FORTUM’S FINANCIAL STATEMENTS 2000

FORTUM’S FINANCIAL STATEMENTS 2000
Operating profit up by nearly 30%, earnings per share improved by 34%
 
Group net sales, at EUR 11,026 million, increased by 34%. Operating profit, at EUR 906 million, increased by 29%. Comparable operating profit was more than 50% better than in the previous year. Profit before extraordinary items improved by 28% to EUR 633 million. Earnings per share, at EUR 0.55, improved by 34%.
 
- The high price of crude oil improved the results for oil production.
- The results for oil refining were good as a result of our strong refining margin.
- The low market price of electricity had an adverse effect on the results for electricity generation and sales.
- Electricity generation capacity, at more than 10,000 MW at year-end, increased as a result of acquisitions.
- Natural gas production began at the Åsgard field in Norway in October.
- Mikael Lilius became President and CEO on 1 September 2000.
- The Board of Directors will propose to the annual general meeting, planned to be held on 4 April 2001, that the dividend will be EUR 0.23 per share.
 
 
 
Key figures
IV/00   
IV/99
2000
1999
Net sales, EUR million
3,294
2,344
11,026
8,232
Operating profit, EUR million
283
183
906
705
Profit before extraordinary items, EUR million
219
127
633
494
Earnings per share, EUR
0.16
0.11
0.55
0.41
Equity per share, EUR
 
 
6.32
6.00
Capital employed (at end of period), EUR million
 
 
11,365
9,425
Interest-bearing net debt (at end of period), EUR million
 
 
4,626
3,818
Investments, EUR million
 
 
3,131 
1,059
Cash flow from operating activities, EUR million
 
 
424
524
Return on capital employed, %
 
 
9.4
8.4
Return on shareholders’ equity, %
 
 
8.6
7.7
Gearing, %
 
 
73
79
Average number of employees
 
 
16,220
17,461
 
                         
Net sales and results of the Group
 
Group net sales increased by 34% to EUR 11,026 million (EUR 8,232 million) from the previous year. This was principally attributable to the increase in the prices of crude oil and petroleum products, and to expanded gas trading. Despite the lower price of electricity, the electricity business’s net sales increased, as a result of additional capacity acquired from Germany and Sweden.
The Nordic countries constitute our most important market area: together they accounted for 57% of our 2000 net sales.
 
Net sales by segment
 
 
 
EUR million
2000
1999
Change-%
 
 
 
 
Oil and Gas Upstream 1)
945
366
158
Oil Refining and Marketing 2)
7,759
5,064
53
Power and Heat Generation and Sales
1,760
1,443
22
Electricity Distribution
467
347
35
Service
356
290
23
Engineering
585
479
22
Other operations
94
137
-31
Internal invoicing
-940
-717
31
Total
11,026
7,409
49
Discontinued operations
-
823
 
Group
11,026
8,232
34
 
 
 
 
1) Includes natural gas trading and retail sales
558
136
 
2) Includes oil trading
1,117
783
 
 
Comparable operating profit improved by 52%
Fortum Group’s operating profit for 2000 increased by 29% to EUR 906 million (EUR 705 million). The comparable increase in the operating profit of the continuing business operations was 52%, because the operating profit for 1999 included EUR 107 million of operating profit from discontinued operations. The increase in the price of crude oil considerably improved the results for oil and gas upstream. The results for oil refining and marketing increased significantly as a result of an improvement in the refining margin. In addition, shipping operations and strong demand for gasoline components contributed to better results of oil refining and marketing.
 
The continuing low price of electricity reduced the profit for power generation and sales. In addition, district heat sales diminished as a result of the warmer-than-average weather.
The volume of our expiring electricity contracts, most of which were signed before the deregulation of the markets, was 4.7 TWh, but a corresponding volume was sold under other contracts. The consequent reduction in operating profit was almost EUR 40 million compared with the previous year. Old contracts to the volume of some 3 TWh will be expiring in 2001 with about 7 TWh expiring over the following three years. It is estimated that future annual effects on operating profit will be less than in 2000.
The effect on our operating profit of Birka Energi Group, of which Fortum owns half, was EUR 175 million.
The poor results of Engineering were attributable to certain loss-making projects of Power Plant Engineering. The other Engineering units were profitable.
Operating profit by segment
 
 
 
EUR million
2000
1999
Change-%
 
 
 
 
Oil and Gas Upstream
218
82
166
Oil Refining and Marketing
382
182
110
Power and Heat Generation and Sales
211
236
-11
Electricity Distribution
127
115
10
Service
12
12
0
Engineering
-21
12
-275
Other operations
-9
-24
138
Eliminations
-14
-17
 
Total
906
598
52
Discontinued operations
-
107
 
Group
906
705
29
 
The business operations acquired during the year had a slightly positive effect on the operating profit. 
Inventory gains, which were a result of the increase in crude oil prices and principally affected statutory crude oil stockpiling, and the appreciation of the coal stock, totalled EUR 24 million (EUR 81 million).
Operating profit includes gains on the sale of fixed assets and shareholdings, at EUR 119 million (EUR 155 million). Correspondingly, non-recurrent write-downs and provisions totalled EUR 66 million (EUR 20 million).
Excluding Birka Energi, our associated companies have been consolidated by the equity method. Our share of the results of these companies, excluding Birka Energi, totalled EUR 46 million (EUR 36 million). Birka Energi has been consolidated using the proportionate method on the basis of 50% ownership.
 
Profit before extraordinary items amounted to EUR 633 million (EUR 494 million).
Profit before taxes was EUR 623 million (EUR 954 million). Extraordinary items in 1999 included the profit from the sale of Gasum Oy’s shares and the business operations of Neste Chemicals Oy and Enermet Oy.
Net profit for the period was EUR 423 million (EUR 703 million) and earnings per share were EUR 0.55 (EUR 0.41). Return on capital employed was 9.4% (8.4%) and return on shareholders’ equity was 8.6% (7.7%).
Our net financing expenses were EUR 273 million (EUR 211 million). Taxes for the financial year totalled EUR 154 million (EUR 229 million).
Major price fluctuations on the markets, increased production volume for Fortum
Oil and Gas Upstream
Our most important area in oil and gas exploration and production is Norway, but we also have operations in Oman and Russia. In addition, we are involved in gas pipeline projects and have interests in gas companies in the Baltic Rim and in the UK.
 
IV/00
IV/99
2000
1999
Net sales, EUR million
414
163
945
366
Operating profit, EUR million
87
40
218
82
Identifiable assets, EUR million
 
 
1,284
1,138
 
In 2000, there was a considerable increase in the price of crude oil. The price of North Sea Brent crude rose as high as USD 35 a barrel during the autumn, and at the year-end it was around USD 24 a barrel. The annual average price of Brent was USD 28.5, compared with approximately USD 18 the previous year. The average price of oil sold by us was USD 27.6 a barrel (USD 17.9).
In 2000, we produced an average of 34,200 oil-equivalent barrels of oil and gas a day (32,700 in 1999) about 1.7 million tonnes a year, an increase of almost 5% on the previous year. Gas production at the Åsgard field in Norway began in October 2000. In 2001, gas production at the field is expected to reach nearly 10,000 oil-equivalent barrels a day.
Oil Refining and Marketing
We own two oil refineries in Finland, a network of service stations and retail outlets in Finland and elsewhere in the Baltic Rim, as well as business operations in lubricants, base oils, components and LPG. For logistics, we use our own and time-chartered tankers as well as terminals.
 
IV/00
IV/99
2000
1999
Net sales, EUR million
2,209
1,602
7,759
5,064
Operating profit, EUR million
108
49
382
182
Identifiable assets, EUR million
 
 
1,838
1,609
 
The international refining margin more than tripled. The annual average was USD 3.4 a barrel (USD 0.9 in 1999). Our refining margin continued to be considerably higher than the international reference margin.
Our wholesale deliveries of petroleum products in Finland totalled 7.8 million tonnes (7.9 million tonnes). Petroleum product sales outside Finland increased slightly and amounted to 4.9 million tonnes (4.8 million tonnes). Our most important export market was Sweden: petroleum product sales to Sweden totalled 1.7 million tonnes (2.0 million tonnes). Exports to North America increased to 1.0 million tonnes (0.8 million tonnes). Exports to the Baltic countries were small.
Our retail and direct sales of petroleum products in Finland were 3.8 million tonnes, the same as in the previous year. In addition, we maintained our market position.
Deliveries of petroleum products refined by Fortum, by product group
(1,000 t)
IV/00
IV/99
2000
1999
Gasoline
998
1,020
3,941
4,186
Diesel
834
750
3,246
2,666
Aviation fuel
174
226
786
1,005
Light fuel oil
517
633
1,843
2,249
Heavy fuel oil
306
296
1,133
1,003
Other
343
332
1,360
1,380
Total
3,172
3,257
12,309
12,489
 
Deliveries of petroleum products refined by Fortum, by area
(1,000 t)
IV/00
IV/99
2000
1999
Finland
1,924
2,051
7,423
7,713
Other Nordic countries
505
520
2,142
2,163
Baltic countries and Russia
64
134
153
417
USA and Canada
287
0
1,029
777
Other countries
392
552
1,562
1,419
Total
3,172
3,257
12,309
12,489
 
Power and Heat Generation and Sales
Fortum is the second-largest power generation company in the Nordic countries and, as a heat producer, is the leading company in the Nordic countries. Our operations are most extensive in Finland and Sweden, but we also operate in continental Europe, the UK, Ireland and South-East Asia.
 
IV/00
IV/99
2000
1999
Net sales, EUR million
514
405
1,760
1,443
- Electricity sales
299
275
1,170
1,037
- Heat sales
121
103
411
360
Operating profit, EUR million
63
60
211
236
Identifiable assets, EUR million
 
 
6,193
4,852
 
The market price of electricity in the Nordic countries remained at the 1999 level. The average system price of the Nord Pool exchange was EUR 12.8 (EUR 13.5) per MWh. The regional prices in Finland and Sweden were higher than the system price. The Nordic countries used a total of 382 TWh of electricity, 1.5% more than in 1999.
Our electricity generation capacity in the Nordic countries was 9,243 MW (8,303 MW) at the end of the year, while our total capacity was 10,163 MW (8,549 MW). Our electricity sales in the Nordic countries amounted to 45.3 TWh (41.6 TWh). Sales in Finland amounted to 28.4 TWh (29.6 TWh) and in Sweden to 16.9 TWh (12.0 TWh), including 50% of Birka Energi’s electricity sales. Outside the Nordic countries, our sales totalled 6.1 TWh (2.2 TWh). The average price of our electricity sold in the Nordic countries decreased by 6% from the previous year.
Electricity sales by area
(TWh)
IV/00
IV/99
2000
1999
Nordic countries, total
13.7
11.2
45.3
41.6
- Sweden*
5.6
3.0
16.9
12.0
- Finland
8.1
9.3
28.4
29.6
Germany
1.1
0.2
3.9
0.2
UK
0.4
0.5
0.2
0.1
Estonia
0.1
0.1
0.2
0.1
Total
15.3
12.0
51.3
43.9
 
*  includes 50% of Birka Energi’s electricity sales
The heat market was influenced by a strong increase in fuel prices and the unexceptionally warm autumn. We sold a total of 15.6 TWh (15.7 TWh) of heat in the Nordic countries.
In December, we signed contracts on long-term deliveries of district heat in the Turku region. The total agreed capacity is about 300 MW and the annual energy volume is 1.5 TWh.
Heat sales by area
(TWh)
IV/00
IV/99
2000
1999
Sweden*
1.2
1.3
4.1
3.8
Finland
2.9
3.6
11.5
11.9
Other countries
0.3
0
0.7
0.0
Total
4.4
4.9
16.3
15.7
 
* includes 50% of Birka Energi’s heat sales
 
Electricity Distribution
Fortum distributes electricity to 900,000 customers through its networks in Sweden, Finland, Germany, and Estonia.
 
IV/00
IV/99
2000
1999
Net sales, EUR million
129
98
467
347
Operating profit, EUR million
34
38
127
115
Identifiable assets, EUR million
 
 
2,263
1,851
 
Distribution prices of electricity were stable. Our networks distributed a total of 15.0 TWh of electricity, 19% more than in the previous year. The increase was attributable to the acquisition of Elektrizitätswerk Wesertal GmbH. We organised electricity distribution in Finland into one unit.
Electricity distribution in distribution networks, by area
 (TWh)
IV/00
IV/99
2000
1999
Sweden*
2.3
3.0
8.1
8.6
Finland
1.1
1.2
4.0
4.0
Other countries
0.7
0.0
2.9
0.0
Total
4.1
4.2
15.0
12.6
 
* includes 50% of Birka Energi’s electricity distribution
Number of electricity distribution customers by area
 
 
31 Dec 2000
31 Dec 1999
Sweden*
438,000
444,000
Finland
282,000
278,000
Other countries
182,000
21,000
Total
902,000
743,000
 
* includes 50% of Birka Energi’s customers
Service
 
Service offers operation and maintenance services for power plant owners, and maintenance services for the process industry. In addition to Finland and Sweden, we have operations in Central Europe and South-East Asia.
 
 
IV/00
IV/99
2000
1999
Net sales, EUR million
122
94
356
290
Operating profit, EUR million
8
10
12
12
Identifiable assets, EUR million
 
 
31
42
 
The availability of the power plants operated by Fortum Service continued to be excellent. Service is responsible for the operation of more than 11,000 MW of electricity generation capacity and 6,800 MW of heat generation capacity. In the maintenance business, our customer relations were increasingly based on partnerships and, during the year, we signed several long-term contracts.
 
Engineering
 
Engineering specialises in turnkey contracts for energy generation and transmission systems, deliveries for oil refining and chemical industries, railway electrification, and communications networks.
 
 
IV/00
IV/99
2000
1999
Net sales, EUR million
177
185
585
479
Operating profit, EUR million
-16
12
-21
12
Identifiable assets, EUR million
 
 
81
37
 

At the year-end, Fortum Engineering’s uninvoiced orders totalled EUR 473 million (EUR 675 million at the end of 1999). We decided to divest Transmission Engineering. Power Plant Engineering showed  a distinct loss, and we started restructuring the operations of this performance unit.
 
 
Significant financing arrangements, liquidity continued to be good
The most significant financial transaction in 2000 was that implemented for the financing of the acquisition of Stora Enso power plants, in which Fortum Capital Ltd issued preferred shares worth EUR 1.2 billion. The increase in the minority interest on the balance sheet of the consolidated financial statements is a result of this financing arrangement.
Interest-bearing net debt was EUR 4,626 million (EUR 3,818 million) and gearing 73% (79%) at the end of the year.
The Group’s liquidity continued to be good. At the end of the year, cash and marketable securities totalled EUR 437 million. In addition, we had a total of about EUR 1 billion of undrawn syndicated loans. In 2000, our net financing expenses totalled EUR 273 million, which corresponds to 2% of net sales. The non-recurrent costs of the financing arrangement in connection with the acquisition of Stora Enso power assets totalled some EUR 33 million.
Our most important loan currencies were the Swedish krona, the euro and the US dollar. At the end of the year, the average interest rate of loans, excluding loans by Birka Energi and after hedging arrangements, was 6.2%.
Most significant investments made in electricity generation
In 2000, we invested EUR 3,131 million  (EUR 1,059 million), a major portion of which was in acquisitions by the Power and Heat sector. The total includes EUR 1,208 million (EUR 8 million) of interest-bearing net debt of the acquired subsidiaries at the time of acquisition.
 
We acquired the share capital of the German energy company, Elektrizitätswerk Wesertal GmbH, for EUR 388 million, in January. In May-June, we acquired Stora Enso’s power plant capacity, corresponding to a total of 1,511 MW and 6.7 TWh of annual production in Finland and Sweden. The value of the transaction, at EUR 1.7 billion, included several companies and interests. We also agreed with Stora Enso on annual electricity deliveries of over 2 TWh over the next three years.
The development of the Åsgard oil and gas field for production was completed. Over the year, a total of around EUR 70 million was spent on preparing for gas production, which began in October, and the related infrastructure.
Corporate reorganisation in power generation
To optimise the production structure of electricity, we sold 97 MW of the capacity we acquired from Stora Enso in Finland to Kemijoki Oy and exchanged the shares we had acquired in Pamilo Oy for those of Bullerforsens Kraft AB in Sweden. We sold our power generation shares in the Vuosaari A and B plants and three hydropower plants acquired from Stora Enso to Helsingin Energia. In addition, we exchanged our shares of the Swedish hydropower company, Gulsele AB, for shares in Kemijoki Oy. We also sold our shares in Lahden Lämpövoima Oy, to Lahti Energia.
 
Share capital increased in connection with Länsivoima merger
 
In the merger of Länsivoima Oyj with Fortum Corporation on 30 September 2000, 60,825,940 new Fortum Corporation shares were issued as merger consideration, and the share capital was increased by EUR 206,808,196. The new shares were combined with Fortum Corporation’s existing share type on 30 September 2000. In the merger, one Länsivoima share was equivalent to 10 Fortum new shares. On 31 December 2000, the number of Fortum Corporation shares was 845,608,575, and the share capital was EUR 2,875,069,155. The number of shares, excluding the parent company shares owned by Group companies, was 794,571,055.
 
Fortum Power and Heat Oy, Fortum Corporation’s wholly-owned subsidiary, was the largest shareholder of Länsivoima Oyj. In the merger, Fortum Power and Heat Oy received 51,037,520 Fortum Corporation shares to the total nominal value of EUR 173,527,568, which is 6.04% of Fortum Corporation shares, share capital and voting rights. Currently these shares do not carry any voting rights. At the same time, the Finnish State’s shareholding decreased from 75.38% to 69.96%. At the year-end, the Finnish State’s holding stood at 70.74%.
 
The Board of Directors of Fortum Corporation has today no unused authorisations from the general meeting of shareholders to increase the company’s share capital or to subscribe for the company’s own shares.
Number of employees almost unchanged
In 2000, Fortum Group employed an average of 16,220 people (17,461 in 1999), and at the end of the year 15,770 people (15,048). The increase was principally a result of the acquisition of the German company, Elektrizitätswerk Wesertal GmbH. At the end of the year, Fortum Corporation employed 377 people (37), after 348 employees of our subsidiaries became employees of Fortum Corporation at the beginning of the year.
Development of business operations
 
Mikael Lilius, President and CEO comments, “Following our strategic review, which we began in the autumn, we selected the Nordic countries and the rest of the Baltic Rim as our geographic focus for our core businesses. In the electricity business, we particularly aim at participating in the Nordic restructuring, and have already expressed our interest in negotiating for the acquisition of all the shares of Birka Energi AB.  We also foresee restructuring in oil refining and marketing, in which we intend to be an active player. Our strong niche position in this business provides us with an excellent base from which to create added value. "
 
During the year, we decided to focus our electricity generation on the Nordic countries and elsewhere in the Baltic Rim, and to divest our power plants in the UK, Ireland and Hungary. In December 2000, an agreement was reached on the sale of our company in Hungary.
 
In order to improve our capital structure, we used a minority investment arrangement to finance the power assets contract which we signed with Stora Enso. For the same reason, we divested significant production assets in Finland. Thanks to these actions, our economic flexibility improved.
 
We redirected the operations of the Engineering sector. We decided to divest Transmission Engineering and started to restructure Power Plant Engineering. In the R&D unit, which supports the power and heat business, we initiated a significant reorganisation to focus with increasing determination on our key expertise, and to organise research and development closer to the business.
 
We aim to use specific financial targets to influence the choices made in our business units. To determine the desired financial targets, we assessed indicators used in our industry. Based on these factors and on market outlook, we confirmed our targeted return on equity (ROE) and return on capital employed (ROCE) at 12%. In September, we launched a Group-wide performance improvement programme to improve our productivity by 5-10% each year and to achieve these financial targets within the next few years.
 
At the beginning of 2001, we established a new sector, Fortum Markets, to develop our customerships in the Nordic countries. This business provides our industrial customers with energy products, and small-scale entrepreneurs and private customers with a wide range of products and services. Fortum Markets is continuing the work started at Energy House and includes e-commerce services, in which we are a forerunner.
 
We can also increase business volume by combining our existing strengths in the operation and maintenance of power plants, and in related technology. This is a growth area, which may be significant on an international scale. To this end, we established Fortum Energy Solutions, where we concentrate our key expertise in these areas.
 
Mikael Lilius says, "These actions to improve performance, combined with focusing and reorganising our business, will contribute to the creation of a stronger company. Our principal shareholder has announced its readiness to change our ownership structure, which would give us the freedom we need for major moves”.
 
Short-term outlook
 
Key market-based factors which will influence our performance are the price of crude oil, the refining margin, the market price of electricity, and the exchange rate of the US dollar.
Opec’s target is to keep the price of crude oil at between USD 22 and 28 dollars a barrel. In February 2001, the price of Brent futures for 2001 on the International Petroleum Exchange was USD 26 to 28 a barrel. Our oil and gas production will increase as a result of the gas production beginning at the Åsgard field.
In 2000, the international refining margin was exceptionally high. A significant reason which has a long-term effect was the stricter environmental requirements for motor fuels and the resulting high demand for products which comply with them. No increase in oil consumption in our most important markets is foreseen. The approximately five-week maintenance shutdown at our Porvoo refinery in spring 2001 will reduce the total amount of our refined petroleum products.
Over the next couple of years, electricity consumption in the Nordic countries is estimated to increase by 1.5% each year. In 2001 the growth is expected to be even faster because of the exceptionally warm weather of the previous year decreasing consumption by almost 10 TWh. The proportion of hydropower in power generation is estimated to fall from the record high of 2000. At the same time, the proportion of coal used in power generation is estimated to increase. The normalisation of the water situation and the low snowfall in Norway indicate a rise in the price of electricity.
Proposal for the distribution of dividends
The Group’s non-restricted and distributable equity at 31 December 2000 was EUR 2,117 million. The parent company’s distributable equity at 31 December 2000 was EUR 465,142,681.91.
The Board of Directors will propose to the annual general meeting, which is planned to be held on 4 April 2001, that Fortum Corporation should pay a dividend of EUR 0.23 per share for 2000, making a total of EUR 194 million.
 
Fortum Corporation
 
APPENDICES:
Figures of the financial statements
 
Further information:
Mikael Lilius, President and CEO, tel. +358 10 45 29100
Juha Laaksonen, Corporate Executive Vice President, Chief Financial Officer, tel. +358 10 45 24519
 
Distribution:
Helsinki Exchanges
Key Media
 
 
FORTUM GROUP
 
 
 
 
 
 
 
JANUARY-DECEMBER 2000
 
 
 
 
 
 
Audited
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
Q4/00
Q4/99
2000
1999
 
 
 
 
 
 
 
 
 
Net sales
 
 
3,294
2,344
11,026
8,232
 
Share of profits (losses) of associated companies
20
2
46
36
 
Other operating income
 
61
54
140
187
 
Depreciation, amortisation and write-downs
-154
-134
-571
-523
 
Other operating expenses
 
-2,938
-2,083
-9,735
-7,227
 
Operating profit
 
 
283
183
906
705
 
Financial income and expenses
-64
-56
-273
-211
 
Profit before extraordinary items
219
127
633
494
 
Extraordinary income
 
 
-
100
0
493
 
Extraordinary expenses
 
-2
-32
-10
-33
 
Profit before taxes
 
 
217
195
623
954
 
Income taxes
 
 
-71
-43
-154
-229
 
Minority interests
 
 
-20
-3
-46
-22
 
Net profit for the period
 
126
149
423
703
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share, EUR
 
0.16
0.11
0.55
0.41
 
Average number of shares, 1,000 shares
 
787,223
784,783
 
 
 
 
 
 
 
 
 
CONSOLIDATED BALANCE SHEET
 
 
 
 
 
 
 
 
 
 
 
Dec 31
Dec 31
 
EUR mill.
 
 
 
 
2000
1999
 
 
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed assets and other long-term investments
11,712
9,724
 
Current assets
 
 
 
 
 
 
 
Inventories
 
 
 
 
746
661
 
Receivables
 
 
 
 
1,933
1,379
 
Cash and cash equivalents
 
 
 
437
775
 
Total
 
 
 
 
3,116
2,815
 
Total
 
 
 
 
14,828
12,539
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SHAREHOLDERS' EQUITY AND LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity
 
 
 
 
 
 
 
Share capital
 
 
 
 
2,875
2,640
 
Other equity
 
 
 
 
2,147
2,065
 
Total
 
 
 
 
5,022
4,705
 
Minority interests
 
 
 
 
1,281
126
 
Provisions for liabilities and charges
 
197
83
 
Deferred tax liabilities
 
 
 
1,177
1,128
 
Long-term liabilities
 
 
 
4,463
3,644
 
Short-term liabilities
 
 
 
2,688
2,853
 
Total
 
 
 
 
14,828
12,539
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity per share, EUR
 
 
 
6.32
6.00
 
Number of shares, 1,000 shares
 
 
845,609
784,783
 
Number of shares,own shares excluded 1,000 shares
794,571
784,783
 
KEY RATIOS
 
 
 
 
Dec 31
Dec 31
 
 
 
 
 
 
2000
1999
 
 
 
 
 
 
 
 
 
Interest-bearing net debt, EUR mill.
 
4,626
3,818
 
Investments, EUR mill.
 
 
 
3,131
1,059
 
Average number of employees
 
 
16,220
17,461
 
Return on capital employed, %
 
 
9.4
8.4
 
Return on shareholders' equity, %
 
8.6
7.7
 
Gearing, %
 
 
 
 
73
79
 
Equity-to-assets ratio, %
 
 
 
43
39
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET SALES BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
Q4/00
Q4/99
2000
1999
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream 
 
414
163
945
366
 
Oil Refining and Marketing
 
2,209
1,602
7,759
5,064
 
Power and Heat Generation and Sales
514
405
1,760
1,443
 
Electricity Distribution
 
129
98
467
347
 
Service
 
 
122
94
356
290
 
Engineering
 
 
177
185
585
479
 
Other Operations
 
 
27
38
94
137
 
Internal invoicing
 
 
-298
-255
-940
-717
 
Total
 
 
3,294
2,330
11,026
7,409
 
Discontinued Operations
1)
-
14
-
823
 
Net sales
 
 
3,294
2,344
11,026
8,232
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1) Includes Gasum, Enermet, Infrarödteknik and
Neste Chemicals in 1999.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DEPRECIATIONS BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
Q4/00
Q4/99
2000
1999
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream 
 
17
28
85
77
 
Oil Refining and Marketing
 
41
36
147
137
 
Power and Heat Generation and Sales
57
41
191
166
 
Electricity Distribution
 
32
19
122
75
 
Service
 
 
2
2
7
7
 
Engineering
 
 
1
2
9
8
 
Other Operations and eliminations
4
4
10
12
 
Total
 
 
154
132
571
482
 
Discontinued Operations
2)
-
2
-
41
 
Depreciations
 
 
154
134
571
523
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2) Includes Gasum, Enermet, Infrarödteknik and Neste Chemicals in 1999.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING PROFIT BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
Q4/00
Q4/99
2000
1999
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
3)
87
40
218
82
 
Oil Refining and Marketing
 
108
49
382
182
 
Power and Heat Generation and Sales
63
60
211
236
 
Electricity Distribution
 
34
38
127
115
 
Service
 
 
8
10
12
12
 
Engineering
 
 
-16
12
-21
12
 
Other Operations
 
 
6
-15
-9
-24
 
Eliminations
 
 
-7
-6
-14
-17
 
Total
 
 
283
188
906
598
 
Discontinued Operations
4)
-
-5
-
107
 
Operating profit
 
 
283
183
906
705
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3) Treatment of Gasum has been changed from a subsidiary company to an associated company in 1999.
4) Includes the impact of change in Gasum holding, Enermet, Infrarödteknik, Neste Chemicals and
Asko in 1999.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENTS BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
Q4/00
Q4/99
2000
1999
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
 
32
29
137
199
 
Oil Refining and Marketing
 
42
35
128
140
 
Power and Heat Generation and Sales
44
111
2,343
445
 
Electricity Distribution
 
37
32
489
226
 
Service
 
 
1
2
5
9
 
Engineering
 
 
16
4
20
12
 
Other Operations and eliminations
5
-1
9
5
 
Total
 
 
177
212
3,131
1,036
 
Discontinued Operations
5)
-
1
-
23
 
Investments
 
 
177
213
3,131
1,059
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5) Includes Gasum, Enermet, Infrarödteknik and Neste Chemicals in 1999.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IDENTIFIABLE ASSETS BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
Dec 31
Dec 31
 
EUR mill.
 
 
 
 
2000
1999
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
 
 
 
1,284
1,138
 
Oil Refining and Marketing
 
 
 
1,838
1,609
 
Power and Heat Generation and Sales
6)
 
 
6,193
4,844
 
Electricity Distribution
6)
 
 
2,263
1,685
 
Service
 
 
 
 
31
42
 
Engineering
 
 
 
 
81
37
 
Other Operations and eliminations
 
141
181
 
Total
 
 
 
 
11,831
9,536
 
Discontinued Operations
 
 
 
-
-
 
Identifiable assets
 
 
 
 
11,831
9,536
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6) Identifiable assets include deferred tax liabilities due to the allocated goodwill
EUR 216 million in 2000 and EUR 252 million in 1999 in Power and Heat Generation and
Sales; and EUR 262 million in 2000 and EUR 211 million in 1999 in Electricity Distribution.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RETURN ON CAPITAL EMPLOYED BY BUSINESS OPERATIONS (SEGMENTS) 7)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dec 31
Dec 31
 
%
 
 
 
 
2000
1999
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
 
 
 
18.0
8.3
 
Oil Refining and Marketing
 
 
 
22.2
11.4
 
Power and Heat Generation and Sales
 
3.8
5.1
 
Electricity Distribution
 
 
 
6.4
7.6
 
Service
 
 
 
 
32.9
38.7
 
Engineering
 
 
 
 
-35.6
24.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7) Return on net assets, % = Operating profit / average net assets
 
 
 
 
 
 
 
 
SIGNIFICANT NON-RECURRING ITEMS IN OPERATING PROFIT
 
BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
Q4/00
Q4/99
2000
1999
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
 
0
0
2
0
 
Oil Refining and Marketing
 
-1
49
32
120
 
Power and Heat Generation and Sales
-27
-5
14
43
 
Electricity Distribution
 
-3
0
-1
0
 
Service
 
 
0
0
0
0
 
Engineering
 
 
0
1
2
16
 
Other Operations and eliminations
21
-1
23
-12
 
Total
 
 
-10
44
72
167
 
Discontinued Operations
8)
-
0
-
48
 
Non-recurring performances
 
-10
44
72
215
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8) Includes Gasum, Enermet, Infrarödteknik, Neste Chemicals and Asko in 1999.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONTINGENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
Dec 31
Dec 31
 
EUR mill.
 
 
 
 
2000
1999
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On own behalf
 
 
 
 
 
 
 
For debt
 
 
 
 
 
 
 
Pledges
 
 
 
 
188
290
 
Real estate mortgages
 
 
 
156
134
 
Company mortgages
 
 
 
 
22
44
 
Other mortgages
 
 
 
 
54
54
 
For other commitments
 
 
 
 
 
 
Pledges
 
 
 
 
2
86
 
Real estate mortgages
 
 
 
87
96
 
Company mortgages
 
 
 
 
3
6
 
Other mortgages
 
 
 
 
6
-
 
Sale and leaseback
 
 
 
 
18
28
 
Other contingent liabilities
 
 
1,178
748
 
Total
 
 
 
 
1,714
1,486
 
 
 
 
 
 
 
 
 
On behalf of associated companies
 
 
 
 
Pledges
 
 
 
 
-
4
 
Real estate mortgages
 
 
 
-
1
 
Guarantees
 
 
 
 
165
79
 
Other contingent liabilities
 
 
368
182
 
Total
 
 
 
 
533
266
 
 
 
 
 
 
 
 
 
On behalf of persons referred to in § 11:7 of the Companies Act
 
Guarantees
 
 
 
 
-
0
 
 
 
 
 
 
 
 
 
On behalf of others
 
 
 
 
 
 
 
Pledges
 
 
 
 
1
0
 
Real estate mortgages
 
 
 
-
0
 
Guarantees
 
 
 
 
140
91
 
Other contingent liabilities
 
 
20
2
 
Total
 
 
 
 
161
93
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
2,408
1,845
 
 
 
 
 
 
 
 
 
Operating lease liabilities
 
 
 
 
 
Due within a year
 
 
 
 
68
50
 
Due after a year
 
 
 
 
122
138
 
Total
 
 
 
 
190
188
 
 
 
 
 
 
 
 
 
Finance leases have been recognised as assets and liabilities.
 
 
 
 
 
 
 
 
 
Liability for nuclear waste disposal
 
489
471
 
Share of reserves in the Nuclear Waste Disposal Fund
-460
-385
 
Liabilities in the balance sheet
9)
 
 
29
87
 
Excess of security given over obligations
0
1
 
 
 
 
 
 
 
 
 
9) Mortgaged bearer papers as security
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives
 
Dec 31
 
 
Dec 31
 
 
 
 
2000
 
 
1999
 
 
 
 
 
 
 
 
 
 
Interest and currency
Derivatives
EUR mill.
Contr-act or
Nation-al value
Fair value
Not recog-nised as an income
Contr-act or nation-al value
Fair
value
Not recog-nised as an income 
 
 
 
 
 
 
 
 
 
Forward rate agreements
85
0
-
-
-
-
 
Interest rate swaps
3,239
-7
2
1,975
0
17
 
Purchased interest rate options
-
-
-
2
0
0
 
Written interest rate options
-
-
-
-
-
-
 
 
 
 
 
 
 
 
 
Forward foreign exchange
 
 
 
 
 
 
contracts 10),11)
2,358
48
-16
1,767
-18
-19
 
Currency swaps
2,308
149
-6
885
1
-27
 
Purchased currency options
144
1
1
54
-1
-1
 
Written currency options
90
1
1
54
-1
-1
 
 
 
 
 
 
 
 
 
10) Incl. also closed forward and future positions
 
 
11) Incl. also contracts used for equity hedging
 
 
 
 
 
 
 
 
 
 
Oil futures and forward
Volume
Fair
value
Not
Recog-
Volume
Fair value
Not recog-
 
instruments
1000 bbl
 
nised as an
1000 bbl
 
nised as an
 
EUR mill. 
 
 
income
 
EUR mill.
Income
EUR
 
 
 
 
 
 
 
Mill.
 
 
 
 
 
 
 
 
 
Sales contracts
15,130
21
17
22,154
-26
-4
 
Purchase contracts
4,341
-10
-10
17,063
7
3
 
Purchased options
2,093
0
0
1,477
0
0
 
Written options
1,250
0
0
1,546
-1
0
 
 
 
 
 
 
 
 
 
Electricity derivatives
Volume
TWh
Fair
value
Not recog-
Volume
TWh
Fair value
Not
recog- 
 
 
 
 
nised
TWh
 
nised
 
 
 
EUR mill.
as an income
 
EUR mill.
as an income
 
 
 
 
EUR mill.
 
 
EUR
Mill.
 
 
 
 
 
 
 
 
 
Sales contracts
70
155
26
21
44
44
 
Purchase contracts
67
-163
-26
21
-61
-43
 
Purchased options
3
0
0
0
0
0
 
Written options
3
0
0
2
0
0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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. The fair values of derivative contracts subject to public
trading are based on market prices as of the balance sheet day. The fair values of other derivatives
are based on the present value of cash flows resulting from the contracts, and, in respect of
options, on evaluation models. Derivative contracts are mainly used to manage the group's
currency, interest rate and price risk.
 
 
 
 
 
 
 
 
 
 
 
 
Own shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In the merger of Länsivoima Oyj on 30 September, Fortum Power and Heat Oy, Fortum's wholly owned
subsidiary, received 51,037,520 Fortum Corporation's shares, with a total par value of EUR
173,527,568.00 and with a book value of EUR 188,928,107.28.
 
This represents 6,04% of the total number of Fortum Corporation's shares and share capital.
At the same time, the Finnish State ownership of the company's share capital decreased from 75.38%
to 69.96% and the share of voting rights decreased to 74.45%.
 
Own shares have been eliminated in the balance sheet of Fortum Group.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY NET SALES BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
EUR mill.
 
Q1/00
Q2/00
Q3/00
Q4/00
2000
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
215
133
183
414
945
 
Oil Refining and Marketing
1,669
1,909
1,972
2,209
7,759
 
Power and Heat Generation and Sales
503
384
359
514
1,760
 
Electricity Distribution
131
106
101
129
467
 
Service
 
78
73
83
122
356
 
Engineering
 
118
155
135
177
585
 
Other Operations
 
21
23
23
27
94
 
Internal invoicing
 
-210
-203
-229
-298
-940
 
Total
 
2,525
2,580
2,627
3,294
11,026
 
Discontinued Operations
-
-
-
-
-
 
Net sales
 
2,525
2,580
2,627
3,294
11,026
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
Q1/99
Q2/99
Q3/99
Q4/99
1999
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
45
51
107
163
366
 
Oil Refining and Marketing
948
1,154
1,360
1,602
5,064
 
Power and Heat Generation and Sales
439
294
305
405
1,443
 
Electricity Distribution
99
77
73
98
347
 
Service
 
63
65
68
94
290
 
Engineering
 
78
111
105
185
479
 
Other Operations
 
25
40
34
38
137
 
Internal invoicing
 
-123
-155
-184
-255
-717
 
Total
 
1,574
1,637
1,868
2,330
7,409
 
Discontinued Operations
12)
325
275
209
14
823
 
Net sales
 
1,899
1,912
2,077
2,344
8,232
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12) Includes Gasum,  Enermet, Infrarödteknik and Neste Chemicals in 1999.
 
 
 
 
 
 
 
 
QUARTERLY OPERATING PROFIT BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
EUR mill.
 
Q1/00
Q2/00
Q3/00
Q4/00
2000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
45
40
46
87
218
 
Oil Refining and Marketing
4
137
133
108
382
 
Power and Heat Generation and Sales
100
46
2
63
211
 
Electricity Distribution
49
19
25
34
127
 
Service
 
4
-2
2
8
12
 
Engineering
 
-2
-4
1
-16
-21
 
Other Operations
 
-1
-10
-4
6
-9
 
Eliminations
 
-2
-1
-4
-7
-14
 
Total
 
197
225
201
283
906
 
Discontinued Operations
-
-
-
-
-
 
Operating profit
 
197
225
201
283
906
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
Q1/99
Q2/99
Q3/99
Q4/99
1999
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
13)
1
9
32
40
82
 
Oil Refining and Marketing
6
40
87
49
182
 
Power and Heat Generation and Sales
158
19
-1
60
236
 
Electricity Distribution
42
17
18
38
115
 
Service
 
3
0
-1
10
12
 
Engineering
 
0
-5
5
12
12
 
Other Operations
 
6
-10
-5
-15
-24
 
Eliminations
 
-10
3
-4
-6
-17
 
Total
 
206
73
131
188
598
 
Discontinued Operations
14)
34
31
47
-5
107
 
Operating profit
 
240
104
178
183
705
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13) Treatment of Gasum has been changed from a subsidiary company to an associated company in 1999.
14) Includes the impact of change in Gasum holding, Enermet, Infrarödteknik, Neste Chemicals and
Asko in 1999.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As a change to the accounting policy, deferred tax liabilities due to the allocated goodwill are entered in the
consolidated balance sheet under fixed assets and deferred
tax liabilities. The impacts of these changes have been accounted for in respect of the comparable periods.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 EUR = 5,94573 FIM