Vattenfall’s New Business Strategy Announced – Potential Divestments

Vattenfall AB today announced its new business strategy. The company wants to focus on its core markets Sweden, Germany and the Netherlands. It strives to increase profit and value creation, reduce debt and CO2 exposure. This may lead to its subsidiary Vattenfall Europe selling German coal-fired power plants, Handelsblatt writes.

“Potential divestments of geographic positions and assets that do not support the new strategic direction will be investigated. By this, Vattenfall aims to reduce its CO2 exposure and strengthen the company’s balance sheet, enabling Vattenfall to realize further growth in the future”, Vattenfall says in its press release. Expansion and growth shall in the future occur in the low C02emitting power production, i.e. wind, nuclear, biomass, hydro and gas power.

State-owned Vattenfall AB mainly operates nuclear, wind and hydro power plants in its home country, while Vattenfall Europe predominantly operates large coal-fired power plants in Germany, Denmark, Poland and the Netherlands. Hence, the fossil-energy generation of Vattenfall Europe amounts to almost 90%, Handelsblatt writes. The reason for the strategy review is a new directive of the Swedish state that requires Vattenfall AB to lower fossil energy production considerably, Handelsblatt explains.

Vattenfall also announced a cost reduction program aimed at reducing the operational costs by SEK 6 billion (appr. EUR 648 million). The company emphasized that it wants to remain an integrated energy company, generating, distributing, trading and selling electricity, heat and gas.

Source: VattenfallHandelsblatt

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