Vattenfall Splits up Into Nordic and European Units

Vattenfall, leader in environmentally sustainable energy production, is changing its organisational structure to cope with ‘substantial  impairments’, reads a note released on Tuesday. 

‘Vattenfall splits up its organisation into a Nordic unit and a continental European unit. This is one of several measures taken in response to developments in the European energy market,’ reads the press release.

The company writes that the Group’s operation will be split up into two regional units from 1 January 2014. The European unit will manage also the UK assets. 

‘Vattenfall is also writing down SEK 29.7 billion (€3.5 billion) of the value of the company’s assets as a consequence of market development and higher business risks,’ reads the note, explaining that the changes reflect an ‘increased uncertainty about the development of the single energy market in Europe, especially in continental Europe.’

According to the company, the European market will not recover in the foreseeable future. 

“The new structure will allow the regions to focus on their respective core issues and will open up opportunities for risk-sharing in Vattenfall’s continental operations over time,” said company’s Chairman of the Board of Directors Lars G Nordström and CEO Øystein Løseth in a joint statement.

The company proceeded with parallel cost reductions and streamlining measures.

‘The cost cuts planned for 2014 have been increased from SEK 1.5 to 2.5 billion (from €175 to €292 million). A new savings target of SEK 2 billion (€234 million) has been set for 2015. We have introduced a recruitment stop as well as major restrictions in the use of external consultants,’ reads the press release.