Fortum Corporation Interim Report 1 January – 30 June 2003

Fortum Corporation STOCK EXCHANGE RELEASE
24 July 2003 at 09.00 1


Fortum Corporation Interim Report 1 January - 30 June 2003


Continued strong performance by Fortum
- significant improvement in ongoing business


The first half-year in brief
- Operating profit excluding non-recurring items improved by 71% and
was EUR 743 (435) million
- Net cash from operating activities continued to be strong and was
EUR 1,060 million
- The balance sheet was further strengthened, gearing at 60%
- Market position was strengthened in Norway and north-western
Russia

Key figures II/03 II/02 I- I- 2002 Last 12
II/03 II/02 months
(LTM)
Net sales, EUR million 2435 2682 6028 5253 11148 11923
Operating profit, EUR 286 422 761 749 1289 1301
million
- excluding non- 272 198 743 435 974 1282
recurring items
Profit before taxes, EUR 216 346 626 615 1008 1019
million
Earnings per share, EUR 0.17 0.29 0.49 0.50 0.79 0.77
Shareholders’ equity per 7.13 6.72 6.97
share, EUR
Capital employed 13077 13734 13765
(at end of period), EUR
million
Interest-bearing net debt 4502 6182 5848
(at end of period), EUR
million
Investments, EUR million 761 3956 4381 1186
Net cash from operating 1060 775 1351
activities,
EUR million
Return on capital employed, % 12.1 10.3 11.1 10.6
Return on shareholders’ equity, % 11.9 9.1 10.5 10.0
Gearing, % 60 87 80
Average number of employees 13272 14659 14053
Average number of shares, million 845823 845638 845642 845785


During the first half of the year, the key market drivers, the
market price of electricity and the international oil refining
margin were significantly higher than during the corresponding
period in 2002. After the record high levels around the year-end,
Nord Pool electricity prices decreased, however, to a level
clearly above that of last year. The international oil refining
reference margin was very high at the beginning of the year,
decreasing somewhat towards the summer.

Fortum took important strategic steps in Norway and north-western
Russia by agreeing with E.ON AG on a swap of power assets. In
addition, Fortum acquired more shares in Hafslund on the market,
leading to a 34.1% share ownership.

The integration of Birka Energi progressed as planned. The synergy
benefits achieved during the first half of the year exceeded EUR
60 million.

The Group’s financial performance in the period from January to
June remained strong and cash flow continued to be at a good level
supported by a decreased working capital and realised foreign
exchange gains. Net debt was further decreased from the first
quarter, despite approximately EUR 500 million worth of strategic
acquisitions. As a result, gearing decreased to 60%.


Net sales and results

April-June

During the second quarter, the Nord Pool electricity price and the
international oil refining margin were lower than in the first
quarter, but exceeded the corresponding level in 2002.

Group operating profit totalled EUR 286 (422) million. The
operating profit excluding non-recurring items, EUR 272 (198)
million, improved by EUR 74 million compared to the corresponding
period in 2002. The improvement was EUR 141 million including the
effect of discontinuing operations. The net amount of non-
recurring items was EUR 14 (224) million.

Typically for the seasons, the results for power and heat
businesses were lower than in the first quarter. However, the
operating profit excluding non-recurring items for the Power, Heat
and Gas segment nearly tripled compared to the corresponding
period last year. The performance of the Markets segment developed
positively. The results of Oil Refining and Marketing segment
stayed almost at last year’s level despite an inventory loss owing
to the decrease in the price of crude oil. Thus, the operational
result of this segment was clearly improved compared to last year.

January-June

Group net sales stood at EUR 6,028 (5,253) million. The main
reason for the increase was higher market prices for electricity
and petroleum products.

Group operating profit totalled EUR 761 (749) million. The
operating profit excluding non-recurring items, EUR 743 (435)
million, improved by EUR 308 million compared to the corresponding
period in 2002. The net amount of non-recurring items was EUR 18
(314) million. Most of the non-recurring items last year were
gains on sales of fixed assets.

Electricity and heat sales volumes increased. This, together with
higher electricity prices, resulted in a significant improvement
in the result for the Power, Heat and Gas segment.

The result for Electricity Distribution segment was lower because
of considerable gains on sales in 2002. The operating profit
excluding non-recurring items was improved compared to last year,
however.

The result for the Markets segment improved compared to last year.

The international oil refining margins were markedly higher than a
year ago, considerably improving the results of the Oil Refining
and Marketing segment. The Shipping business enjoyed high freight
rates, mainly during the first quarter.

Profit before taxes was EUR 626 (615) million.

The Group´s net financial expenses were EUR 135 (134) million.

Minority interests accounted for EUR 47 (40) million. These were
mainly attributable to the preference shares issued by Fortum
Capital Ltd in 2000 and to Fortum Värme Holding, in which the City
of Stockholm has a 50% economic interest.

Taxes for the period totalled EUR 167 (149) million.

Net profit for the period was EUR 412 (426) million. Earnings per
share were EUR 0.49 (0.50). Return on capital employed was 12.1%
(10.3%) and return on shareholders´ equity was 11.9% (9.1%).

SEGMENT REVIEWS

Power, Heat and Gas

The main business area comprises power and heat generation and
sales as well as gas operations in the Nordic countries and other
parts of the Baltic Rim. The Service business (former Fortum
Energy Solutions) is included in this segment as from 1 January
2003.


EUR million II/03 II/02 I- I- 2002 LTM
II/03 II/02
Net sales 718 783 1932 1716 3644 3860
- electricity sales 381 326 1056 703 1661 2014
- heat sales 165 146 433 339 686 780
- other sales 172 311 443 674 1297 1066
Operating profit 136 156 429 305 617 741
- excluding non- 136 48 430 196 501 735
recurring items
Return on net assets, % 9.9 7.7 7.5 8.5
Net assets (at end of 8566 8735 8748
period)

Electricity consumption in the Nordic countries decreased by 2%
during the second quarter and was 85.7 (87.5) terawatt-hours
(TWh). Consumption in Finland decreased by 4%. In Sweden,
consumption was at the same level as last year and in Norway it
was down by 3% on the corresponding period last year.

During the period from January to June, electricity consumption in
the Nordic countries remained at the previous year’s level and was
197 (198) TWh. Consumption in Finland increased by 6%. In Sweden,
consumption was at the same level as last year and in Norway it
was down by 5% on the corresponding period last year.

During the second quarter, the average spot price for electricity
on the Nordic power exchange (Nord Pool) was EUR 28.6 per megawatt-
hour compared to EUR 53.3 during the first quarter. The average
price of electricity during the period from January to June was
EUR 40.9 (18.7) per megawatt-hour. The price level was supported
by the deficit in water reservoirs at the beginning of the year
and lower-than-normal hydro inflows during the first two quarters.
Despite the lower-than-normal hydro inflows, the hydrological
situation strengthened due to low hydro production.

The average price of electricity on the Nordic power exchange
increased by 119% in the period from January to June compared to
last year. The corresponding price increase of electricity sold by
Fortum in the Nordic countries was 43%. The Nord Pool price during
the second quarter was down by 46% compared to the first quarter.
The corresponding decrease for Fortum was 19%.

The Power, Heat and Gas segment’s sales in the Nordic countries
amounted to 30.2 (26.6) TWh in total and represented approximately
15% (14%) of total Nordic electricity consumption during the
period from January to June.

Fortum’s own power generation in the Nordic countries during
January to June was 26.7 (22.6) TWh, of which about 8.4 (9.7) TWh
or 31% (43%) was hydropower-based and 12.7 (10.6) TWh or 48% (47%)
nuclear power-based. Due to low hydro power availability thermal
power production increased to 5.6 (2.3) TWh and its share of own
production increased to 21% (10%). Of the total Nordic electricity
consumption during the first half of the year, 14% was provided
from Fortum’s production facilities, compared to 11% last year.

In April, Fortum completed majority share acquisitions of two heat
companies, one in Poland (73% of the company D.Z.T. S.p.z.o.o.),
and one in Estonia (60% of the company Tartu Energia AS).

Electricity sales by II/03 II/02 I- I- 2002 LTM
area II/03 II/02
TWh
Sweden *) 6.3 8.2 15.2 14.5 28.0 28.7
Finland 6.6 5.3 15.0 12.1 26.1 29.0
Other countries 1.0 1.9 1.7 4.1 5.9 3.5
Total 13.9 15.4 31.9 30.7 60.0 61.2

Heat sales by area II/03 II/02 I- I- 2002 LTM
TWh II/03 II/02

Sweden *) 1.7 1.6 5.7 3.9 8.2 10.0
Finland 2.3 2.0 5.8 5.3 9.8 10.3
Other countries 1.4 1.0 2.2 2.2 4.5 4.5
Total 5.4 4.6 13.7 11.4 22.5 24.8

*) The effects of Birka Energi’s change of ownership on
electricity and heat sales volumes were 2.4 TWh and 1.4 TWh
respectively in 2002.

Electricity 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 II/03 II/02 I- I- 2002 LTM
II/03 II/02
Net sales 160 156 359 317 640 682
- distribution network 130 136 297 267 526 556
transmission
- regional network 20 19 45 37 80 88
transmission
- other sales 10 1 17 13 34 38
Operating profit 61 72 142 185 279 236
- excluding 41 40 121 94 187 214
non-recurring items
Return on net assets, % 9.0 12.7 9.3 7.5
Net assets (at end of 3,064 3,145 3,199
period)

Volume of distributed II/03 II/02 I- I- 2002 LTM
electricity by area II/03 II/02
TWh
Sweden *) 3.4 3.3 8.3 6.6 14.4 16.1
Finland 1.3 1.1 3.3 2.5 5.4 6.2
Other countries 0.3 0.6 0.3 1.3 1.4 0.4
Total 5.0 5.0 11.9 10.4 21.2 22.7
*)The Birka Energi acquisition accounts for a 1.7 TWh increase in
the volume transmitted via the distribution networks in 2002.


Number of electricity 30.6. 30.6. 2002
distribution customers by 2003 2002
area, thousands
Sweden 850 890 890
Finland 395 390 390
Other countries *) 115 20 20
Total 1360 1300 1300
*) Østfold Energi Nett AS with 94,000 customers is included in the
figures as of 1 May, 2003.

The volumes of distribution and regional network transmissions
totalled 11.9 (10.4) TWh and 10.6 (9.6) TWh respectively.

Electricity transmissions via the regional distribution network to
customers outside the Group totalled 7.8 (6.5) TWh in Sweden and
2.8 (3.1) TWh in Finland.

Markets

Markets focuses on the retail sale of electricity and oil
products, mainly heating oil, as well as related services to a
total of 1.4 million private and business customers.


EUR million II/03 II/02 I- I- 2002 LTM
II/03 II/02
Net sales 327 270 803 576 1,280 1,507
Operating profit 15 4 8 6 -11 -9
- excluding 15 4 8 5 -12 -9
non-recurring items
Return on net assets, % 23.1 9.5 -11.4 -11.5
Net assets (at end of period) 119 109 55


The Markets business unit buys its electricity and oil products at
market terms.

The market environment during the period was characterised by
falling wholesale prices of electricity. However, overall prices
were higher than during the corresponding period last year.

Electricity sales totalled 17.2 (15.6) TWh during the period. The
effect on electricity sales volumes of the change in Birka
Energi’s ownership was 1.9 TWh during the period from January to
February 2002. Sales of heating oil amounted to 0.4 (0.4) million
tonnes during the period from January to June.

As of May 2003, Markets has been serving 83,000 customers in
Norway through the acquisition of Østfold Energi Kraftsalg AS.

A programme to improve business processes was launched during the
spring.

Oil Refining and Marketing

The activities cover the refining and marketing of oil as well as
logistics. The main products are traffic fuels and heating oils.

EUR million II/03 II/02 I- I- 2002 LTM
II/03 II/02
Net sales 1643 1790 3718 3321 7083 7480
Operating profit 75 79 200 135 253 318
- excluding 93 70 216 97 205 324
non-recurring items
Return on net assets, % 26.8 16.8 16.0 21.0
Net assets (at end of 1435 1543 1510
period)

During the period, the international refining margin in north-
western Europe (Brent Complex) averaged USD 2.9/bbl (0.4/bbl).
Fortum’s premium margin continued to be on average about USD 2/bbl
above the international reference margin.

The price of Brent crude averaged USD 28.8/bbl (23.1/bbl). It was
at its highest at the beginning of June, about USD 29/bbl. The
inventory losses during the period from January to June were EUR
14 (gains 29) million.

Fortum refined a total of 6.4 (6.3) million tonnes of crude oil
and other feedstocks. A total of 3.8 (3.9) million tonnes of
petroleum products were sold in Finland. Exports amounted to 2.6
(2.4) million tonnes.

In Shipping, two product tankers, in which Fortum’s holding is
50%, were agreed to be sold in June. In July, a letter of intent
was signed concerning selling the oil terminal in Tallinn,
Estonia. The final contract is scheduled to be signed during this
year.

In June, Fortum sold its bitumen wholesale business to the Swedish
Nynäs Petroleum, in which Fortum has a 50% holding.

Fortum did not have any oil or gas production of its own during
the first half of 2003. Oil production at the South Shapkino field
in north-western Russia started in mid-July. Fortum’s share of the
exploitable oil reserves in this oil field, which is owned fifty-
fifty by Fortum and the Russian Lukoil, has been estimated at
approximately 82 million barrels.


Deliveries of petroleum II/03 II/02 I- I- 2002 LTM
products refined by II/03 II/02
Fortum-by product group (1,000 t)
Gasoline 971 1095 2060 2143 4595 4512
Diesel 1110 887 1905 1843 3619 3681
Aviation fuel 131 164 251 300 586 537
Light fuel oil 296 337 719 723 1503 1499
Heavy fuel oil 296 265 682 679 1233 1236
Other 446 396 788 615 1504 1677
Total 3250 3144 6405 6303 13040 13142


Deliveries of petroleum II/03 II/02 I- I- 2002 LTM
products refined by II/03 II/02
Fortum-by area (1,000 t)
Finland 1860 1938 3789 3870 7845 7764
Other Nordic countries 533 484 967 928 1982 2021
Baltic countries and 21 8 29 19 41 51
Russia
USA and Canada 133 339 517 587 1276 1206
Other countries 703 375 1103 899 1896 2100
Total 3250 3144 6405 6303 13040 13142


Business development and restructuring

In January, Fortum and E.ON AG agreed on a swap of power assets.
Fortum acquired assets in Norway and north-western Russia and sold
some non-core assets in Ireland, Germany and southern Sweden.

As a result of these transactions, the shares involved in
the Russian Lenenergo were transferred to Fortum in March and
the shares in the Norwegian Hafslund ASA as well as Østfold
Energi Kraftsalg AS, Østfold Energi Nett AS and Østfold
Entreprenor AS in April. After some further acquisitions from
the market, Fortum owned 34.1% of the share capital in Hafslund
at the end of June. The total acquisition cost of the Hafslund
shares was EUR 279 million.

At the end of June, Fortum completed the divestments of power
plants in Burghausen, Germany and Edenderry, Ireland as well as
Fortum Distribution Småland AB in Sweden.

Transactions relating to the swap of assets with E.ON were
completed by the end of June. The transaction relating to the
shares in the Norwegian Fredrikstad Energi AS is still waiting for
technical conclusion.

The disposal of the Norwegian E&P assets was completed in March.
The financial impact of the transaction was included in Fortum´s
2002 annual closing. In June, Fortum divested its retail gas sales
operations in the U.K.

Investments and financing

Investments in fixed assets during the period from January to June
totalled EUR 761 (3,956) million. Of this, EUR 517 (3,706) million
were acquisitions.

At the end of the period, interest-bearing net debt stood at EUR
4,502 (6,182) million. The gearing ratio at the end of June was
60% (80% at the end of 2002).

Group net financial expenses were EUR 135 (134) million.

In February, Fortum Corporation established a bond programme
(Medium Term Note Programme) of SEK 7.0 billion for the purpose of
enabling the issue of bonds on the Swedish capital markets in
Swedish krona and euro. The programme replaces the SEK 7.0 billion
programme in the name of Fortum Power and Heat AB.

In April, Fortum Corporation signed a EUR 1.2 billion revolving
credit facility. This five-year facility is for general corporate
purposes and replaces existing syndicated facilities established
by various subsidiaries.

In July, Fortum Corporation established a bond programme (Euro
Medium Term Note Programme) of EUR 4.0 billion in order to enable
the issue of bonds on the international capital markets.

Shares and shareholdings

A total of 72,060 Fortum Corporation shares were subscribed to
with the share warrants relating to Fortum Corporation’s 1999
warrant bond to employees and management stock option scheme. The
increase in the share capital resulting from the share
subscriptions, a total of EUR 245,004, was entered in the trade
register on 5 May 2003. After the increase, Fortum Corporation’s
share capital is EUR 2,875,881,891 and the total number of shares
is 845,847,615.

Group personnel

The average number of employees in the Group during the period
from January to June was 13,272 (14,659). The reduction is mainly
attributable to the combination of the businesses of Birka Energi
and Fortum, as well as to the formation of the new associated
company Enprima at the beginning of this year. The number of
employees at the end of the period was 13,969 (13,670 at the end
of 2002).

Fortum has decided to launch a new share-based long-term incentive
programme (Performance Share Arrangement) for key personnel in the
Group. The potential reward under the arrangement will be based on
the performance of the Group, its business units and the
individual manager, as well as appreciation of the Fortum share.
At this stage the new arrangement concerns some 190 managers.

Fortum estimates that 0.1 to 0.3 per cent of the outstanding
Fortum shares i.e. 1,000,000 to 2,500,000 shares, will be
allocated under each individual plan. The shares will be bought on
the market and thus there will be no dilution effect. This
arrangement is intended to replace other possible long term
incentive schemes for top management.


Appointments and resignations

In April, Tanja Karpela, Leena Luhtanen and Matti Vanhanen
announced their resignations from Fortum's Supervisory Board after
their appointment as members of the Council of State.

In June, Kari Huopalahti, Senior V.P. Corporate Development and
member of the Corporate Executive Committee, left the company.

The Chairman of the Board of Directors, Matti Vuoria, has been
appointed President and CEO of Varma-Sampo, a major Finnish mutual
pension insurance company, as of 1 June 2004. Matti Vuoria
continues as Fortum´s Executive Chairman until the end of this
year.

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.

According to general market information, electricity consumption
in the Nordic countries is predicted to increase by about 1-2%
each year over the next years. During the first half of 2003, the
average spot price for electricity was EUR 40.9 per megawatt-hour
on the Nordic electricity market, or 119% higher than the
corresponding figure for 2002. The electricity forwards for the
rest of 2003 at the beginning of July were in the range of EUR 29-
30 per megawatt-hour.

The synergy benefits generated by the creation of a pan-Nordic
power and heat business following the acquisition of the remaining
50% of the former Birka Energi will exceed the target of EUR 100
million a year as of 2004.

The continuous operations of the power and heat businesses usually
result in a significantly better performance in the first and last
quarter of the year than in the second and third quarter.

The international refining margin in north-western Europe (Brent
Complex) was considerably higher than at the beginning of 2002 and
averaged USD 2.9/bbl (USD 0.4/bbl) during the period from January
to June. In July 2003, the international refining margin has been
averaging USD 2.7/bbl. For several years, the international Brent
Complex refining margin has averaged USD 1.5 - 2.0/bbl. The
management expects Fortum’s premium margin to remain at the strong
levels of previous years. During 2003, no major maintenance
shutdowns are planned at the refineries.

The average price for Brent crude oil was USD 27.5/bbl in January-
June 2003. On 30 June, it was USD 28.3/bbl. In July 2003, the
price has been averaging USD 28.4/bbl while the International
Petroleum Exchange’s Brent futures for the remainder of 2003 have
been averaging USD 26.3/bbl. The price of crude oil has an impact
on the results of Oil Refining and Marketing through inventory
gains and losses.

Due to the disposals of the oil and gas production assets in Oman
and Norway, there was no own production in the first half of
2003. Oil production at the South Shapkino oil field in north-
western Russia started in mid-July. A production level of 12,500
bbl/d (Fortum’s 50% share) is expected to be reached in September.
Production will gradually be increased and full capacity (25,000
bbl/d) will be reached during 2004. The operations will be
earnings neutral during 2003.

The repositioning of Fortum has now been virtually completed. Most
of the targets set out in the strategic agenda have been reached:
a strong balance sheet and well performing businesses,
which generate a healthy cash flow. This gives Fortum a solid
platform to further strengthen its position as a leading Nordic
energy company.

The information contained in the Interim Financial Statements has
not been audited.


Espoo, 24 July 2003
Fortum Corporation
The Board of Directors


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

Distribution:
Helsinki Exchanges
Key media

For further information, please contact:
Juha Laaksonen, CFO, tel. +358 10 452 4519

FORTUM GROUP

JANUARY-JUNE 2003
Interim financial statements are unaudited

CONSOLIDATED INCOME STATEMENT

MEUR Q2/03 Q2/02 Q1-Q2/03 Q1-Q2/02 2002 Last 12
months
Net sales 2435 2682 6028 5253 11148 11923
Share of profits of
associated companies 9 4 20 13 31 38
Other operating income 63 238 76 327 370 119
Depreciation, amortisation
and write-downs -134 -172 -267 -323 -694 -638
Other operating
expenses -2087 -2330 -5096 -4521 -9566 -10141
Operating profit 286 422 761 749 1289 1301
Financial income and
expenses -70 -76 -135 -134 -281 -282
Profit before taxes 216 346 626 615 1008 1019
Income taxes -60 -84 -167 -149 -269 -287
Minority interests -14 -18 -47 -40 -73 -80
Net profit for the period 142 244 412 426 666 652


Earnings per share, EUR 0.17 0.29 0.49 0.50 0.79 0.77
Fully diluted earnings
per share 0.16 0.29 0.48 0.50 0.78
Average number of shares,
1,000 shares 845823 845638 845642 845785
Diluted adjusted average number of
shares, 1 000 shares 855935 851580 851482

CONSOLIDATED BALANCE SHEET

MEUR Jun 30 Jun 30 Dec 31
2003 2002 2002
ASSETS
Fixed assets and other
long-term investments 13908 14868 14837
Current assets
Inventories 539 622 504
Receivables 1382 1638 2027
Cash and cash equivalents 665 428 592
Total . 2586 2688 3123
Total 16494 17556 17960

SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital 2876 2875 2876
Other equity 3151 2807 3020
Total 6027 5682 5896
Minority interests 1434 1443 1432
Provisions for liabilities
and charge 76 95 133
Deferred tax liabilities 1775 1804 1866
Long-term liabilities 4095 5402 4699
Short-term liabilities 3087 3130 3934
Total 16494 17556 17960

Equity per share, EUR 7.13 6.72 6.97
Number of shares, 1,000 shares 845848 845666 845776

CASH FLOW STATEMENT
MEUR Jun 30 Jun 30 Dec 31
2003 2002 2002

Net cash from operating activities 1060 775 1351
Capital expenditures -244 -250 -649
Acquisition of shares -503 -1756 -1771
Proceeds from sales of fixed assets 80 102 120
Proceeds from sales of shares 1219 754 889
Change in other investments -32 154 33
Cash flow before financing activities 1580 -221 -27
Net change in loans -1204 295 209
Dividends paid -264 -220 -220
Other financing items -40 -48 30
Net cash from financing activities -1 508 27 19
Net increase (+)/decrease (-) in cash
and marketable securities 72 -194 -8

KEY RATIOS
Jun 30 Jun 30 Dec 31 Last 12
2003 2002 2002 months

Capital employed, MEUR 13077 13734 13765
Interest-bearing net debt,MEUR 4502 6182 5848
Investments, MEUR 761 3956 4381 1186
Return on capital employed,% 12.1 10.3 11.1 10.6
Return on shareholders' equity,% 11.9 9.1 10.5 10.0
Interest coverage 5.4 5.2 4.7 4.7
FFO / interest-bearing
net debt, % 1) 42.6 24.5 28.1
Gearing, % 60 87 80
Adjusted gearing, % 2) 91 125 115
Equity-to-assets ratio, % 45 41 41
Average number of employees 13272 14659 14053

1) FFO = Funds from Operations
2) The minority interest related to the preference shares amounting
to EUR 1.2 billion and carrying fixed income dividend of 6.7 percent,
issued by Fortum Capital Ltd,is treated as liability.

NET SALES BY SEGMENTS

MEUR Q2/03 Q2/02 Q1-Q2/03 Q1-Q2/02 2002 Last 12
months
Power, Heat and Gas 718 783 1932 1716 3644 3860
Electricity Distribution 160 156 359 317 640 682
Oil Refining and Marketing 1643 1790 3718 3321 7083 7480
Markets 327 270 803 576 1280 1507
Other Operations 19 16 39 30 64 73
Eliminations -432 -356 -823 -756 -1668 -1735
Total 2435 2659 6028 5204 11043 11867
Discontinuing operations*) - 23 - 49 105 -
Total 2435 2682 6028 5253 11148 11867
*) Internal sales excluded

OPERATING PROFIT BY SEGMENTS

MEUR Q2/03 Q2/02 Q1-Q2/03 Q1-Q2/02 2002 Last 12
months
Power, Heat and Gas 136 156 429 305 617 741
Electricity Distribution 61 72 142 185 279 236
Oil Refining and Marketing 75 79 200 135 253 318
Markets 15 4 8 6 -11 -9
Other Operations -2 -10 -19 -21 -64 -62
Eliminations 1 1 1 - - 1
Total 286 302 761 610 1074 1225
Discontinuing operations - 120 - 139 215 76
Total 286 422 761 749 1289 1301

NON-RECURRING ITEMS IN OPERATING PROFIT BY SEGMENTS
MEUR Q2/03 Q2/02 Q1-Q2/03 Q1-Q2/02 2002 Last 12
months
Power, Heat and Gas - 108 -1 109 116 6
Electricity Distribution 20 32 21 91 92 22
Oil Refining and Marketing -18 9 -16 38 48 -6
Markets - - - 1 1 -
Other Operations 12 8 14 8 4 10
Total 14 157 18 247 261 32
Discontinuing operations - 67 - 67 54 -13
Total 14 224 18 314 315 19

DEPRECIATION, AMORTISATION AND WRITE-DOWNS BY SEGMENTS

MEUR Q2/03 Q2/02 Q1-Q2/03 Q1-Q2/02 2002 Last 12
months
Power, Heat and Gas 58 65 116 115 236 237
Electricity Distribution 39 42 76 76 147 147
Oil Refining and Marketing 31 33 61 67 152 146
Markets 3 7 7 12 25 20
Other Operations 3 4 7 7 23 23
Eliminations - -2 - -2 -1 1
Total 134 149 267 275 582 574
Discontinuing operations - 23 - 48 112 64
Total 134 172 267 323 694 638

INVESTMENTS BY SEGMENTS

MEUR Q2/03 Q2/02 Q1-Q2/03 Q1-Q2/02 2002 Last 12
months
Power, Heat and Gas 351 76 404 2468 2619 555
Electricity Distribution 201 113 224 1287 1394 331
Oil Refining and Marketing 64 41 96 64 177 209
Markets 26 4 26 108 109 27
Other Operations 7 1 11 3 7 15
Total 649 235 761 3930 4306 1137
Discontinuing operations - 17 - 26 75 49
Total 649 252 761 3956 4381 1186

NET ASSETS BY SEGMENTS
MEUR Jun 30 Jun 30 Dec 31
2003 2002 2002

Power, Heat and Gas 3) 8566 8735 8748
Electricity Distribution 3) 3064 3145 3199
Oil Refining and Marketing 1435 1543 1510
Markets 119 109 55
Other Operations 112 143 30
Total 13296 13675 13542
Discontinuing operations - 1013 927
Total 13296 14688 14469

3) Net assets include deferred tax liabilities due to the allocated
goodwill: EUR 501 mill. June 30, 2003, and EUR 502 mill.
December 31, 2002 in Power, Heat and Gas segment; and EUR 260 mill.
June 30, 2003 EUR 344 mill. December 31, 2002 in Electricity
Distribution.

RETURN ON NET ASSETS BY SEGMENTS 4)

% Jun30 Jun30 Jun30 Jun30 Dec31 Dec31 Last 12 Last 12
2003 2003*) 2002 2002*) 2002 2002*)months months*)

Power, Heat and Gas 9.9 9.9 7.7 4.9 7.5 6.1 8.5 8.4
Electricity
Distribution 9.0 7.7 12.7 6.5 9.3 6.2 7.5 6.8
Oil Refining and
Marketing 26.8 28.9 16.8 12.0 16.0 13.0 21.0 21.4
Markets 23.1 23.1 9.5 7.9 -11.4 -12.4 -11.5 -11.5

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

CONTINGENT LIABILITIES
MEUR Jun 30 Jun 30 Dec 31
2003 2002 2002
Contingent liabilities
On own behalf
For debt
Pledges 512 453 553
Real estate mortgages 233 236 237
Company mortgages - 82 32
Other mortgages - 52 26
For other commitments
Real estate mortgages 54 54 55
Pledges, company and
other mortgages 1 6 8
Sale and leaseback 9 16 15
Other contingent liabilities 99 534 474
Total 908 1433 1400
On behalf of associated companies
Pledges and real estate
mortgages 12 8 9
Guarantees 637 218 345
Other contingent liabilities 182 184 184
Total 831 410 538
On behalf of others
Guarantees 23 5 4
Other contingent liabilities 6 14 4
Total 29 19 8
Total 1768 1862 1946
Operating lease liabilities
Due within a year 61 60 58
Due after a year 121 66 91
Total 182 126 149

Finance leases have been recognised as assets and liabilities.

Liability for nuclear waste
disposal 545 515 545
Share of reserves in
the Nuclear Waste
Disposal Fund -535 -505 -535
Liabilities in the
balance sheet 5) 10 10 10

5) Mortgaged bearer papers as security
x
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 Jun 30 2003 Dec 31 2002

Interest and currency Contract Fair Not Contract Fair Not
derivatives or value recog. or value recog.
notinal as an notional as an
MEUR value income value income

Forward rate agreements 784 -1 -1 2950 -2 -2
Interest rate swaps 6015 8 46 6898 21 34
Forward foreign exchange
contracts 6) 7599 57 46 6351 63 30
Currency swaps 530 36 10 2334 227 60
Purchased currency optio 64 7 7 248 9 11
Written currency options 29 1 1 66 1 1

6) Incl. also contracts used for equity hedging

Derivatives Jun 30 2002

Interest and currency Contract Fair Not
derivatives or value recognised
notional as an
MEUR value income

Forward rate agreements 6015 1 1
Interest rate swaps 6833 -2 33
Forward foreign exchange
contracts 6) 6351 38 1
Currency swaps 2 951 237 46
Purchased currency optio 277 11 11
Written currency options 94 2 2


Oil futures and forward Jun 30 2003 Dec 31 2002
instruments Volume Fair Not Volume Fair Not
value recog. value recog.
as an as an
income income

1000 bbl MEUR MEUR 1000 bbl MEUR MEUR
Sales contracts 16589 - - 10697 -11 -11
Purchase contracts 19241 3 3 12170 13 13
Purchased options 400 - - - - -
Written options 600 - - - - -

Oil futures and forward Jun 30 2002
instruments

1000 bbl MEUR MEUR
Sales contracts 10364 1 1
Purchase contracts 8351 1 1
Purchased options - - -
Written options 25 - -


Electricity derivatives Jun 30 2003 Dec 31 2002
Volume Fair Not Volume Fair Not
value recog. value recog.
as an as an
íncome income

TWh MEUR MEUR TWh MEUR MEUR
Sales contracts 77 -368 -226 94 -2065 -1406
Purchase contracts 74 337 195 78 1709 1051
Purchased options 3 -2 -2 2 1 -1
Written options 7 - - 6 3 6

Electricity derivatives Jun 30 2002

TWh MEUR MEUR
Sales contracts 87 74 73
Purchase contracts 86 -72 -73
Purchased options 5 -2 -1
Written options 9 4 4


Natural gas derivates Jun 30 2003 Dec 31 2002
Volume Fair Not Volume Fair Not
value recog. value recog.
as an as an
income income

Mill.t MEUR MEUR Mill.th.MEUR MEUR
Sales contracts 3135 -38 -38 4072 127 127
Purchase contracts 2965 38 38 3773 -115 -115
Purchased options 980 -5 -5 1287 -7 -7
Written options 1039 7 7 1335 - -

Natural gas derivates June 30 2002

Mill.th. MEUR MEUR
Sales contracts 2568 43 43
Purchase contracts 2650 -39 -39
Purchased options 574 - -
Written options -504 2 2


The fair values of derivative contracts subject to public trading are
based on market prices as of the balance sheet date. 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.
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 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Q1/02

Power, Heat and Gas 718 1214 1 234 694 783 933
Electricity Distribution 160 199 184 138 156 162
Oil Refining and Marketing 1643 2075 1968 1794 1790 1531
Markets 327 476 418 286 270 306
Other Operations 19 20 19 15 16 14
Eliminations -432 -391 -567 -344 -356 -401
Total 2435 3593 3256 2583 2659 2545
Discontinuing operations - - 34 22 23 26
Total 2435 3593 3290 2605 2682 2571

QUARTERLY OPERATING PROFIT BY SEGMENTS

MEUR Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Q1/02

Power, Heat and Gas 136 293 284 28 156 149
Electricity Distribution 61 81 61 34 72 113
Oil Refining and Marketing 75 125 42 76 79 57
Markets 15 -7 -19 2 4 2
Other Operations -2 -17 -27 -17 -10 -12
Eliminations 1 - -1 1 1 -1
Total 286 475 340 124 302 308
Discontinuing operations - - 51 25 120 19
Total 286 475 391 149 422 327