Condensed income statement
| Amounts in SEK million unless stated otherwise | 2008 | 2007 | Change, % | |
| 1 | Net sales | 164,549 | 143,639 | 14.6 |
| Profit before depreciation/amortisation (EBITDA) | 45,960 | 45,821 | 0.3 | |
| 2 | Operating profit (EBIT) | 29,895 | 28,583 | 4.6 |
| 3 | Financial items, net | -6,397 | -4,650 | -37.6 |
| Profit before tax | 23,498 | 23,933 | -1.8 | |
| 4 | Income tax expense | -5,735 | -3,247 | -76.6 |
| Profit for the year | 17,763 | 20,686 | -14.1 |
See the complete income statement.
1 Net sales
The increase in net sales is mainly attributable to higher electricity prices received. Approximately SEK 5.5 billion is attributable to currency effects. Excluding intra-Group transactions, net sales for Business Group Central Europe increased by SEK 12.4 billion, of which SEK 10.8 billion pertains to operations in Germany. For Business Group Nordic the increase was SEK 10.3 billion. For the primary segment “Other”, which includes Energy Trading, net sales decreased by SEK 1.8 billion.
2 Operating profit (EBIT)
Operating profit rose 4.6%. Factors that affected the change in operating profit are shown in the chart below. In addition, it can be noted that profit for 2007 was charged with impairment losses of SEK 1,850 million, compared with SEK 423 million for 2008. Operating profit for 2008 was favourably affected by currency effects of approximately SEK 800 million as a result of the weaker Swedish krona. The earnings impact in 2008 for the continued outages at the German nuclear power plants, Krümmel and Brunsbüttel, is estimated to have amounted to EUR 573 million (SEK 5,540 million). The earnings impact for 2007 was EUR 201 million (SEK 1,900 million).
Factors that affected the change in operating profit (EBIT)
3 Financial items, net
Net financial items amounted to SEK -6,397 million (-4,650), a deterioration by 37.6%. The drop is mainly attributable to the fair valuation of derivatives. Net interest income averaged SEK -202 million per month (-166). The increase in interest expense for loans is attributable to higher borrowings and higher interest rates.
Interest income from financial investments, and interest expenses for loans and received/paid interest affecting cash flow are broken down as follows:
| Amounts in SEK million | 2008 | 2007 | Change, % |
| Interest income from financial investments | 1,692 | 1,331 | 27.1 |
| Interest expenses for loans | –4,151 | –3,325 | –24.9 |
| Cash interest received | 1,679 | 1,420 | 18.2 |
| Cash interest paid | –3,846 | –2,902 | –32.5 |
See also Notes 13 and 14 to the consolidated accounts.
4 Income tax expense
The tax expense increased by SEK 2,488 million to SEK 5,735 million (3,247). The effective tax rate as per the income statement was 24.4% (13.6%). In December 2008 the Swedish government decided to reduce the company income tax rate for companies in Sweden from 28.0% to 26.3%, with effect from 1 January 2009. Based on Vattenfall’s balance sheet as per 31 December 2008, the deferred tax expense in the income statement for 2008 has been reduced by SEK 749 million. Profit for 2007 was affected by a nonrecurring positive tax effect of SEK 3,800 million in Germany as a result of the German government’s decision to reduce the company tax rate by approximately 10 percentage points.
