FORTUM CORPORATION INTERIM REPORT 1 JANUARY - 31 MARCH, 2001

Major improvement in results - operating profit up by over 50%, profit before extraordinary items up by over 70%
 
Group net sales increased by 27% to EUR 3,202 million. Operating profit increased by 56% to EUR 307 million. Profit before extraordinary items increased by 72% to EUR 246 million.
Earnings per share increased by 33% to EUR 0.20. Power and Heat Generation and Sales saw its results boosted by increased electricity sales and the rise in the price of electricity in the Nordic countries. Oil and Gas Upstream improved its results following a slight increase in output. On average the price of crude oil remained on a par with the corresponding figure for the previous year. Oil Refining and Marketing’s results were up reflecting the increase in Fortum’s refining margin compared to the corresponding period in 2000.
 
 
Key Indicators
 
 
I/01
I/00
2000
 
 
 
 
Net sales, EUR million
3,202
2,525
11,026
Operating profit, EUR million
307
197
906
Profit before extraordinary items, EUR million
246
143
633
Earnings per share, EUR
0.20
0.15
0.55
Shareholders’ equity per share, EUR million
6.26
6.03
6.32
Capital employed (at end of period), EUR million
10,760
9,605
11,365
Interest-bearing net debt (at end of period), EUR million
4,046
4,350
4,626
Investments in fixed assets, EUR million
123
514
3,131
Net cash from operating activities, EUR million
447
52
424
Return on capital employed, %
11.7
8.9
9.4
Return on equity, %
11.8
9.5
8.6
Gearing, %
64
90
73
Average number of employees
15,602
16,081
16,220
 
 
Net sales and results
 
Group net sales stood at EUR 3,202, an increase of 27% over the corresponding figure for the previous year (EUR 2,525 million). The rise was mainly attributable to the following: Oil Refining


                                                                                                                          2
 
and Marketing’s higher sales volumes coupled with a stronger dollar, the growth in trading revenue following the sharp increase in the price of natural gas, increased electricity output, and the rise in the electricity price.
 
Group operating profit rose by 56% to EUR 307 (197) million. The substantial increase in power plant capacity and the rise in the price of electricity both had a positive impact on the results of Power and Heat Generation and Sales. Oil and Gas Upstream’s results were boosted by the rise in gas production. Oil Refining and Marketing showed a significant increase in operating profit due to the improvement in Fortum’s refining margin. Fortum’s shipping operations and the brisk demand for gasoline components also contributed to the rise.
 
The Birka Energi Group, in which Fortum has a 50% interest, accounted for EUR 75 (63) million of Fortum’s operating profit.
 
Inventory losses totalled EUR 41 (11) million and gains from the disposal of fixed assets totalled EUR 1 (4) million. 
 
Pre-tax profits totalled EUR 246 (143) million. Profit for the first quarter was EUR 158 (114) million.
 
The Group’s net financial expenses were EUR 61 (54) million. A total of EUR 21 (3) million has been entered under minority interests in the income statement. The increase is due to the financing arrangements for the acquisition of power assets in Sweden, which came into effect on 1 June 2000.
 
Review of Business Operations
 
Oil and Gas Upstream
 
Oil and gas exploration and production is centred on Norway but there are also operations in Oman and Russia. In Britain Fortum is engaged in gas trading and sells gas to end-users while in the Baltic region the company is involved in gas pipeline projects and owns shares in gas companies.
 
 
I/01
I/00
2000
 
 
 
 
Net sales, EUR million*
502
215
945
Operating profit, EUR million
51
45
218
Identifiable assets, EUR million
1,329
1,206
1,284
Return on net assets, %
15.6
15.4
18.0
 
* The total attributable to natural gas trading and retail sales was EUR 402 (132) million.
 
 
 
                                                                                                                          3
 
The average price of North Sea Brent light crude during the period from January to March was USD 25.8 (approx. USD 27) a barrel. The average price per barrel of oil sold by Fortum was USD 25.8 (27).
 
Oil and gas production
 
(boepd)
I/01
I/00
2000
 
 
 
 
Total
40,500
35,400
34,200
 
 
Production at the beginning of the year was equivalent to an annual output of 2.0 (1.7) million tonnes. Natural gas accounted for one fifth of the oil and gas production for the period from January to March.
 
In March, the Norwegian subsidiary, Fortum Petroleum AS, acquired a 30% interest in a new licence for exploration and production on the Norwegian Continental Shelf.
 
SeverTEK, which is owned jointly by Fortum and the Russian oil company, Lukoil, began test production at the Jushno-Shapkinskoje oil field in Timan Petshora in northern Russia. The field’s oil reserves total over 20 million tonnes.
 
 
Oil Refining and Marketing
 
Fortum owns two oil refineries in Finland and a network of service stations and retail outlets in Finland and the Baltic countries. The company also sells lubricants, base oils, components and LPG. On the logistics side, Fortum owns and charters tankers and also owns oil storage depots.
 
 
 
I/01
I/00
2000
 
 
 
 
Net sales, EUR million
1,941
1,669
7,759
Operating profit, EUR million
52
4
382
Identifiable assets, EUR million
1,584
1,645
1,838
Return on net assets, %
12.2
1.0
22.2
 
 
The international refining margin in north-west Europe for the period from January to March averaged USD 2.25 (2.27) a barrel. The margins increased towards the end of the first quarter, partly as a result of strong demand for motor fuels that comply with environmental restrictions. Fortum’s refining margin was around USD 2 higher than the corresponding international margin.
 
Consumption of petroleum products in Finland totalled 2.7 (2.5)

                                                                                                                          4
 
million tonnes. Demand for gasoline fell by around 1.7% while demand for diesel rose by 2.0%. There was a rise of approximately 10% in demand for light fuel oils and low-sulphur heavy fuel oils. There were no significant changes in Fortum’s market share.
 
During the period from January to March Fortum refined a total of 3.3 (2.9) million tonnes of crude oil and other feedstock. 1.8 (1.9) million tonnes of petroleum products were delivered to customers in Finland with exports totalling nearly 1.4 (1.0) million tonnes.
 
At the beginning of the year, around 110,000 tonnes of extra-clean gasoline from the Porvoo refinery was delivered to Germany for long-term storage. Total deliveries are set to rise during the year to hundreds of thousands of tonnes. The product’s sulphur content is only one fifth of that found in the gasoline typically on sale within the EU.
 
The Porvoo refinery made preparations for the maintenance shutdown of around five weeks planned for April/May. The total cost of the work to be carried out during this period is estimated at around EUR 34 million. The expense has been accrued over a four-year period commencing in 1997. Work on the installation of new production units is also to be done while the plant is shut down. The main purpose of the new units is to increase the plant’s capacity to produce low-sulphur motor fuels and lubricant base oil. Citydiesel production capacity is to rise to 3.9 million tonnes a year while output of base oil is set to increase three-fold to 150,000 tonnes a year. The maintenance shutdown will result in a production loss of around 1 million tonnes.
 
Fortum is to invest in a gasoline desulphurisation unit for its Naantali refinery. The unit is scheduled for completion in the spring of 2002. The total cost of the investment is around EUR 20 million.
 
Deliveries of petroleum products refined by Fortum - by product group
 
(1,000 t)
I/01
I/00
2000
 
 
 
 
Gasoline
989
924
3,941
Diesel
1,001
667
3,246
Aviation fuel
84
185
786
Light fuel oil
558
546
1,843
Heavy fuel oil
287
265
1,133
Other
240
281
1,360
Total
3,159
2,868
12,309
 

                                                                                                                          5
 
Deliveries of petroleum products refined by Fortum - by area
 
(1,000 t)
I/01
I/00
2000
 
 
 
 
Finland
1,809
1,853
7,423
Sweden
483
446
2,142
Baltic countries and Russia
29
51
153
USA and Canada
340
233
1,029
Other countries
498
285
1,562
Total
3,159
2,868
12,309
 
 
 
Power and Heat Generation and Sales
 
Fortum is one of the two largest companies in the Nordic countries producing and selling electricity and is also the leading heat producer in the region. Its operations are centred on Finland and Sweden but it is also active in continental Europe, Britain, Ireland and south-east Asia.
 
 
 
I/01
I/00
2000
 
 
 
 
Net sales, EUR million
604
503
1 760
- electricity sales, EUR million
393
318
1 170
- heat sales, EUR million
136
140
411
Operating profit, EUR million
157
100
211
Identifiable assets, EUR million
6,098
5,176
6,193
Return on net assets, %
10.2
8.0
3.8
 
 
Electricity consumption in the Nordic countries totalled 117 (111) terawatt-hours, of which 13.6 (11.7) terawatt-hours was sold by Fortum. Sales outside the Nordic countries stood at 1.7 (1.5) terawatt-hours.
 
During the period under review, there was a substantial increase in sales in Sweden compared to the corresponding figure for the previous year. This was attributable to the major investment in additional power plant capacity in 2000.
 
The price of electricity on the Nordic spot market during the period from January to March was around 80% higher than the corresponding figure in 2000, averaging EUR 24.5 (13.6) per megawatt-hour. The price rise was mainly due to the fall-off in hydropower production which is returning to normal following the high precipitation levels in recent years. The average price of

                                                                                                                          6
 
electricity sold by Fortum in the Nordic countries was up by nearly 7% on the corresponding period for the previous year.
 
Electricity sales by area (TWh)
 
 
I/01
I/00
2000
 
 
 
 
Total for Nordic countries
13,6
11,7
45,3
- Finland
8,1
8,2
28,4
- Sweden*
5,5
3,5
16,9
Germany
1,1
0,9
3,9
Great Britain and Ireland
0,5
0,5
1,9
Estonia
0,1
0,1
0,3
Total
15,3
13,2
51,4
 
* includes 50% of Birka Energi’s electricity sales - 3.5 (3.5) terawatt-hours.
 
The electricity contracts expiring in 2001 - most of which were signed prior to deregulation - provide for the supply of 3 terawatt-hours of electricity and around 7 terawatt-hours in the following three years. The contracts expiring this year are not expected to have an adverse impact on the results.
 
During the period from January to March, around 33% (25%) of Fortum’s electricity output was hydropower-based and around 35% (36%) was nuclear power-based. Other energy sources were coal, peat, natural gas, biomass, wind power and oil.
 
At the end of March, a contract was agreed covering the sale of the Joensuu power plant. Ownership of the plant was transferred to Espoon Sähkö Group on 2 April.
 
Heat sales by area (TWh)
 
 
I/01
I/00
2000
 
 
 
 
Finland
3.8
4.2
11.5
Sweden*
1.9
1.6
4.1
Other countries
0.3
0.2
0.7
Total
6.0
6.0
16.3
 
* 50% of Birka Energi’s heat sales
 
 
Electricity distribution
 
Fortum distributes electricity to a total of 900,000 customers in Sweden, Finland, Germany and Estonia.
 
 
                                                                                                                          7
 
 
I/01
I/00
2000
 
 
 
 
Net sales, EUR million
135
131
467
Operating profit, EUR million
56
49
127
Identifiable assets, EUR million
2,200
2,182
2,263
Return on net assets, %
10.0
10.1
6.4
 
During the period from January to March, a total of 4.8 (4.5) terawatt-hours of electricity was transmitted through the distribution networks.
 
Electricity transmissions via distribution networks - by area (TWh)
 
 
I/01
I/00
2000
 
 
 
 
Sweden*
2.6
2.5
8.1
Finland
1.4
1.3
4.0
Germany
0.8
0.7
2.7
Estonia
0.0
0.0
0.2
Total
4.8
4.5
15.0
 
* 50% of Birka Energi’s electricity transmissions
 
Number of customers supplied electricity via distribution networks - by area
 
 
31.3.2001
31.3.2000
31.12.2000
 
 
 
 
Sweden*
440,000
440,000
440,000
Finland
280,000
280,000
280,000
Germany
160,000
170,000
160,000
Estonia
20,000
20,000
20,000
Total
900,000
910,000
900,000
* includes 50% of Birka Energi’s customers that are supplied electricity via distribution networks
 
Electricity transmissions via the regional distribution network to customers outside the Group totalled 1.0 (1.1) TWh in Finland and 2.4 (1.5) TWh in Sweden.
 
Electricity transmission prices remained stable.
 
 
Service
 
The Service sector provides operation and maintenance services to power plant owners as well as maintenance services to process industries. In addition to Finland and Sweden the unit has

                                                                                                                          8
 
operations in central Europe and Asia.
 
 
I/01
I/00
2000
 
 
 
 
Net sales, EUR million
77
78
356
Operating profit, EUR million
6
4
12
Identifiable assets, EUR million
24
33
31
Return on net assets, %
87.3
42.7
32.9
 
The availability of the power plants operated and maintained by Fortum Service remained excellent, standing at 98% (98.6%) for the period from January to March. Fortum Service is responsible for a total of 76 power and heating plants of varying sizes and types throughout Finland.
 
In March Fortum Service signed a long-term contract with Joensuun Energia covering the operation and maintenance of the Joensuu power plant. The maintenance unit secured a number of orders for turbine maintenance and substation projects as well as for transformer maintenance assignments. Demand for its services outside Finland is also growing.
 
 
Engineering
 
The Engineering sector supplies energy production and transmission systems, either complete or in part, and plant and equipment for the oil refinery and chemical industries. It also specialises in railway electrification and communications networks.
 
 
I/01
I/00
2000
 
 
 
 
Net sales, EUR million
104
118
585
Operating profit, EUR million
-11
-2
-21
Identifiable assets, EUR million
49
24
81
Return on net assets, %
-67.7
-26.2
-35.6
 
The value of Engineering’s outstanding order book at the end of the period was EUR 466 (609) million.
 
The Power Plant and Power Transmission units showed a loss for the first quarter. The restructuring programme that was initiated in 2000 continued.
 
 
Investments and finance
 
Investments in fixed assets during the period from January to

                                                                                                                          9
 
March totalled EUR 123 (514) million.
 
At the end of the period, interest-bearing net debt stood at EUR 4,046 million (EUR 4,626 million at the end of 2000). The gearing ratio was 64% (73% at the end of 2000).
 
 
Business development and restructuring
 
Fortum’s core markets are the Nordic countries and other countries in the Baltic area.
 
Fortum has a firm foothold in the electricity markets in the Nordic countries. The company is keen to further strengthen its position and to that end it has expressed an interest in acquiring the entire share capital of the Swedish company, Birka Energi AB.
 
During the first part of the year, changes were made to the Group’s organisational structure. Fortum Energy Solutions, the sector responsible for energy services and solutions, began operations at the beginning of March. The new sector also incorporates the former Service sector and some parts of the other sectors. The Group aims to expand its business in selected European and south-east Asian markets by giving customers direct access to expert support during the development, investment and production phases of energy projects. The work of the sector is underpinned by the Group’s specialist know-how in power plant operation and maintenance and related technologies.
 
The new Fortum Markets sector was started up at the beginning of April. Its remit covers business development in the Nordic countries with the focus on the selling and marketing of services and products designed for the Finnish market. The other sectors within Fortum are Oil and Gas, Power and Heat, and Engineering.
 
The sale of BERt of Hungary to EdF International S.A., which was agreed at the end of 2000, is still waiting for official approval. Progress on the sale of power plants in Great Britain and Ireland has been slow for three reasons: the current price differential between gas and electricity, competition from the sale of other electricity generating facilities, and the new electricity trading system (NETA), the introduction of which was delayed until March 2001.
 
The negotiations relating to the sale of the Power Transmission Engineering unit are moving forward.
 
The research and development unit, which supports the Group’s power and heat business, underwent reorganisation. Under the restructuring programme, the unit’s activities will be placed closer to the business operations they are designed to support while some of the unit’s work will be discontinued.
 

                                                                                                                          10
 
Annual General Meeting
 
At the Annual General Meeting held on 4 April 2001, a dividend of EUR 0.23 (0.18) per share was approved.
 
The following people were re-appointed as members of the Supervisory Board: Henrik Aminoff, Tuija Brax, Kaarina Dromberg, Klaus Hellberg, Harri Holkeri, Mikko Immonen, Kyösti Karjula, Tanja Karpela, Kari Laitinen, Jouko K. Leskinen, Leena Luhtanen, Matti Vanhanen, Sirkka Vilkamo and Ben Zyskowicz. The following new members were appointed: Jorma Huuhtanen, Rakel Hiltunen and Pertti Mäki-Hakola. Kari Laitinen and Ben Zyskowicz  were elected as Chairman and Deputy Chairman of the Supervisory Board respectively.
 
SVH PricewaterhouseCoopers Oy, Authorised Public Accountants, were re-appointed as auditors.
 
The changes to the Articles of Association and the granting of share options to key people within the Group as proposed by the Board of Directors was approved at the Annual General Meeting.
 
Group personnel
 
The average number of people employed by the Fortum Group during the period from January to March was 15,602 (16,081).
 
 
 
Short-term outlook
 
The most important market factors influencing Fortum’s results are the market price of electricity, the price of crude oil, the oil refining margin and the US dollar exchange rate.
 
Electricity consumption is predicted to rise in the Nordic countries over the next few years at an annual rate of approximately 1.5%. The share of the annual electricity output accounted for by hydropower-based generation is expected to decrease in the Nordic markets, falling below the record high achieved in 2000 while coal-based output is forecast to increase its share. At the end of April, Nord Pool electricity futures for the remainder of 2001 were priced at EUR 22 - 26 per megawatt-hour. The continous operations of power and heat generation and sales usually result in a significantly better performance in the first and final quarters of the year than in the second and third quarters.
 
The Opec target price for crude oil is USD 22 - 28 a barrel. At the end of April the price of the International Petroleum Exchange’s Brent futures for 2001 was USD 26 - 28 a barrel. Fortum expects to increase its oil and gas production during the current

                                                                                                                          11
 
year by around 25% following the start-up of gas production at Åsgard.
 
During the first quarter of 2001, the international oil refining margin was on average at the same high level as the previous year’s figure. A major reason for this was the tightening of the environmental requirements for motor fuels and the subsequent brisk demand for products that comply with the new standards. In April the Brent Complex margin was over USD 5 a barrel mainly due to the high price of gasoline. No increase in oil consumption in Fortum’s core markets is anticipated. The maintenance shutdown at Fortum’s Porvoo refinery scheduled for April/May 2001 will reduce output of refined petroleum products during the current year by around 1 million tonnes.
 
The interim financial statements are unaudited.
 
Espoo, 4 May 2001
Fortum Corporation
Board of Directors
 
 
 
 
Carola Teir-Lehtinen
Senior Vice President, Corporate Communications
 
 
 
Further information:
Mikael Lilius, President and CEO, tel. +358 10 45 29100
Juha Laaksonen, Chief Financial Officer, tel. +358 10 45 24519
Raija Norppa-Rahkola, Vice President, Investor Relations +358 10 24135
 
APPENDICES
 
 
 
DISTRIBUTION:
Helsinki Exchanges
Key Media
 
 

 
FORTUM GROUP
JANUARY-MARCH 2001
Interim financial statements are unaudited.
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
 
 
Q1/01
Q1/00
2000
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
3,202
2,525
11,026
 
Share of profits (losses) of associated companies
 
11
12
46
 
Other operating income
 
 
 
 
14
12
140
 
Depreciation, amortisation and write-downs
 
 
-137
-137
-571
 
Other operating expenses
 
 
 
 
-2,783
-2,215
-9,735
 
Operating profit
 
 
 
 
307
197
906
 
Financial income and expenses
 
 
 
 
-61
-54
-273
 
Profit before extraordinary items
 
 
 
 
246
143
633
 
Extraordinary income
 
 
 
 
0
-
0
 
Extraordinary expenses
 
 
 
 
0
-
-10
 
Profit before taxes
 
 
 
 
246
143
623
 
Income taxes 1)
 
 
 
 
-67
-26
-154
 
Minority interests
 
 
 
 
-21
-3
-46
 
Net profit for the period
 
 
 
 
158
114
423
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share, EUR
 
 
 
 
0.20
0.15
0.55
 
Average number of shares, 1,000 shares
 
 
 
794,571
784,783
787,223
 
 
 
 
 
 
 
 
 
 
1) Accrued taxes for the financial period.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED BALANCE SHEET
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31
Mar   31
Dec 31
 
EUR mill.
 
 
 
 
2001
2000
2000
 
 
 
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
 
Fixed assets and other long-term investments
 
 
11,333
10,636
11,712
 
Current assets
 
 
 
 
 
 
 
 
Inventories
 
 
 
 
683
648
746
 
Receivables
 
 
 
 
2,091
1,495
1,933
 
Cash and cash equivalents
 
 
 
 
430
395
437
 
Total
 
 
 
 
3,204
2,538
3,116
 
Total
 
 
 
 
14,537
13,174
14,828
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SHAREHOLDERS' EQUITY AND LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity
 
 
 
 
 
 
 
 
Share capital
 
 
 
 
2,875
2,640
2,875
 
Other equity
 
 
 
 
2,102
2,094
2,147
 
Total
 
 
 
 
4,977
4,734
5,022
 
Minority interests
 
 
 
 
1,306
125
1,281
 
Provisions for liabilities and charges
 
 
 
209
86
197
 
Deferred tax liabilities
 
 
 
 
1,138
1,248
1,177
 
Long-term liabilities
 
 
 
 
4,161
4,246
4,463
 
Short-term liabilities
 
 
 
 
2,746
2,735
2,688
 
Total
 
 
 
 
14,537
13,174
14,828
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity per share, EUR
 
 
 
 
6.26
6.03
6.32
 
Number of shares, 1,000 shares
 
 
 
 
845,609
784,783
845,609
 
Number of shares,own shares excluded 1,000 shares
 
794,571
784,783
794,571
 
 
 
 
 
 
 
 
 
 
KEY RATIOS
 
 
 
 
Mar 31
Mar 31
Dec 31
 
 
 
 
 
 
2001
2000
2000
 
 
 
 
 
 
 
 
 
 
Interest-bearing net debt, EUR mill.
 
 
 
4,046
4,350
4,626
 
Investments, EUR mill.
 
 
 
 
123
514
3,131
 
Average number of employees
 
 
 
 
15,602
16,081
16,220
 
Return on capital employed, %
 
 
 
 
11.7
8.9
9.4
 
Return on shareholders' equity, %
 
 
 
 
11.8
9.5
8.6
 
Gearing, %
 
 
 
 
64
90
73
 
Equity-to-assets ratio, %
 
 
 
 
44
37
43
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET SALES BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
 
 
Q1/01
Q1/00
2000
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream 
 
 
 
 
502
215
945
 
Oil Refining and Marketing
 
 
 
 
1,941
1,669
7,759
 
Power and Heat Generation and Sales
 
 
 
604
503
1,760
 
Electricity Distribution
 
 
 
 
135
131
467
 
Service
 
 
 
 
77
78
356
 
Engineering
 
 
 
 
104
118
585
 
Other Operations
 
 
 
 
22
21
94
 
Internal invoicing
 
 
 
 
-183
-210
-940
 
Total
 
 
 
 
3,202
2,525
11,026
 
Discontinued Operations
 
 
 
 
-
-
-
 
Net sales
 
 
 
 
3,202
2,525
11,026
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DEPRECIATIONS BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
 
 
Q1/01
Q1/00
2000
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream 
 
 
 
 
24
23
85
 
Oil Refining and Marketing
 
 
 
 
34
35
147
 
Power and Heat Generation and Sales
 
 
 
43
46
191
 
Electricity Distribution
 
 
 
 
29
27
122
 
Service
 
 
 
 
2
2
7
 
Engineering
 
 
 
 
3
2
9
 
Other Operations and eliminations
 
 
 
 
2
2
10
 
Total
 
 
 
 
137
137
571
 
Discontinued Operations
 
 
 
 
-
-
-
 
Depreciations
 
 
 
 
137
137
571
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING PROFIT BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
 
 
Q1/01
Q1/00
2000
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
 
 
 
51
45
218
 
Oil Refining and Marketing
 
 
 
 
52
4
382
 
Power and Heat Generation and Sales
 
 
 
157
100
211
 
Electricity Distribution
 
 
 
 
56
49
127
 
Service
 
 
 
 
6
4
12
 
Engineering
 
 
 
 
-11
-2
-21
 
Other Operations
 
 
 
 
-5
-1
-20
 
Eliminations
 
 
 
 
1
-2
-3
 
Total
 
 
 
 
307
197
906
 
Discontinued Operations
 
 
 
 
-
-
-
 
Operating profit
 
 
 
 
307
197
906
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENTS BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
 
 
Q1/01
Q1/00
2000
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
 
 
 
16
29
137
 
Oil Refining and Marketing
 
 
 
 
30
27
128
 
Power and Heat Generation and Sales
 
 
 
63
190
2,343
 
Electricity Distribution
 
 
 
 
10
258
489
 
Service
 
 
 
 
1
2
5
 
Engineering
 
 
 
 
2
2
20
 
Other Operations and eliminations
 
 
 
 
1
6
9
 
Total
 
 
 
 
123
514
3,131
 
Discontinued Operations
 
 
 
 
-
-
-
 
Investments
 
 
 
 
123
514
3,131
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IDENTIFIABLE ASSETS BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31
Mar 31
Dec 31
 
EUR mill.
 
 
 
 
2001
2000
2000
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
 
 
 
1,329
1,206
1,284
 
Oil Refining and Marketing
 
 
 
 
1,584
1,645
1,838
 
Power and Heat Generation and Sales 2)
 
 
 
6,098
5,176
6,193
 
Electricity Distribution 2)
 
 
 
 
2,200
2,182
2,263
 
Service
 
 
 
 
24
33
31
 
Engineering
 
 
 
 
49
24
81
 
Other Operations and eliminations
 
 
 
 
144
141
141
 
Total
 
 
 
 
11,428
10,407
11,831
 
Discontinued Operations
 
 
 
 
-
-
-
 
Identifiable assets
 
 
 
 
11,428
10,407
11,831
 
 
 
 
 
 
 
 
 
 
2) Identifiable assets include deferred tax liabilities due to the allocated goodwill: EUR 196 mill. March 31,2001, EUR 259 mill.
March 31, 2000 and EUR 216 mill. December 31, 2000 in Power and Heat Generation and Sales; and EUR 247 mill.
March 31, 2001, EUR 246 mill. March 31, 2000 and EUR 262 mill. December 31, 2000 in Electricity Distribution.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RETURN ON NET ASSETS BY BUSINESS OPERATIONS (SEGMENTS) 3)
 
 
 
 
 
 
 
 
 
 
 
 
 
%
 
 
 
 
Q1/01
Q1/00
2000
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
 
 
 
15.6
15.4
18.0
 
Oil Refining and Marketing
 
 
 
 
12.2
1.0
22.2
 
Power and Heat Generation and Sales
 
 
 
10.2
8.0
3.8
 
Electricity Distribution
 
 
 
 
10.0
10.1
6.4
 
Service
 
 
 
 
87.3
42.7
32.9
 
Engineering
 
 
 
 
-67.7
-26.2
-35.6
 
 
 
 
 
 
 
 
 
 
3) Return on net assets, % = Operating profit/average identifiable assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIGNIFICANT NON-RECURRING ITEMS IN OPERATING PROFIT BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
 
 
Q1/01
Q1/00
2000
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
 
 
 
0
0
2
 
Oil Refining and Marketing
 
 
 
 
-43
-12
32
 
Power and Heat Generation and Sales
 
 
 
-1
-2
14
 
Electricity Distribution
 
 
 
 
0
0
-1
 
Service
 
 
 
 
0
0
0
 
Engineering
 
 
 
 
0
0
2
 
Other Operations and eliminations
 
 
 
 
0
1
23
 
Total
 
 
 
 
-44
-13
72
 
Discontinued Operations
 
 
 
 
-
-
-
 
Non-recurring items
 
 
 
 
-44
-13
72
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONTINGENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31
Mar 31
Dec 31
 
EUR mill.
 
 
 
 
2001
2000
2000
 
 
 
 
 
 
 
 
 
 
Contingent liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On own behalf
 
 
 
 
 
 
 
 
For debt
 
 
 
 
 
 
 
 
Pledges
 
 
 
 
187
295
188
 
Real estate mortgages
 
 
 
 
149
174
156
 
Company mortgages
 
 
 
 
32
27
22
 
Other mortgages
 
 
 
 
54
54
54
 
For other commitments
 
 
 
 
 
 
 
 
Pledges
 
 
 
 
2
86
2
 
Real estate mortgages
 
 
 
 
85
96
87
 
Company mortgages
 
 
 
 
0
1
3
 
Other mortgages
 
 
 
 
7
-
6
 
Sale and leaseback
 
 
 
 
19
21
18
 
Other contingent liabilities
 
 
 
 
385
811
543
 
Total
 
 
 
 
920
1,565
1,079
 
 
 
 
 
 
 
 
 
 
On behalf of associated companies
 
 
 
 
 
 
 
 
Pledges
 
 
 
 
-
5
-
 
Real estate mortgages
 
 
 
 
-
2
-
 
Guarantees
 
 
 
 
235
270
165
 
Other contingent liabilities
 
 
 
 
369
-
368
 
Total
 
 
 
 
604
277
533
 
 
 
 
 
 
 
 
 
 
On behalf of persons referred to in § 11:7 of the Companies Act
 
 
 
Guarantees
 
 
 
 
-
0
-
 
 
 
 
 
 
 
 
 
 
On behalf of others
 
 
 
 
 
 
 
 
Pledges
 
 
 
 
0
0
1
 
Real estate mortgages
 
 
 
 
0
0
-
 
Company mortgages
 
 
 
 
-
-
-
 
Guarantees
 
 
 
 
59
87
140
 
Other contingent liabilities
 
 
 
 
4
3
20
 
Total
 
 
 
 
63
90
161
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
1,587
1,932
1,773
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31
Mar 31
Dec 31
 
EUR mill.
 
 
 
 
2001
2000
2000
 
 
 
 
 
 
 
 
 
 
Operating lease liabilities
 
 
 
 
 
 
 
 
Due within a year
 
 
 
 
70
53
68
 
Due after a year
 
 
 
 
114
140
122
 
Total
 
 
 
 
184
193
190
 
 
 
 
 
 
 
 
 
 
Finance leases have been recognised as assets and liabilities.
 
 
 
 
 
 
 
 
 
 
 
 
Liability for nuclear waste disposal
 
 
 
489
471
489
 
Share of reserves in the Nuclear Waste Disposal Fund
 
-460
-385
-460
 
Liabilities in the balance sheet 4)
 
 
 
29
87
29
 
Excess of security given over obligations
 
 
0
1
0
 
 
 
 
 
 
 
 
 
 
4) Mortgaged bearer papers as security
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives
 
Mar 31
 
 
Mar 31
 
 
Dec 31
 
 
2001
 
 
2000
 
 
2000
 
 
 
 
 
 
 
 
 
Interest and currency
Con-tract
Fair
value
Not
rec-
Con-tract
Fair
value
Not
rec-
Con-tract
Fair
derivatives
or 
notio
nal
value
 
 
ogni-
sed
as an
income
or
notio
nal
value
 
ogni-
sed
as an
income
or
natio
nal
value
value
EUR mill.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forward rate agreements
186
0
0
48
0
0
85
0
Interest rate swaps
4,148
-49
-26
2,329
5
21
3,239
-7
Purchased interest rate options
-
-
-
2
0
0
-
-
Written interest rate options
-
-
-
-
-
-
-
-
 
 
 
 
 
 
 
 
 
Forward foreign exchange
 
 
 
 
 
 
 
 
contracts 5),6)
3,720
52
20
2,247
-41
-34
2,358
48
Currency swaps
3,270
285
60
907
-10
-30
2,308
149
Purchased currency options
174
-4
-4
51
-1
-1
144
1
Written currency options
77
0
0
51
-2
-2
90
1
 
 
 
 
 
 
 
 
 
5) Incl. also closed forward and future positions
 
 
 
 
 
6) Incl. also contracts used for equity hedging
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil futures and forward
Volume
Fair
value
Not recog
Volume
Fair
value
Not recog
Volume
Fair
instruments
 
 
nised as an
 
 
nised as am
 
value
 
 
 
income
 
 
income
 
 
 
 
 
 
 
 
 
 
 
 
1000 bbl
EUR mill.
EUR mill.
1000
bbl
EUR mill.
EUR  mill.
1000 bbl
EUR mill
 
 
 
 
 
 
 
 
 
Sales contracts
11,676
6
6
18,324
9
-2
15,130
21
Purchase contracts
10,269
-9
-9
15,547
12
-2
4,341
-10
Purchased options
1,117
1
1
2,525
1
1
2,093
0
Written options
1,675
0
0
2,525
0
0
1,250
0
 
 
 
 
 
 
 
 
 
Electricity derivatives
Volume
Fair value
Not recog
Volume
Fair value
Not recog
Volume
Fair
 
 
 
nised as an
income
 
 
nised as an income
 
value
 
 
 
 
 
 
 
 
 
 
TWh
EUR mill.
EUR mill.
TWh
EUR mill.
EUR mill.
TWh
EUR mill
 
 
 
 
 
 
 
 
 
Sales contracts
78
-270
-188
28
45
45
70
155
Purchase contracts
73
281
192
22
-64
-48
67
-163
Purchased options
3
5
4
1
0
0
3
0
Written options
5
-9
-7
5
1
1
3
0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In addition to other contingent liabilities, a guarantee has been given on behalf of Gasum Oy, which covers 75% of the natural
gas commitments arising from the natural gas supply agreement between Gasum and OOO Gazexport. The fair values of derivative
contracts subject to public trading are based on market prices as of the balance sheet 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.
Derivative contracts are mainly used to manage the group's currency, interest rate and price risk.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Own shares
 
 
 
 
 
 
 
 
Fortum Corporation's subsidiary Fortum Power and Heat Oy has 51,037,520 Fortum Corporation's shares, with a total par value
of EUR 173,527,568.00 and with a book value of EUR 188,928,107.28. This represents 6,04% of the total number of Fortum Corporation's shares and share capital. Own shares have
been eliminated in the balance sheet of Fortum Group.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY NET SALES BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
Q1/00
Q2/00
Q3/00
Q4/00
2000
Q1/01
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
215
133
183
414
945
502
 
Oil Refining and Marketing
 
1,669
1,909
1,972
2,209
7,759
1,941
 
Power and Heat Generation and Sales
503
384
359
514
1,760
604
 
Electricity Distribution
 
131
106
101
129
467
135
 
Service
 
78
73
83
122
356
77
 
Engineering
 
118
155
135
177
585
104
 
Other Operations
 
21
23
23
27
94
22
 
Internal invoicing
 
-210
-203
-229
-298
-940
-183
 
Total
 
2,525
2,580
2,627
3,294
11,026
3,202
 
Discontinued Operations
 
-
-
-
-
-
-
 
Net sales
 
2,525
2,580
2,627
3,294
11,026
3,202
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY OPERATING PROFIT BY BUSINESS OPERATIONS (SEGMENTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
Q1/00
Q2/00
Q3/00
Q4/00
2000
Q1/01
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas Upstream
 
45
40
46
87
218
51
 
Oil Refining and Marketing
 
4
137
133
108
382
52
 
Power and Heat Generation and Sales
100
46
2
63
211
157
 
Electricity Distribution
 
49
19
25
34
127
56
 
Service
 
4
-2
2
8
12
6
 
Engineering
 
-2
-4
1
-16
-21
-11
 
Other Operations
 
-1
-10
-4
-5
-20
-5
 
Eliminations
 
-2
-1
-4
4
-3
1
 
Total
 
197
225
201
283
906
307
 
Discontinued Operations
 
-
-
-
-
-
-
 
Operating profit
 
197
225
201
283
906
307
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 EUR = 5,94573 FIM
 
 
 
 
 
 
 
 
Fortum Corporation