Vattenfall's third-quarter profit slides as reactor outages offset pricier power

what happened

Sweden's state-owned utility Vattenfall said on Thursday that its underlying operating profit for the third quarter fell 38% year on year, to 3.81 billion crowns, or about $385 million, according to Reuters. Group sales declined 13%. The main drags were lower nuclear output, driven largely by outages at the Ringhals 3 and Ringhals 4 reactors, and reduced hydro generation after a weaker water balance.

Average day-ahead power prices in the Nordic region rose 107% over the quarter, to €74.4 per megawatt-hour. Prices in Germany and the Netherlands climbed 52% and 60%, the company said in a statement. The Middle East conflict has pushed oil and gas prices higher.

CFO Kerstin Ahlfont told Reuters she expects European energy prices to stay volatile through the winter. She said gas storage sits below its usual level for this time of year, which is a clear cause for concern.

why it matters

For markets, the report shows how low gas storage in Europe and the Middle East supply shock keep power and gas prices elevated heading into winter. Generators with large nuclear and hydro exposure can lose volumes even as prices rise, so the net effect on earnings depends on the generation mix.

market impact

European gas: low storage and elevated power prices support the market into winter

• ▲European gas pressure up — low storage levels raise concern about winter supply

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