Swedish state-owned utility Vattenfall proposed paying a dividend for the first time in five years, after it swung to a pre-tax profit in 2017.
In the fourth quarter, Vattenfall reported an operating profit before items affecting comparability of 7.3 billion crowns ($920 million), up from a year-ago 7.1 billion.
It proposed a dividend of 2.0 billion crowns ($250 million) or 24% of profit to its owner, the Swedish government, against a target range of 40–70 % of profit after tax.
After a financially devastating expansion out of its Nordic home market, Vattenfall has spent the last several years cutting and affecting asset write-downs.
“After a prolonged period of strained market conditions and large write-downs of asset values, Vattenfall today is a stronger and more resilient company,” Vattenfall Chief Executive Magnus Hall said.
The company reported a pretax profit of 12.9 billion crowns ($1.6 billion) for 2017 against a 5.0 billion loss a year earlier. Profit from wind power alone jumped to 2.1 billion ($260 million) crowns from 878 million ($110 million).
“It is related to a number of new wind projects that are now starting to generate profits. We are also growing profits on the distribution side,” Hall told Reuters.
Vattenfall plans to maintain investments while controlling expenditure and maintaining the savings programme. Of the 46 billion crown investment plan for 2018-2019, 13 billion was allocated to wind power.
Despite sluggish electricity demand, the market has seen a significant boost from new wind power capacity.
Hall told Reuters he saw little change in electricity demand and prices in the short term. Longer-term, consumption was set to pick up in Vattenfall’s markets, he added.
These shifts can include a movement towards electric vehicles, such is currently noted in Sweden.
Vattenfall, which generates most of its electricity from nuclear power, in 2016 sold its lignite power operations in Germany and said it would focus investments on renewable power.
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