During the fourth quarter 2010, power forward price for the first quarter of 2011 in Nord Pool increased from EUR 51 per megawatt-hour (MWh) at the beginning of the quarter to EUR 84 per MWh at year-end. Most of the increase, EUR 22 per MWh, took place during December. Also the full-year 2011 forward price increased significantly during December.
The effect has reversed to a large extent during the first weeks of 2011, driven by a rapid decline of especially 2011 Nord Pool forward prices. During January, for example, the February 2011 forward price has decreased to EUR 63 per MWh.
According to IFRS (IAS 39), some of the derivative positions Fortum uses for hedging its electricity generation do not qualify for Hedge Accounting. Hedge Accounting allows booking fair value changes resulting from derivative position market value changes in equity in the balance sheet. If the Hedge Accounting is not applied, the mark-to-market value change has to be booked in the profit and loss statement. In the fourth quarter 2010, the impact of this accounting treatment was exceptionally high.
Fortum will publish its financial statements bulletin for 2010 on 2 February 2011 at 9 a.m. EET.
Executive Vice President, Corporate Relations and Sustainability
Fortum’s Investor Relations, tel. +358 10 453 6150 and +358 10 453 2552, email@example.com
Mika Paloranta, Head of Asset Backed Trading, tel. +358 10 452 4138
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