Fortum Corporation Interim Report 1 January - 31 March 2003

Fortum Corporation STOCK EXCHANGE RELEASE
24 April 2003 1 (1)


Fortum Corporation Interim Report 1 January - 31 March 2003


Strong financial performance by Fortum during the first quarter
- profits up by more than 50%


The first quarter in brief
- Earnings per share were EUR 0.32, up 52% on the corresponding
period in 2002
- Operating profit excluding non-recurring items doubled
- Continued strong net cash from operating activities, EUR 344
million
- Net debt stood at EUR 4.624 million, a further decrease of EUR
1.2 billion, gearing at 63%
- Important strategic steps in Norway and Russia


Key figures I/03 I/02 2002 Last 12
months
(LTM)
Net sales, EUR million 3,593 2,571 11,148 12,170
Operating profit, EUR million 475 327 1,289 1,437
Profit before taxes, EUR 410 269 1,008 1,149
million
Earnings per share, EUR 0.32 0.21 0.79 0.89
Shareholders’ equity per 6.96 6.48 6.97
share, EUR
Capital employed 12,309 14,581 13,765
(at end of period), EUR
million
Interest-bearing net debt 4,624 7,111 5,848
(at end of period), EUR
million
Investments, EUR million 112 3,704 4,381 789
Net cash from operating 344 325 1,351
activities,
EUR million
Return on capital employed, % 15.6 8.8 11.1 11.8
Return on shareholders’ 16.5 8.5 10.5 11.4
equity, %
Gearing, % 63 102 80
Average number of employees 12,733 13,710 14,053
Number of employees (at end 12,645 14,809 13,670
of period)
Average number of shares, 845,776 845,609 845,642 845,692
million


The first three months of the year were characterised by gradually
decreasing Nord Pool power prices after the record high levels
around the year-end, staying, however, clearly above the prices
during the corresponding period in 2002. The international
refining margin was also very high during the first quarter,
whereas the price of crude oil started to fall sharply in mid-
March.

In January, Fortum took important strategic steps in Norway and
north-western Russia by agreeing with E.ON AG on a swap of power
assets. The disposal of the Norwegian oil and gas assets was
completed in early March.

During the first quarter of the year, the integration of Birka
Energi progressed as planned. The synergy benefits achieved during
the first quarter exceeded EUR 30 million.

The Group’s quarterly financial performance was strong and cash
flow continued to be at a good level. Net debt further decreased
by 1.2 billion and gearing was at 63%, well below the target level
of 70%. During the last 12 months, the net debt has decreased by
EUR 2.5 billion.


Net sales and results

Group net sales stood at EUR 3,593 (2,571) million. The main
reason for the increase was higher market prices for electricity
and petroleum products.

Group operating profit totalled EUR 475 (327) million. The
operating profit excluding non-recurring items, EUR 471 (237)
million, improved by EUR 234 million compared to the corresponding
period in 2002. The net amount of non-recurring items was EUR 4
(90) million.

Electricity and heat sales volumes increased. This together with
higher electricity prices resulted in a significant improvement in
the results of the Power, Heat and Gas segment. The contribution
of the Service business was at the previous year’s level.

The results for the Markets segment were negative due to the poor
performance of the sales of electricity. The results for the sales
of heating oil developed positively.

The international oil refining margins were markedly higher than a
year ago, significantly improving the results for Oil Refining and
Marketing. The Shipping business enjoyed higher freight rates
mainly because of heavy ice conditions.

Profit before taxes was EUR 410 (269) million.

The Group´s net financial expenses were EUR 65 (58) million.

Minority interests accounted for EUR 33 (22) 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 107 (65) million.

Net profit for the period was EUR 270 (182) million. Earnings per
share were EUR 0.32 (0.21). Return on capital employed was 15.6%
(8.8%) and return on shareholders´ equity was 16.5% (8.5%).

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 I/03 I/02 2002 LTM
Net sales 1,214 933 3,644 3,925
- electricity sales 675 377 1,661 1,959
- heat sales 268 193 686 761
- other sales 271 362 1,297 1,206
Operating profit 293 149 617 761
- excluding non-recurring 294 148 501 647
items
Return on net assets, % 13.4 7.9 7.5 8.6
Net assets (at end of period) 8,741 9,100 8,748


Despite the slightly colder-than-normal temperatures, electricity
consumption in the Nordic countries remained at the previous
year’s level and was 111 (112) terawatt-hours (TWh) during the
period from January to March. Consumption in Finland increased by
6%, however. In Sweden, the consumption was at the previous year’s
level. Consumption in Norway decreased due to lower industrial
consumption, caused by exceptionally high electricity prices and
increased use of heating oil. Fortum’s sales in the Nordic
countries amounted to 17.3 (13.1) TWh in total and represented
approximately 16% (12%) of total Nordic electricity consumption in
the period from January to March. Sales outside the Nordic
countries totalled 0.7 (2.2) TWh.

During the period from January to March, the average price of
electricity on the Nordic power exchange Nord Pool was 53.3 (21.2)
EUR/MWh, which is 152% higher than the corresponding figure for
2002 and 7% up on the last quarter of 2002. The high price was due
to a significantly dryer-than-normal period, with low temperatures
starting already in the fall of 2002 and leading to low hydro
reservoir levels and hydro power production.

The average price of electricity sold by Fortum in the Nordic
countries was up 49% on the corresponding period last year and up
27% compared to the last quarter of 2002.

Fortum’s own power generation in the Nordic countries during
January to March was 14.8 (11.4) TWh, of which about 4.1 (4.9) TWh
or 28% (43%) was hydropower-based and 6.7 (5.4) TWh or 45% (48%)
nuclear power-based. Due to low hydro power availability thermal
power production went up to 4.0 (1.1) TWh and its share of own
production increased to 27% (9%).

Fortum Service refocused its strategy to operation and maintenance
services in the Nordic area and selected international markets.


Electricity sales by area I/03 I/02 2002 LTM
TWh
Sweden *) 8.9 6.3 28.0 30.6
Finland 8.4 6.8 26.1 27.7
Other countries 0.7 2.2 5.9 4.4
Total 18.0 15.3 60.0 62.7


Heat sales by area I/03 I/02 2002 LTM
TWh
Sweden *) 4.0 2.3 8.2 9.9
Finland 3.5 3.3 9.8 10.0
Other countries 0.8 1.2 4.5 4.1
Total 8.3 6.8 22.5 24.0

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


Electricity Distribution

Fortum owns and operates distribution and regional networks and
distributes electricity to a total of 1.3 million customers in
Sweden, Finland and Estonia.


EUR million I/03 I/02 2002 LTM
Net sales 199 162 640 677
- distribution network 167 131 526 563
transmission
- regional network 25 18 80 87
transmission
- other sales 7 13 34 28
Operating profit 81 113 279 247
- excluding non–recurring 80 55 187 212
items
Return on net assets, % 10.2 16.2 9.3 7.7
Net assets (at end of period) 3,179 3,472 3,199


Volume of distributed I/03 I/02 2002 LTM
electricity by area
TWh
Sweden 4.9 3.3 14.4 16.0
Finland 2.0 1.4 5.4 6.0
Other countries 0.0 0.7 1.4 0.7
Total 6.9 5.4 21.2 22.7

The Birka Energi acquisition accounts for a 1.7 TWh increase in
the volume transmitted via the distribution networks, and the sale
of the German (Wesertal) distribution business accounts for the
decrease in other countries.

Number of electricity 31.3.20 31.3.20 2002
distribution customers by 03 02
area, thousands
Sweden 890 890 890
Finland 390 280 390
Other countries 20 180 20
Total 1,300 1,350 1,300

The volumes of distribution and regional network transmissions
totalled 6.9 (5.4) TWh and 5.9 (5.0) respectively.

Electricity transmissions via the regional distribution network to
customers outside the Group totalled 4.3 (2.9) TWh in Sweden and
1.6 (2.1) TWh in Finland.


Markets

Markets focuses on the retail sale of electricity and heating oil
as well as related services to a total of 1.3 million private and
business customers.


EUR million I/03 I/02 2002 LTM
Net sales 476 306 1,280 1,450
Operating profit -7 2 -11 -20
- excluding non–recurring -7 1 -12 -21
items
Return on net assets, % -62.6 6.0 -11.4 -23.2
Net assets (at end of period) 34 161 55


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

The market environment was characterised by cold weather and a
steep increase in the market price of electricity in the fourth
quarter in 2002. The cold season around the turn of the year
resulted in an unpredicted growth in electricity sales volumes. As
a consequence, the procurement and sales portfolios were not
properly hedged, leading to a negative impact on results. Although
sales prices were increased, it was not enough to secure a
positive operating profit.

Electricity sales totalled 9.3 (7.7) TWh during the period. The
effect on electricity sales volumes of the change in Birka Energi
ownership was 1.9 TWh during the period from January to February.
Sales of heating oil amounted to 0.3 (0.3) million tonnes.

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 I/03 I/02 2002 LTM
Net sales 2,075 1,531 7,083 7,627
Operating profit 125 57 253 321
- excluding non–recurring 123 28 205 300
items
Return on net assets, % 32.9 13.8 16.0 20.7
Net assets (at end of period) 1,527 1,622 1,510

Throughout the first quarter, the international refining margin in
north-western Europe (Brent Complex) was considerably higher than
during the previous year, on average USD 3.8/bbl (-0.2/bbl). At
its highest, the refining margin increased to almost USD 7/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 31.5/bbl (21.1/bbl).
However, at the end of the period under review, it went down
considerably. The inventory gains during the period from January
to March were EUR 3 (20) million.

Fortum refined a total of 3.2 (3.2) million tonnes of crude oil
and other feedstocks. Some 1.9 (1.9) million tonnes of petroleum
products were sold in Finland. Exports amounted to 1.2 (1.2)
million tonnes. The retail sale volumes in Finland increased
slightly.

Shipping freight rates were exceptionally high due to the
difficult ice conditions and volatility in international oil
markets. In January, the second super ice-class crude oil carrier
Mastera was delivered to Fortum.

The new iso-octane production plant in Edmonton, Canada, was in
full production and regular customer deliveries were made to
California.

Following the sale of the oil and gas production assets in Norway
and Oman, Fortum will not have any production of its own during
the first half of 2003. Preparations to start production at the
South Shapkino field in north-western Russia towards the end of
2003 continued as planned. Fortum’s share of the exploitable oil
reserves in this oil field, which is owned fifty-fifty by Fortum
and the Russian Lukoil, have been estimated at approximately 82
million barrels.


Deliveries of petroleum I/03 I/02 2002 LTM
products refined by Fortum –
by product group (1,000 t)
Gasoline 1,088 1,048 4,595 4,635
Diesel 796 956 3,619 3,458
Aviation fuel 120 136 586 570
Light fuel oil 423 386 1,503 1,540
Heavy fuel oil 386 414 1,233 1,205
Other 342 219 1,504 1,627
Total 3,155 3,159 13,040 13,036


Deliveries of petroleum I/03 I/02 2002 LTM
products refined by Fortum –
by area (1,000 t)
Finland 1,929 1,932 7,845 7,842
Other Nordic countries 434 444 1,982 1,972
Baltic countries and Russia 8 11 41 38
USA and Canada 384 248 1,276 1,412
Other countries 400 524 1,896 1,772
Total 3,155 3,159 13,040 13,036


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. The
transactions will substantially strengthen Fortum´s position in
its focus area, the Nordic countries and the rest of the Baltic
Rim.

9.5% of the shares in the Russian Lenenergo were transferred to
Fortum on 31 March 2003. The purchase price was EUR 25 million.
Fortum now owns 15.9% of the share capital and 18.6% of the voting
rights. The shares in the Norwegian Hafslund ASA were transferred
to Fortum on 10 April 2003. Fortum owns 21.4% of the share capital
and 26.4% of the voting rights. The purchase price was EUR 155
million. All remaining transactions are progressing well and are
expected to be completed by the end of June, subject to authority
approvals.

The disposal of the Norwegian E&P assets was completed in early
March. The financial impact of the transaction was included in
Fortum´s 2002 annual closing.


Investments and financing

Investments in fixed assets during the first quarter totalled EUR
112 (3,704) million.

At the end of the period, interest-bearing net debt stood at EUR
4,624 million. The gearing ratio at the end of March was 63% (80%
at the end of 2002).

Group net financial expenses were EUR 65 (58) 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.


Shares and shareholdings

A total of 15,600 Fortum Corporation shares were subscribed for
with the share warrants relating to Fortum Corporation’s 1999
warrant bond to employees. The increase in the share capital
resulting from the share subscriptions, a total of EUR 53,040.00
was entered in the trade register on 20 February 2003. After the
increase, Fortum Corporation’s share capital is EUR 2,875,636,887
and the total number of shares is 845,775,555.


Annual General Meeting

At the Annual General Meeting held on 27 March 2003, a dividend of
EUR 0.31 (0.26) per share was approved.

The following persons were re-appointed as members of the
Supervisory Board: Klaus Hellberg, Rakel Hiltunen, Harri Holkeri,
Jorma Huuhtanen, Mikko Immonen, Kimmo Kalela, Tanja Karpela, Leena
Luhtanen, Matti Vanhanen and Ben Zyskowicz. Satu Hassi, Kalevi
Lamminen and Juha Mikkilä were elected as new members. Leena
Luhtanen was re-elected as Chairman and Ben Zyskowicz as Deputy
Chairman of the Supervisory Board.

PricewaterhouseCoopers Oy, Authorised Public Accountants, were re-
appointed as auditors.


Group personnel

The average number of employees in the Group during the period
from January to March was 12,733 (13,710). The number of employees
at the end of the period was 12,645 (13,670 at the end of 2002).
The reduction is mainly attributable to the formation of the new
associated company Enprima at the beginning of this year.


Group management

Christian Lundberg was appointed President of Fortum Markets and
member of the Corporate Executive Committee as of 1 February 2003.


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,
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 quarter of 2003,
the average spot price for electricity was EUR 53.3 per megawatt-
hour on the Nordic electricity market, or 152% higher than the
corresponding figure for 2002. At the beginning of April 2003, the
spot price was in the range of EUR 29 - 36 per megawatt-hour. The
electricity forwards for the rest of 2003 in mid-April were in the
range of EUR 31 – 32 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. All transactions relating to the power
asset swap with E.ON are expected to be completed by the end of
the second quarter, subject to authority approvals. The
transactions are expected to be earnings neutral in 2003.

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 3.8/bbl (USD -0.2/bbl) during the period from January
to March. In April 2003, the international refining margin has
been averaging USD 3.3/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 31.5/bbl in January-
March 2003. On 31 March, it was USD 28.1/bbl. In April 2003, the
price has been averaging USD 25.4/bbl while the International
Petroleum Exchange’s Brent futures for the remainder of 2003 have
been averaging USD 24.6/bbl. The price of crude oil has an impact
on the results of Oil Refining and Marketing through inventory
gains and losses.

The exceptionally high freight rates in the first quarter have
weakened towards the summer.

Due to the disposals of the oil and gas production assets in Oman
and Norway, there will be no own production in the first half of
2003. Preparations for the start of oil production in late 2003 at
the South Shapkino oil field in north-western Russia are
continuing as planned.


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


Espoo, 24 April 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-MARCH 2003
Interim financial statements are unaudited


CONSOLIDATED INCOME STATEMENT

MEUR Q1/03 Q1/02 2002 Last
twelve
months
(LTM)
Net sales 3593 2571 11148 12170
Share of profits of associated
companies 11 9 31 33
Other operating income 13 89 370 294
Depreciation, amortisation and
write-downs -133 -151 -694 -676
Other operating expenses -3009 -2191 -9566 -10384

Operating profit 475 327 1289 1437
Financial income and expenses -65 -58 -281 -288

Profit before taxes 410 269 1008 1149
Income taxes -107 -65 -269 -311
Minority interests -33 -22 -73 -84

Net profit for the period 270 182 666 754


Earnings per share, EUR 0.32 0.21 0.79 0.89
Fully diluted earnings per share 0.32 0.21 0.78
Average number of shares, 1000 shares 845776 845609 845642 845692
Diluted adjusted average number of
shares, 1,000 shares 853677 850986 851482


CONSOLIDATED BALANCE SHEET

MEUR Mar 31 Mar 31 Dec 31
2003 2002 2002

ASSETS

Fixed assets and other
long-term investments 13674 15856 14837
Current assets
Inventories 536 591 504
Receivables 1938 2051 2027
Cash and cash equivalents 339 523 592
Total 2813 3165 3123

Total 16487 19021 17960

SHAREHOLDERS' EQUITY AND LIABILITIES

Shareholders' equity
Share capital 2876 2875 2876
Other equity 3008 2603 3020
Total 5884 5478 5896
Minority interests 1461 1469 1432
Provisions for liabilities and
charges 99 145 133
Deferred tax liabilities 1798 1928 1866
Long-term liabilities 3988 5447 4699
Short-term liabilities 3257 4554 3934

Total 16487 19021 17960

Equity per share, EUR 6.96 6.48 6.97
Number of shares, 1,000 shares 845776 845609 845776


CASH FLOW STATEMENT

MEUR Mar 31 Mar 31 Dec 31
2003 2002 2002

Net cash from operating activities 344 325 1351
Capital expenditures -83 -81 -649
Acquisition of shares -29 -1683 -1771
Proceeds from sales of fixed assets 63 92 120
Proceeds from sales of shares 933 148 889
Change in other investments 1 -159 33

Cash flow before financing activities 1229 -1358 -27
Net change in loans -1480 1307 209
Dividends paid - - -220
Other financing items -1 - 30

Net cash from financing activities -1481 1307 19

Net increase (+)/decrease (-) in cash
and marketable securities -252 -51 -8

KEY RATIOS
Mar 31 Mar 31 Dec 31 LTM
2003 2002 2002

Capital employed 12309 14581 13765
Interest-bearing net debt, MEUR 4624 7111 5848

Investments, MEUR 112 3704 4381 789

Return on capital employed, % 15.6 8.8 11.1 11.8
Return on shareholders' equity, % 16.5 8.5 10.5 11.4
Interest coverage 7.1 5.9 4.7 5.0
FFO / interest-bearing net debt, % 1) 37.6 23.5 29.6
Gearing, % 63 102 80
Adjusted gearing, % 2) 95 145 115
Equity-to-assets ratio, % 45 37 41
Average number of employees 12733 13710 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 Q1/03 Q1/02 2002 LTM

Power, Heat and Gas 1214 933 3644 3925
Electricity Distribution 199 162 640 677
Oil Refining and Marketing 2075 1531 7083 7627
Markets 476 306 1280 1450
Other operations 20 14 64 70
Eliminations -391 -401 -1668 -1658

Total 3593 2545 11043 12091
Discontinuing operations*) - 26 105 79

Total 3593 2571 11148 12170

*) Internal sales excluded

OPERATING PROFIT BY SEGMENTS

MEUR Q1/03 Q1/02 2002 LTM

Power, Heat and Gas 293 149 617 761
Electricity Distribution 81 113 279 247
Oil Refining and Marketing 125 57 253 321
Markets -7 2 -11 -20
Other operations -17 -12 -64 -69
Eliminations - -1 - -

Total 475 308 1074 1240
Discontinuing operations - 19 215 197

Total 475 327 1289 1437

NON-RECURRING ITEMS IN OPERATING PROFIT BY SEGMENTS

MEUR Q1/03 Q1/02 2002 LTM

Power, Heat and Gas -1 1 116 114
Electricity Distribution 1 58 92 35
Oil Refining and Marketing 2 29 48 21
Markets - 1 1 -
Other operations 2 1 4 5
Eliminations - - - -

Total 4 90 261 175
Discontinuing operations - - 54 54

Total 4 90 315 229

DEPRECIATION, AMORTISATION AND WRITE-DOWNS BY SEGMENTS

MEUR Q1/03 Q1/02 2002 LTM

Power, Heat and Gas 58 50 236 244
Electricity Distribution 37 34 147 150
Oil Refining and Marketing 30 34 152 148
Markets 4 5 25 24
Other operations 4 3 23 24
Eliminations - - -1 -1

Total 133 126 582 589
Discontinuing operations - 25 112 87

Total 133 151 694 676

INVESTMENTS BY SEGMENTS

MEUR Q1/03 Q1/02 2002 LTM

Power, Heat and Gas 53 2392 2619 280
Electricity Distribution 23 1174 1394 243
Oil Refining and Marketing 32 23 177 186
Markets - 104 109 5
Other operations 4 2 7 9
Eliminations - - - -

Total 112 3695 4306 723
Discontinuing operations - 9 75 66

Total 112 3704 4381 789

NET ASSETS BY SEGMENTS
MEUR Mar 31 Mar 31 Dec 31
2003 2002 2002

Power, Heat and Gas 3) 8741 9100 8748
Electricity Distribution 3) 3179 3472 3199
Oil Refining and Marketing 1527 1622 1510
Markets 34 161 55
Other operations 126 179 30
Eliminations - - -

Total 13607 14534 13542
Discontinuing operations - 1264 927

Total 13607 15798 14469

3) Net assets include deferred tax liabilities due to the allocated
goodwill: EUR 491 mill. March 31, 2003, and EUR 502 mill. December 31,
2002 in Power, Heat and Gas segment; and EUR 339 mill. March 31, 2003
EUR 344 mill. December 31, 2002 in Electricity Distribution.

RETURN ON NET ASSETS BY SEGMENTS 4)

% Mar 31 Mar 31 Mar 31 Mar 31 Dec 31 Dec 31 LTM LTM
2003 2003*) 2002 2002*) 2002 2002*) *)

Power, Heat and Gas 13.4 13.4 7.9 7.9 7.5 6.1 8.6 7.3
Electricity
Distribution 10.2 10.0 16.2 7.9 9.3 6.2 7.7 6.6
Oil Refining and
Marketing 32.9 32.4 13.8 6.7 16.0 13.0 20.7 19.4
Markets -62.6 -62.6 6.0 2.8 -11.4 -12.4 -23.2 -23.2

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

CONTINGENT LIABILITIES

MEUR Mar 31 2003 Mar 31 2002 Dec 31 2002

Contingent liabilities

On own behalf
For debt
Pledges 492 436 553
Real estate mortgages 235 241 237
Company mortgages 7 9 32
Other mortgages 26 52 26
For other commitments
Pledges 2 - 7
Real estate mortgages 55 59 55
Company mortgages - 3 1
Sale and leaseback 9 18 15
Other contingent liabilities 94 489 474

Total 920 1307 1400

On behalf of associated companies
Pledges 9 8 9
Guarantees 721 189 345
Other contingent liabilities 184 184 184
Total 914 381 538

On behalf of others
Guarantees 5 67 4
Other contingent liabilities 9 12 4
Total 14 79 8

Total 1848 1767 1946

Operating lease liabilities

Due within a year 62 70 58
Due after a year 133 87 91

Total 195 157 149

Finance leases have been recognised as assets and liabilities.

Liability for nuclear waste
disposal 545 516 545
Share of reserves in the Nuclear
Waste Disposal Fund -535 -506 -535

Liabilities in the balance
sheet 5) 10 10 10

5) 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 2003 Mar 31 2002 Dec 31 2002


Interest and currency derivates

Contract or Contract or Contract or
notional value notional value notional value
MEUR

Forward rate agreements 1863 6201 2950
Interest rate swaps 6836 6103 6898
Forward foreign
exchange contracts 5) 5440 4892 5626
Currency swaps 2325 3222 2334
Purchased currency options 100 173 248
Written currency options 46 85 66

5) Incl. also contracts used for equity hedging

Fair value Fair value Fair value
MEUR

Forward rate agreements -2 1 -2
Interest rate swaps -18 -22 21
Forward foreign
exchange contracts 5) 50 -61 63
Currency swaps 243 228 227
Purchased currency options 8 -4 9
Written currency options 1 1 1

5) Incl. also contracts used for equity hedging

Not recognised Not recognised Not recognised
MEUR as an income as an income as an income

Forward rate agreements -2 1 -2
Interest rate swaps 40 34 34
Forward foreign
exchange contracts 5) 39 8 30
Currency swaps 62 18 60
Purchased currency options 8 -4 11
Written currency options 1 1 1

5) Incl. also contracts used for equity hedging


Oil futures and forward instruments
Volume Volume Volume
1000 bbl 1000 bbl 1000 bbl

Sales contracts 17800 5460 10697
Purchase contracts 14868 5646 12170
Purchased options 1100 1700 -
Written options 850 900 -

Fair value Fair value Fair value
MEUR MEUR MEUR

Sales contracts 1 -15 -11
Purchase contracts -1 13 13
Purchased options - -1 -
Written options 1 1 -


Not recognised Not recognised Not recognised
as an income as an income as an income
MEUR MEUR MEUR

Sales contracts 1 -15 -11
Purchase contracts -1 13 13
Purchased options - -1 -
Written options 1 1 -


Electricity derivatives

Volume Volume Volume
TWh TWh TWh

Sales contracts 82 98 94
Purchase contracts 68 93 78
Purchased options 2 5 2
Written options 4 7 6

Fair value Fair value Fair value
MEUR MEUR MEUR

Sales contracts -277 215 -2065
Purchase contracts 239 -209 1709
Purchased options - -1 1
Written options - 3 3

Not recognised Not recognised Not recognised
as an income as an income as an income
MEUR MEUR MEUR

Sales contracts -205 178 -1406
Purchase contracts 168 -169 1051
Purchased options 1 -1 -1
Written options -1 3 6


Natural gas derivates
Volume Volume Volume
Mill.th. Mill.th. Mill.th.

Sales contracts 3590 2409 4072
Purchase contracts 3271 2439 3773
Purchased options 1378 345 1287
Written options 1202 338 1335

Fair value Fair value Fair value
MEUR MEUR MEUR

Sales contracts 7 105 127
Purchase contracts -3 -104 -115
Purchased options -7 3 -7
Written options 5 - -

Not recognised Not recognised Not recognised
as an income as an income as an income
MEUR MEUR MEUR

Sales contracts 7 105 127
Purchase contracts -3 -104 -115
Purchased options -7 3 -7
Written options 5 - -

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

Power, Heat and Gas 1214 1234 694 783 933
Electricity Distribution 199 184 138 156 162
Oil Refining and Marketing 2075 1968 1794 1790 1531
Markets 476 418 286 270 306
Other operations 20 19 15 16 14
Eliminations -391 -567 -344 -356 -401

Total 3593 3256 2583 2659 2545
Discontinuing operations - 34 22 23 26

Total 3593 3290 2605 2682 2571

QUARTERLY OPERATING PROFIT BY SEGMENTS

MEUR Q1/03 Q4/02 Q3/02 Q2/02 Q1/02
Power, Heat and Gas 293 284 28 156 149
Electricity Distribution 81 61 34 72 113
Oil Refining and Marketing 125 42 76 79 57
Markets -7 -19 2 4 2
Other operations -17 -27 -17 -10 -12
Eliminations - -1 1 1 -1

Total 475 340 124 302 308
Discontinuing operations - 51 25 120 19

Total 475 391 149 422 327