Stock exchange release

Fortum January-March 2019 Interim Report: Positive effect of improved prices offset by lower hydro volumes

26 April 2019, 9:00 EEST



This release is a summary of Fortum’s Interim Report January-March 2019. The complete report is attached to this release as a pdf-file. It is also available on the company's website at

January-March 2019

  • Comparable EBITDA was EUR 545 (538) million, +1%
  • Comparable operating profit was EUR 408 (405) million, +1%
  • Operating profit was EUR 358 (482) million, -26%
  • Earnings per share were EUR 0.38 (0.43), of which EUR -0.04 (0.07) related to items affecting comparability
  • Strong cash flow from operating activities totalled EUR 751 (273) million; the increase was mainly due to the change in settlements for futures

Summary of outlook

  • The Generation segment's Nordic generation hedges: approximately 75% hedged at EUR 32 per MWh for the remainder of 2019, and approximately 55% at EUR 31 per MWh for 2020. From the beginning of 2019, the reported hedge prices also include the effect of proxy hedging. This change had a minor effect on the prices
  • Capital expenditure, including maintenance but excluding acquisitions, is expected to be in the range of EUR 600-650 million in 2019. In 2020, capital expenditure is expected to decline

Key financial ratios

EUR million 2018 LTM
Return on capital employed, % 6.7 6.5
Comparable net debt/EBITDA 3.6 3.3

Key figures

EUR million I/19 I/18 2018 LTM
Sales 1,690 1,585 5,242 5,347
Comparable EBITDA 545 538 1,523 1,530
Comparable operating profit 408 405 987 990
Operating profit 358 482 1,138 1,014
Share of profits of associates and
joint ventures
111 47 38 102
Profit before income taxes 424 493 1,040 971
Earnings per share, EUR 0.38 0.43 0.95 0.90
Net cash from operating activities 751 273 804 1,282
Shareholders’ equity per share, EUR 13.14 13.64 13.33
Interest-bearing net debt (at the end of the period) 4,995 899 5,509

Fortum's President and CEO Pekka Lundmark:

"Following an upward market in 2018, commodity prices in the first quarter of 2019 were generally on a higher level than a year earlier. During the first quarter, however, prices fluctuated and decreased slightly, reflecting some macro uncertainty in the market. With the exception of coal, most commodity prices have recovered in the beginning of the second quarter. At the beginning of the year, Nordic hydro reservoirs were below normal levels, but the situation improved clearly during the quarter.

The first-quarter results were impacted by two main drivers: higher power prices and lower hydro production volumes. The Generation segment's Nordic hedge price for 2019 is clearly above last year’s level, and with the spot prices in the first quarter also above last year's prices, the achieved power price for the Generation segment increased by 14%. Unfortunately, the low reservoir levels at the beginning of the quarter negatively affected our hydro production, offsetting almost all of the positive effect of the higher power prices.

The Consumer Solutions segment showed a clear result improvement, partly due to improved margins and partly due to favourable market conditions in the quarter that temporarily increased profitability. The City Solutions segment improved its result mainly due to improved performance of the recycling and waste business. The result of the Russia segment improved, measured in roubles, but suffered from the unfavourable rouble-euro exchange rate.

We have continued to implement our strategy with a current focus on operational excellence to maintain our benchmark performance. The internal work to identify improvement areas continues and, based on current analysis, we see potential for improvements with an annual result effect in the tens of millions. Cash flow optimisation and capital expenditure prioritisation continue to be at the top of our agenda, in order to strengthen the balance sheet. In February, we successfully issued a EUR 2.5 billion bond at competitive prices, reaffirming market confidence in Fortum. The bond proceeds were used to repay the Uniper acquisition financing facility from last year and a maturing higher-cost bond. The refinancing resulted in a more balanced debt maturity profile.

In line with our strategy, we have also continued the focused growth in the power value chain. In India, Fortum won the right to build a 250-megawatt solar plant in Rajasthan. In Finland, Fortum's 90-megawatt Kalax wind power project was approved for the Finnish national renewables scheme. The granted premium in the Finnish scheme is very low, which supports our projection that wind power in the Nordics is becoming competitive in its own right and that no new support schemes are needed.

In February, we were pleased to re-start discussions with Uniper in order to establish in earnest how our companies can work together. The discussions in the various work streams have proceeded well. As we believe a thorough process is required to look at all the possibilities in detail, it will still take some time before we have tangible results to share.

Over the quarter, we have been engaged in discussions with our stakeholders about Fortum’s climate commitments and the impact of our energy production. We welcome the opportunities for dialogue on the ways by which Europe can transition to low-carbon energy production in the decades ahead. Fortum is one of Europe's lowest emitting utilities and our European production fleet of today is very much in line with the goals of the Paris Agreement. We support the net-zero emissions target for 2050. Consequently, Fortum targets to report along the guidelines of the Task Force on Climate-related Financial Disclosures as part of the 2019 annual reporting package. We will also continue to encourage European leaders to seek a common path to implementing the transition to a carbon-neutral society in a controlled manner, without compromising the security of supply. On this quest, further strengthening and broadening of the EU emissions trading scheme is key."

Espoo, 25 April 2019

Fortum Corporation
Board of Directors

News conference/webcast

The joint news conference for media, investors and analysts will be held on 26 April 2019 at 11.00 EEST at Fortum Head office in Keilalahdentie 2-4, Espoo. 

The conference is available as a live webcast on Fortum's web site at To participate in the teleconference, please dial in approximately 5 minutes before the beginning of the event using the numbers below:

FI +358  9 81 710 310
UK +44 333 300 0804
US +1 631 913 14 22

Pin: 58854482#

The webcast will be recorded and published on Fortum's website at together with the transcript after the event.

Further information:

Investor Relations and Financial Communications: Ingela Ulfves, tel. +358 40 515 1531, Måns Holmberg, tel. +358 44 518 1518, Rauno Tiihonen, tel. +358 10 453 6150, Pirjo Lifländer, tel. +358 40 643 3317, and investors [at] fortum [dot] com (investors[at]fortum[dot]com)

Media: Pauliina Vuosio, tel. +358 50 453 2383

Financial calendar in 2019

  • January-June 2019 Half-year Financial Report on 19 July at approximately 9:00 EEST
  • January-September 2019 Interim Report on 24 October at approximately 9:00 EEST


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