Interim Report January -  March 2004

Fortum Corporation STOCK EXCHANGE RELEASE
22 April 2004 at 9.00 a.m. 1 (12)


Fortum Corporation
Interim Report January - March 2004

A good start to the year
- earnings up by nearly 20%

The first quarter in brief
- Operating profit EUR 562 million (+18%) despite weaker market
drivers
- Improvement in all segments
- Earnings per share EUR 0.38 (+19%)
- Net debt EUR 5,276 million (EUR -350 million since end 2003),
due to strong cash flow
- Ongoing work to separate and list oil businesses


Key figures I/04 I/03 2003 Last 12
months
(LTM)
Net sales, EUR million 2,823 3,593 11,392 10,622
Operating profit, EUR million 562 475 1,420 1,507
- excluding non-recurring 529 471 1,360 1,418
items, EUR million
Profit before taxes, EUR 487 410 1,184 1,261
million
Earnings per share, EUR 0.38 0.32 0.91 0.97
Shareholders’ equity per share, 7.50 6.96 7.55
EUR
Capital employed 12,101 12,309 12,704
(at end of period), EUR million
Interest-bearing net debt 5,276 4,624 5,626
(at end of period), EUR
million*)
Investments, EUR million 108 112 1,136 1,132
Net cash from operating 458 344 1,577
activities,
EUR million
Return on capital employed, % 18.6 15.6 11.4 12.9
Return on shareholders’ equity, 20.4 16.5 12.3 12.5
%*)
Gearing, %*) 80 63 85
Average number of employees 13,023 12,733 13,343
Average number of shares, 849,698 845,776 846,831 845,953
1,000s
*) the figures for 2003 and the first quarter in 2004 include the
impact of the redemption of the preference shares worth EUR 1.2
billion issued by Fortum Capital Ltd

During the first three months of the year, Fortum´s financial
performance improved compared to the first quarter in 2003. The
operating results of all segments were higher than during the
corresponding period last year despite significantly lower Nord
Pool electricity prices and lower oil refining reference margins
compared to the previous year's figures. The good result was due
to operational efficiency: utilisation of the flexible power
production portfolio, successful hedging, good availability of
production units, a high-value oil product slate as well as an
improved cost structure. Cash flow from operating activities
continued to be healthy. The balance sheet was further
strengthened by a EUR 350 million reduction in net debt compared
to year-end 2003.

Preparations to separate and list the oil businesses continued.

Fortum continued to divest non-core businesses.

The first quarter was characterised by the relative stability of
the Nord Pool power prices, although the average was 46% lower
than during the corresponding period in 2003. The international
oil refining reference margin was strong, even if the average
level was 18% lower than a year ago.

Net sales and results

Group net sales stood at EUR 2,823 million (EUR 3,593 million in
January-March 2003). The main reasons for the decrease were the
lower market prices for electricity, the Group's exit from gas
trading and a weakened US dollar and lower oil trading levels.

Group operating profit totalled EUR 562 (475) million. Operating
profit excluding non-recurring items stood at EUR 529 (471)
million. The net amount of non-recurring items was EUR 33 (4)
million, including a one-time compensation of EUR 29 million from
parties in the new nuclear power unit relating to the existing
nuclear infrastructure.

The results for Power, Heat and Gas improved compared to the
corresponding period last year, despite lower market prices for
electricity. This was mainly due to Fortum's flexible production
portfolio, successful hedging, internal efficiency improvements
and a considerable improvement in Fortum Värme's results.

As a regulated business, Distribution´s results remained stable.
Internal efficiency measures enabled a slight improvement in the
results.

The results for Markets improved significantly compared to last
year. The main enablers were better risk management, improved
business processes and cost reductions.

The results for Oil Refining and Marketing reached a record high
in spite of a lower international oil refining reference margin
and a weaker US dollar than a year ago. This was due to a
favourable product slate, competitive feedstocks and excellent
availability at the refineries. In addition, Shipping enjoyed high
freight rates, especially for crude oil. Due to the slight
increase in the price of crude oil, some inventory gains were
included in the results.

Profit before taxes was EUR 487 (410) million.

The Group´s net financial expenses were EUR 75 (65) million. The
amount includes the interest cost attributable to the debt assumed
when redeeming the preference shares issued by Fortum Capital Ltd
as well as approximately EUR 10 million representing the net
present value of the interest rate differential relating to the
prepayment of the private placement bonds issued in the United
States in 1992.

Minority interests accounted for EUR 19 (33) million. The decrease
is mainly due to the above-mentioned redemption of Fortum
Capital's preference shares, accounted for as minority interests
before the redemption. The figure for 2004 is mainly attributable
to Fortum Värme Holding, in which the City of Stockholm has a 50%
economic interest.

Taxes for the period totalled EUR 147 (107) million. The tax rate
according to the income statement was 30.2% (26.1%).

Net profit for the period was EUR 321 (270) million. Earnings per
share were EUR 0.38 (0.32). Return on capital employed was 18.6%
(15.6%) and return on shareholders´ equity was 20.4% (16.5%).

SEGMENT REVIEWS

Power, Heat and Gas

The main business area comprises power and heat generation and
sales in the Nordic countries and other parts of the Baltic Rim as
well as the provision of operation and maintenance services in the
Nordic area and selected international markets. Fortum is the
second largest power company in the Nordic countries as well as
the leading heat producer in the region.


EUR million I/04 I/03 2003 LTM
Net sales 890 1,204 3,394 3,080
- electricity sales 511 665 1,853 1,699
- heat sales 286 268 775 793
- other sales 93 271 766 588
Operating profit 335 291 776 820
- excluding non-recurring 312 292 775 795
items
Net assets (at end of 8,569 8,699 8,850
period)
Return on net assets, % 15.4 13.3 8.9 9.5

The decrease in net sales was due to the lower prices of
electricity and the exit from gas trading.

During the period from January to March, the spot price for
electricity on the Nordic power exchange, Nord Pool, remained
stable, averaging EUR 28.6 (53.3) per megawatt-hour. The price was
about 46% lower than the corresponding figure last year and 16%
lower compared to the last quarter of 2003.

At the start of 2004, the Nordic water reservoirs were about 16
TWh below the average but 8 TWh above the corresponding level for
2003. During the first quarter, the water reservoir deficit
decreased slightly but snow accumulation was poor leading to a
deficit in snow reservoirs. According to preliminary statistics,
the Nordic countries consumed 113 (112) TWh electricity during the
first quarter, which was 1% more than the previous year.

Fortum´s own power generation in the Nordic countries during the
first quarter was 15.2 (14.8) TWh, 13 % (13%) of Nordic
electricity consumption.

The average price of electricity sold by Fortum in the Nordic
countries was 14% lower than the corresponding figure last year
and 7% lower compared to the last quarter of 2003.

Fortum´s total electricity sales volumes amounted to 17.7 (18.0)
TWh. Sales volumes in the Nordic countries were 17.3 (17.3) TWh
representing approximately 15% (15%) of Nordic electricity
consumption during the period. Sales volumes in Power, Heat and
Gas amounted to 16.5 (17.9) TWh, of which 16.1 (17.2) TWh was
attributable to the Nordic countries.

The business of Fortum Värme in Sweden developed positively owing
to a favourable fuel mix and good power plant availability.

In March, Fortum signed a 12-year operation and maintenance
contract for a waste facility under construction by Kent
Enviropower Limited in the UK.


Own power generation by I/04 I/03 2003 LTM
source, TWh, in the Nordic
countries
Hydropower 4.7 4.1 16.9 17.5
Nuclear power 7.0 6.7 23.8 24.1
Thermal power 3.5 4.0 10.5 10.0
Total 15.2 14.8 51.2 51.6

Share of own production I/04 I/03 2003 LTM
in the Nordic countries, %
Hydropower 31 28 33 34
Nuclear power 46 45 46 47
Thermal power 23 27 21 19
Total 100 100 100 100

Electricity sales by area, I/04 I/03 2003 LTM
TWh
Sweden 7.9 8.9 28.2 27.2
Finland*) 8.2 8.3 28.5 28.4
Other countries 0.4 0.7 2.4 2.1
Total 16.5 17.9 59.1 57.7
*) 2003 volumes have been restated due to internal transfer
between segments

Heat sales by area, I/04 I/03 2003 LTM
TWh
Sweden 4.0 4.0 9.5 9.5
Finland 3.5 3.5 10.3 10.3
Other countries 1.2 0.8 3.9 4.3
Total 8.7 8.3 23.7 24.1

Distribution

Fortum owns and operates distribution and regional networks and
distributes electricity to a total of 1.4 million customers in
Sweden, Finland, Norway and Estonia.

EUR million I/04 I/03 2003 LTM
Net sales 206 199 688 695
- distribution network 174 165 569 578
transmission
- regional network 25 27 88 86
transmission
- other sales 7 7 31 31
Operating profit 87 81 247 253
- excluding non-recurring 87 80 227 234
items
Net assets (at end of 3,095 3,179 3,129
period)
Return on net assets, % 11.2 10.2 7.9 8.1

During the first quarter, the volume of distribution and regional
network transmissions totalled 7.0 (6.6) TWh and 5.4 (6.2) TWh
respectively.

Electricity transmissions via the regional distribution network to
customers outside the Group totalled 4.5 (4.6) TWh in Sweden and
0.9 (1.6) TWh in Finland.

Distribution tariffs remained unchanged during the period under
review in all of Fortum's markets.

A new Customer Service Unit providing a uniform interface for all
retail sales and distribution customers was formed in cooperation
with Fortum Markets as of 1 January 2004.


Volume of distributed I/04 I/03 2003 LTM
electricity by area, TWh
Sweden*) 4.2 4.6 14.2 13.8
Finland 2.0 2.0 6.2 6.2
Norway 0.7 - 1.3 2.0
Other countries 0.1 0.0 0.2 0.3
Total 7.0 6.6 21.9 22.3
*) The distribution and regional networks in Sweden have been re-
classified in the fourth quarter of 2003 resulting in a slight
change in distribution volumes.

Number of electricity 31.3.2004 31.3.2003 2003
distribution customers by
area, 1,000s
Sweden 860 890 855
Finland 400 390 400
Other countries*) 115 20 115
Total 1,375 1,300 1,370
*) Fortum Distribution AS (formerly Østfold Energi Nett AS) is
included in the figures as of 1 May 2003.

Markets

The Markets segment focuses on the retail sale of electricity and
oil products, mainly heating oil, as well as related services to a
total of 1.3 million private and business customers in Sweden,
Finland and Norway.

EUR million I/04 I/03 2003 LTM
Net sales 515 687 2,024 1,852
Operating profit 12 -5 47 64
- excluding non–recurring 12 -5 47 64
items
Net assets (at end of 166 76 35
period)
Return on net assets, % 47.8 -30.4 61.6 65.0

Sales to other electricity companies have been transferred from
Power, Heat and Gas to Markets, which explains the changes in 2003
figures.

At the beginning of the year, average retail electricity prices
decreased slightly in Finland, Sweden and Norway. Fortum also
reduced its retail prices in these countries.

The prices of oil products rose at the beginning of the year. In
January, the volume of heating oil sold was significantly lower
than the year before, mainly due to warmer weather and higher
prices. In February and March, the volumes sold increased
slightly.

During the first quarter, the segment's electricity sales totalled
12.8 (13.5) TWh. The decline was due to warmer weather, a lower
industrial utilisation rate and turnover in the customer base.
Sales of heating oil stood at 0.3 (0.3) million tonnes. The
Markets business unit buys its electricity through Nord Pool. Its
oil products are also purchased on market terms.

Fortum substantially increased the sale and marketing of
electricity and oil to household customers. In order to improve
customer relations, a new Customer Service Unit providing a
uniform interface for all retail sales and distribution customers
was formed in cooperation with Fortum Distribution as of 1 January
2004.

Oil Refining and Marketing

The activities of Oil Refining and Marketing cover the production,
refining and marketing of oil as well as logistics. The main
products are traffic fuels and heating oils. Fortum is the leading
producer of clean traffic fuels in the Nordic area.


EUR million I/04 I/03 2003 LTM
Net sales 1,682 2,075 7,192 6,799
Operating profit 140 125 396 411
- excluding non–recurring 130 123 381 388
items
Net assets (at end of 1,478 1,527 1,402
period)
Return on net assets, % 38.9 32.9 27.0 28.2

The decrease in net sales was for the most part due to a weakened
US dollar and lower trading volumes.

The price of crude oil remained high throughout the period under
review. The price of Brent crude averaged USD 32.0 (31.5) per
barrel. In January-March, inventory gains were EUR 9 (3) million.

During the first quarter, the international refining margin in
north-western Europe (Brent Complex) was lower than during the
corresponding period last year. The reference margin used by
Fortum averaged USD 3.1 (3.8) per barrel. However, Fortum’s
premium margin on a quarterly basis exceeded even the long-
established level of USD 2/bbl.

The high margin was a result of a concerted effort on a number of
fronts: the production of high-value products, excellent
availability at the refineries, use of competitive raw materials
and efficient logistics.

Fortum refined a total of 3.3 (3.2) million tonnes of crude oil
and other feedstocks. In Finland, oil product sales amounted to
approximately 1.9 (1.9) million tonnes. There were no significant
changes in the market shares. Exports accounted for a total of 1.3
(1.2) million tonnes.

Freight rates for crude oil were very high at the beginning of the
year because of the ice conditions and the poor availability of
ice-class crude vessels. Product freight rates were also robust. A
new product tanker was completed and handed over to Fortum in
China.

During the first quarter, the average oil production of SeverTEK
was 25,127 barrels per day (of which Fortum's share is 50%). The
total production will be gradually increased with the aim of
reaching full production capacity of 50,000 barrels a day during
2005, somewhat later than planned. Fortum's share of this maximum
production corresponds to 10% of Fortum's own needs. SeverTEK is a
joint venture owned equally by the Russian company, Lukoil and
Fortum.

Work on the EUR 500 million investment to increase the sulphur-
free diesel production capacity of the Porvoo refinery continued
as planned during the first quarter.

As of 1 April, a new Components business unit was formed in the
oil sector to meet the growing demand in the components markets.
Fortum supplies lubricant and traffic fuel components and develops
biocomponents.

Deliveries of oil products refined by Fortum by product group
1,000 t I/04 I/03 2003 LTM
Gasoline 976 1,088 4,434 4,322
Diesel 892 796 3,886 3,983
Aviation fuel 151 120 611 642
Light fuel oil 397 423 1,474 1,448
Heavy fuel oil 429 386 1,314 1,357
Other 374 342 1,672 1,704
Total 3,219 3,155 13,391 13,455

Deliveries of oil products refined by Fortum by area
1,000 t I/04 I/03 2003 LTM
Finland 1,940 1,929 7,889 7,900
Other Nordic countries 448 434 1,921 1,935
Baltic countries and 23 8 62 77
Russia
USA and Canada 356 384 1,252 1,224
Other countries 452 400 2,267 2,319
Total 3,219 3,155 13,391 13,455

Business development and restructuring

Preparations continued to separate the oil businesses into a new
company and to have the new company listed on the Helsinki
Exchanges. The new company will comprise all of Fortum´s existing
oil business with its refining, marketing, shipping and oil
production activities. The new business structure of the Oil
sector, as of 1 April 2004, consists of four business units: Oil
Refining, Oil Retail, Shipping and Components.

Investments and divestments

Investments in fixed assets during the first quarter totalled EUR
108 (112) million.

Work on the EUR 500 million investment to increase the sulphur-
free diesel production capacity of the Porvoo refinery continued
as planned during the first quarter. The estimated cost for 2004
is somewhat above EUR 100 million. The investment is expected to
be completed by the end of 2006.

Fortum will participate in the new fifth nuclear power plant unit
in Finland with a share of approximately 25%. Thus Fortum´s
investment as an equity share will be EUR 180 million during 2004
- 2009, entitling it to approximately 400 MW of the plant´s
capacity. During the first quarter, Fortum also provided a
shareholders' loan of EUR 45 million.

In February, Fortum secured an agreement on the purchase of
additional shares in the Russian company, OAO Lenenergo, by which
Fortum´s ownership of the share capital and the voting rights
would increase to 21.0%, and to 20.7% respectively. The
transaction is subject to the approval of the Russian competition
authorities, as Fortum´s ownership in Lenenergo would exceed 20%.

Fortum has taken further steps to divest non-core businesses: the
Flow Improver Agent (FIA), a specialty chemicals business, was
sold to M-I Finland Oy, an affiliate of M-I LLC, headquartered in
Texas, USA and a contract was signed to divest the engineering
business in Hungary, ETV-Eröterv Rt, to the management group of
the company.

Financing

Fortum´s net debt decreased by EUR 350 million and stood at EUR
5,276 million (EUR 5,626 million at year end) and the gearing
ratio was 80% (85% at year end).

The Group's net financing expenses were EUR 75 (65) million. One
reason for the increase was the redemption of the preference
shares issued by Fortum Capital Ltd in 2000, which was financed
with debt in December 2003. The other reason was that Fortum´s
subsidiary, Fortum Finance BV, used its option to prepay USD 73
million private placement bonds (originally due in 2007) issued in
the United States markets in 1992. The prepayment on 31 March 2004
further clarified Fortum´s financing structure and rationalised
the management of the Group´s currency risk exposure. The
prepayment premium paid to the investors in accordance with the
terms of the bonds was USD 12.9 million (EUR 10.5 million) which
amount has been booked as an interest expense in the first quarter
results. This premium was compensation for the difference between
the fixed interest rate of the prepaid bonds and the current
substantially lower interest rate level.

Moody's credit rating was upgraded to Baa1 (stable) on 13 February
2004. Standard & Poor's long-term credit rating for Fortum
Corporation was restated at BBB+ (stable).

Shares and share capital

A total of 16,004 Fortum Corporation shares were subscribed for
with the share warrants relating to Fortum Corporation´s 1999
warrant bond to employees, while a total of 965,000 shares were
subscribed for with the share warrants relating to Fortum
Corporation´s 1999 management share option scheme. These shares
were entered into the trade register on 12 February 2004. The
increase in the share capital resulting from the share
subscriptions was EUR 3,335,413.60. After the increase, Fortum
Corporation´s share capital is EUR 2,889,365,828.60 and the total
number of shares is 849,813,479.

Currently, the Board of Directors has no unused authorisations
from the General Meeting of shareholders to issue convertible
loans or bonds with warrants, issue new shares or acquire the
company´s own shares.

Annual General Meeting

At the Annual General Meeting held on 25 March 2004, a dividend of
EUR 0.42 (0.31) per share was approved.

The following persons were re-appointed as members of the
Supervisory Board: Satu Hassi, Klaus Hellberg, Rakel Hiltunen,
Jorma Huuhtanen, Mikko Immonen, Kimmo Kalela, Juha Mikkilä and Ben
Zyskowicz, and Lasse Hautala, Timo Kalli, Kimmo Kiljunen and Jari
Koskinen were elected as new members. Timo Kalli was elected as
Chairman and Klaus Hellberg as Deputy Chairman of the Supervisory
Board.

The following persons were re-elected to the Board of Directors
according to the new Articles of Association: Peter Fagernäs
(Chairman), Heikki Pentti (Deputy Chairman), Birgitta Kantola,
Lasse Kurkilahti, Antti Lagerroos and Erkki Virtanen. Birgitta
Johansson-Hedberg was elected as a new member.

Authorised Public Accountants, PricewaterhouseCoopers Oy, were re-
elected as auditors with Juha Tuomala, Authorised Public
Accountant, having the principal responsibility.

Group personnel

The average number of employees in the Group during the period
from January to March was 13,023 (12,733). The number of employees
at the end of the period was 13,029 (12,645).

Group management

Mr Risto Rinne was appointed President, Oil Sector and member of
the Corporate Executive Committee as of 15 January 2004.

Events after the period under review

Fortum Teknik & Miljö AB, a company specialising in energy
consulting, was sold to the Swedish company, Ångpanneföreningen.

Fortum and Jacobs Engineering Group Inc., based in California,
USA, announced a letter of intent which enables Jacobs to purchase
an ownership position in Fortum's Neste Engineering operations.

Outlook

The key market drivers influencing Fortum´s performance are the
market price of electricity and the international oil refining
margin. Other important market drivers are the price of crude oil,
and the exchange rates of the US dollar and the Swedish krona.
During 2005, emissions trading may become a new key market driver.

During the past five years, the volume of Fortum´s CO2-free power
generation has increased from 30 TWh to 41 TWh. Its share was 78%
of Fortum´s power generation in 2003. With this production
portfolio, Fortum is in a good position with regard to the
possible impacts of emissions trading.

According to general market information, electricity consumption
in the Nordic countries is predicted to increase by about 1% a
year over the next few years. During the first quarter, the
average spot price for electricity was EUR 28.6 (53.3) per
megawatt-hour on the Nordic electricity market. At the beginning
of April, the Nordic water reservoirs were about 14 TWh below the
average and 6 TWh above the corresponding level for 2003. During
the first part of April, the spot price has been at the level of
EUR 29 per megawatt-hour while the electricity price in the
forward market for the remainder of 2004 has been in the range of
EUR 29-31 per megawatt-hour. For the next 12 months, Fortum's
hedging level for electricity sales is approximately 60%.

The oil market fundamentals are developing according to Fortum's
assumptions: the consumption of clean traffic fuels is increasing
and the demand for heavy fuel oil is decreasing making the complex
refineries even more competitive. In addition, Fortum’s position
along the new export routes for Russian crude oil gives it a clear
advantage. These developments are in line with Fortum's
profitability assumptions for the ongoing Porvoo refinery upgrade
investment and establish a good starting point for the future
listing of the oil businesses.

The oil refining reference margin in north-western Europe (Brent
Complex) averaged USD 3.1 (3.8) /bbl during the first quarter.
During the first half of April, the average reference margin
strengthened and exceeded USD 5/bbl. Fortum’s premium margin is
expected to remain at the strong levels of previous years. No
major maintenance shutdowns are planned at the refineries during
2004.

The average price for Brent crude oil was USD 32.0 (31.5) /bbl
during the first quarter. During the first half of April 2004, the
price has been averaging USD 32.9/bbl while the International
Petroleum Exchange’s Brent futures for the remainder of 2004 have
been averaging USD 31.8/bbl. The price of crude oil has an impact
on the results of Oil Refining and Marketing through inventory
gains and losses.

The refining margins and shipping freights are exposed to USD
exchange rate volatility and therefore a weakened US dollar will
have a negative impact on the profitability of the oil business.
However, this impact is mitigated because of the forward hedging
policy of the estimated US dollar sales margins.

During the first quarter, the fixing euro exchange rates against
the US dollar and the Swedish crona were on average 1.241 (1.075)
and 9.191 (9.197) respectively. At the end of March, the exchange
rates were 1.222 (1.090) and 9.258 (9.261) respectively.

Preparations for listing the oil businesses continued during the
first quarter, aiming at readiness towards the end of the year.
The timing of the planned initial public offering will depend on
market conditions, however.

Due to seasonal reasons, the continuous operations of the power
and heat businesses usually result in a significantly better
financial performance in the first and last quarters of the year
than in the second and third quarters.

The strong first quarter, the current market fundamentals and the
company's hedging positions strengthen management's confidence in
2004 as another good year for Fortum.

Espoo, 22 April 2004
Fortum Corporation
Board of Directors

The figures have not been audited.

Fortum will adopt the International Financial Reporting Standards
(IFRS/IAS) as of 2005.

Publication of results in 2004:
Interim Report 1 January - 30 June 2004 will be published on 28
July 2004
Interim Report 1 January - 30 September 2004 will be published on
21 October 2004


Fortum Corporation
Carola Teir-Lehtinen
Senior Vice President, Corporate Communications

Further information:
Mikael Lilius, President and CEO, tel. +358 10 452 9100
Juha Laaksonen, CFO, tel. +358 10 452 4519


Distribution:
Helsinki Exchanges
Key media



FORTUM GROUP

JANUARY-MARCH 2004
Interim financial statements are unaudited

CONSOLIDATED INCOME STATEMENT

MEUR Q1/04 Q1/03 2003 Last 12
months
Net sales 2 823 3 593 11 392 10 622
Share of profits of associated 10 11 41 40
companies
Other operating income 49 13 151 187
Materials and services -1 873 -2 678 -8 054 -7 249
Personnel expenses -172 -183 -654 -643
Depreciation, amortisation and -121 -133 -538 -526
write-downs
Other operating expenses -154 -148 -918 -924
Operating profit 562 475 1 420 1 507
Financial income and expenses -75 -65 -236 -246
Profit before taxes 487 410 1 184 1 261
Income taxes -147 -107 -325 -365
Minority interests -19 -33 -90 -76
Net profit for the period 321 270 769 820

Earnings per share, EUR 0.38 0.32 0.91 0.97
Fully diluted earnings per share, EUR 0.37 0.32 0.90
Average number of shares,
1,000 shares 849 698 845 776 846 831 845 953
Diluted adjusted average number
of sharesm 1,000 shares 867 344 853 684 858 732
CONSOLIDATED BALANCE SHEET
MEUR Mar 31 Mar 31 Dec 31
2004 2003 2003
ASSETS
Fixed assets and other long-term
investments
Intangible assets 156 165 146
Property, plant and equipment 11 446 11 541 11 632
Other long-term investments 1 776 1 434 1 762
Other interest-bearing long-term
investments 673 534 632
Total 14 051 13 674 14 172
Current assets
Inventories 580 536 551
Trade receivables 1 049 1 096 951
Short-term receivables 427 842 449
Cash and cash equivalents 203 339 439
Total 2 259 2 813 2 390
Total 16 310 16 487 16 562

SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital 2 889 2 876 2 886
Other equity 3 487 3 008 3 520
Total 6 376 5 884 6 406
Minority interests 245 1 461 232
Provisions for liabilities and
charges 210 99 207
Deferred tax liabilities 1 862 1 798 1 843
Liabilities
Long term liabilities
Interest-bearing 4 235 3 536 4 840
Interest free 345 452 346
Short term liabilities
Interest-bearing 1 245 1 428 1 225
Interest free 1 792 1 829 1 463
Total 16 310 16 487 16 562

Equity per share, EUR 7.50 6.96 7.55
Number of shares, 1,000 shares 849 813 845 776 848 832

CHANGE IN SHAREHOLDERS' EQUITY
MEUR Jan-Mar31 Jan-Mar31 Dec 31
2004 2003 2003

Shareholders' equity, 1 January 6 406 5 897 5 897
Stock options exercised - - 22
Dividend -357 -262 -262
Translation differencies 6 -21 -20
Net earnings for the period 321 270 769
Total 6 376 5 884 6 406

CASH FLOW STATEMENT
MEUR Mar 31 Mar 31 Dec 31
2004 2003 2003

Net cash from operating activities 458 344 1 577
Capital expenditures -108 -83 -550
Acquisition of shares - -29 -570
Proceeds from sales of fixed asset 14 63 142
Proceeds from sales of shares 1 933 1 227
Change in other investments -51 1 -67
Cash flow before financing activities 314 1 229 1 759
Net change in loans -549 -1 480 -399
Dividends paid - - -264
Other financing items * -2 -1 -1 245
Net cash from financing activities -551 -1 481 -1 908
Net increase (+)/decrease (-) in cash
and marketable securities -237 -252 -149

* Includes the redemption of Fortum Capital Ltd preference shares
-1 200 million euros in December 2003

KEY RATIOS
Mar 31 Mar 31 Dec 31 Last 12
2004 2003 2003 months

Capital employed, MEUR 12 101 12 309 12 704
Interest-bearing net debt, MEUR 5 276 4 624 5 626
Investments, MEUR 108 112 1 136 1 132
Return on capital employed, % 18.6 15.6 11.4 12.9
Return on shareholders' equity, % 20.4 16.5 12.3 12.5
Interest coverage 7.6 7.1 5.8 6.0
FFO / interest-bearing net debt, % 1) 46.5 43.5 26.1
Gearing, % 80 63 85
Equity-to-assets ratio, % 41 45 40
Average number of employees 13 023 12 733 13 343

1) FFO = Funds from operations
Comparison figures include the effect of the redemption of Fortum
Capital Ltd preference shares in December 2003.

NET SALES BY SEGMENTS
MEUR Q1/04 Q1/03 2003 Last 12
months

Power, Heat and Gas 890 1 204 3 394 3 080
Distribution 206 199 688 695
Markets 515 687 2 024 1 852
Oil Refining and Marketing 1 682 2 075 7 192 6 799
Other Operations 18 20 84 82
Eliminations -487 -592 -1 990 -1 885
Total 2 823 3 593 11 392 10 622

OPERATING PROFIT BY SEGMENTS
MEUR Q1/04 Q1/03 2003 Last 12
months

Power, Heat and Gas 335 291 776 820
Distribution 87 81 247 253
Markets 12 -5 47 64
Oil Refining and Marketing 140 125 396 411
Other Operations -12 -17 -46 -41
Total 562 475 1 420 1 507

NON-RECURRING ITEMS IN OPERATING PROFIT BY SEGMENTS
MEUR Q1/04 Q1/03 2003
Last 12
months

Power, Heat and Gas 23 -1 1 25
Distribution - 1 20 19
Markets - - - -
Oil Refining and Marketing 10 2 15 23
Other Operations 0 2 24 22
Total 33 4 60 89

DEPRECIATION, AMORTISATION AND WRITE-DOWNS BY SEGMENTS
MEUR Q1/04 Q1/03 2003 Last 12
months

Power, Heat and Gas 56 58 231 229
Distribution 33 37 143 139
Markets 4 4 16 16
Oil Refining and Marketing 27 30 131 128
Other Operations 1 4 17 14
Total 121 133 538 526

INVESTMENTS BY SEGMENTS
MEUR Q1/04 Q1/03 2003 Last 12
months

Power, Heat and Gas 38 53 545 530
Distribution 14 23 339 330
Markets 2 - 28 30
Oil Refining and Marketing 50 32 202 220
Other Operations 4 4 22 22
Total 108 112 1 136 1 132
NET ASSETS BY SEGMENTS
MEUR Mar 31 Mar 31 Dec 31
2004 2003 2003

Power, Heat and Gas 8 569 8 699 8 850
Distribution 3 095 3 179 3 129
Markets 166 76 35
Oil Refining and Marketing 1 478 1 527 1 402
Other Operations 121 126 95
Total 13 429 13 607 13 511

RETURN ON NET ASSETS BY SEGMENTS 2)

% Mar 31 Mar 31 Mar 31 Mar 31
2004 2004*) 2003 2003*)

Power, Heat and Gas 15.4 14.3 13,3 13,4
Distribution 11.2 11.2 10,2 10,0
Markets 47.8 47.8 -30,4 -30,4
Oil Refining and Marketing 38.9 36.1 32,9 32,4

% Dec 31 Dec 31 Last 12 Last 12
2003 2003*) months months*)

Power, Heat and Gas 8.9 8.9 9.5 9.2
Distribution 7.9 7.2 8.1 7.5
Markets 61.6 61.1 65.0 64.6
Oil Refining and Marketing 27.0 26.0 28.2 26.6

2) Return on net assets, % = Operating profit/average net assets
*) Non-recurring items deducted from operating profit

CONTINGENT LIABILITIES
MEUR Mar 31 Mar 31 Dec 31
2004 2003 2003
Contingent liabilities
On own behalf
For debt
Pledges 161 492 149
Real estate mortgages 91 235 91
Company mortgages - 7 -
Other mortgages - 26 -
For other commitments
Real estate mortgages 55 55 55
Pledges, company and other
mortgages - 2 -
Sale and leaseback 8 9 8
Other contingent liabilities 101 94 101
Total 416 920 404
On behalf of associated companies
Pledges and real estate mortgages 12 9 12
Guarantees 478 721 562
Other contingent liabilities 182 184 182
Total 672 914 756
On behalf of others
Guarantees 16 5 15
Other contingent liabilities 6 9 7
Total 22 14 22
Total 1 110 1 848 1 182
Operating lease liabilities
Due within a year 75 62 75
Due after a year 103 133 103
Total 178 195 178

Liability for nuclear waste disposal 570 516 570
Share of reserves in the Nuclear Waste
Disposal Fund -560 -506 -560
Liabilities in the balance sheet 3) 10 10 10

3) Mortgaged bearer papers as security

In addition to other contingent liabilities a guarantee has been
given on behalf of Gasum Oy, which covers 75% of the natural gas
commitments arising from the natural gas supply agreement between
Gasum and OOO Gazexport.

Derivatives Mar 31 2004 Mar 31 2003

Interest and currency derivaties

Contract Fair Not recogn. Contract Fair Not rec.
or value as an or value as an
notional income notional income
value value
MEUR
Forward rate agreements 324 - - 1 863 -2 -2
Interest rate swaps 4 178 -104 -66 6 836 -18 40
Forward foreign exchange 7 946 86 7 5 440 50 39
Currency swaps 339 8 3 2 325 243 62
Purchased currency optio 425 -5 -5 100 8 8
Written currency options 425 -4 -4 46 1 1

Dec 31 2003

Forward rate agreements 330 - -
Interest rate swaps 4 253 -97 -69
Forward foreign exchange 8 396 129 49
Currency swaps 333 -3 1
Purchased currency optio - - -
Written currency options - - -

4) Incl. also contracts used for equity hedging

Oil futures and forward Mar 31 2004 Mar 31 2003
instruments Volume Fair Not recogn. Volume Fair Not rec.
value as an value as an
income income

1 000 bbl MEUR MEUR 1000 bbl MEUR MEUR

Sales contracts 30 596 1 1 17 800 1 1
Purchase contracts 33 712 9 9 14 868 -1 -1
Purchased options 3 650 - - 1 100 - -
Written options 2 598 - - 850 1 1

Dec 31 2003

1 000 bbl MEUR MEUR


Sales contracts 22 304 -11 -11
Purchase contracts 37 239 14 14
Purchased options 150 - -
Written options 600 - -

Electricity derivatives
Mar 31 2004 Mar 31 2003
Volume Fair Not recogn. Volume Fair Not rec.
value as an value as an
income income

TWh MEUR MEUR TWh MEUR MEUR

Sales contracts 66 -198 -92 82 -277 -205
Purchase contracts 42 194 86 68 239 168
Purchased options - - - 2 - 1
Written options - - - 4 - -1

Dec 31 2003
TWh MEUR MEUR

Sales contracts 58 -100 -65
Purchase contracts 50 136 101
Purchased options - - -
Written options - - -

Natural gas derivates
Mar 31 2004 Mar 31 2003
Volume Fair Not recogn. Volume Fair Not rec.
value as an value as an
income income

Mill.th MEUR MEUR Mill.th. MEUR MEUR
Sales contracts - - - 3 590 7 7
Purchase contracts - - - 3 271 -3 -3
Purchased options - - - 1 378 -7 -7
Written options - - - 1 202 5 5

Dec 31 2003
Mill.th MEUR MEUR
Sales contracts 8 - -
Purchase contracts 8 - -
Purchased options - - -
Written options - - -

other derivatives are based on the present value of cash flows resulting
from the contracts, and, in respect of options, on evaluation models.
The amounts also include unsettled closed positions. Derivative contracts
are mainly used to manage the group's currency, interest rate and price
risk.

QUARTERLY NET SALES BY SEGMENTS
MEUR Q1/04 Q4/03 Q3/03 Q2/03 Q1/03

Power, Heat and Gas 890 852 622 716 1 204
Distribution 206 186 143 160 199
Markets 515 525 406 406 687
Oil Refining and Marketing 1 682 1 757 1 717 1 643 2 075
Other Operations 18 23 22 19 20
Eliminations -487 -506 -383 -509 -592
Total 2 823 2 837 2 527 2 435 3 593

QUARTERLY OPERATING PROFIT BY SEGMENTS
MEUR Q1/04 Q4/03 Q3/03 Q2/03 Q1/03

Power, Heat and Gas 335 273 76 136 291
Distribution 87 58 47 61 81
Markets 12 22 15 15 -5
Oil Refining and Marketing 140 78 118 75 125
Other Operations -12 -11 -16 -2 -17
Eliminations - - -1 1 -
Total 562 420 239 286 475