Vattenfall recorded a rise in profits for 2012, but warned that persistently tough economic conditions were expected for this year.

“Demand is still low as a result of the economic recession. At the same time, new capacity is being added, especially in renewable energy production, which has led to low electricity prices,” CEO Oystein Loseth said.
Oystein Loseth of Vattenfall
Vattenfall has responded to the ongoing recessionary malaise by continuing to cut back on costs and improve production efficiency at its plants in Scandinavia and northern Europe.

Platts reported that in 2012 the Swedish utility’s electricity generation increased by 7.3 per cent to 178.9 TWh compared with 166.7 TWh in 2011, boosted by increased availability at its Swedish nuclear power plants. Fourth-quarter production rose to 49.9 TWh, up from 43.7 TWh a year earlier.

Vattenfall posted 2012 operating profit up 12.8 per cent to $4.1bn compared with $3.6bn the previous year. Net profit was $2.7bn against $1.65bn.

The 2011 result was affected by impairment losses and provisions, which the company believes is attributable to Germany’s decision to phase out nuclear power.

Vattenfall said on Tuesday that arbitration measures were proceeding against the decision in Germany.

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