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UPDATE 1-Vattenfall slides to Q4 loss as German nuclear costs weigh
February 7, 2017 / 12:56 PM / 10 months ago

UPDATE 1-Vattenfall slides to Q4 loss as German nuclear costs weigh

* Fourth-quarter operating loss 2.8 bln crowns

* 5.6 bln provision for Germany nuclear waste storage costs

* Proposes no dividend for 2016 for fourth year in a row (Adds detail, background)

STOCKHOLM, Feb 7 (Reuters) - Swedish utility Vattenfall slumped to an operating loss of 2.8 billion crowns ($315 million) in the fourth quarter after booking provisions for nuclear waste storage in Germany and other one-off charges.

Vattenfall had already taken a $3.5 billion charge in the second quarter, mainly for German lignite mines and power plants sold in September, and it ended 2016 with a record annual loss of 21.2 billion crowns.

The company, which has struggled for years due to low energy prices and financially disastrous overseas expansion, said it would not pay an annual dividend to its owner, the Swedish government, for a fourth straight year.

“We entered 2016 with a number of fundamental issues that needed to be resolved in order to support the transition of the energy system and to shape a Vattenfall that is ready to take on the future,” Chief Executive Magnus Hall said in a statement.

“Looking back, we can conclude that significant progress has been made with a positive outcome for the company and our customers and, not least, reduced risk.”

Vattenfall said higher provisions for future nuclear waste storage due to new legislation in Germany, which is phasing out nuclear power, accounted for 5.6 billion crowns of the 9.9 billion of net charges in the fourth quarter.

Other provisions related to Swedish nuclear power and charges for gas-fired plants in the Netherlands and meant the company swung to a fourth-quarter loss after an operating profit of 3.6 billion in the same period a year earlier.

While it is continuing to unwind its central European empire, the firm also announced plans to invest 325 million euros in a new gas-fired combined heat and power plant in Germany due to start operating in 2020.

Vattenfall said its investments over the next two years would total 50 billion crowns, with wind power accounting for 17 billion. Hall told a news conference the utility was participating in wind tenders across Europe.

The company’s power generation shrank in the fourth quarter to 32.5 terawatt hours, from 45.5 terawatt hours a year earlier.

“Despite a number of positive developments, the electricity business situation remains tough with low prices and continued overcapacity,” said Hall.

Underlying profit from continuing operations rose to 7.1 billion crowns in the fourth quarter from 6.4 billion a year earlier, the company said.

$1 = 8.8855 Swedish crowns Reporting by Anna Ringstrom; editing by David Clarke

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