* 2017 pretax profit 13 bln SEK vs yr-ago 5 bln loss
* Vattenfall has booked huge writedowns over recent years
* Proposes 2 bln SEK dividend to the Swedish state (Adds detail, background)
STOCKHOLM, Feb 7 (Reuters) - Swedish state-owned utility Vattenfall proposed paying a dividend for the first time in five years on Wednesday after it swung to a pretax profit in 2017 despite sluggish electricity demand, helped in part by new wind power capacity.
Vattenfall has spent recent years cutting costs in the wake of a financially disastrous expansion out of its Nordic home market that resulted in huge writedowns.
“After a prolonged period of strained market conditions and large writedowns of asset values, Vattenfall today is a stronger and more resilient company,” Vattenfall Chief Executive Magnus Hall said.
The company reported a pretax profit of 12.9 billion crowns ($1.6 billion) for 2017 against a 5.0 billion loss a year earlier. Profit from wind power alone jumped to 2.1 billion crowns from 878 million.
“It is related to a number of new wind projects that are now starting to generate profits. We are also growing profits on the distribution side,” Hall told Reuters.
The focus for the company, which still has a savings programme underway and which competes with the likes of Germany’s E.ON and Finland’s Fortum, is to maintain investments while keeping costs under control.
Vattenfall unveiled an investment plan for 2018-2019 of 46 billion crowns, of which 13 billion was earmarked for wind power. Its earlier investment plan, for 2017-2018, totalled 50 billion.
Hall told Reuters he saw little change in electricity demand and prices in the short term. Longer-term, consumption was set to pick up in Vattenfall’s markets, he added.
In Sweden, this was likely to happen on the back of an industry shift towards more electricity and electric vehicles while in Germany, a shift in heating away from gas and oil would be a key factor, Hall said.
Vattenfall, which generates most of its electricity from nuclear power, in 2016 sold its lignite power operations in Germany and said it would focus investments on renewable power.
It proposed a dividend of 2.0 billion crowns or 24 percent of profit to its owner, the Swedish government, against a target range of 40–70 percent of profit after tax.
In the fourth quarter, Vattenfall reported an operating profit before items affecting comparability of 7.3 billion crowns ($920 million), up from a year-ago 7.1 billion. ($1 = 7.9602 Swedish crowns) (Reporting by Anna Ringstrom; editing by Niklas Pollard/Keith Weir)