Fortum Corporation Interim Report 1 January – 30 September 2003

Fortum Corporation STOCK EXCHANGE RELEASE
23 October 2003 at 9.00 a.m. 1 (1)


Fortum Corporation Interim Report 1 January – 30 September 2003

Strong business performance continues
- Fortum´s operating profit hits EUR 1 billion

January-September in brief
- Operating profit excluding non-recurring items up by 71%
- Strong cash flow, EUR 1,381 million
- Third quarter earnings per share double previous year's figure
- Decision to separate and list oil business


Key figures III III I-III I-III 2002 Last
/03 /02 /03 /02 12
months
(LTM)
Net sales, EUR million 2527 2605 8555 7858 11148 11845
Operating profit, EUR 239 149 1000 898 1289 1391
million
- excluding non-recurring 231 136 974 571 974 1377
items
Profit before taxes, EUR 185 75 811 690 1008 1129
million
Earnings per share, EUR 0.15 0.07 0.64 0.57 0.79 0.86
Shareholders’ equity per 7.30 6.77 6.97
share, EUR
Capital employed 12773 13488 13765
(at end of period), EUR
million
Interest-bearing net debt 4420 6033 5848
(at end of period), EUR
million
Investments, EUR million 889 4121 4381
Net cash from operating 1381 977 1351
activities,
EUR million
Return on capital 10.6 9.6 11.1 11.3
employed, %
Return on shareholders’ 10.5 8.7 10.5 10.8
equity, %
Gearing, % 58 84 80
Average number of 13594 14333 14053
employees
Average number of shares, 845836 845655 845642 845783
1,000s

The Group’s financial performance in January-September was strong
and cash flow continued to be healthy, based on good operating
results and supported by a further decrease in working capital and
high foreign exchange gains owing to debt restructuring. Net debt
was further reduced to EUR 4,420 million. As a result, gearing
decreased to 58%.

The various moves to improve performance have contributed to the
positive trend in the results. The integration of Birka Energi
progressed as planned. The synergy benefits achieved in January-
September amounted to EUR 90 million.

Fortum took important strategic steps in Norway and in north-
western Russia after concluding an agreement with E.ON AG on a
swap of power assets. In addition, Fortum acquired further shares
in Hafslund in June on the market, thereby increasing its
shareholding interest in the company to 34.1%.

During the period under review, 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 highs reached around year-end, Nordic power
Exchange (Nord Pool) electricity prices decreased, although they
remained well in excess of the previous year's levels. Likewise,
the international oil refining reference margin, which was very
high at the beginning of the year, decreased somewhat but
continued on a higher level than a year ago.

In September, Fortum decided to commence preparations to separate
its oil business into a new company and subsequently to list the
new company on the Helsinki stock exchange. Fortum also decided to
invest EUR 500 million to upgrade the Porvoo refinery, in order to
take advantage of well-established market trends and thereby
further improve its competitiveness and profitability. These
strategic decisions will enable Fortum to further increase its
Nordic utility focus and continue to participate actively in the
restructuring of the Nordic power and heat markets.

Net sales and results

July-September

The operating profit for all segments improved compared to the
corresponding period last year. Power, Heat and Gas more than
doubled its operating profit excluding non-recurring items. Oil
Refining and Marketing's results improved by more than 50%.

Group operating profit totalled EUR 239 (149) million. The
operating profit excluding non-recurring items stood at EUR 231
(136) million, an increase of EUR 95 million compared to the
corresponding period in 2002. The net amount of non-recurring
items was EUR 8 (13) million. Earnings per share doubled to EUR
0.15 (0.07).

During the third quarter, the Nord Pool electricity price and the
international oil refining margin both exceeded the levels reached
in the corresponding period in 2002.

January-September

Group net sales stood at EUR 8,555 (7,858) million. The increase
was mainly attributable to the higher market price of electricity
and petroleum products.

Group operating profit totalled EUR 1,000 (898) million. The
operating profit excluding non-recurring items stood at EUR 974
(571) million, an increase of EUR 403 million compared to the
corresponding period in 2002. Taking into consideration also the
impact of discontinuing operations, the improvement of operating
profit was EUR 500 million. The net amount of non-recurring items
was EUR 26 (327) 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 results of Power, Heat and Gas.

Electricity Distribution's results were somewhat lower than
previous year due to substantial gains on sales in 2002. However,
operating profit excluding non-recurring items was well up on the
previous year's figures.

The Markets segment tripled its results compared to last year.

The international oil refining margins were markedly higher than a
year ago, which gave a major boost to Oil Refining and Marketing's
results. Shipping enjoyed high freight rates, mainly during the
first quarter. The fleet utilisation rate continued to be high as
a result of renewed tonnage and specialist knowledge of arctic
conditions. The Oil Retail business also performed well.

Profit before taxes was EUR 811 (690) million.

The Group´s net financial expenses were EUR 189 (208) million.

Minority interests accounted for EUR 57 (50) 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 212 (158) million.

Net profit for the period was EUR 542 (482) million. Earnings per
share were EUR 0.64 (0.57). Return on capital employed was 10.6%
(9.6%) and return on shareholders´ equity was 10.5% (8.7%).

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. Fortum is the second largest power
company in the Nordic countries as well as the leading heat
producer in the region. The Service business (former Fortum Energy
Solutions) is included in this segment as from 1 January 2003.


EUR million III III I-III I-III 2002 LTM
/03 /02 /03 /02
Net sales 626 694 2558 2410 3644 3792
- electricity sales 337 325 1393 1028 1661 2026
- heat sales 107 114 540 453 686 773
- other sales 182 255 625 929 1297 993
Operating profit 77 28 506 333 617 790
- excluding non- 78 33 508 230 501 779
recurring items
Return on net assets, % 7.8 5.5 7.5 9.1
Net assets (at end of 8720 8717 8748
period)

According to preliminary estimates, electricity consumption in the
Nordic countries decreased by 1% during the third quarter and was
77.6 (78.3) terawatt-hours (TWh). Consumption in Finland was on a
par with the previous year's level while in Sweden it fell by
about 3% and in Norway it increased by about 1% on the
corresponding period last year.

In January-September, according to preliminary estimates,
electricity consumption in the Nordic countries decreased by 1%
and was 275 (277) TWh. Consumption in Finland increased by 4%. In
Sweden, consumption was at the same level as last year and in
Norway it was down by 4% on the corresponding period last year.

During the third quarter the average spot price for electricity on
the Nordic power exchange (Nord Pool) was EUR 31.0 (20.1) per
megawatt-hour (MWh) and the deficit in water reservoirs remained
practically unchanged. The average price of electricity was EUR
37.6 (19.2) per megawatt-hour in January-September. The price
level was supported by the prevailing deficit in water reservoirs
and lower-than-normal inflows.

In January-September, the Nord Pool price increased by 95%
compared to last year. The corresponding price increase in
electricity sold by Fortum in the Nordic countries was 39%.

Power, Heat and Gas strengthened its market position. Sales in the
Nordic countries totalled 41.9 (37.8) TWh which accounted for
approximately 15% (14%) of total Nordic electricity consumption in
January-September.

Fortum’s own power generation in the Nordic countries in January-
September was 37.1 (32.7) TWh which represented approximately 13%
(12%) of total Nordic electricity consumption. The balance between
energy sources was significantly different from last year due to
low water reservoirs. This illustrates the flexibility of Fortum's
flexible production portfolio.

In line with its Nordic strategy, Fortum divested its gas retail
operations in the UK in June and is in the process of divesting
its gas trading operations. Fortum continues to be a shareholder
in a number of gas companies in the Nordic area and is involved in
various development projects including the North Transgas project.

Demand for contract-based maintenance was healthy, and Fortum
Service signed several new contracts with industrial customers.
Also demand for substation and hydropower services continued to be
good.


Electricity sales by III III I-III I-III 2002 LTM
area /03 /02 /03 /02
TWh
Sweden *) 5.5 5.1 20.7 19.6 28.0 29.1
Finland 6.2 6.1 21.2 18.2 26.1 29.1
Other countries 0.4 1.1 2.1 5.2 5.9 2.8
Total 12.1 12.3 44.0 43.0 60.0 61.0


Heat sales by area III III I-III I-III 2002 LTM
TWh /03 /02 /03 /02
Sweden *) 0.8 0.7 6.5 4.6 8.2 10.1
Finland 1.6 1.8 7.4 7.1 9.8 10.1
Other countries 0.6 1.1 2.8 3.3 4.5 4.0
Total 3.0 3.6 16.7 15.0 22.5 24.2
*) 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.

Own power generation III III I-III I-III 2002 LTM
by source, TWh, /03 /02 03 /02
in the Nordic countries
Hydro 3.5 4.4 11.9 14.1 18.1 15.9
Nuclear 4.8 5.0 17.5 15.6 22.0 23.9
Thermal 2.1 0.7 7.7 3.0 6.4 11.1
Total 10.4 10.1 37.1 32.7 46.5 50.9

Share of own III III I-III I-III 2002 LTM
production, %, /03 /02 /03 /02
in the Nordic countries
Hydro 34 44 32 43 39 31
Nuclear 46 49 47 48 47 47
Thermal 20 7 21 9 14 22
Total 100 100 100 100 100 100

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 III III I-III I-III 2002 LTM
/03 /02 /03 /02
Net sales 143 138 502 456 640 686
- distribution network 118 110 415 377 526 564
transmission
- regional network 19 19 64 56 80 88
transmission
- other sales 6 9 23 23 34 34
Operating profit 47 34 189 219 279 249
- excluding 48 34 169 128 187 228
non–recurring items
Return on net assets, % 8.0 9.9 9.3 7.9
Net assets (at end of 3106 3117 3199
period)

Volume of distributed III III I-III I-III 2002 LTM
electricity by area /03 /02 /03 /02
TWh
Sweden*) 2.7 2.9 11.0 9.5 14.4 15.9
Finland 1.1 1.1 4.4 3.6 5.4 6.2
Other countries 0.4 0.0 0.7 1.3 1.4 0.8
Total 4.2 4.0 16.1 14.4 21.2 22.9
*)The Birka Energi acquisition accounts for a 1.7 TWh increase in
the volume transmitted via the distribution networks in 2002.

Number of electricity 30.9.2003 30.9.2002 2002
distribution customers
by area, 1,000s
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 16.1 (14.4) TWh and 14.7 (14.3) TWh respectively.

Electricity transmissions via the regional distribution network to
customers outside the Group totalled 10.8 (9.7) TWh in Sweden and
3.9 (4.5) TWh in Finland.

Electricity distribution prices were raised in Sweden and Norway
as from 1 October, with an average rise of 5% in Sweden and 6% in
Norway.

Markets

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


EUR million III III I-III I-III 2002 LTM
/03 /02 /03 /02
Net sales 329 286 1,132 862 1280 1550
Operating profit 14 2 22 8 -11 3
- excluding 14 2 22 7 -12 3
non–recurring items
Return on net assets, % 41.3 9.1 -11.4 4.6
Net assets (at end of 74 73 55
period)

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

In Finland, the average retail market prices for private customers
were stable whereas in Sweden and Norway they increased towards
the end of summer and early autumn. Fortum's retail prices
remained unchanged during the third quarter.

During the third quarter, electricity sales totalled 7.6 (8.0) TWh
and sales of heating oil 0.1 (0.1) million tonnes. In January-
September, electricity sales totalled 24.8 (23.6) TWh. 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 0.5 (0.5) million tonnes in
January-September.

The business processes improvement programme launched in the
spring contributed to the turnaround in the unit's results.

Oil Refining and Marketing

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

EUR million III III I-III I-III 2002 LTM
/03 /02 /03 /02
Net sales 1717 1794 5435 5114 7083 7404
Operating profit 118 76 318 211 253 360
- excluding 104 60 320 157 205 367
non–recurring items
Return on net assets, % 28.7 17.6 16.0 24.1
Net assets (at end of 1446 1555 1510
period)

The average international refining margin in north-western Europe
(Brent Complex) during the third quarter was USD 2.7/bbl
(1.3/bbl). In January-September, it averaged USD 2.8/bbl
(0.7/bbl). Fortum’s premium margin continued to average about USD
2/bbl above the international reference margin.

The price of Brent crude averaged USD 28.4/bbl (26.9/bbl) during
the third quarter. In January-September, the average price was
USD 28.6/bbl (24.4/bbl). At the end of September, the price of
Brent was around USD 27/bbl.

The inventory gain during the third quarter was EUR 14 (17)
million and EUR -0.4 (47) million in January-September.

In January-September, Fortum refined a total of 9.7 (9.9) million
tonnes of crude oil and other feedstocks. A total of 5.8 (5.7)
million tonnes of petroleum products were sold in Finland. Exports
amounted to 3.9 (3.8) million tonnes.

During the third quarter, shipping rates remained at a normal
level, but were considerably lower than during the first half of
the year. The fleet utilisation rate remained high and the fleet
renewal programme was continued. In September, a decision was made
to sell one crude oil tanker and to divest the offshore loading
business. One new product tanker was delivered to Fortum in
September.

Fortum started production at the South Shapkino oil field in north-
western Russia in mid-July. The daily production rates are about
20,000 barrels per day (100%). The planned maximum production rate
of 50,000 barrels per day (of which Fortum’s share is 25,000
barrels per day) will be reached by the end of 2004 according to
current estimates. Fortum’s share of the exploitable oil reserves
in this oil field, which is owned fifty-fifty by Fortum and the
Russian company Lukoil, has been estimated at approximately 82
million barrels.


Deliveries of petroleum III III I-III I-III 2002 LTM
products refined by /03 /02 /03 /02
Fortum – by product
group (1,000 t)
Gasoline 1075 1247 3135 3390 4595 4340
Diesel 971 783 2876 2626 3619 3869
Aviation fuel 159 172 410 472 586 524
Light fuel oil 362 331 1081 1054 1503 1530
Heavy fuel oil 269 260 951 939 1233 1245
Other 488 424 1276 1039 1504 1741
Total 3324 3217 9729 9520 13040 13249


Deliveries of petroleum III III I-III I-III 2002 LTM
products refined by /03 /02 /03 /02
Fortum – by area (1,000
t)
Finland 2002 1848 5791 5718 7845 7918
Other Nordic countries 503 529 1470 1457 1982 1995
Baltic countries and 33 9 62 28 41 75
Russia
USA and Canada 278 435 795 1022 1276 1049
Other countries 508 396 1611 1295 1896 2212
Total 3324 3217 9729 9520 13040 13249


Business development and restructuring

Transactions relating to the swap of power assets between Fortum
and E.ON AG were completed by the end of June. Fortum acquired
assets in Norway and north-western Russia and sold some non-core
assets in Ireland, Germany and southern Sweden. The transaction
relating to the shares in the Norwegian company 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 results. In June, Fortum divested its retail gas sales
operations in the UK and started a process to divest its gas
trading operations.

In September, Fortum announced that it will commence preparations
to separate its oil business into a new company and to have the
new company listed on the Helsinki stock exchange (IPO). The new
company will comprise all of Fortum’s existing oil business with
its refining, marketing, shipping and oil production activities.

This strategic decision will enable Fortum to further increase its
Nordic utility focus and to continue to participate actively in
the restructuring of the Nordic power and heat markets. It will
also improve the competitive position and commercial prospects of
the oil business and create two leading Nordic companies with
strong competitive positions in their respective markets.

Investments and financing

The IPO will facilitate a EUR 500 million investment to add
sulphur-free diesel production capacity at the Porvoo refinery.
While the total production capacity will remain unchanged, the
refinery will be able to significantly increase the production of
high-margin products utilising more Russian crudes, for example,
which are competitively available as Porvoo is adjacent to
established Russian crude oil export routes to the Western
markets. The annual production of sulphur-free diesel at the
refinery will grow by about one million tonnes and will be mainly
replacing heavy fuel oil production. Fortum expects to increase
its refining margin premium by at least USD 1/bbl and thus achieve
an attractive return on investment even using relatively
conservative assumptions.

The high expected return from the upgrade investment is driven by
the Porvoo refinery’s ability to produce more high-margin,
environmentally benign products from less expensive crude oil. The
demand for these products is rapidly growing in Fortum’s key
markets. The investment is expected to be completed by the end of
2006.

Investments in fixed assets in January-September totalled EUR 889
(4,121) million. Of this, EUR 520 (3,729) million were
acquisitions.

At the end of the period, interest-bearing net debt stood at EUR
4,420 (6,033) million. The gearing ratio at the end of September
was 58% (80% at the end of 2002). Adjusted gearing (Fortum Capital
Ltd's minority interest included in liabilities) was 88% (115% at
the end of 2002).

Group net financial expenses were EUR 189 (208) 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 137,820 Fortum Corporation shares were subscribed for
and entered in the trade register under Fortum Corporation’s 1999
bond loan with warrants to employees and the management stock
option scheme.

After these increases, Fortum Corporation’s share capital is EUR
2,876,052,435 and the total number of shares is 845,897,775.

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

Group personnel

The average number of employees in the Group in January-September
was 13,594 (14,333). 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 13,201 (13,670 at the end of 2002).

Outlook

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

During the past five years the volume of Fortum's CO2-free power
production has increased from 27 TWh to 41 TWh. Its share was 79%
of Fortum`s power generation in 2002. With this production
portfolio Fortum is well-positioned when emission trading starts.

According to general market information, electricity consumption
in the Nordic countries is predicted to increase by about 1% a
year over the next few years. In January-September 2003, the
average spot price for electricity was EUR 37.6 per megawatt-hour
on the Nordic electricity market, or 95% higher than the
corresponding figure for 2002. Currently the deficit in water
reservoirs is 17 TWh and the electricity forwards for the rest of
2003 are in the range of EUR 37-40 per megawatt-hour and EUR 34-42
for the period January-April 2004.

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.

In 2002, the operating profit for discontinuing Oil and Gas
Upstream segment was EUR 213 million. During the fourth quarter,
the operating profit was EUR 51 million.

The international refining margin in north-western Europe (Brent
Complex) was considerably higher than in the corresponding period
in 2002 and averaged USD 2.8/bbl (0.7/bbl) in January-September.
In October 2003, the international refining margin has been
averaging USD 1.8/bbl. For several years, the international Brent
Complex refining margin has averaged USD 1.5 – 2.0/bbl. Management
expects Fortum’s premium margin to remain as strong as in previous
years. No major maintenance shutdowns are planned at the
refineries during 2004.

The average price for Brent crude oil was USD 28.6/bbl in January-
September 2003. On 30 September, it was USD 28.2/bbl. In October
2003, the price has been averaging USD 30.2/bbl. Currently the
International Petroleum Exchange’s Brent futures for the remainder
of 2003 average USD 28.6/bbl and USD 27.3/bbl for the first half
of 2004. The price of crude oil has an impact on the results of
Oil Refining and Marketing through inventory gains and losses.

Oil production at the South Shapkino oil field in north-western
Russia started in mid-July. In late September, the production
level was 20,000 bbl/d (Fortum’s 50% share). Production will
gradually be increased and full capacity (Fortum´s share 25,000
bbl/d) will be reached by the end of 2004. The operations will be
earnings neutral during 2003.

The separation and listing of the oil business will allow the new
company to take full advantage of market developments and
facilitate the upgrade of the Porvoo refinery. These measures will
also enable Fortum to further increase its Nordic utility focus
and to continue its active participation in the restructuring of
the Nordic power and heat markets.

During 2003, Fortum's ongoing businesses have been performing
well. The company's current position, ongoing performance
improvement measures and the market outlook all point to an
attractive near future for Fortum.

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

Espoo, 23 October 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-SEPTEMBER 2003

Interim financial statements are unaudited

CONSOLIDATED INCOME STATEMENT
MEUR Q3/03 Q3/02 Q1-Q3/03 Q1-Q3/02 2002 Last 12
months

Net sales 2527 2605 8555 7858 11148 11845
Share of profits of
associated companies 9 3 29 16 31 44
Other operating income 19 9 95 336 370 129
Depreciation,amortisation
and write-downs -128 -165 -395 -488 -694 -601
Other operating expenses -2188 -2303 -7284 -6824 -9566 -10026
Operating profit 239 149 1000 898 1289 1391
Financial income
and expenses -54 -74 -189 -208 -281 -262
Profit before taxes 185 75 811 690 1008 1129
Income taxes -45 -9 -212 -158 -269 -323
Minority interests -10 -10 -57 -50 -73 -80
Net profit for the period 130 56 542 482 666 726


Earnings per share, EUR 0.15 0.07 0.64 0.57 0.79 0.86
Fully diluted earnings
per share 0.15 0.07 0.63 0.57 0.78
Average number of
shares, 1000 shares 845836 845655 845642 845783
Diluted adjusted average
number of shares,1000 shares 857249 851169 851482

CONSOLIDATED BALANCE SHEET
MEUR Sep 30 2003 Sep 30 02 Dec 31 02

ASSETS
Fixed assets and other long-term inve 14189 14819 14837
Current assets
Inventories 541 671 504
Receivables 1157 1520 2027
Cash and cash equivalents 277 259 592
Total 1975 2450 3123
Total 16164 17269 17960

SHAREHOLDERS' EQUITY AND LIABILITIES

Shareholders' equity
Share capital 2876 2875 2876
Other equity 3297 2854 3020
Total 6173 5729 5896
Minority interests 1449 1447 1432
Provisions for liabilities and charge 187 95 133
Deferred tax liabilities 1803 1774 1866
Long-term liabilities 3844 5367 4699
Short-term liabilities 2708 2857 3934
Total 16164 17269 17960

Equity per share, EUR 7.30 6.77 6.97
Number of shares, 1,000 shares 845898 845720 845776

CASH FLOW STATEMENT

MEUR Sep 30 2003 Sep 30 02 Dec 31 02

Net cash from operating activities 1381 977 1351
Capital expenditures -370 -393 -649
Acquisition of shares -504 -1765 -1771
Proceeds from sales of fixed assets 101 105 120
Proceeds from sales of shares 1221 857 889
Change in other investments -53 15 33

Cash flow before financing activities 1776 -204 -27
Net change in loans -1791 20 209
Dividends paid -264 -220 -220
Other financing items -40 67 30
Net cash from financing activities -2095 -133 19

Net increase (+)/decrease (-) in cash
and marketable securities -319 -337 -8

KEY RATIOS
Sep30 2003 Sep30 02 Dec31 02 Last 12
months
Capital employed, MEUR 12773 13488 13765
Interest-bearing net debt, MEUR 4420 6033 5848
Investments, MEUR 889 4121 4381 1149
Return on capital employed, % 10.6 9.6 11.1 11.3
Return on shareholders' equity, % 10.5 8.7 10.5 10.8
Interest coverage 5.1 4.3 4.7 5.2
FFO / interest-bearing net debt, % 1) 39.5 24.0 28.1
Gearing, % 58 84 80
Adjusted gearing, % 2) 88 121 115
Equity-to-assets ratio, % 47 42 41
Average number of employees 13594 14333 14053

1) FFO = Net cash from operating activities before changes in working
capital
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 Q3/03 Q3/02 Q1-Q3/03 Q1-Q3/02 2002 Last 12
months

Power, Heat and Gas 626 694 2558 2410 3644 3792
Electricity Distribution 143 138 502 456 640 686
Oil Refining and Marketing 1717 1794 5435 5114 7083 7404
Markets 329 286 1132 862 1280 1550
Other Operations 22 15 61 45 64 80
Eliminations -310 -344 -1133 -1100 -1668 -1701
Total 2527 2583 8555 7787 11043 11811
Discontinuing operations*) - 22 - 71 105 34
Total 2527 2605 8555 7858 11148 11845

*) Internal sales excluded

OPERATING PROFIT BY SEGMENTS
MEUR Q3/03 Q3/02 Q1-Q3/03 Q1-Q3/02 2002 Last 12
months

Power, Heat and Gas 77 28 506 333 617 790
Electricity Distribution 47 34 189 219 279 249
Oil Refining and Marketing 118 76 318 211 253 360
Markets 14 2 22 8 -11 3
Other Operations -16 -17 -35 -37 -64 -62
Eliminations -1 1 - 1 - -1
Total 239 124 1000 735 1074 1339
Discontinuing operations - 25 - 163 215 52
Total 239 149 1000 898 1289 1391

NON-RECURRING ITEMS IN OPERATING PROFIT BY SEGMENTS
MEUR Q3/03 Q3/02 Q1-Q3/03 Q1-Q3/02 2002 Last 12
months

Power, Heat and Gas -1 -5 -2 103 116 11
Electricity Distribution -1 - 20 91 92 21
Oil Refining and Marketing 15 16 -1 54 48 -7
Markets - - - 1 1 -
Other Operations -5 2 9 11 4 2
Total 8 13 26 260 261 27
Discontinuing operations - - - 67 54 -13
Total 8 13 26 327 315 14

DEPRECIATION, AMORTISATION AND WRITE-DOWNS BY SEGMENTS
MEUR Q3/03 Q3/02 Q1-Q3/03 Q1-Q3/02 2002 Last 12
months

Power, Heat and Gas 55 62 171 177 236 230
Electricity Distribution 34 38 110 114 147 143
Oil Refining and Marketing 30 33 91 100 152 143
Markets 5 7 12 19 25 18
Other Operations 4 3 11 9 23 25
Eliminations - - - -2 -1 1
Total 128 143 395 417 582 560
Discontinuing operations - 22 - 71 112 41
Total 128 165 395 488 694 601

INVESTMENTS BY SEGMENTS
MEUR Q3/03 Q3/02 Q1-Q3/03 Q1-Q3/02 2002 Last 12
months

Power, Heat and Gas 61 59 465 2527 2619 557
Electricity Distribution 17 45 241 1332 1394 303
Oil Refining and Marketing 47 45 143 109 177 211
Markets - 1 26 109 109 26
Other Operations 3 - 14 3 7 18
Total 128 150 889 4080 4306 1115
Discontinuing operations - 15 - 41 75 34
Total 128 165 889 4121 4381 1149

NET ASSETS BY SEGMENTS
MEUR Sep 30 2003 Sep 30 02 Dec 31 02

Power, Heat and Gas 3) 8720 8717 8748
Electricity Distribution 3) 3106 3117 3199
Oil Refining and Marketing 1446 1555 1510
Markets 74 73 55
Other Operations 113 144 30
Total 13459 13606 13542
Discontinuing operations - 1002 927
Total 13459 14608 14469

3) Net assets include deferred tax liabilities due to the allocated
goodwill: EUR 509 mill. September 30, 2003,and EUR 502 mill.
December 31, 2002 in Power, Heat and Gas segment; and EUR 247 mill.
September 30, 2003 EUR 344 mill. December 31, 2002 in Electricity
Distribution.

RETURN ON NET ASSETS BY SEGMENTS 4)

% Sep30 Sep30 Sep30 Sep30 Dec31 Dec31 Last 12 Last 12
2003 2003*) 2002 2002*) 2002 2002*)
months months*)

Power, Heat and Gas 7.8 7.8 5.5 3.8 7.5 6.1 9.1 9.0
Electricity
Distribution 8.0 7.2 9.9 5.8 9.3 6.2 7.9 7.3
Oil Refining and
Marketing 28.7 28.8 17.6 13.1 16.0 13.0 24.1 24.6
Markets 41.3 41.3 9.1 7.9 -11.4 -12.4 4.6 4.1

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

CONTINGENT LIABILITIES
MEUR Sep 30 2003 Sep 30 02 Dec 31 02
Contingent liabilities
On own behalf
For debt
Pledges 525 438 553
Real estate mortgages 237 235 237
Company mortgages - 34 32
Other mortgages - 26 26
For other commitments
Real estate mortgages 54 54 55
Pledges, company and other mortgages 1 15 8
Sale and leaseback 9 16 15
Other contingent liabilities 96 527 474
Total 922 1345 1400
On behalf of associated companies
Pledges and real estate mortgages 12 17 9
Guarantees 597 277 345
Other contingent liabilities 182 184 184
Total 791 478 538
On behalf of others
Guarantees 15 - 4
Other contingent liabilities 5 10 4
Total 20 10 8
Total 1733 1833 1946
Operating lease liabilities
Due within a year 55 61 58
Due after a year 108 119 91
Total 163 180 149

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

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 Sep 30 2003 Dec 31 2002
Interest and currency
derivatives Contract Fair Not recogn. Contract Fair Not rec.
or value as an or value as an
notional income notional income
MEUR value value

Forward rate agreements 335 - - 2950 -2 -2
Interest rate swaps 5784 9 16 6898 21 34
Forward foreign exchange
contracts 6) 7866 -54 33 5626 63 30
Currency swaps 347 13 5 2334 227 60
Purchased currency options 32 4 4 248 9 11
Written currency options 15 - - 66 1 1

Sep 30 2002

Forward rate agreements 4617 -2 -2
Interest rate swaps 6872 15 26
Forward foreign exchange
contracts 6) 5530 -31 -9
Currency swaps 2359 271 73
Purchased currency options 278 7 7
Written currency options 75 2 2

6) Incl. also contracts used for equity hedging

Oil futures and forward instruments

Sep 30 2003 Dec 31 2002
Volume Fair Not recogn. Volume Fair Not rec.
value as an value as an
income income

1000 bbl MEUR MEUR 1000 bbl MEUR MEUR

Sales contracts 11345 -3 -3 10697 -11 -11
Purchase contracts 26398 7 7 12170 13 13
Purchased options 100 - - - - -
Written options 100 - - - - -

Sep 30 2002

Sales contracts 8391 -7 -7
Purchase contracts 6767 7 7
Purchased options 250 - -
Written options 250 - -


Electricity derivatives

Sep 30 2003 Dec 31 2002
Volume Fair Not recogn. Volume Fair Not rec.
value as an value as an
income income

TWh MEUR MEUR TWh MEUR MEUR
Sales contracts 58 -349 -218 94 -2065 -1406
Purchase contracts 57 308 176 78 1709 1051
Purchased options 1 -1 -2 2 1 -1
Written options 3 -4 -3 6 3 6

Sep 30 2002

Sales contracts 82 -207 -154
Purchase contracts 76 216 146
Purchased options 4 1 2
Written options 9 - -

Natural gas derivates

Sep 30 2003 Dec 31 2002
Volume Fair Not recogn. Volume Fair Not rec.
value as an
value as an
income income

Mill.th. MEUR MEUR Mill.th. MEUR MEUR
Sales contracts 2543 36 - 4072 127 127
Purchase contracts 2543 -34 - 3773 -115 -115
Purchased options 709 1 - 1287 -7 -7
Written options 709 -3 - 1335 - -

Sep 30 2002

Sales contracts 2218 -19 -19
Purchase contracts 2110 23 23
Purchased options 783 -2 -2
Written options 697 1 1

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 Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Q1/02
Power, Heat and Gas 626 718 1214 1234 694 783 933
Electricity Distribution 143 160 199 184 138 156 162
Oil Refining and Marketing 1717 1643 2075 1968 1794 1790 1531
Markets 329 327 476 418 286 270 306
Other Operations 22 19 20 19 15 16 14
Eliminations -310 -432 -391 -567 -344 -356 -401
Total 2527 2435 3593 3256 2583 2659 2545
Discontinuing operations - - - 34 22 23 26
Total 2527 2435 3593 3290 2605 2682 2571

QUARTERLY OPERATING PROFIT BY SEGMENTS
MEUR
Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Q1/02
Power, Heat and Gas 77 136 293 284 28 156 149
Electricity Distribution 47 61 81 61 34 72 113
Oil Refining and Marketing 118 75 125 42 76 79 57
Markets 14 15 -7 -19 2 4 2
Other Operations -16 -2 -17 -27 -17 -10 -12
Eliminations -1 1 - -1 1 1 -1
Total 239 286 475 340 124 302 308
Discontinuing operations - - - 51 25 120 19
Total 239 286 475 391 149 422 327


SHARES AND SHAREHOLDINGS Number Share
of shares capital
EUR
Share capital on 31 Dec 2002 845 759 955 2 875 583 847

Subscribed under bond loan with
warrants 1999
- 20 February 2003 15 600 53 040
- 5 May 2003 27 060 92 004
- 3 September 2003 50 160 170 544

Subscribed under management share
option scheme 1999 5 May 2003 45 000 153 000

Share capital on 30 September 2003 845 897 775 2 876 052 435