By Nora Buli

OSLO (Reuters) – Swedish utility Vattenfall on Thursday reported a largely unchanged underlying operating profit for the first quarter, supported by its heating and energy trading arms, offsetting lower contributions from its wind business.

Underlying operating profit before interest and tax (EBIT) at the state-owned energy group stood at 9.5 billion Swedish crowns ($922.50 million), unchanged from a year earlier.

“We have a better result in our heat business, especially in Germany, but also in our distribution business and we have a good trading result,” CEO Anna Borg told Reuters in an interview.

Vattenfall achieved a price of 40 euros per megawatt hour (MWh) for its Nordic power production in the quarter, up from 20 euros/MWh a year earlier.

“The prices are a bit lower in the market, but we have a slightly lower hedge degree than we had last year, which means that we get paid more for our electricity in this quarter compared to the same period last year,” Borg said.

At the end of the first quarter, Vattenfall had hedged 56% of its 2023 generation compared with 72% of its 2022 output sold at the same time a year earlier.

The company also benefited from lower differences between the four Swedish price areas compared to last year, Borg said.

The benchmark Nordic system price for wholesale power averaged 85.22 euros per megawatt hour (MWh) in the first quarter, down from 110.06 euros/MWh a year ago, as energy markets calmed from spikes seen in the wake of the Ukraine war.

However, lower continental European power prices compared to a year ago had a negative impact on its wind power business, Borg said.

The unit’s underlying EBIT in the first quarter halved to 2.4 billion crowns from 4.9 billion crowns a year ago.

($1 = 10.2981 Swedish crowns)

(Reporting by Nora Buli in Oslo, editing by Gwladys Fouche and Kim Coghill)