INTERIM REPORT 1 JANUARY-30 JUNE 1999: FORTUM’S OPERATING PROFIT FOR THE FIRST SIX MONTHS EUR 352 MILLION OR FIM 2,093 MILLION

Fortum Group’s operating profit for January-June 1999 rose to EUR 352 million (EUR 321 million for January-June 1998) and profit before extraordinary items to EUR 252 million (EUR 219 million). Profit per share was EUR 0.22 (EUR 0.18), return on capital employed 7.7% (8.1%), return on shareholders’ equity 7.1% (7.0%), and gearing 94% (93% at the end of 1998).
 
The results were adversely affected by the lower average market price of electricity than in the comparative period, and by the low oil refining margin. In contrast, the results were improved by the activities of Birka Energi Group and increased gains on the sales of fixed assets. The operating profit for the review period includes inventory gains totalling EUR 15 million (inventory losses EUR 37 million), a major portion of which concerned statutory crude oil stockpiling.
 
At EUR 3,811 million, Fortum Group’s net sales were 14% lower than in the comparative period.
 
Operating profit for April-June totalled EUR 108 million and profit before extraordinary items EUR 59 million.
 
Net profit for the period totalled EUR 437 million (EUR 141 million). It was improved by gains on the sale of Gasum shares and on other previously conducted fixed-asset transactions, entered under extraordinary items, totalling EUR 324 million.
 
Prospects for the rest of the year
 
The stronger price of crude oil contributed to an improved Group performance during the second quarter. The price of crude oil has continued to rise since the end of the review period, and, if the current price level prevails, it will further boost the Group’s profitability. On the other hand, the low market price of electricity and the low oil refining margins will continue to affect the Group’s 1999 performance. On the basis of the current market outlook, Fortum’s management believes that the Group’s 1999 profit before extraordinary items will be better than in 1998.
 
The Interim Report is unaudited. The Interim Report for January-September will be published on 5 November 1999.
 
Fortum Corporation
 
 
Antti Ruuskanen
Corporate Executive Vice President
 
FOR FURTHER INFORMATION, PLEASE CONTACT:
Heikki Marttinen, President and CEO, tel. +358 10 452 4100
Eero Aittola, CFO, tel. +358 10 452 4234
Jari Mäntylä, Corporate Controller, tel. +358 10 452 4976
Antti Ruuskanen, Corporate Executive Vice President, Communications, tel. +358 10 452 4850
 
APPENDIX
Interim Report 1 January-30 June 1999
 
Fortum Corporation
 
INTERIM REPORT 1 JANUARY-30 JUNE 1999
 
Six months in brief
 
- Fortum’s January-June operating profit totalled EUR 352 million (EUR 321 million in January-June 1998)
- The price of crude oil strengthened in the second quarter. The market price of electricity and oil refining margins continued to be very low.
- Oil production in the Åsgard field began in May.
- Fortum sold 50% of its Gasum shares in May. An agreement on the sale of Enermet was signed after the end of the review period in July.
 
Market review
 
At the beginning of the year, the price of crude oil in the international market was very low. In the spring, however, the price began to climb and, at the turn of June and July, the dated quotation of Brent Blend was more than USD 17 a barrel, reflecting more confident market expectations for the rest of the year. The price continued to climb during July, and, by the end of the month, Brent was trading at around USD 20 a barrel.
 
The prices of petroleum products in the international market rose less than the price of crude oil, and refining margins were exceptionally low throughout the first half of the year.
 
In Finland, sales of motor gasoline rose by 1%, of diesel fuel by 5%, of light fuel oil by 6%, and of heavy fuel oil by 4% from the comparative period in 1998. The growth in demand was attributed to, for example, increased industrial activity, and, as far as the fuel oils are concerned, to a colder winter in Finland than in the previous year.
 
Consumption of natural gas in Finland during January-June 1999 was 20.4 TWh (20.3 TWh during January-June 1998).
 
The abundant supply of hydro-electric power and coal-fired power in the Nordic countries continued, with the result that electricity prices continued to be low.
 
In the Nordic countries, consumption of electricity grew by slightly more than 1% during the first half of the year compared with the comparative period. In Finland, the bulk of this growth came from retail consumers and the service sector. Finland’s electricity consumption was 39.2 TWh.
 
Results for January-June
 
At EUR 3,811 million, Fortum Group’s net sales were 14% lower than in the comparative period.
 
Operating profit for January-June was EUR 352 million (EUR 321 million in the comparative period in 1998). Profit before extraordinary items was EUR 252 million (EUR 219 million). The results were adversely affected by the lower average market price of electricity than in the comparative period, and by the low oil refining margin. In contrast, the results were improved by the activities of Birka Energi Group and increased gains on the sales of fixed assets. The operating profit for the review period includes inventory gains totalling EUR 15 million (inventory losses EUR 37 million), a major portion of which concerned statutory crude oil stockpiling.
 
Operating profit for April-June was on the same level as in the previous year. It fell by EUR 7 million to EUR 108 million. At EUR 59 million, profit before extraordinary items was the same as in the previous year.
 
Net profit for the period totalled EUR 437 million (EUR 141 million). It was improved by gains on the sale of Gasum shares and on other previously conducted fixed-asset transactions, entered under extraordinary items, totalling EUR 324 million. Profit per share was EUR 0.22 compared to EUR 0.18 a year earlier. Return on capital employed was 7.7% and return on shareholders’ equity 7.1% (8.1% and 7.0%).
 
Investments and financing
 
The Group’s investments in January-June totalled EUR 609 million (EUR 449 million), a major portion of which was accounted for by acquisitions made by the Power and Heat Division during the first quarter. Investments during April-June totalled EUR 204 million.
 
The acquisition of shares in Espoon Sähkö Oyj and Lahden Lämpövoima were the most significant share acquisitions carried out during January-June. In the latter case, Fortum has started legal proceedings at a district court to adjust the redemption price. The largest ongoing investment project is the development of the Åsgard oil and gas fields in Norway.
 
After the end of the review period, Fortum acquired, on 5 August, 10% of Länsivoima Oyj shares, as a result of which our share of the voting rights of Länsivoima shares rose to 75%. Consequently, since our shareholding now exceeds two thirds, we will have to make a redemption offer for the remaining shares in Länsivoima.
 
Interest-bearing net debt at the end of the review period was EUR 4,277 million (EUR 3,898 at the end of 1998). It was reduced by the proceeds from the sale of Gasum shares completed during the second quarter. The weakening of the euro against the Swedish krona and the US dollar during the first six months of the year increased our interest-bearing debt. Our gearing was 94% (93%).
 
In May, Fortum divested 50% of its Gasum Oy shares as required by the European Commission. The Finnish state acquired 24% of the shares, Ruhrgas Energie Beteiligungs-AG 20%, and a consortium comprising Metsä-Serla Corporation, Stora Enso Oyj, and UPM-Kymmene Corporation, 6%. Following this transaction, Fortum owns 25% of Gasum’s shares, while the other 25% is held by OAO Gazprom of Russia.
 
After the end of the review period, Fortum signed an agreement on the sale of its wholly-owned subsidiary Enermet Oy. Fortum will hold a minority interest in the new company, which will continue Enermet’s business. Preparations on the rearrangement of ownership of Neste Chemicals are progressing as planned.
 
Year 2000 programme
 
We will achieve year 2000 compliance for all major areas in 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 stronger price of crude oil contributed to an improved Group performance during the second quarter. The price of crude oil has continued to rise since the end of the review period, and, if the current price level prevails, it will further boost the Group’s profitability. On the other hand, the low market price of electricity and the low oil refining margins will continue to affect the Group’s 1999 performance. On the basis of the current market outlook, Fortum’s management believes that the Group’s 1999 profit before extraordinary items will be better than in 1998.
 
Divisional reviews
 
Oil and Gas
 
Fortum’s petroleum product sales to the Finnish market during January-June 1999 totalled 3.7 million tonnes, which was at the same level as a year earlier.
 
Petroleum product sales to other countries amounted to 2.4 million tonnes, up 10% on the comparative period in 1998. Sales to western markets rose by nearly a third, whereas demand conditions in Russia and the Baltic countries reduced sales in this area to only a third of the figure for the comparative period. Motor gasoline exports totalled 1.3 tonnes, which represents 55% of total exports. Exports of low-emission diesel fuel rose by 50%, and those of aviation fuel tripled from the beginning of 1998.
 
Fortum’s market shares in Finland during January-June were as follows: gasoline 32%, diesel fuel 44%, light fuel oil 40%, and heavy fuel oil 46%. These were virtually the same as in the comparative period.
 
Conversion of the unmanned fuel outlet network into the A24 concept was completed in Finland. These outlets now total 150. During January-June, 13 new A24 outlets were opened in the Baltic countries, while three new service stations were opened in St Petersburg.
 
In June, Fortum signed a memorandum of understanding with Norway’s Statoil on the setting up of a joint venture, which would encompass both companies’ unmanned fuel outlets, service stations, direct sales, and oil terminal operations in Estonia, Latvia, Lithuania, Poland, and Russia. It is planned for the new company to begin operations on 1 January 2000.
 
An EUR 29 million project to double the production of CityDiesel at the Porvoo refinery continued. This additional one-million-tonne capacity is scheduled to be available in December 1999.
 
A petroleum product terminal with a tank capacity of 31,000 cubic metres was completed in St Petersburg.
 
Our oil and gas production during the first half of 1999 averaged 29,100 oil-equivalent barrels a day or some 1.5 million tonnes a year, down approximately 16% on the comparative period in 1998.
 
Production in the Heidrun field in Norway rose from the beginning of the year, and work began to maintain and continue the current peak production level for approximately four years as from 2001. In contrast, Brage has now reached the declining stage of production in the field life cycle. May saw the start-up of oil production in Åsgard, which is our largest field with a 7% stake. Gas production in Åsgard is scheduled to begin at the end of 2000. Our total daily production is expected to exceed 40,000 barrels in the third quarter. This corresponds to approximately 2 million oil-equivalent tonnes a year. Production in 1998 totalled 1.65 million tonnes.
 
In May, a new production licence for a discovery bordering the Brage field was granted by the Norwegian government to a consortium, in which Fortum has a 13.2% stake. The other partners are the Norwegian state, Norsk Hydro, Exxon, and Statoil.
 
The market for liquefied petroleum gas (LPG) was unstable during the first half of the year, with the result that world market prices were low. Consequently, the volume of trading was kept at a low level. At the end of the review period, however, prices improved noticeably. LPG deliveries to industrial customers and retail consumers in Finland and Sweden rose compared with the first half of the previous year.
 
During the review period, Fortum increased its holding of the Estonian-based Eesti Gaas to 14% and acquired 2% of the Latvian-based gas company Latvijas Gaze.
 
Power and Heat
 
In the first half of the year, Fortum sold a total of 21.3 TWh of electricity in the Nordic market, of which sales in Finland amounted to 15.0 TWh and in Sweden 6.3 TWh. Electricity sales in Finland increased by 3% between January and June 1998. In Sweden, sales decreased by 24% from the comparative period. 57% of total sales (59% in the comparative period) were to large customers, 29% (31%) to small customers, and 14% (10%) to the electricity exchange or temporary sales.
 
Of the electricity sold in the Nordic countries, we generated 19.1 TWh (17.6 TWh) in our wholly- or partly-owned power plants. The balance was procured from other power generators, from Russia, or from electricity exchanges.
 
Outside the Nordic countries, we sold 1.1 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 from other power generators. 
 
A total of 8.5 TWh of heat was sold, 29% up on the comparative period: 65% of the sales was district heat, 35% steam. The growth came from Birka Energi’s sales, of which Fortum accounted for distinctly more than of sales through Gullspång Kraft a year earlier.
 
Fortum’s subsidiaries distributed 2.1 TWh of electricity (1.7 TWh) in their networks to the Finnish customers. In Sweden, the corresponding electricity distribution was 4.0 TWh (3.4 TWh), half of Birka Energi’s distribution.
 
As a result of complaints made, the County Administrative Court of Uusimaa decided in May to quash the decision of the Municipal Executive Board of Tuusula made in March 1998 to sell Fortum its 35% holding in Tuusulanjärvi Energy Ltd. Fortum and the municipality of Tuusula are holding negotiations on the altered situation.
 
In May, Birka Energi increased its share of ownership in the Swedish Ekerö Energi AB from 15% to 40%. In addition, it made a bid for the rest of the company’s shares in June.
 
After the end of the review period, in July, Fortum and the Estonian-based Eesti Ühispank purchased the entire share capital of AS Viru Energia. Following the sale, Fortum now owns 70% and Eesti Ühispank 30% of the company. Fortum’s Hungarian associated company Budapesti Erömü Rt. signed financing contracts on the building of the Újpest 110-MW gas-fired power plant in Budapest. For the project, Fortum undertook to subscribe EUR 11 million on the increase of the share capital of Budapesti Erömü.
 
After the end of the review period, Birka Energi acquired 65% of the shares of the Norwegian district heat generation and distribution company Baerum Fjernvarme AS from the Norwegian municipality of Baerum, and agreed on sales co-operation in electricity and energy services in Norway with Trondheim Energiverk AS. The agreement also includes a 50% share of Trondheim Energiverk Kraftsalg AS.
 
Operation and Maintenance
 
Power plants operated as planned and continued to have good availability. The division undertook several outages of turbine plants, both in Finland and overseas. In Sweden, a long-term maintenance agreement was signed with the Värtan power plant. A number of overhauls on transformers and endoscopic inspections as well as substation installations and maintenance work were carried out during the first six months of the year. An agreement on high-voltage maintenance was made with the Kaukas unit of UPM-Kymmene in Lappeenranta, eastern Finland.
 
In July, an agreement was signed with Budapest Erömü, the energy company of Budapest, on support operation and maintenance services to the Újpest power plant to be built in Hungary.
 
Engineering
 
In power plants engineering, the most significant deliveries underway during the first half of the year were the Edenderry peat-fired power plant in Ireland, the Grangemouth combined heat and power (CHP) plant in Scotland, the Tychy CHP plant and the Kozienice desulphurisation plant in Poland, and the modernisation projects in the Iasi, Suceava and Bucharest South power plants in Romania. In the Czech Republic, the handover of the Olomouc CHP project to the customer was postponed to take place in August.
 
In oil, gas and chemicals engineering, a letter of intent was signed in June with the German oil company, Veba Oel, on the sale of the NExETHERS licence relating to the ether technology developed by Fortum.
 
The railway electrification project on the Kokemäki-Pori section, western Finland, was completed. In Sweden, the first maintenance agreements on the railway line were signed in May.
 
New orders worth EUR 258 million were received in the first half of the year. The most significant of these were the delivery of the Újpest CHP plant in Hungary and the modernisation project on the Braila power plant in Romania.
 
Chemicals
 
Market conditions for adhesive resins during January-June continued to be fairly satisfactory, especially in North America. In Europe, demand for resins was somewhat lower than during the comparative period, principally as a result of lower activity in our customer industries.
 
The market for oxo products was difficult, especially during the first few months of the year. This was principally as a result of the economic situation in Asia and increased production capacity in key markets. Towards the end of the review period, however, there were slight improvements in the market conditions.
 
Favourable developments continued in the unsaturated polyesters and gelcoats businesses, and demand improved, particularly in southern and central Europe.
 
Corporate structure
 
Our new corporate structure came into effect at the beginning of the year. The divisions are now Oil and Gas, Power and Heat, Operation and Maintenance, Engineering, and Chemicals.
 
In June, the Board of Directors decided to renew the Group’s corporate governance model with effect from the beginning of 2000. The aim is to enhance business operations, accelerate decision making, improve customer service, and increase flexibility. In addition, one to two decision-making levels will be eliminated, and the present divisional level staff functions will be reorganised. Fortum’s businesses will be carried out by 32 performance units.
 
Personnel
 
In January-June, Fortum Group employed on average 18,878 people. In 1998, our average number of employees was 19,003.
 
Helsinki, 5 August 1999
 
Fortum Oyj
Board of Directors
 
FORTUM GROUP JANUARY-JUNE 1999
 
 
 
 
 
 
 
 
 
Interim financial statements are unaudited.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR million
 
Apr-Jun
Apr-Jun
Jan-Jun
Jan-Jun
Jan-Dec
 
 
 
 
 
1999
1998
1999
1998
1998
 
 
 
 
 
 
 
 
 
 
 
 
 
NET SALES
 
1912
2092
3811
4443
8494
 
 
 
Share of profits (losses) of associated
 
 
 
 
 
 
 
companies
 
14
6
30
19
42
 
 
 
Other operating income
 
29
8
79
38
102
 
 
 
Depreciation, amortisation and write-downs
-126
-129
-249
-255
-496
 
 
 
Other operating expenses
 
-1721
-1862
-3319
-3924
-7547
 
 
 
OPERATING PROFIT
 
108
115
352
321
595
 
 
 
Financial income and expenses
-49
-56
-100
-102
-218
 
 
 
PROFIT BEFORE EXTRAORDINARY ITEMS
59
59
252
219
377
 
 
 
Extraordinary income
 
324
9
324
9
11
 
 
 
Extraordinary expenses
 
0
-5
0
-12
-16
 
 
 
PROFIT BEFORE TAXES
 
383
63
576
216
372
 
 
 
Income taxes
 
 
 
 
 
 
 
 
 
For the financial period and previous periods   1)
 
-65
-30
-107
-75
-130
 
 
 
Change in deferred tax liabilities
-7
-1
-15
15
-2
 
 
 
Total
 
-72
-31
-122
-60
-132
 
 
 
Minority interests
 
-5
-7
-17
-15
-27
 
 
 
Net profit for the period
 
306
25
437
141
213
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share, EURO
 
 
 
0.22
0.18
0.27
 
 
 
Average number of shares, 1,000 shares
 
784783
784783
784783
 
 
 
 
 
 
 
 
 
 
 
 
 
1) Accrued taxes for the financial period.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET SALES BY DIVISION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
Apr-Jun
Apr-Jun
Jan-Jun
Jan-Jun
Jan-Dec
 
 
 
 
 
1999
1998
1999
1998
1998
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas
 
1170
1232
2133
2593
4916
 
 
 
Power and Heat
 
371
406
909
933
1796
 
 
 
Operation and Maintenance
 
65
60
128
109
250
 
 
 
Engineering
 
111
103
189
180
411
 
 
 
Chemicals
 
209
239
408
494
908
 
 
 
Other operations
 
30
26
54
45
95
 
 
 
Internal invoicing
 
-97
-56
-179
-119
-270
 
 
 
Total
 
1859
2010
3642
4235
8106
 
 
 
Discontinued operations 1)
 
53
82
169
208
388
 
 
 
Net sales
 
1912
2092
3811
4443
8494
 
 
 
 
 
 
 
 
 
 
 
 
 
1) Include Gasum Group, Infrarödteknik Group and Microchemistry.
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING PROFIT BY DIVISION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
Apr-Jun
Apr-Jun
Jan-Jun
Jan-Jun
Jan-Dec
 
 
 
 
 
1999
1998
1999
1998
1998
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas 1)
 
44
32
51
40
136
 
 
 
Power and Heat
 
40
61
247
216
347
 
 
 
Operation and Maintenance
 
0
-2
3
2
8
 
 
 
Engineering
 
-5
1
-5
-1
16
 
 
 
Chemicals
 
10
10
15
21
18
 
 
 
Other operations
 
9
8
21
20
29
 
 
 
Internal invoicing
 
3
-3
-8
-3
-11
 
 
 
Total
 
101
107
324
295
543
 
 
 
Discontinued operations 2)
 
7
8
28
26
52
 
 
 
Operating profit
 
108
115
352
321
595
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1) Treatment of Gasum Group has been changed from a subsidiary company to an associated company in all reporting periods.
 
 
 
 
 
 
 
 
 
2) Include the impact of change in Gasum holding, Infrarödteknik Group an Microchemistry.
 
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED BALANCE SHEET
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
 
Jun 30
Jun 30
Dec 31
 
 
 
 
 
 
 
1999
1998
1998
 
 
 
ASSETS
 
 
 
 
 
 
 
 
 
Fixed assets and other long-term investments
9491
8293
8845
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
Inventories
 
 
 
640
629
576
 
 
 
Receivables
 
 
 
1272
1206
1192
 
 
 
Cash and cash equivalents
 
 
 
627
1184
564
 
 
 
Total
 
 
 
2539
3019
2332
 
 
 
Total
 
 
 
12030
11312
11177
 
 
 
 
 
 
 
 
 
 
 
 
 
SHAREHOLDERS' EQUITY AND LIABILITIES
 
 
 
 
 
 
 
Shareholders' equity
 
 
 
 
 
 
 
 
 
Share capital  1)
 
 
 
2640
2633
2640
 
 
 
Other equity
 
 
 
1770
1359
1335
 
 
 
Total
 
 
 
4410
3992
3975
 
 
 
Minority interests
 
 
 
148
254
210
 
 
 
Provisions for liabilities and charges
 
74
44
64
 
 
 
Deferred tax liabilities
 
 
 
688
684
679
 
 
 
Long-term liabilities
 
 
 
4666
4153
3961
 
 
 
Short-term liabilities
 
 
 
2044
2185
2288
 
 
 
Total
 
 
 
12030
11312
11177
 
 
 
 
 
 
 
 
 
 
 
 
 
1) The share capital of Fortum Corporation was FIM 15,696 million as of June 30, 1999.
 
 
 
 
 
 
 
 
 
 
 
Equity per share, EUR
 
 
 
5.62
5.09
5.06
 
 
 
Number of shares, 1,000 shares
 
 
784783
784783
784783
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
KEY RATIOS
 
 
 
Jun 30
Jun 30
Dec 31
 
 
 
 
 
 
 
1999
1998
1998
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing net debt, EUR mill.
 
4277
3310
3898
 
 
 
Investments, EUR mill.
 
 
 
609
449
1702
 
 
 
Average number of employees
 
 
 
18878
18365
19003
 
 
 
Return on capital employed, %
 
 
7.7
8.1
7.8
 
 
 
Return on shareholders' equity, %
 
 
7.1
7.0
5.7
 
 
 
Gearing, %
 
 
 
94
78
93
 
 
 
Equity-to-assets ratio, %
 
 
 
38
38
38
 
 
 
 
 
 
 
 
 
 
 
 
 
CONTINGENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
 
 
 
Jun 30
 
Dec 31
 
 
 
 
 
 
 
1999
 
1998
 
 
 
CONTINGENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On own behalf
 
 
 
 
 
 
 
 
 
For debt
 
 
 
 
 
 
 
 
 
Pledges
 
 
 
410
 
341
 
 
 
Real estate mortgages
 
 
 
160
 
150
 
 
 
Company mortgages
 
 
 
47
 
53
 
 
 
Other mortgages
 
 
 
58
 
52
 
 
 
For other commitments
 
 
 
 
 
 
 
 
 
Pledges
 
 
 
71
 
70
 
 
 
Real estate mortgages
 
 
 
143
 
138
 
 
 
Sale and leaseback
 
 
 
16
 
11
 
 
 
Other contingent liabilities
 
 
 
191
 
205
 
 
 
Total
 
 
 
1096
 
1020
 
 
 
 
 
 
 
 
 
 
 
 
 
On behalf of associated companies
 
 
 
 
 
 
 
 
Guarantees
 
 
 
273
 
249
 
 
 
 
 
 
 
 
 
 
 
 
 
On behalf of persons referred to in § 11:7 of the Companies Act
 
 
 
Guarantees
 
 
 
0
 
0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On behalf of others
 
 
 
 
 
 
 
 
 
Pledges
 
 
 
12
 
8
 
 
 
Real estate mortgages
 
 
 
0
 
0
 
 
 
Guarantees
 
 
 
39
 
37
 
 
 
Other contingent liabilities
 
 
 
37
 
38
 
 
 
Total
 
 
 
88
 
83
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
1457
 
1352
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING LEASE LIABILITIES
 
 
 
 
 
 
 
 
 
Due within a year
 
 
 
46
 
41
 
 
 
Due after a year
 
 
 
156
 
158
 
 
 
Total
 
 
 
202
 
199
 
 
 
 
 
 
 
 
 
 
 
 
 
Finance leases have been recognised as assets and liabilities.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITY FOR NUCLEAR WASTE DISPOSAL
 
459
 
459
 
 
 
Share of reserves in the Nuclear Waste Disposal Fund
-372
 
-330
 
 
 
Liabilities in the balance sheet
 
 
87
1)
129
1)
 
 
 
 
 
 
 
 
 
 
 
 
1) Mortgaged bearer papers as security
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DERIVATIVES
 
 
Jun 30
 
 
 
Dec 31
 
 
 
 
 
1999
 
 
 
1998
 
 
INTEREST AND CURRENCY DERIVATIVES
Cont-ract
Fair
value
Not
recog-
 
Cont-ract
Fair
value
Not
recog-
 
EUR mill.
 
or
 
nised
 
or
 
nised
 
 
 
notional
as an
 
notional
as an
 
 
 
 
 
income
 
value
 
income
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
1975
-29
-20
 
1554
-32
-32
 
Interest rate options
 
 
 
 
 
 
 
 
 
Purchased
 
16
0
0
 
33
0
0
 
Written
 
264
0
0
 
236
-3
-3
 
Forward foreign exchange contracts
1840
-10
-17
 
1953
9
-1
 
Currency swaps
 
607
38
0
 
535
29
0
 
Currency options
 
 
 
 
 
 
 
 
 
Purchased
 
91
-1
1
 
94
-1
-1
 
Written
 
71
-2
-3
 
94
1
1
 
 
 
 
 
 
 
 
 
 
 
OIL FUTURES AND FORWARD INSTRUMENTS
 
Volume
1000 bbl
Fair
value
Not
recog-
 
Volume
1000 bbl
Fair
value
Not
recog-
 
 
 
 
 
nised
 
 
 
nised
 
 
 
 
EUR
as an
 
 
EUR
as an
 
 
 
 
mill.
income
 
 
mill.
income
 
 
 
 
 
EUR
 
 
 
EUR
 
 
 
 
 
mill.
 
 
 
mill.
 
 
 
 
 
 
 
 
 
 
 
Sales contracts
 
22614
-25
-25
 
9585
5
5
 
Purchase contracts
 
15847
9
9
 
2586
-2
-2
 
Options
 
 
 
 
 
 
 
 
 
Purchased
 
1702
-2
-2
 
325
0
0
 
Written
 
2975
2
2
 
425
0
0
 
 
 
 
 
 
 
 
 
 
 
ELECTRICITY DRIVATIVES
 
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
 
21
81
81
 
19
33
37
 
Purchase contracts
 
23
-95
-94
 
22
-41
-41
 
Options
 
 
 
 
 
 
 
 
 
Purchased
 
1
0
0
 
0
0
0
 
Written
 
4
-1
-1
 
1
0
0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.
 
 
 
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 resul
 
ting from the contracts, and, in respect of options, on evaluation models.
 
 
 
 
 
 
 
 
 
 
 
NET SALES BY DIVISION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
I/98
II/98
III/98
IV/98
1998
I/99
II/99
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas
1361
1232
1200
1123
4916
 963
1170
 
 
Power and Heat
 527
 406
 350
 513
1796
 538
 371
 
 
Operation and Maintenance
  49
  60
  60
  81
 250
  63
  65
 
 
Engineering
  77
 103
  91
 140
 411
  78
 111
 
 
Chemicals
 255
 239
 217
 197
 908
 199
 209
 
 
Other operations
  19
  26
  22
  28
  95
  24
  30
 
 
Internal invoicing
 -63
 -56
 -57
 -94
-270
 -82
 -97
 
 
Total
2225
2010
1883
1988
8106
1783
1859
 
 
Discontinued operations 1)
 126
  82
  73
 107
 388
 116
  53
 
 
Net sales
2351
2092
1956
2095
8494
1899
1912
 
 
 
 
 
 
 
 
 
 
 
 
1) Include Gasum Group,  Infrarödteknik Group and Microchemistry.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING PROFIT BY DIVISION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUR mill.
I/98
II/98
III/98
IV/98
1998
I/99
II/99
 
 
 
 
 
 
 
 
 
 
 
 
Oil and Gas  1)
  8
32
58
 38
136
  7
44
 
 
Power and Heat
155
61
 5
126
347
207
40
 
 
Operation and Maintenance
  4
-2
 2
  4
  8
  3
 0
 
 
Engineering
 -2
 1
 4
 13
 16
  0
-5
 
 
Chemicals
 11
10
 0
 -3
 18
  5
10
 
 
Other operations
 12
  8
 5
  4
 29
 12
  9
 
 
Eliminations
  0
 -3
-2
 -6
-11
-11
  3
 
 
Total
188
107
72
176
543
223
101
 
 
Discontinued operations 2)
 18
  8
10
 16
 52
 21
  7
 
 
Operating profit
206
115
82
192
595
244
108
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1) Treatment of Gasum Group has been changed from a subsidiary company to an associated company in all reporting periods.
 
 
 
 
 
 
 
2) Include the impact of change in Gasum holding, Infrarödteknik Group and Microchemistry.
 
 
 
 
 
 
 
 
 
 
 
1 EUR = 5,94573 FIM