(Recasts on underlying profit, adds CEO, detail)
OSLO, Oct 27 (Reuters) - Vattenfall on Tuesday posted a 34% rise in third-quarter underlying profit, buoyed by sales and trading despite the Swedish utility generating less electricity and lower power prices.
The utility posted an underlying profit of 4.8 billion Swedish crowns ($549 million) in the quarter, up from 3.6 billion crowns a year ago.
Vattenfall benefited from good results at its trading activities as well as positive developments in its sales business, including higher business-to-business sales in France.
“Our price hedges are moderating the negative effect of falling electricity prices,” the company said in a statement.
Selling some of its output on the financial forward market, Vattenfall had achieved an average price of 38 euros per megawatt hour for its Nordic power portfolio in the third quarter, compared to a Nordic system price of just 8.88 euros per megawatt hour.
Nordic power prices were 74% lower compared to a year ago, due to a high level of precipitation in the region and warm weather that lowered demand.
Hydropower is the dominant electricity generation source in the Nordics. Higher precipitation means water reservoirs at dams are fuller, pushing power prices down.
Outgoing CEO Magnus Hall, who will step down in November, said he was not worried about the impact of this autumn’s resurgence in COVID-19 cases and lockdown measures.
“The electricity consumption has already gone down compared to last year. So to expect that to continue to go down more, just for the fourth quarter, I’m not so sure,” he told Reuters.
He added the fourth and first quarter were traditionally strong business periods for the firm.
$1 = 8.7369 Swedish crowns Reporting by Nora Buli, editing by Gwladys Fouche and David Evans
Our Standards: The Thomson Reuters Trust Principles.