INTERIM REPORT 1 JANUARY - 31 MARCH - FORTUM'S OPERATING PROFIT FOR JANUARY-MARCH EUR 244 MILLION OR FIM 1,449 MILLION

Fortum Group's operating profit for January-March 1999 increased to EUR 244 million (206 Me) and profit before extraordinary items to EUR 193 million (160 Me). Earnings per share rose to EUR 0.17 (0.15 e), return on capital employed to 10.2% (9.7%), return on shareholder's equity to 10.7% (10.5%) and gearing to 100% (91%).
 
At EUR 1,899 million, the Group's net sales were 19% lower than in the comparative period. The decrease was principally attributed to cuts in the volume of oil trading. The results were mainly improved by the formation of Birka Energi Group and increased gains on the sales of fixed assets. In contrast, the results were adversely affected by lower average market prices of oil and electricity than in the comparative period, and by low oil refining margin. The operating profit for the review period included inventory gains totalling EUR 3 million (inventory losses EUR 21 million).
 
Prospects for the rest of the year: The low market price of electricity will adversely affect the Power and Heat Division’s results in 1999. If the price of crude oil stays at its present level or continues to rise, the Oil and Gas Division’s results will improve. Each USD 1 increase in the price of crude oil will make an improvement of more than EUR 10 million in Fortum’s results for the rest of the year. These are the principal reasons for an anticipated improvement in the results of Fortum Group’s operations for 1999 from the previous year, even though the net sales will decrease owing to cuts in the volume of oil trading.
 
The interim report hasn't been audited. The interim report January - June will be disclosed on 6 August, 1999.
 
Fortum Corporation
 
 
Antti Ruuskanen
Corporate Executive Vice President, Communications
 
DISTRIBUTION: Helsinki Exchanges,Key media
 
FOR FURTHER INFORMATION, please contact
Heikki Marttinen, President and CEO, tel. +358 9 6185 8210
Eero Aittola, CFO, +358 9 6185 8202
Jari Mäntylä, Corporate Controller, +358 9 6185 8223
 
 
APPENDIX
 
Interim Report 1 January - 31 March 1999           
 
First quarter in brief
 
- Fortum’s operating profit for January-March was EUR 244 million (EUR 206 million in January-March 1998). Return on capital employed was 10.2% (9.7%).
- Following a long decline, the price of crude oil rose noticeably at the end of the review period, but the impact on results will not be apparent until the second quarter. The price of electricity continued to be extremely low.
- Oil refining margins were exceptionally low throughout the first quarter.
 
Market review
 
At the beginning of 1999, the price of crude oil in the international market continued to be low, at between USD 10 and USD 12 a barrel. In addition, in view of global demand for oil, the weather in key market areas was warmer than average and stocks continued to be large, with the result that further cuts in oil production were obvious. In March, therefore, a group of oil producers agreed to make further cuts with effect from April 1999. As a result of that decision, ratified by OPEC later in March, the price of crude oil (Brent dated) rose to almost USD 15 a barrel. Refining margins were, however, exceptionally low throughout the first quarter.
 
Sales of motor gasoline in Finland increased by 4% from the comparative period in 1998. Sales of diesel fuel grew by 7%, and, as a result of a colder winter in Finland than in the comparative period, sales of both light and heavy fuel oil grew by 11%.
 
Consumption of natural gas during the first quarter of 1999 was 11.9 TWh (12.0 TWh during the first quarter of 1998).
 
The abundant supply of hydro power and coal-generated power in the Nordic countries continued, with the result that the market price for electricity remained low. Despite occasional peaks, the market prices did not rise even in the record sub-zero temperatures at the end of January.
 
Consumption of electricity in Finland grew by slightly more than 2% during the first quarter. Compared with January–March 1998, the growth rate decreased noticeably, principally as a result of slower economic growth in Finland.
 
Results for January-March
 
At EUR 1,899 million, Fortum Group’s net sales were 19% lower than in the comparative period in 1998. The decrease was principally attributed to cuts in the volume of oil trading. Operating profit for January-March was EUR 244 million (EUR 206 million in the comparative period in 1998). Profit before extraordinary items was EUR 193 million (EUR 160 million). The results were mainly improved by the formation of Birka Energi Group and increased gains on the sales of fixed assets. In contrast, the results were adversely affected by lower average market prices of oil and electricity than in the comparative period, and by the low oil refining margin. The operating profit for the review period included inventory gains totalling EUR 3 million (inventory losses EUR 21 million).
 
Profit for the period was EUR 131 million (EUR 116 million). Earnings per share was EUR 0.17, compared with EUR 0.15 in 1998. Return on capital employed was 10.2% and return on shareholders’ equity 10.7% (9.7% and 10.5%).
 
Investments and financing
 
The Group’s investments in January-March totalled EUR 405 million (EUR 209 million), a major portion of which was accounted for by acquisitions by the Power and Heat Division.
 
The acquisition of shares in Lahden Lämpövoima and Espoon Sähkö Oyj were the most significant share acquisitions carried out during January-March. In March, Fortum used its right, based on its ownership, to acquire 40% of the shares of Lahden Lämpövoima, which had been sold in 1998 by the city of Lahti to Lahti Energia Oy. Consequently, Fortum’s holding in Lahden Lämpövoima rose from 50% to 90%. By the end of March, Länsivoima Oyj acquired nearly 28% of the shares of Espoon Sähkö Oyj at a price of approximately EUR 87 million.
 
The largest ongoing investment project is the development of the Åsgard oil and gas fields in Norway, in which we have planned to invest a further EUR 140 million over the next few years.
 
The weakening of the euro against the Swedish krona and the US dollar at the beginning of 1999 increased Fortum’s interest-bearing debt, which, at the end of the review period, was EUR 4,296 million (EUR 3,898 million at the end of 1998). Gearing was 100% (93%).
 
Negotiations on the divestment of Gasum shares will probably be completed by the agreed date, 3 June 1999. Ownership arrangements concerning Neste Chemicals and Enermet are intended to be completed during 1999.
 
Year 2000 programme
 
We aim to achieve year 2000 compliance for all major areas by August 1999. Corporate management believes that the turn of the millennium will not pose any material information technology problems to our business.
 
Prospects for the rest of the year
 
The low market price of electricity will adversely affect the Power and Heat Division’s results in 1999. If the price of crude oil stays at its present level or continues to rise, the Oil and Gas Division’s results will improve. Each USD 1 increase in the price of crude oil will make an improvement of more than EUR 10 million in Fortum’s results for the rest of the year. These are the principal reasons for an anticipated improvement in the results of Fortum Group’s operations for 1999 from the previous year, even though the net sales will decrease owing to cuts in the volume of oil trading.
 
Divisional reviews
 
Oil and Gas
 
During January-March, Fortum sold 1.8 million tonnes of petroleum products to the Finnish market, an increase of 3% on 1998.
 
Petroleum product sales to other countries totalled 1.2 million tonnes, up 21% on the comparative period in 1998. Sales to western markets rose by 50%, whereas sales to Russia and the Baltic countries fell considerably as a result of deteriorating market conditions. Motor gasoline accounted for half of total exports, and exports of environmentally-preferred diesel fuel doubled, reaching 200,000 tonnes.
 
Fortum’s share of gasoline sales to the Finnish market during January-March was 32.8% (up 0.1% percentage points). Diesel fuel had a market share of 44.2% (down 0.5 percentage points), light fuel oil 40.2% (up 0.1 percentage points), and heavy fuel oil 42.8% (up 1.2 percentage points).
 
Production at the Porvoo and Naantali refineries continued more or less as planned. In March, the Porvoo refinery achieved a new production record since the prevailing structure was introduced.
 
An EUR 29 million investment project to double the production of CityDiesel began at the Porvoo refinery. One million tonnes of extra capacity is scheduled to be available in December 1999.
 
Development of the oil terminal operations in Finland and cooperation with other oil companies has been productive. The volumes delivered through the Kemi and Kokkola terminals in northern Finland have grown by more than 40% in the last couple of years. Construction of a product terminal at St Petersburg is expected to be completed on schedule early in the summer.
 
Development and rationalisation of the retail outlet network in Finland continued. Conversion of the unmanned outlets into the A24 concept was nearly completed. Eight new A24 outlets were opened in the Baltic countries during January-March.
 
The state of California has initiated measures to end the use of MTBE gasoline component in the state by the end of 2002. A review of the impact of this decision on Fortum’s component business has been initiated.
 
Oil and gas production during the first quarter of 1999 was, on average, 28,700 oil-equivalent barrels per day or approximately 1.4 million tonnes a year. This is nearly a fifth less than during the comparative period in 1998 and approximately 6% less than during the last quarter of 1998. In Norway, typical to mature fields, production in the Brage field has begun to decline, while larger-than-expected amounts of associated gas are affecting production in the Heidrun field. This problem will, however, be eliminated when a gas pipeline connection from Heidrun to Åsgard is completed. Oil production in Åsgard, which has our largest reserves of gas and oil, is expected to begin in May. Our daily production in the third quarter is expected rise to more than 40,000 oil-equivalent barrels or approximately 2 million tonnes a year. These figures include our production in Oman, which has been relatively stable.
 
Our oil production in Oman resulted in a joint venture in the gas sector with Occidental Petroleum and BP Amoco. We have a 14% holding in the venture, which was granted the right to evaluate gas reserves in an area of 14,000 square kilometres. This includes the old Suneinah concession (of which our share is 35%), but the agreement does not cover oil production in the area.
 
Power and Heat
 
In the first quarter, Fortum sold a total of 12.1 TWh of electricity in the Nordic market. Sales in Finland increased by 4%, to 8.5 TWh, but in Sweden, they decreased by 18% to 3.6 TWh. 58% of sales were to large customers, 29% to small customers, and 13% to the electricity exchange or temporary sales.
 
Of the electricity sold, we generated 10.2 TWh in our wholly- and partly-owned power plants. The balance was procured from other Nordic power generators, Russia, and electricity exchanges.
 
The new contracts signed with large customers are mostly short term. The decrease in contracted sales was compensated for by increasing sales to the exchange and by temporary bilateral trade.
 
Outside the Nordic countries, we sold more than 0.5 TWh of electricity, a major part of which was generated by our Brigg power plant in the UK. The electricity sold in Germany and Estonia was procured by other generators.
 
At the beginning of March, a new long-term contract for additional supplies from Russia came into operation. Under this contract, for the next ten years Russia will provide Fortum with 0.3 TWh of hydro-generated electricity a year.
 
In April, Tunturituuli Oy, of which Fortum owns more than 55%, made the decision to build three new wind power plants, to a total capacity of 600 kW, at Olostunturi. On completion of these plants, Tunturituuli will have an electricity generation capacity of 3.4 MW.
 
In the opinion of the Finnish Competition Authority, published after the end of the review period in April, Fortum is not guilty of misusing the dominant position in the years 1993-1995 in the making of long-term electricity agreements in the Finnish wholesale electricity market. While the Authority expressed an opinion that Fortum still has a very strong market position, it did not classify that as being a dominant position.
 
A total of 5.3 TWh of heat was sold, 29% up on the corresponding period of the previous year: 70% of the sales was district heat, 30% steam. The growth came from Birka Energi’s sales, of which Fortum accounted for distinctly more than Gullspång Kraft’s sales in the reference period in 1998.
 
Fortum’s subsidiaries distributed 1.3 TWh of electricity in their networks to the Finnish customers. In Sweden, the corresponding electricity distribution was 2.2 TWh, half of Birka Energi AB’s distribution. There were 284,000 distribution customers in Finland, resulting in an income of FIM 178 million, and 854,000 in Sweden, resulting in an income of FIM 305 million.
 
Fortum is currently building power plants in Ireland and in Scotland. Licensing delays have, however, delayed the plants which are being developed in Thailand.
 
 
Operation and Maintenance
 
Power plants operated as planned and continued to have excellent availability, but the abundancy in the market meant that the total volume generated by the condensing power plants in the first quarter was less than planned.
 
The unsettled economic situation in South East Asia continued to have an impact and slowed down our building projects in Thailand and Indonesia.
 
The maintenance market continued to develop favourably. Operation and Maintenance signed a contract for the transfer of CAE Screenplates Oy’s service and maintenance operations to Fortum Service. We also signed contracts for several turbine outages in Finland, with Birka Service in Stockholm and with SCA Mannheim in Germany. We were energetic in the sale of maintenance contracts for transformers.
 
Engineering
 
The delivery projects for the Edenderry peat-fired power plant in Ireland, the Grangemouth combined heat and power (CHP) plant in Scotland, and the Kozienice desulphurisation plant in Poland have begun and are proceeding to plan. The Olomouc CHP project in the Czech Republic was, however, delayed and its hand-over took place in April.
 
The delivery of the instrumentation and control systems for the North-West power plant at St Petersburg was completed. The Tychy CHP project in Poland proceeded to the building and installation stage, and design work continued for the Laem Chabang CHP project in Thailand. In Romania, the modernisation projects for the Iasi, Suceava and Bucharest South power plants began.
 
The investment projects at the Porvoo and Naantali refineries, initiated in 1998, the oil terminal project in St Petersburg, and Borealis’s polypropylene project in Austria, all proceeded as planned.
 
New orders worth FIM 133 million were received. The most significant were those for the automation projects for the Narva and Lenenergo power plants, and the project management for the Stora Enso´s Kaukopää mill and for Voimavasu in Salo. In addition, the order for the modernisation project of the Braila power plant in Romania was confirmed, and the contract will be signed in May.
 
Engineering obtained an order from Fingrid for a design and construction project for the 400-kV power line between Länsisalmi and Kymi. In Norway, a skeleton agreement, extending over three years for power transmission lines, was signed with Enitel AS.
 
 
Chemicals
 
Demand for adhesive resins during January-March was slightly weaker than during the comparative period in 1998, particularly in Europe, but the market in North America continued to be satisfactory.
 
The market for oxo products was extremely difficult, principally as a result of the economic situation in Asia and increased production capacity in key markets. Ways to increase the share of products with a higher added value and to cut costs were continued.
 
Demand for unsaturated polyesters and gelcoats improved during the first quarter, particularly in southern and central Europe.
 
Annual general meeting
 
The annual general meeting of Fortum Corporation, held on 20 April 1999, adopted the financial statements of the parent company and the Group, discharged Fortum’s Supervisory Board, the Board of Directors, and the President and CEO from liability for 1998, and decided that a dividend of FIM 0.75 per share, totalling FIM 589 million, will be paid for 1998.
 
Pirkko Alitalo, Ilkka-Christian Björklund, Kaarina Dromberg, Ulrika Gyllenberg, Tytti Isohookana-Asunmaa, Timo Järvilahti, Timo Laaksonen, Jouko K. Leskinen, Leena Luhtanen, Pekka Tuomisto, Taisto Turunen and Matti Vanhanen were re-elected as members of the company’s Supervisory Board. Tuija Brax, Klaus Hellberg, Ben Zyskowicz, Ville Itälä and Kari Laitinen were elected as new members.
 
Ilkka-Christian Björklund was re-elected as Chairman of the Supervisory Board, and Ben Zyskowicz was elected as Deputy Chairman.
 
Authorised public accountants Arthur Andersen Oy and SVH PricewaterhouseCoopers Oy were elected as auditors.
 
Corporate structure
 
Our new corporate structure became effective at the beginning of the year. The divisions are now Oil and Gas, Power and Heat, Operations and Maintenance, Engineering, and Chemicals.
Corporate management
 
Parallel to the introduction of the new corporate structure, we began a project to enhance corporate governance at Fortum. As part of this project, after the end of the review period in April 1999, the Board of Directors confirmed the composition of the new Corporate Executive Committee (CEC).
 
Heikki Marttinen, President and CEO, is the Chairman of the CEC. Its members are Eero Aittola, CFO, Veli-Matti Ropponen, head of the Oil and Gas Division, and Kalervo Nurmimäki, head of the Power and Heat Division. Veli-Matti Ropponen is President of Fortum Oil and Gas Oy (starting on 1 April 1999), and Kalervo Nurmimäki is President of Fortum Power and Heat Oy.
 
CEC also forms the boards of Fortum Oil and Gas Oy and Fortum Power and Heat Oy, the meetings of which are also attended by employee representatives.
 
New compositions were confirmed for the boards of directors of Fortum Engineering Ltd, Fortum Service Oy, and Neste Chemicals Oy, which are also chaired by Heikki Marttinen.
 
The former, larger Corporate Executive Committee changed its role and now serves a cooperation forum for the corporate management and the divisions, and will be known as the Group Management Committee or GMC.
 
Human resources
 
During the first three months of the year, two employee incentive schemes were introduced. 130 persons, nominated by the Board of Directors, subscribed for the stock options, which are part of the management stock option scheme. The stock options entitle the holders to subscribe for Fortum shares between 1 October 2002 and 1 October 2005. The subscription price is at a minimum of EUR 5.61 with the precondition that Fortum’s earnings per share and share price performance are at least as good as the average of the peer group of European listed companies. As a result of the subscriptions made under this stock option scheme, Fortum’s share capital may rise by a maximum of FIM 300 million, or 15 million shares.
 
In April, Fortum issued a bond loan with warrants, to be subscribed for by employees. The maximum amount of the bond loan is FIM 25 million, but 1,859 Fortum employees subscribed for it to a value of FIM 41 million. As a result, allocations had to be scaled down. The shares attached to the scheme can be subscribed for from 17 May 2002 to 17 May 2005, at a maximum price of EUR 5.03, and may result in Fortum’s share capital rising by a maximum of FIM 150 million, or 7.5 million shares.

 
In January-March, the average number of the employees in the Group was 18,479.
 
Helsinki, 5 May 1999
 
Fortum Corporation
Board of Directors
 
 
ENCLOSURES: Consolidated income statement, Net sales by division, Operating profit by division, Consolidated balance sheet, Key ratios, Contingent liabilities
 
 
 
FORTUM GROUP
 
 
 
 
 
 
 
JANUARY-MARCH 1999
 
 
 
 
 
 
 
Interim financial statements are
unaudited.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jan-Mar
Jan-Mar
Jan-Dec
Jan-Mar
Jan-Mar
Jan-Dec
 
 
1999
1998
1998
1999
1998
1998
 
 
EUR
EUR
EUR
FIM
FIM
FIM
 
 
mill.
mill.
mill.
mill.
mill.
mill.
 
 
 
 
 
 
 
 
Net sales
 
1899
2351
8494
11293
13978
50501
Share of profits (losses) of associated companies
16
13
42
93
77
250
 
 
 
 
 
 
 
 
Other operating income
 
50
30
102
296
177
605
Depreciation,
amortisation
 
 
 
 
 
 
 
and write-downs
 
-123
-126
-496
-734
-748
-2950
Other operating expenses
 
-1598
-2062
-7547
-9499
-12261
-44865
Operating profit
 
244
206
595
1449
1223
3541
Financial income and
expenses
-51
-46
-218
-300
-273
-1298
Profit before
extraordinary items
193
160
377
1149
950
2243
Extraordinary income
 
-
-
11
-
-
63
Extraordinary expenses
 
-
-7
-16
-
-41
-92
Profit before taxes
 
193
153
372
1149
909
2214
Income taxes
 
 
 
 
 
 
 
For the financial period and
 
 
 
 
 
 
previous periods   1)
 
-42
-45
-130
-252
-267
-773
Change in deferred tax
liabilities
-8
16
-2
-46
98
-12
Total
 
-50
-29
-132
-298
-169
-785
Minority interests
 
-12
-8
-27
-73
-50
-162
Net profit for the
period
 
131
116
213
778
690
1267
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share, EUR (FIM)
0.17
0.15
0.27
0.99
0.92
1.62
Average number of shares, 1 000 shares
784783
784783
784783
784783
784783
784783
 
 
 
 
 
 
 
 
1) Accrued taxes for the financial period.
 
 
 
 
 
 
 
 
 
 
 
 
NET SALES BY DIVISION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jan-Mar
Jan-Mar
Jan-Dec
Jan-Mar
Jan-Mar
Jan-Dec
 
 
1999
1998
1998
1999
1998
1998
 
 
EUR
EUR
EUR
FIM
FIM
FIM
 
 
mill.
mill.
mill.
mill.
mill.
mill.
 
 
 
 
 
 
 
 
Oil and Gas
 
1078
1486
5298
6407
8833
31501
Power and Heat
 
538
527
1796
3201
3134
10675
Operation and
Maintenance
 
63
49
250
374
293
1487
Engineering
 
78
77
411
466
458
2445
Chemicals
 
199
255
908
1184
1518
5397
Other operations
 
26
22
106
155
128
632
Internal invoicing
 
-83
-65
-275
-494
-386
-1636
Net sales
 
1899
2351
8494
11293
13978
50501
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING PROFIT BY DIVISION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jan-Mar
Jan-Mar
Jan-Dec
Jan-Mar
Jan-Mar
Jan-Dec
 
 
1999
1998
1998
1999
1998
1998
 
 
EUR
EUR
EUR
FIM
FIM
FIM
 
 
mill.
mill.
mill.
mill.
mill.
mill.
 
 
 
 
 
 
 
 
Oil and Gas
 
29
26
188
170
152
1120
Power and Heat
 
207
155
347
1228
921
2061
Operation and
Maintenance
 
3
4
8
17
26
46
Engineering
 
0
-2
16
-2
-13
97
Chemicals
 
5
11
18
28
63
111
Other operations
 
12
12
29
73
75
173
Eliminations
 
-12
0
-11
-65
-1
-67
Operating profit
 
244
206
595
1449
1223
3541
 
 
 
 
 
 
 
 

 
CONSOLIDATED BALANCE SHEET
 
 
 
 
 
 
 
 
 
Mar 31
Mar 31
Dec 31
Mar 31
Mar 31
Dec 31
 
 
1999
1998
1998
1999
1998
1998
 
 
EUR
EUR
EUR
FIM
FIM
FIM
 
 
mill.
mill.
mill.
mill.
mill.
mill.
 
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
Fixed assets and other long-term investments
9454
8905
8845
56213
52943
52590
Current assets
 
 
 
 
 
 
 
Inventories
 
675
681
576
4011
4049
3427
Receivables
 
1288
1354
1192
7657
8049
7087
Cash and cash
equivalents
 
627
810
564
3729
4819
3352
Total
 
2590
2845
2332
15397
16917
13866
Total
 
12044
11750
11177
71610
69860
66456
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SHAREHOLDERS' EQUITY AND LIABILITIES
 
 
 
 
 
Shareholders' equity
 
 
 
 
 
 
 
Share capital
 
2640
2633
2640
15696
15656
15696
Other equity
 
1439
1456
1335
8559
8657
7937
Total
 
4079
4089
3975
24255
24313
23633
Minority interests
 
213
289
210
1268
1716
1249
Provisions for
liabilities and
 
 
 
 
 
 
charges
 
67
41
64
401
242
379
Deferred tax liabilities
 
704
689
679
4184
4094
4038
Long-term liabilities
 
4395
4466
3961
26131
26554
23555
Short-term liabilities
 
2586
2176
2288
15371
12941
13602
Total
 
12044
11750
11177
71610
69860
66456
 
 
 
 
 
 
 
 
Equity per share,
EUR (FIM)
 
5.20
5.21
5.06
30.91
30.98
30.11
Number of shares,
1 000 shares
784783
784783
784783
784783
784783
784783
 
 
 
 
 
 
 
 
KEY RATIOS
 
Mar 31
Mar 31
Dec 31
Mar 31
Mar 31
Dec 31
 
 
1999
1998
1998
1999
1998
1998
 
 
 
 
 
 
 
 
Interest-bearing net debt, EUR mill. (FIM mill.)
4296
4003
3898
25544
23801
23180
Investments, EUR mill. (FIM mill.)
405
209
1702
2408
1240
10119
Average number of
employees
 
18479
17806
19003
 
 
 
Return on capital
employed, %
10.2
9.7
7.8
 
 
 
Return on shareholders' equity, %
10.7
10.5
5.7
 
 
 
Gearing, %
 
100
91
93
 
 
 
Equity-to-assets ratio, %
 
36
38
38
 
 
 
CONTINGENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31
 
Dec 31
Mar 31
 
Dec 31
 
 
1999
 
1998
1999
 
1998
 
 
EUR
 
EUR
FIM
 
FIM
 
 
mill.
 
mill.
mill.
 
mill.
Contingent liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On own behalf
 
 
 
 
 
 
 
For debt
 
 
 
 
 
 
 
Pledges
 
410
 
341
2433
 
2031
Real estate mortgages
 
156
 
150
929
 
899
Company mortgages
 
47
 
53
281
 
315
Other mortgages
 
58
 
52
346
 
310
For other commitments
 
 
 
 
 
 
 
Pledges
 
71
 
70
424
 
415
Real estate mortgages
 
143
 
138
849
 
820
Sale and leaseback
 
12
 
11
69
 
64
Other contingent
liabilities
198
 
205
1182
 
1216
Total
 
1095
 
1020
6513
 
6070
 
 
 
 
 
 
 
 
On behalf of associated companies
 
 
 
 
 
 
Guarantees
 
262
 
249
1557
 
1478
 
 
 
 
 
 
 
 
On behalf of persons referred to in § 11:7 of the Companies Act
 
 
Guarantees
 
0
 
0
0
 
0
 
 
 
 
 
 
 
 
On behalf of others
 
 
 
 
 
 
 
Pledges
 
11
 
8
66
 
48
Real estate mortgages
 
0
 
0
2
 
2
Guarantees
 
58
 
37
346
 
219
Other contingent
liabilities
38
 
38
226
 
224
Total
 
107
 
83
640
 
493
 
 
 
 
 
 
 
 
Total
 
1464
 
1352
8710
 
8041
 
 
 
 
 
 
 
 
Operating lease
liabilities
 
 
 
 
 
 
 
Due within a year
 
44
 
41
261
 
244
Due after a year
 
161
 
158
957
 
940
Total
 
205
 
199
1218
 
1184
 
 
 
 
 
 
 
 
Finance leases have been recognised as assets and liabilities.
 
 
 
 
 
 
 
 
 
 
Liability for nuclear waste disposal
459
 
459
2732
 
2732
Share of reserves in the
 
 
 
 
 
 
 
Nuclear Waste Disposal Fund
 
-372
 
-330
-2212
 
-1963
Liabilities in the
balance sheet
87
1)
129    
1) 520
1)
769
 
 
 
 
 
 
1) Mortgaged bearer papers as security
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives
 
 
Mar 31
 
 
Dec 31
 
 
 
 
1999
 
 
1998
 
 
 
 
 
 
 
 
 
Interest and currency
derivatives
Con-tract
Fair
value
Not
recog-
Con-tract
Fair
value
Not
recog-
EUR mill.
 
or
 
nised
or
 
nised
 
 
notional
as an
notional
as an
 
 
value
 
income
value
 
income
 
 
 
 
 
 
 
 
FRAs and bond futures
 
23
0
0
-
-
-
Interest rate swaps
 
1752
-46
-43
1554
-32
-32
Interest rate options
 
 
 
 
 
 
 
Purchased
 
33
0
0
33
0
0
Written
 
255
0
0
236
-3
-3
Forward foreign exchange contracts
1824
-13
-14
1953
9
-1
Currency swaps
 
573
41
0
535
29
0
Currency options
 
 
 
 
 
 
 
Purchased
 
126
-2
-3
94
-1
-1
Written
 
126
-1
0
94
1
1
 
 
 
 
 
 
 
 
Oil futures and forward
 
Volume
Fair
Not
Volume
Fair
Not
instruments
 
1000 bbl
value
recog-
nised
1000 bbl
value
recog-
nised
 
 
 
EUR
as an
 
EUR
as an
 
 
 
mill.
income
 
mill.
income
 
 
 
 
EUR
 
 
EUR
 
 
 
 
mill.
 
 
mill.
 
 
 
 
 
 
 
 
Sales contracts
 
15741
-32
-32
9585
5
5
Purchase contracts
 
7015
14
14
2586
-2
-2
Options
 
 
 
 
 
 
 
Purchased
 
1200
0
0
325
0
0
Written
 
2200
0
0
425
0
0
 
 
 
 
 
 
 
 
Electricity derivatives
 
Volume
Fair
Not
Volume
Fair
Not
 
 
TWh
value
recog-
TWh
value
recog-
 
 
 
EUR
nised
 
EUR
nised
 
 
 
mill.
as an
 
mill.
as an
 
 
 
 
income
 
 
income
 
 
 
 
EUR
 
 
EUR
 
 
 
 
mill.
 
 
mill.
Sales contracts
 
23
103
103
19
33
37
Purchase contracts
 
23
-117
-117
22
-41
-41
Options
 
 
 
 
 
 
 
Purchased
 
1
0
0
0
0
0
Written
 
4
-1
-1
1
0
0

 
 
 
 
 
 
 
 
 
 
 
 
Mar 31
 
 
Dec 31
 
 
 
 
1999
 
 
1998
 
 
 
 
 
 
 
 
 
Interest and currency
derivatives
Con-tract
Fair
value
Not
recog-
Con-tract
Fair
value
Not
recog-
FIM mill.
 
or
 
nised
or
 
nised
 
 
notional
as an
notional
as an
 
 
value
 
income
value
 
income
 
 
 
 
 
 
 
 
FRAs and bond futures
 
137
0
0
-
-
-
Interest rate swaps
 
10416
-276
-258
9237
-191
-191
Interest rate options
 
 
 
 
 
 
 
Purchased
 
194
0
0
197
0
0
Written
 
1516
-1
0
1404
-17
-17
Forward foreign exchange contracts
10844
-77
-84
11609
56
-5
Currency swaps
 
3410
245
0
3182
175
0
Currency options
 
 
 
 
 
 
 
Purchased
 
749
-11
-17
555
-3
-3
Written
 
749
-5
1
555
6
6
 
 
 
 
 
 
 
 
Oil futures and forward
 
Volume
Fair
Not
Volume
Fair
Not
instruments
 
1000 bbl
value
recog-
1000 bbl
value
recog-
 
 
 
FIM
nised
 
FIM
nised
 
 
 
mill.
as an
 
mill.
as an
 
 
 
 
income
 
 
income
 
 
 
 
FIM
 
 
FIM
 
 
 
 
mill.
 
 
mill.
Sales contracts
 
15741
-188
-188
9585
30
30
Purchase contracts
 
7015
81
81
2586
-11
-11
Options
 
 
 
 
 
 
 
Purchased
 
1200
2
2
325
1
1
Written
 
2200
-2
-2
425
0
0
 
 
 
 
 
 
 
 
Electricity derivatives
 
Volume
Fair
Not
Volume
Fair
Not
 
 
TWh
value
recog-
TWh
value
recog-
 
 
 
FIM
nised
 
FIM
nised
 
 
 
mill.
as an
 
mill.
as an
 
 
 
 
income
 
 
income
 
 
 
 
FIM
 
 
FIM
 
 
 
 
mill.
 
 
mill.
Sales contracts
 
23
614
614
19
197
221
Purchase contracts
 
23
-697
-694
22
-242
-242
Options
 
 
 
 
 
 
 
Purchased
 
1
1
1
0
0
0
Written
 
4
-3
-3
1
0
0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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. Other contingent liabilities include a rent liability totalling at most        DEM 60 million, tied to the price development of petrochemicals and plastics in 1996-1999. This liability will not materialise at market prices on the balance sheet date.
 
NET SALES BY DIVISION
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
I/98
II/98
III/98
IV/98
1998
I/99
 
 
 
 
 
 
 
Oil and Gas
1486
1312
1272
1228
5298
1078
Power and Heat
527
406
350
513
1796
538
Operation and
Maintenance
49
60
60
81
250
63
Engineering
77
103
91
140
411
78
Chemicals
255
239
217
197
908
199
Other operations
22
29
24
31
106
26
Internal invoicing
-65
-57
-58
-95
-275
-83
Net sales
2351
2092
1956
2095
8494
1899
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING PROFIT BY DIVISION
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
I/98
II/98
III/98
IV/98
1998
I/99
 
 
 
 
 
 
 
Oil and Gas
26
40
69
53
188
29
Power and Heat
155
61
5
126
347
207
Operation and
Maintenance
4
-2
2
4
8
3
Engineering
-2
1
4
13
16
0
Chemicals
11
10
0
-3
18
5
Other operations
12
8
5
4
29
12
Eliminations
0
-3
-3
-5
-11
-12
Operating profit
206
115
82
192
595
244
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET SALES BY DIVISION
 
 
 
 
 
 
 
 
 
 
 
 
 
FIM mill.
I/98
II/98
III/98
IV/98
1998
I/99
 
 
 
 
 
 
 
Oil and Gas
8833
7805
7558
7305
31501
6407
Power and Heat
3134
2411
2080
3050
10675
3201
Operation and
Maintenance
293
357
357
480
1487
374
Engineering
458
613
540
834
2445
466
Chemicals
1518
1419
1293
1167
5397
1184
Other operations
128
173
145
186
632
155
Internal invoicing
-386
-342
-343
-565
-1636
-494
Net sales
13978
12436
11630
12457
50501
11293
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
OPERATING PROFIT BY DIVISION
 
 
 
 
 
 
 
 
 
 
 
 
FIM mill.
I/98
II/98
III/98
IV/98
1998
I/99
 
 
 
 
 
 
 
Oil and Gas
152
241
408
319
1120
170
Power and Heat
921
363
32
745
2061
1228
Operation and
Maintenance
26
-13
9
24
46
17
Engineering
-13
6
22
82
97
-2
Chemicals
63
60
3
-15
111
28
Other operations
75
42
29
27
173
73
Eliminations
-1
-14
-17
-35
-67
-65
Operating profit
1223
685
486
1147
3541
1449
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 EUR = 5.94573 FIM