UPDATE 1-Vattenfall CEO to step down in 2015, Q3 profits fall
* CEO Loseth says won't renew contract
* Board begins search for successor
* Q3 underlying earnings fall 10.6 pct yr/yr (Adds detail, background, quote)
STOCKHOLM, Oct 29 (Reuters) - State-owned Swedish utility Vattenfall, which is battling weak wholesale electricity prices and a disastrous acquisition, said on Tuesday its chief executive would step down when his contract expires in March 2015.
The company also said lingering weakness in wholesale power prices had pressured underlying operating earnings, which fell 10.6 percent in the third quarter.
Vattenfall wrote down the value of its business by 30 billion crowns ($4.7 billion) in the second quarter alone due to weak power markets and a hangover from a decade of debt-fuelled expansion that left it one of Europe's biggest energy firms.
CEO Oystein Loseth was head of Dutch firm Nuon when Vattenfall bought it for 8.5 billion euros ($11.7 billion) in 2009 in a deal that proved ill-timed as power markets softened in the wake of the global financial crisis.
Loseth then succeeded the mastermind of the purchase, former Vattenfall Chief Executive Lars Josefsson, when he left the group in 2010 as political and media criticism gathered pace against a deal that was already turning sour.
"I have informed the Board that I do not wish to extend my contract after 2015. This is for personal reasons. I have notified the board early in order to provide clarity and to give them sufficient time for recruitment," Loseth said.
Chairman Lars Nordstrom said the board would begin the recruitment process to find a successor.
The company, fully owned by the Swedish government, said underlying operating earnings were 4.00 billion Swedish crowns ($631.3 million) in the third quarter compared with 4.47 billion in the corresponding period of last year.
Vattenfall said in the second quarter it would split into two divisions - one Nordic and one for continental Europe - and consider outside investors for the European business.
"The work on splitting up Vattenfall's operations into two regions - the Nordic countries and Continental Europe/UK - is progressing according to plan," Loseth said on Tuesday.
($1 = 6.3362 Swedish crowns)
($1 = 0.7254 euros) (Reporting by Niklas Pollard and Johan Ahlander; Editing by Mark Potter)
- Air strike kills 15 civilians in Yemen by mistake: officials
- Pope attacks mega-salaries and wealth gap in peace message
- North Korea says Jang Song Thaek, uncle of leader Kim Jong Un, executed
- Probation for drunk Texas teen driver who killed four sparks backlash
- North Korea executes leader's powerful uncle in rare public purge |