By Nora Buli
OSLO (Reuters) -Turbulence caused by international trade tariffs could curb growth in energy demand in Europe as companies pause investments in new factories, the CEO of Swedish utility Vattenfall told Reuters on Tuesday.
The company, with operations across northern Europe including Britain and Germany, said large industrial clients that are active in global markets were the first to be affected by trade barriers.
“I think we see a bit of hesitation when it comes to investments and the next steps, and that could possibly delay the increased (power) demand somewhat,” Vattenfall CEO Anna Borg said after the group reported first-quarter earnings.
The state-owned company posted an underlying profit before interest and tax of 8.5 billion Swedish crowns ($886.4 million) for January to March, down 21% from 10.7 billion crowns a year earlier. It said underlying earnings last year were boosted by heating and offshore wind asset sales.
“Although it’s a quarter with a lot of turbulence and uncertainty in the world around us, we are still delivering a stable result if you clear the result for these comparability items,” Borg said.
For its own investment projects there might be some room for negotiation with suppliers, given that fewer projects are now being built compared to projections made a few years ago, she added.
In March, Vattenfall took the final investment decision for the German Nordlicht 1 and 2 wind farm projects, which also involved buying back a 49% stake from Germany’s BASF and instead agreeing a long-term supply contract with the chemicals group.
“For us, the project is a fundamentally good project in the market where much more fossil-free electricity will be needed for all kinds of industry,” Borg said.
Vattenfall has no immediate plans to find a new co-investor for the project, she added.
($1 = 9.5896 Swedish crowns)
(Reporting by Nora Buli, editing by Terje Solsvik and Susan Fenton)
