"The second quarter of 2019 was a good quarter for Fortum. Results improved in all business segments, cash flow was strong and there was continued focus on strengthening the balance sheet. The higher achieved power price and the higher hydro and nuclear volumes were the main drivers for the clear result improvement in the Generation segment. The results of the Russia segment improved, with higher electricity margins and capacity prices as the main drivers. Part of the improvement was related to high bad-debt provisions in the second quarter of last year.
The weather was warmer than normal in most heating areas, but not as warm as last year. Although seasonally loss-making, the results of the City Solutions segment improved due to higher heat sales, favourable power prices, and better results in our recycling and waste business. Consumer Solutions showed a clear result improvement for the second quarter in a row, after a weaker year in 2018. Roughly half of the result improvement was due to higher margins; the other half was of a more temporary nature.
In the second quarter, Fortum received dividends from Uniper for the first time. The dividend of EUR 165 million strongly contributed to Fortum’s cash flow. Fortum’s EUR 399 million share of Uniper’s profits clearly increased Fortum’s net profit and had a EUR 0.45 positive effect on Fortum’s earnings per share.
We remain convinced that Fortum and Uniper together can take a leading role in the European energy transition. Working in close alignment, we would be stronger and better positioned to address the key challenges of the future energy landscape: affordability, sustainability, and security of supply. The talks we held with Uniper during the spring only strengthened our conviction. Following the controversy around the Uniper annual general meeting in May, we have met with Uniper employee representatives, the new members of the Management Board and the Supervisory Board. I am pleased that we have now agreed that discussions will continue.
In June, the new Finnish Government presented its political programme. I am glad to see that the new government has indicated its commitment to an ambitious climate policy. The programme contains several positive tax-related proposals to support decarbonisation and electrification, but also increased taxes for heating fuels that overlap with the EU ETS. Similarly as in Sweden, also the Finnish Government proposes the introduction of a tax on waste incineration. Such a tax would be inefficient, as it would hardly steer towards efficient recycling and reuse. It is essential that rejects from sorting of non-recyclable waste and hazardous waste would be excluded from such a tax."