarily high cash inflows due to increased marginal calls,” the company said in a presentation.
The benchmark price for Nordic system power has risen on an annual basis after a cold, dry winter and strong fuel and coal markets, averaging EUR 68.27 per megawatt hour for the first nine months of 2021, compared with EUR 9.98 / MWh for the same period in 2020.
Vattenfall hedges against price volatility by selling part of its future production on the futures markets.
At the end of September, Nordic electricity prices of EUR 30 per megawatt hour (MWh) had been achieved for this year, based on spot market sales and hedges, unchanged from the end of June.
For 2022 production, it has secured 78% of its planned production, up from 73% at the end of June, with the price rising by 1 euro to 29 euros / MWh. For 2023, it has hedged 41% to an average of 28 euros / MWh, up from 33% and 27 euros / MWh at the end of the first quarter.
In the wholesale market, Nordic power was traded for 2022 at the latest at 37.95 euros / MWh.
($ 1 = 8.5881 Swedish kronor)
Reporting by Nora Buli, editing by Gwladys Fouche
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