STOCKHOLM: Swedish energy group Vattenfall said it was able to cut its losses last year despite tough conditions in the European utilities sector, asset write-downs and falling electricity demand.

The company, a major provider of electricity in northern Europe, reported a net loss of 8.18 billion kronor ($990 million, 871 million euros) in 2014 which was an improvement on the 13.67 billion-kronor-loss the year before.

Sales fell by four percent to 165.94 billion kronor, largely as a result of the company being forced to sell its controlling stake in the power grid of the German city Hamburg following a local referendum.

“2014 was an eventful and challenging year that was characterised by weak demand, a surplus of production capacity and falling electricity prices,” Vattenfall chief executive Magnus Hall said in a statement.

He added that the losses were partly offset by 13.7 billion kronor in cost cuts compared with the cost base in 2010.

Vattenfall was further hit by asset write-down charges worth 23.8 billion kronor, which Hall said were “the main explanation for the year’s negative result.”

Many energy providers in Europe have made huge asset write-downs in the last two years because of weak demand for electricity against a background of sluggish economic activity.

They have also been caught out by the US shale energy boom which has pushed down the price of coal for power generation, undermining the profitability of new gas-powered plants and some investment programs.

Electricity prices fell last year by an average of 22 percent in the Nordic countries and by 13 percent in Germany.

The group — which runs 900 wind turbines in Northern Europe and Britain — has sought to shift to more renewable energy sources and divested from several controversial fossil-fuel plants last year.