"The determined execution of our transformation strategy continued during the spring and summer with active portfolio rotation and decarbonisation. First, we agreed to sell 500 MW of solar power capacity in India, in line with our build-operate-transfer business model, and signed a comprehensive agreement with Actis targeting potential further investments in solar power plants in India. Second, we closed the divestment of our Baltic district heating business for a total consideration of approximately EUR 710 million. And third, we signed an agreement on the sale of our 50% stake in Stockholm Exergi for EUR 2.9 billion. These three successful transactions bring the value of our portfolio rotation over the last eighteen months to a total of EUR 5.2 billion. The efficient implementation of our chosen strategy has strengthened Fortum’s balance sheet. Subsequent to the closing of the Baltic district heating and Exergi divestments our leverage, measured as financial net debt-to-comparable EBITDA, will further decrease to well below our target of less than 2 times. Our efforts have not gone unnoted as both the Standard & Poor’s and Fitch rating agencies, have now removed the negative outlook for Fortum and we are very pleased that they revised their long-term ratings to BBB with a stable outlook.
The execution of our decarbonisation strategy is also proceeding well. In July, we agreed to sell our Argayash coal-fired combined heat and power plant in Russia. As we announced earlier this year, the fuel switch of the Chelyabinsk CHP-2 unit from coal to gas means that we now have a clear path to cease the use of coal in our Russia segment by the end of 2022. This leaves the Group’s Russian operations with only one coal-fired power plant without a clearly communicated exit path, the Berezovskaya 3 power plant of the Uniper segment. In our Uniper business in Germany, we were successful also in the third round of auctions for the closure of coal-fired power plants. The bid for closure of the Scholven C power plant was accepted, which makes it the third success in the three auctions held so far and Uniper’s third coal-fired power plant to be closed ahead of our previously announced, already ambitious schedule. I am also pleased that we have been able to accelerate our decarbonisation in the UK, as we plan to close the first block of the Ratcliffe coal-fired power plant as early as September 2022 and the remaining three units by the end of 2024, all ahead of schedule. This means we have been able to announce the accelerated closure of almost 40% of our coal-fired generation capacity within less than one year.
Due to seasonality, the second and third quarters are normally weaker than the winter quarters and this year was no exception. In addition, the comparable operating profit for the second quarter declined because Uniper’s Global Commodities business did not replicate the strong profits from the second quarter of 2020 and Uniper also experienced an intra-year phasing effect, due to the increase in the price for CO2 emission rights that shifted margins from the second quarter to the second half of 2021. The results of Fortum’s Generation segment benefitted from higher power prices and strong performance in physical optimisation, although the effect was dampened by the fairly high hedge levels. All other segments showed improving or stable results. The results of the first half of 2021 was strong thanks to the good results of Uniper and improvements in the Generation and City Solutions segments. With a comparable earnings per share of EUR 1.61 for the last twelve months and a strengthening balance sheet, Fortum is well equipped for the ongoing energy transition.
Fortum’s decarbonisation efforts are supported by the EU Commission’s ‘Fit for 55’ legislative package that guides the EU economy towards a 55% reduction in greenhouse gas emissions by 2030 and climate neutrality by 2050. The package is well in line with Fortum’s views and includes, among other measures, a tightening of the EU ETS and its expansion to maritime transport as well as ambitious targets for renewable hydrogen use. Carbon pricing will also be broadened to buildings and road transport, something we have long been advocating for. These measures are more challenging to implement than measures targeting large industrial installations, but they are necessary in order to reach the high climate ambitions of the EU, something that cannot be achieved by focusing only on the energy sector.
On 9 August, the IPCC – Intergovernmental Panel on Climate Change published a new report that reinforces the scientific basis of climate change and the human impact on it. It emphasises the urgency of climate action and the necessity for all mitigation and adaptation measures. In Fortum’s view, the findings of the report underline the importance of making full use of all CO2-free technologies in climate change mitigation."