Vattenfall announces job cuts as profits plummet

Swedish energy group Vattenfall said Tuesday that it would cut a thousand jobs as its quarterly profits plunged by nearly a half compared to last year.  

The state-owned company, a major provider of electricity in northern Europe, reported a 42 percent fall in net profits to 4.68 billion kronor ($542 million, 499 million euros) in the first quarter compared to the same period in 2014.

"We need to continue lowering our costs and will reduce the number of employees corresponding to approximately 1,000 full-time equivalents," chief executive Magnus Hall said in a statement.

"Demand for electricity remained weak during the first quarter of the year, and electricity prices have continued to fall," he added.

The group, which is seeking to close coal fired plants in Germany, has had seen two consecutive years of losses caused partly by substantial write down charges.

Many energy providers in Europe have made huge asset write-downs in the last two years because of weak demand for electricity against a background of sluggish economic activity.

They have also been caught out by the US shale energy boom, which has pushed down the price of coal for power generation, undermining the profitability of new gas-powered plants and some investment programmes.

Electricity prices fell last year by an average of 22 percent in the Nordic countries and by 13 percent in Germany.

Vattenfall, which employs more than 30,000, and has operations in Sweden, Finland, Denmark, Germany, the Netherlands and Britain did not specify where the lay-offs would take place.