Report on operations for the nine months ended september 30, 1999

Organization number 556006-8420 REPORT ON OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 * Slightly lower earnings * Tough price competition * Lower hydroelectric and nuclear power production * Significant acquisitions COMMENTS BY GROUP CEO Today, Sydkraft has approximately 800 000 customers. This year, we have grown by more than 50 000 customers and, if we include the 49% holding in Norrköpings Miljö & Energi acquired on September 1, approximately 50 000 more can be added. On December 2, Østfold Energi in southern Norway will decide whether it will sell 49% of the shares in its subsidiaries, Østfold Energi Kraftsalg and Østfold Energi Nett, to Sydkraft. Østfold Energi has 90 000-100 000 customers in the most expansive region of Norway. In Denmark, the electricity market is slowly but surely opening up. Sydkraft is established there through its interest in the energy trading company Elektra Energihandel A/S, which it owns jointly with three major energy distributors on the island of Sjaelland. In Poland, we have a couple of cooperation agreements and have also made an offer for the majority of the shares in a listed Polish co-generation (CHP) plant north of Katowice. The restructuring of the energy market in Europe is continuing at an undiminished pace. Currently, the most active measures are being implemented in Germany. The largest energy companies are planning to merge and form various alliances. Competition is increasing significantly and electricity prices are declining drastically. In the Swedish market, electricity prices have reached their lowest level as a result of full deregulation having been implemented on November 1. The Swedish energy companies can hardly be said to compete on price any more - price levels are approximately the same throughout Sweden - instead it is becoming increasingly clear that it is the strong brands that will survive. Sydkraft is a strong brand. Our Consulting and Contracting business area is developing favorably, with several new acquisitions. Following our acquisition of Tellus Miljöteknik, with about a hundred of highly qualified environmental consultants, we purchased El & Trafikteknik in Gothenburg, the consulting company Picon in Skövde and parts of EPS Consulting in Vänersborg. The Government's decision to withdraw the permit to operate the B1 reactor at the Barsebäck nuclear power plant will become effective at midnight on November 30, 1999. No inhibition order to prevent the execution of the Government's decision has been received. Sydkraft will receive compensation for the loss of electricity production, either through a voluntary settlement with the Government, or through the application of the Decommissioning Act. Earnings for the first nine months of the year were satisfactory, given the background of lower hydroelectric and nuclear power production plus the pressure on energy prices, particularly in the electricity market. Lars Frithiof ------------------------------------------------------------ Please visit for further information The following files are available for download:

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Sydkraft is a supplier of electricity, gas, heating and energy services.