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Fortum CEO Markus Rauramo’s statement on the Group’s Russian businesses

03 March 2022, 9:00 EET

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As the CEO of a company with long business ties and broad operations in Russia, I am devastated and sad by Russia’s attack on Ukraine and follow the situation with the highest attention. Over the past week we have already witnessed what great suffering the war has caused to people. There is no justification for this. It has also shaken the relationship between Russia and Europe, damaging ties that have been built up over decades. The consequences will be far-reaching.

Together with our subsidiary Uniper, we have 12 power plants in Russia with a combined power generation capacity 15.5 gigawatts (GW) and heat production capacity 10.2 GW. In 2021, we generated 71.9 terawatt-hours (TWh) of electricity and produced 19.1 TWh of heat in Russia. Our Russian generating assets and the exposure in the Nord Stream 2 pipeline project carry a book value of approximately EUR 5.5 billion. In 2021, our Russian operations contributed approximately EUR 500 million in comparable operating profit, which corresponds to approximately 20% of the Group’s comparable operating profit.1) In addition, Uniper’s long-term gas contracts total approximately 370 TWh/a and approximately half of this amount is sourced from Russia.

Most importantly, we have around 7,000 colleagues in Russia. Many of our employees across Europe work with these colleagues and the developments of the past days have been distressing and challenging for all of us. In this unprecedented situation, our primary focus and concern is for our employees wellbeing and the security of supply of customers in all our countries.

All our operations are currently running as normal, so we can fulfil our duties to our customers. The situation is very dynamic and keeps evolving on a daily – if not hourly – basis, and it is very difficult to predict the extent of impacts on our operations in the future. It is obviously clear that we are complying with all applicable laws and regulations, including sanctions, and preparing for various scenarios. In case the escalation of events would hinder us from fulfilling our energy delivery commitments to our European customers, we would work with our respective regulators and governments to find a joint solution.

At the same time, business as usual cannot continue. For now, we have stopped all new investment projects in Russia until further notice and we will continue to reduce our thermal exposure in Russia.

Amongst all the uncertainty, one thing is absolutely clear: Europe’s urgent need for an energy transition. The current developments have also added a new variable to the equation of sustainability, affordability and security of supply, which is independence. We are actively supporting this through our investments into clean power, increasingly clean gas and flexibility. This morning’s announcement on our decision to apply for an extension to the lifetime of our Loviisa nuclear power plant in Finland, Uniper’s recently increased LNG imports and decision to resume planning of a hydrogen-ready LNG-terminal in Wilhelmshaven, Germany, are examples of our commitment. We are in continuous discussions with the Finnish and German governments on how Fortum Group can support security of supply in a decarbonising Europe.

1) The Russian rouble (RUB) has depreciated significantly from the closing rate as of 31 December 2021. If this prevails, it has a negative translation impact on Fortum Group’s earnings, assets and liabilities denominated in RUB.

Markus Rauramo
President and CEO
Fortum Corporation