Stockholm (AFP) - Sweden's state-owned energy group Vattenfall announced a massive 36.3 billion krona ($4.2 billion, 3.9 billion euro) writedown Tuesday tied to looming closures of two nuclear reactors and slumping lignite activity in Germany.
Vattenfall said second quarter losses skyrocketed to 25 billion krona ($2.9 billion, 2.7 billion euros), while revenue fell 1.3 percent to 36.1 billion krona.
"Naturally, this is a very negative development which unfortunately reflects the world we live in," Vattenfall president Magnus Hall said in a statement.
"Very low electricity prices... are putting pressure on margins for conventional generation from gas, coal, hydro and nuclear power facilities."
Hall said energy demand that slumped after the economic crisis in 2009 had still not recovered, while capacity from both solar and wind power, with low marginal costs, has been added to the system.
Vattenfall said it had taken a 17 billion krona hit on the weak profitability of its Ringhals 1 and 2 nuclear reactors, whose shuttering the group in April decided to advance from 2025 to 2020 at latest.
It also wrote down an additional 19 billion krona on its lignite, or brown coal, assets and income in Germany.
Vattenfall has been looking to sell its German brown coal plant in Hamburg, and Hall said "activities to identify additional cost reductions are in progress in the entire organisation."