Vattenfall fit for investments going forward

The first quarter has given Vattenfall a robust start to the year. The company’s good earning capacity is a prerequisite for meeting its major investment needs in the future.

Compared to the first quarter of 2005, operating profit excluding items affecting comparabil-ity increased by 37 per cent to SEK 12,435 million (9,096). Sales rose by 15 per cent to SEK 40,432 million (35,036). The largest part of the SEK 3,366 million increase in profit was contributed by Vattenfall’s German operations – which alone accounted for an SEK 2,047 million increase – and is attributable to the greater availability of our power plants, higher heat and electricity production and higher wholesale electricity prices. Our Nordic operations account for SEK 1,155 million of the profit increase. Here too, the majority of the improvement stems from generation operations following wholesale electricity price increases. Costs in Vattenfall’s electricity network operations were substantially lower than in the first quarter of 2005 when the storm Gudrun caused severe damage. The remaining proportion of the profit increase is from the operations in Poland, where the cold winter con-tributed to greater revenue from heating operations. Return on equity was 23.2 per cent, and return on net assets was 17.4 per cent; both figures exclude items affecting comparability. Net debt fell by SEK 7,869 million during the quarter due to the strong cash flow from operations. Vattenfall’s total electricity generation climbed somewhat to 47.8 TWh compared to the first quarter of last year (46.2). The generation of hydro and nuclear power remained largely un-changed, while fossil fuel power increased. Vattenfall is planning to invest SEK 104 billion by 2010, of which SEK 54 billion will be invested in Germany, SEK 42 billion in the Nordic countries and SEK 8 billion in Poland. The largest portion of the investments, SEK 70 billion, is earmarked for generation operations, while SEK 29 billion is for networks and the remaining SEK 5 billion is planned for other operations. The entire report is available at www.vattenfall.com (select “Investors” -> “Financial Re-ports”). Analysts’ Conference and Conference Call at 10:00h To participate in the Conference Call please dial one of the following numbers a few minutes before 10:00 CET. +44 (0) 20 7107 0611 (UK) +46 (0) 8 5069 2105 (Sweden) +45 80 883 140 (Denmark) +33 (0) 1 7070 0543 (France) +49 (0) 69 2 22220593 (Germany) Playback: The playback will be available one hour after the Conference Call for at least 72 hours. To listen to the Digital Playback please dial +44 207 108 6233 (number in UK) and enter ID 310 followed by the # sign. Web cast To follow Vattenfall’s presentations on the Internet (audio and slides), please click on the link “webcast” which will be displayed on www.vattenfall.com and select Investors -> Presenta-tions. Alternatively, you can access the webcast via www.financialhearings.com and select “Vattenfall 27 April”. The presentations will be available in the archive for several months. Please note that you will need “Real Player” or “Windows Media Player” to follow the pres-entations. For further information, please contact: Knut Leman, Senior Vice President Communications, phone: +46 (8) 739 50 31 Klaus Aurich, Head of Investor Relations, phone: +46 (8) 739 65 14 Martin May, Head of Group Media Relations, phone: +46 (8) 739 52 70 From Vattenfall's Press Office, telephone: +46 8 739 50 10.