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VATTENFALL

Swedish energy giant Vattenfall cuts 2,500 jobs

Swedish energy group Vattenfall announced on Tuesday that 2,500 staff members would be made redundant as a part of a two-year saving plan.

Swedish energy giant Vattenfall cuts 2,500 jobs

Around 400 of the job losses will be felt in Sweden.

Vattenfall announced plans to save 4.5 billion kronor ($705 million) over the next two years, blaming low demand and over-capacity for the drastic move.

“These new conditions require us to further improve our efficiency and strengthen our financial position,” Vattenfall head Øystein Løseth wrote in a statement.

“I want to underline that Vattenfall will carry out these redundancies in a socially responsible manner and in close talks with the unions in the respective countries,” he added.

Around 1,500 of the redundancies will be in Germany, roughly 500 in Holland, 400 in Sweden and 50 elsewhere.

The company plans to make savings of 3 billion kronor in 2013 and 1.5 billion in 2014, partly via the job cuts, which will be implemented over the next two years.

Vattenfall also plans to sell its power station in Denmark, and part of its power plant in Lippendorf, Germany.

TT/The Local/og

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VATTENFALL

Swedish energy firm racks up giant losses

UPDATED: Swedish energy giant Vattenfall recorded losses amounting to nearly 29 billion kronor ($3.4 billion) on Tuesday as the company continued its battle against increasingly tough market conditions.

Swedish energy firm racks up giant losses
Vattenfall chief executive Magnus Hall on Tuesday. Photo: Fredrik Persson/TT

Hit by asset write-down charges worth 36 billion kronor, Sweden's Vattenfall reported a net loss of 28.812 billion kronor in the second quarter of the year, a huge drop from 2.3 billion kronor in the same period in 2014.

The state-owned energy firm, a major provider of electricity in northern Europe, has been struggling to improve profits for several years, suffering from weak demand and plunging electricity prices.

It attributed 17 billion kronor of the total asset write-downs to the same fall in profits which led to a shock announcement earlier this year that it planned to close Ringhals 1 and 2 in south-western Sweden.

It said at the time that the two reactors were too costly to keep in production until 2025 as previously planned.

“This is of course very negative but unfortunately reflects the reality we're living in,” said its chief executive Magnus Hall in a statement on Tuesday morning.

It also wrote down an additional 15 billion kronor on its lignite, or brown coal, assets in Germany.

Earlier this year Vattenfall announced that 1,000 workers were being let go as part of a series of bids to curb losses, including speeding up the sale of the German plants.

It reported a total turnover of 36.1 billion kronor in the second quarter of 2015 on Tuesday, down from 36.6 billion in the same period last year.

Hall said that the work to tighten the belt was continuing “to identify further reductions in costs”.

Since the Vattenfall Group bought energy giant Nuon in 2009, a deal which has been hotly debated in Sweden, the firm's assets have been written down by over 52 billion kronor. 

Many energy providers in Europe have made huge asset write-downs in the last two years because of weak demand for electricity against a background of sluggish economic activity.

They have also been caught out by the US shale energy boom, which has pushed down the price of coal for power generation, undermining the profitability of new gas-powered plants and some investment programmes.

Vattenfall employs more than 30,000 and has operations in Sweden, Finland, Denmark, Germany, the Netherlands and Britain.