At the end of 2020, approximately 75% of the Generation segment’s estimated Nordic power sales volume was hedged at EUR 33 per MWh for 2021 (at the end of the third quarter of 2020: 75% at EUR 33 per MWh), and approximately 50% at EUR 31 per MWh for 2022 (at the end of the third quarter of 2020: 40% at EUR 32 per MWh).
At the end of 2020, approximately 90% of the Uniper segment’s estimated Nordic power sales volume was hedged at EUR 27 per MWh for 2021 (at the end of the third quarter of 2020: 85% at EUR 28 per MWh), approximately 65% at EUR 24 per MWh for 2022 (at the end of the third quarter of 2020: 55% at EUR 24 per MWh), and approximately 25% at EUR 22 per MWh for 2023.
The reported hedge ratios are based on the hedges and power generation forecasts of the Generation segment and of the Uniper segment’s Nordic generation. The underlying generation assets and definition of hedges differ to some extent and thus are not fully comparable.
The reported hedge ratios may vary significantly, depending on Fortum’s and Uniper’s actions on the electricity derivatives markets. Hedges are mainly financial contracts, most of them electricity derivatives quoted on Nasdaq Commodities.
Fortum estimates its capital expenditure, including maintenance but excluding acquisitions, to be approximately EUR 1,400 million in 2021, of which the share of maintenance capital expenditure is estimated to be approximately EUR 700 million, well below the level of depreciation.
The Generation segment’s achieved Nordic power price typically depends on factors such as hedge ratios, hedge prices, spot prices, availability and utilisation of Fortum’s flexible generation portfolio, as well as currency fluctuations. Excluding the potential effects from changes in the power generation mix (currently approximately 45 TWh), a EUR 1 per MWh change in the Generation segment’s achieved Nordic power price will result in an approximately EUR 45 million change in the segment’s annual comparable operating profit. The achieved power price also includes the results of optimisation of Fortum’s hydro and nuclear generation, as well as operations in the physical and financial commodity markets.
In February 2021, the Wholesale Market Trading Administrator published data from 2020 regarding the rate of return and the CPI, which are used to calculate the CSA price for 2021. The CSA payments were revised downwards, mainly due to the lower Government bond yield (6.3% for 2021 vs. 7.6% for 2020). In 2021, in the Russia segment, the negative financial effect related to the ending of the CSA period of two production units is expected to exceed the positive effect of three units entering the four-year period of higher CSA payments.
Excluding the potential effects from changes in the power generation mix, a EUR 1 per MWh change in the Uniper segment’s power sales price for the outright generation (hydro and nuclear, currently approximately 25 TWh) will result in an approximately EUR 25 million change in the segment’s annual comparable operating profit. Uniper also has generation other than hydro and nuclear power, and the sensitivity for that generation is different and is not included in the previously mentioned sensitivity.
With regard to Uniper, reference is made to the guidance that the company publishes quarterly.
In 2021, the comparable effective income tax rate for Fortum is estimated to be in the range of 20-25%. The actual effective income tax rate on the income statement differs from the guided comparable effective income tax rate range depending on capital gains, share of profits from associates and joint ventures, and volatility in fair valuations.
In June 2018, the Swedish Government decided to lower the Swedish corporate tax in two steps, from 22.0% to 21.4%, effective January 2019, and to 20.6%, effective January 2021.