Billion Writedown of Waterfall – Private Businesses

In addition to the impairment contributes to increased provisions and low electricity prices to the negative result.

“The market prices of electricity continued to fall during the second quarter. The low electricity prices is gaining of Vattenfall’s performance when our forward contracts concluded in previous years at higher prices gradually expire, “said Vattenfall CEO Magnus Hall in the interim report.

Very low electricity prices have squeezed margins for conventional production which led to Vattenfall’s board decided on impairment charges as follows:

• weak profitability and subsequent closing of Ringhals 1 and 2 means a writedown of SEK 17 billion.

• lignite operations are also affected by low prices and increased business risk, which overall gives an impairment loss of approximately SEK 15 billion.

• together with write-downs of SEK 4 billion for Moorburg and increased provisions charged to the second quarter with a total of about 40 billion.

– This is of course, very negative but reflects unfortunately the reality we live in, Magnus Hall comment.

Vattenfall’s strategy change towards more renewable power generation continues.

“The business organization we have implemented provide good opportunities to increase the pace of transition but we must continue to work hard to reduce our costs, “writes Magnus Hall.

Personnel reduction program announced in the last quarter of progress but delayed somewhat because of the reorganization. Activities to identify further cost reductions continue across the organization.