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German writedown cuts Vattenfall's Q1 income

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14:36 CEST+02:00
Vattenfall's interim Q1 net income fell by more than half after the company revealed a writedown from the sale of its high-voltage grids in Germany was significantly higher than expected. At the same time, the energy giant earned large profits from this winter's high electricity prices across the Nordic region.

On March 12th, Vattenfall announced it would sell its high-voltage grids in Germany to Belgium's Elia System Operator and Australia's Industry Funds Management for nearly 8 billion kronor ($1.1 billion). "We are very pleased," said then-Vattenfall CEO Lars G. Josefsson.

However, the company issued an interim Q1 report showing a 5.3 billion kronor ($728.12 million) writedown on the transaction. As a result, return on equity fell to 6.6 percent, far below the government's performance level requirement of 15 percent over a business cycle of five to seven years.

"This is not acceptable to us in the long run and we will put a lot of effort into reversing this trend," said Norwegian Øystein Løseth, the company's new CEO, when he presented the report.

Moderate Party energy policy spokesperson Anna Kinberg Batra urged Vattenfall, which earned large sums from high electricity prices during the winter, to contribute to the renewal of nuclear reactors.

"The next time it gets cold, and that will happen again, nuclear energy has to work," she wrote in an open letter to Løseth.

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