Sweden's Vattenfall loses 200,000 clients after nuclear plant incidents

Sunday, November 4, 2007

The Associated Press Wednesday, October 31, 2007
STOCKHOLM, Sweden: Swedish utility Vattenfall AB has lost almost 200,000 customers in Germany because of a "crisis in confidence" after failing to properly inform the public about a fire in a nuclear power plant and the shutdown of another, company officials said Wednesday.
The loss was experienced "mainly in the wake" of the fire at the Kruemmel plant and the temporary shutdown of the Brunsbuettel nuclear power plant in Germany, both in Germany on June 28, Vattenfall president and chief executive Lars G. Josefsson said.

"In recent months, Vattenfall has lost nearly 200,000 retail customers in Germany," Josefsson said. "This is a result of the crisis in confidence that Vattenfall experienced mainly in the wake of the events at the Krummel and Brunsbuttel nuclear power plants."

At least two Vattenfall executives, including Vattenfall Europe AG CEO Klaus Rauscher and the head of its German branch, Bruno Thomauske, left the company amid criticism of how the incidents were handled.

Even though the Kruemmel fire was brought under control quickly, without injuries or radioactive leaks, the German unit was accused of being too slow to cooperate with investigators and by failing to properly inform the public about the incidents.

The Swedish state-owned company, which also reported its third-quarter earnings Wednesday, said it had seen "significant reductions" of retail customers in Germany's two largest cities, Hamburg and Berlin.

In a move to restore the confidence, it said it had launched an improved product offer with competitive prices and by trying to attract new customers through intensified marketing in areas outside of Hamburg and Berlin.

Despite the customer loss in Germany, the company said net sales in Germany rose 18 percent in the quarter compared with the same period last year. This was mainly because of a higher feed of wind power to its transmission network of which certain, higher, costs were passed on to customers, driving up the revenue numbers in the unit.

Net sales for the Vattenfall group came to 31.59 billion kronor (€3.43 billion; US$4.94 billion) in the three-month period, compared with 27.99 billion kronor a year ago.

Net profit also rose, to 3.15 billion kronor (€342 million; US$493 million), up from 1.73 billion in the same quarter in 2006. The company attributed the increase to its German operations, which last year was hurt by 931 million kronor (€101 million; US$146 million) in impairment losses.

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