Swedish-owned energy company Vattenfall's third quarter earnings improved as a result of lower costs and increased production. Total electricity generation output increased by 4.4TWh, compared with the third quarter for 2014. Hydropower increased due to higher precipitation - up from 6.1TWh for Q3/2014 to 9.5TWh this year.
“Compared with a year ago, during the third quarter Vattenfall increased its underlying operating profit, improved its cash flow and lowered its debt. The profit increase is mainly attributable to higher production volumes and lower operating costs," comments Magnus Hall, President and CEO of Vattenfall.
However the company warns that market conditions remain challenging with a considerable capacity surplus and low electricity prices, especially in the Nordic countries, which is squeezing production margins. Despite substantial reductions in Vattenfall's costs since 2010, it says that cost-cutting efforts must continue. Among other measures, opportunities to outsource parts of administration and IT operations to external service providers are being investigated. In addition purchasing processes will continue to be sharpened and streamlined in an effort to achieve further reductions.
