Norwegian named as new Vattenfall CEO

Sweden’s Vattenfall has picked a successor to take over from current CEO Lars G. Josefsson, who has been under fire following a string of controversies at the state-owned energy giant.

Norwegian named as new Vattenfall CEO

Josefsson is set to be replaced before next summer by Norwegian Øystein Løseth, who currently heads the Dutch company Nuon Energy, half of which is owned by Vattenfall.

Løseth is 51-years-old and has been at Nuon since 2003. He has also served on the management team of Norwegian energy company Statkraft.

He has also worked for Naturkraft, Alliance Gas and Statoil, according to a statement.

Løseth was appointed as first senior executive vice president in Vattenfall AB and deputy CEO for the Group by Vattenfall’s board during an extra board meeting on Sunday.

The company said he will work in parallel with Josefsson for a “period of time” before taking over as CEO sometime before the summer of 2010.

“This will be a good transfer process, one which takes into account the complexity of Vattenfall’s operations and the assets Vattenfall owns and manages,” said Vattenfall board chair Lars Westerberg in a statement.

Øystein called Vattenfall “Europe’s most exciting energy company” and said that he is “honoured” to take over the company.

“I see this as a fantastic opportunity to further build on our strengths – but also to take on the challenges that Vattenfall faces,” Løseth said in a statement.

Josefsson is due to retire when he turns 60 in 2010, but has come under increasingly heavy fire in the Swedish media in recent few weeks.

The controversy around his management of the state-owned power giant was such that Swedish Enterprise Minister Maud Olofsson said on Friday that she hoped for the early appointment of a new chief.

“I hope there will be an announcement about a new CEO as soon as possible,” she said.

A Vattenfall spokesman told AFP last week that the company would name Josefsson’s replacement “in due time,” and insisted the appointment had nothing to do with the controversy around Josefsson.

“There is no connection between what is happening now and the process to find a new CEO because it has been going on for a long time,” spokesman Mark Vadasz said.

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Swedish energy firm racks up giant losses

UPDATED: Swedish energy giant Vattenfall recorded losses amounting to nearly 29 billion kronor ($3.4 billion) on Tuesday as the company continued its battle against increasingly tough market conditions.

Swedish energy firm racks up giant losses
Vattenfall chief executive Magnus Hall on Tuesday. Photo: Fredrik Persson/TT

Hit by asset write-down charges worth 36 billion kronor, Sweden's Vattenfall reported a net loss of 28.812 billion kronor in the second quarter of the year, a huge drop from 2.3 billion kronor in the same period in 2014.

The state-owned energy firm, a major provider of electricity in northern Europe, has been struggling to improve profits for several years, suffering from weak demand and plunging electricity prices.

It attributed 17 billion kronor of the total asset write-downs to the same fall in profits which led to a shock announcement earlier this year that it planned to close Ringhals 1 and 2 in south-western Sweden.

It said at the time that the two reactors were too costly to keep in production until 2025 as previously planned.

“This is of course very negative but unfortunately reflects the reality we're living in,” said its chief executive Magnus Hall in a statement on Tuesday morning.

It also wrote down an additional 15 billion kronor on its lignite, or brown coal, assets in Germany.

Earlier this year Vattenfall announced that 1,000 workers were being let go as part of a series of bids to curb losses, including speeding up the sale of the German plants.

It reported a total turnover of 36.1 billion kronor in the second quarter of 2015 on Tuesday, down from 36.6 billion in the same period last year.

Hall said that the work to tighten the belt was continuing “to identify further reductions in costs”.

Since the Vattenfall Group bought energy giant Nuon in 2009, a deal which has been hotly debated in Sweden, the firm's assets have been written down by over 52 billion kronor. 

Many energy providers in Europe have made huge asset write-downs in the last two years because of weak demand for electricity against a background of sluggish economic activity.

They have also been caught out by the US shale energy boom, which has pushed down the price of coal for power generation, undermining the profitability of new gas-powered plants and some investment programmes.

Vattenfall employs more than 30,000 and has operations in Sweden, Finland, Denmark, Germany, the Netherlands and Britain.