German writedown cuts Vattenfall's Q1 income
TT/Vivian Tse · 29 Apr 2010, 14:36
Published: 29 Apr 2010 14:36 GMT+02:00
- Vattenfall sells German power grid (12 Mar 10)
- Vattenfall wins joint bid to build world's biggest wind farm (09 Jan 10)
- Norwegian named as new Vattenfall CEO (16 Nov 09)
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.