2013-10-23 08:00:01 CEST
2013-10-23 08:00:10 CEST
REGULATED INFORMATION
Fortum - Interim report (Q1 and Q3)
Fortum Corporation interim report Q3 2013: Typically weak third-quarter results further burdened by very low hydro volumes – strong cash flow
Espoo, Finland, 2013-10-23 08:00 CEST (GLOBE NEWSWIRE) -- FORTUM CORPORATION
INTERIM REPORT 23 October 2013 at 9:00 EEST
July−September 2013
-- Comparable operating profit EUR 166 (223) million, -26%
-- Operating profit EUR 97 (226) million, of which EUR -69 (3) million relates
to items affecting comparability
-- Earnings per share EUR 0.04 (0.14), -71%, of which EUR -0.05 (0.01) per
share relates to items affecting comparability
-- Cash flow from operating activities totalled EUR 414 (111) million, +273%
-- Nearly all-time low hydro production, 3.9 (6.3) TWh
-- 2014: 65% hedged at EUR 42 per MWh; and 2015: 20% hedged at
EUR 41 per MWh
-- Finalisation of the Russian investment programme postponed by some months;
ready by mid-2015
-- Electricity production at the Inkoo coal-fired power plant in Finland to be
discontinued
January−September 2013
-- Comparable operating profit EUR 1,114 (1,161) million, -4%
-- Operating profit EUR 1,138 (1,251) million, of which EUR 24 (90) million
relates to items affecting comparability
-- Earnings per share EUR 0.84 (0.91), -8%, of which EUR 0.03 (0.11) per share
relates to items affecting comparability
-- Cash flow from operating activities totalled EUR 1,460 (983) million, +49%
-- Efficiency programme continued to develop well
-- Assessment of the electricity distribution business progressed
Key figures III/13 III/12 I-III/1 I-III/1 2012* LTM**
* 3 2*
--------------------------------------------------------------------------------
Sales, EUR million 1,148 1,140 4,466 4,325 6,159 6,300
--------------------------------------------------------------------------------
Operating profit, EUR million 97 226 1,138 1,251 1,874 1,761
--------------------------------------------------------------------------------
Comparable operating profit, 166 223 1,114 1,161 1,752 1,705
EUR million
--------------------------------------------------------------------------------
Profit before taxes, EUR 23 150 970 1,043 1,586 1,513
million
--------------------------------------------------------------------------------
Earnings per share, EUR 0.04 0.14 0.84 0.91 1.59 1.52
--------------------------------------------------------------------------------
Net cash from operating 414 111 1,460 983 1,382 1,859
activities, EUR million
--------------------------------------------------------------------------------
Shareholders' equity per 10.81 10.72 11.30
share, EUR
--------------------------------------------------------------------------------
Interest-bearing net debt 7,897 7,764 7,814
(at end of period), EUR
million
--------------------------------------------------------------------------------
Average number of shares, 888,367 888,367 888,367
1,000s
--------------------------------------------------------------------------------
Key financial ratios 2012* LTM**
-----------------------------------------------
Return on capital employed, % 10.2 9.5
-----------------------------------------------
Return on shareholders' equity, % 14.6 14.4
-----------------------------------------------
Net debt/EBITDA 3.1 3.2
-----------------------------------------------
Comparable net debt/EBITDA 3.2 3.3
-----------------------------------------------
*) Comparative period figures for 2012 presented in the interim report are
restated due to an accounting change for pensions.
**) Last twelve months
Summary of outlook
-- Fortum currently expects the annual electricity demand growth in the Nordic
countries to be on average 0.5% in the coming years.
-- Capital expenditure guidance: EUR 1.1-1.4 billion in 2013 and EUR 0.9-1.1
billion in 2014, excluding potential acquisitions.
-- Power Division's Nordic generation hedges: For the rest of the calendar
year 2013, 85% hedged at EUR 44 per MWh; for the 2014 calendar year, 65%
hedged at EUR 42 per MWh; and for the 2015 calendar year, 20% hedged at EUR
41 per MWh.
-- Fortum's goal is to achieve an operating profit level (EBIT) of about EUR
500 million run-rate in its Russia Division during 2015.
Fortum's CFO Markus Rauramo
”Characteristic for the third-quarter result was the industry-typical
seasonality, however, the result was also burdened by very low hydro production
and the impairment of the Inkoo coal-fired power plant in Finland as well as
unplanned outages in Russia. Comparable operating profit amounted to a
disappointing EUR 166 million, cash flow for operating activities from all
divisions was, however, very strong at EUR 414 million. The on-going efficiency
programme continued to proceed according to plan, and divestments as well as
the cost level have developed very well.
Electricity consumption in the Nordic countries was slightly lower than last
year at 79 TWh, even though non-industrial consumption is partly offsetting the
decrease in industrial demand. In Russia, consumption increased marginally to
230 TWh. Nordic hydro reservoirs were below the long-term average at the end of
the quarter and clearly lower than last year's record-high level. Precipitation
has been weak in Fortum's operating areas and this has put pressure on hydro
volumes, which were exceptionally low during the quarter and thus impacted the
result negatively.
The business environment continues to be challenging not only for energy
companies, but for the whole economy. Fortum is well positioned to capture the
opportunities that the upcoming changes in the operating environment can
provide. We are improving efficiency and have supportive on-going investments.
During the quarter, we inaugurated two new power plants. The first large-scale
biomass-fired combined heat and power plant in Jelgava, Latvia, and Fortum's
most significant investment in Russia, the gas-fired thermal power plant Nyagan
GRES. The second of the Nyagan GRES units, Nyagan 2, is currently under testing
and is expected to be commissioned by the end of this year.
The Russian government's target to increase gas prices by 15% annually to reach
netback price parity with European prices by 2018 has recently been changed.
The forecast by the Russian ministry of economic development now suggests much
lower annual increases. The Russia Division's profits are impacted by possible
changes in gas prices, currency exchange rates and other regulations. The
suggested gas price development and the weaker Russian rouble makes the EUR 500
million operating profit level (EBIT) goal during 2015 more challenging,
however, the company is making every effort to mitigate the negative impacts.
The assessment of the Distribution business is progressing well and, as
communicated before, it should be finalised by the end of this year.
In early October, CDP (Carbon Disclosure Project), representing over 700
institutional investors, ranked Fortum as the best company in the Nordic
climate index. The index assesses the climate performance of companies. Fortum
received its all-time high scoring - a full 100/100. Fortum is featured in the
CDP's Nordic Climate Disclosure Leadership Index (CDLI) for the 6th consecutive
year. This recognition is highly valued by our company, as climate change
mitigation is embedded in Fortum's strategy.
Our emphasis continues to be on customers, sustainability and safety. I have
confidence that 2013 will be a good year for Fortum. We will continue to drive
efficiency in our operations and in that way mitigate external volatile
conditions.”
Efficiency programme 2013-2014
Fortum started an efficiency programme in 2012 in order to maintain and
strengthen its strategic flexibility and competitiveness and to enable the
company to reach its financial targets in the future.
The aim is to improve the company's cash flow by more than approximately EUR 1
billion during 2013-2014 by reducing capital expenditures (capex) by EUR
250-350 million, divesting approximately EUR 500 million of non-core assets,
reducing fixed costs and focusing on working capital efficiency.
Capex in 2013 will be EUR 1.1-1.4 billion and in 2014 EUR 0.9-1.1 billion. At
the end of 2014, the cost run-rate will be approximately EUR 150 million lower
compared to 2012, including growth projects.
If headcount reductions are needed, Fortum seeks to limit redundancies by using
natural rotation and retirement whenever possible. The assessments will
therefore be done at a unit level.
At the end of September 2013, Fortum had divested approximately EUR 200 million
in non-core assets since the start of the efficiency programme.
Restatement related to IFRS changes in pension accounting
Fortum is applying an amended IFRS standard for pensions as of 1 January 2013.
Adoption of the new standard is done retrospectively and comparative
information for 2012 is therefore restated to reflect the change. The change
had only a minor impact on Fortum's financial results and financial position;
however, it reduced the equity by EUR 124 million as of 1 January 2012. The
restated comparative figures for the year 2012 are presented in the attachment
to the first-quarter 2013 interim report.
Financial results
July−September
In the third quarter of 2013, Group sales were EUR 1,148 (1,140) million.
Comparable operating profit totalled EUR 166 (223) million and the reported
operating profit totalled EUR 97 (226) million. Fortum's operating profit for
the period was affected by non-recurring items, an IFRS accounting treatment
(IAS 39) of derivatives mainly used for hedging Fortum's power production and
nuclear fund adjustments amounting to EUR -69 (3) million.
The share of profits from associates in the third quarter was EUR 4 (7)
million. The share of profits from Hafslund and TGC-1 are based on the
companies' published second-quarter interim reports.
Sales by division
EUR million III/13 III/12 I-III/13 I-III/12 2012 LTM
--------------------------------------------------------------------------------
Power 495 506 1,706 1,696 2,415 2,425
--------------------------------------------------------------------------------
Heat 214 205 1,126 1,151 1,628 1,603
--------------------------------------------------------------------------------
Russia 210 203 805 711 1,030 1,124
--------------------------------------------------------------------------------
Distribution* 219 225 791 756 1,070 1,105
--------------------------------------------------------------------------------
Electricity Sales* 133 119 548 501 722 769
--------------------------------------------------------------------------------
Other 16 23 47 96 137 88
--------------------------------------------------------------------------------
Netting of Nord Pool -92 -66 -378 -342 -503 -539
transactions
--------------------------------------------------------------------------------
Eliminations -47 -75 -179 -244 -340 -275
--------------------------------------------------------------------------------
Total 1,148 1,140 4,466 4,325 6,159 6,300
--------------------------------------------------------------------------------
* Part of the Electricity Solutions and Distribution Division
Comparable operating profit by division
EUR million III/13 III/12 I-III/13 I-III/12 2012 LTM
--------------------------------------------------------------------
Power 138 201 651 765 1,146 1,032
--------------------------------------------------------------------
Heat -14 -9 167 177 271 261
--------------------------------------------------------------------
Russia -15 -12 46 40 68 74
--------------------------------------------------------------------
Distribution* 57 57 254 218 320 356
--------------------------------------------------------------------
Electricity Sales* 13 9 41 29 39 51
--------------------------------------------------------------------
Other -13 -23 -45 -68 -92 -69
--------------------------------------------------------------------
Total 166 223 1,114 1,161 1,752 1,705
--------------------------------------------------------------------
* Part of the Electricity Solutions and Distribution Division
Operating profit by division
EUR million III/13 III/12 I-III/13 I-III/12 2012 LTM
--------------------------------------------------------------------
Power 43 205 643 787 1,175 1,031
--------------------------------------------------------------------
Heat -3 -10 180 225 344 299
--------------------------------------------------------------------
Russia -15 -12 46 51 79 74
--------------------------------------------------------------------
Distribution* 75 58 272 227 331 376
--------------------------------------------------------------------
Electricity Sales* 14 11 45 33 39 51
--------------------------------------------------------------------
Other -17 -26 -48 -72 -94 -70
--------------------------------------------------------------------
Total 97 226 1,138 1,251 1,874 1,761
--------------------------------------------------------------------
* Part of the Electricity Solutions and Distribution Division
January−September
In January-September, Group sales were EUR 4,466 (4,325) million. Comparable
operating profit totalled EUR 1,114 (1,161) million and the reported operating
profit totalled EUR 1,138 (1,251) million. Fortum's operating profit for the
period was affected by non-recurring items, an IFRS accounting treatment (IAS
39) of derivatives mainly used for hedging Fortum's power production and
nuclear fund adjustments amounting to EUR 24 (90) million.
The share of profits of associates and joint ventures was EUR 66 (26) million.
The increase comes mainly from TGC-1. The share of profits from Hafslund and
TGC-1 are based on the companies' published fourth-quarter 2012 as well as
first- and second-quarter 2013 interim reports.
The Group's net financial expenses were EUR 234 (234) million. Net financial
expenses were negatively affected by changes in the fair value of financial
instruments of EUR 7 (16) million.
Profit before taxes was EUR 970 (1,043) million.
Taxes for the period totalled EUR 177 (196) million. The tax rate according to
the income statement was 18.3% (18.8%). The tax rate, excluding mainly the
impact of the share of profits of associated companies and joint ventures as
well as non-taxable capital gains, was 20.4% (21.2%).
The profit for the period was EUR 793 (847) million. Fortum's earnings per
share were EUR 0.84 (0.91), of which EUR 0.03 (0.11) per share relates to items
affecting comparability.
Non-controlling (minority) interests amounted to EUR 47 (37) million. These are
mainly attributable to AB Fortum Värme Holding, in which the city of Stockholm
has a 50% economic interest.
Financial position and cash flow
Cash flow
In January-September 2013, total net cash from operating activities increased
by EUR 477 million to EUR 1,460 (983) million, mainly due to a decrease in
working capital EUR 234 million, lower realised foreign exchange losses EUR 187
million and lower amount of paid taxes EUR 94 million. Capital expenditures
decreased by EUR 42 million to EUR 877 (919) million. Proceeds from divestments
totalled EUR 145 (315) million. Cash flow before financing activities, i.e.
dividend distributions and financing, increased by EUR 325 million to EUR 670
(345) million. The strong SEK (Swedish krona) during January-September had a
negative impact on the cash flow through realised net foreign exchange losses
related to the rollover of foreign exchange contract hedging loans to Fortum's
Swedish subsidiaries. Realised foreign exchange gains and losses were EUR -46
(-233) million.
During the reporting period, dividends totalling EUR 888 million were paid on
19 April 2013 using the cash and cash equivalents.
Assets and capital employed
Total assets decreased by EUR 731 million to EUR 23,830 (24,561 at year-end
2012) million. Non-current assets decreased by EUR 227 million from EUR 21,677
million to EUR 21,450 million. The majority, EUR 179 million, was a result of
the decreased value of intangible assets, property, plants and equipment as
well as participations in associates and joint ventures due to the weakening
Russian rouble, Swedish krona and other currencies and a decrease in derivative
financial instruments of EUR 129 million. Other non-current assets increased
with EUR 81 million. The decrease in current assets was EUR 504 million,
totalling EUR 2,380 million. The decrease relates mainly to the decrease in
trade and other receivables, totalling EUR 529 million, which is offset by an
increase of EUR 132 million in liquid funds.
Capital employed was EUR 19,213 (19,420 at year-end 2012) million, a decrease
of EUR 207 million. The decrease was due to the lower amount of total assets,
EUR 731 million, and a EUR 524 million decrease in interest-free liabilities.
Equity
Total equity was EUR 10,221 (10,643 at year-end 2012) million, of which equity
attributable to owners of the parent company totalled EUR 9,601 (10,040)
million and non-controlling interests EUR 620 (603) million.
The decrease in equity attributable to owners of the parent company totalled
EUR 439 million and is mainly due to the payment of dividends totalling EUR 888
million, net profit of EUR 746 million for the period and translation
differences of EUR -321 million.
Financing
Net debt increased during January-September by EUR 83 million to EUR 7,897
(7,814 at year-end 2012) million, mainly as a result of the dividend payment of
EUR 888 million in April.
During January-September Fortum Oyj issued new long term debt in SEK and EUR
amounting to approximately EUR 760 million.
At the end of September 2013, the Group's liquid funds totalled EUR 1,095 (963
at year-end 2012) million. Liquid funds include cash and bank deposits held by
OAO Fortum amounting to EUR 142 (128 at year-end 2012) million. In addition to
the liquid funds, Fortum had access to approximately EUR 2.2 billion of undrawn
committed credit facilities.
The Group's net financial expenses during January-September 2013 were EUR 234
(234) million. Net financial expenses include changes in the fair value of
financial instruments of EUR -7 (-16) million.
Fortum Corporation's long-term credit rating with S&P was A- (negative outlook).
In February, Fortum decided to terminate the rating relationship with Moody's
Investors Service. Moody's had an A2 rating with a negative outlook. As of
April, Fortum and Fitch Ratings entered into an agreement. Fitch will provide a
rating of Fortum Corporation and any subsequently issued securities issued
under Fortum's EMTN programme. Fitch's current long-term issuer default rating
of Fortum Corporation is A- (negative outlook).
Key figures
For the last twelve months, net debt to EBITDA was 3.2 (3.1 at year-end 2012)
and comparable net debt to EBITDA 3.3 (3.2), impacted by EUR 888 million in
dividend payments. Gearing was 77% (73%) and the equity-to-assets ratio 43%
(43%). Equity per share was EUR 10.81 (11.30). For the last twelve months,
return on capital employed was 9.5% (10.2%) and return on shareholders' equity
14.4% (14.6%).
Outlook
Key drivers and risks
Fortum's financial results are exposed to a number of strategic, political,
financial and operational risks. The key factor influencing Fortum's business
performance is the wholesale price of electricity in the Nordic region. The key
drivers behind the wholesale price development in the Nordic region are the
supply-demand balance, fuel and CO2 emissions allowance prices as well as the
hydrological situation. The completion of Fortum's investment programme in
Russia is also one key driver to the company's result growth, due to the
increase in production volumes.
The continued global economic uncertainty and Europe's sovereign-debt crisis
has kept the outlook for economic growth unpredictable. The overall economic
uncertainty impacts commodity and CO2 emission allowance prices, and this could
maintain downward pressure on the Nordic wholesale price for electricity in the
short term. In the Russian business, the key factors are the regulation around
the heat business and further development of electricity and capacity markets.
Operational risks related to the investment projects in the current investment
programme are still valid. In all regions, fuel prices and power plant
availability also impact the profitability. In addition, increased volatility
in exchange rates due to financial turbulence could have both translation and
transaction effects on Fortum's financials, especially through the SEK and RUB.
In the Nordic countries, also the regulatory and fiscal environment for the
energy sector has added risks for utility companies.
Nordic market
Despite macroeconomic uncertainty, electricity will continue to gain a higher
share of the total energy consumption. Fortum currently expects the average
annual growth rate in electricity consumption to be 0.5%, while the growth rate
for the nearest years will largely be determined by macroeconomic development
in Europe and especially in the Nordic countries.
During the third quarter of 2013, the prices of coal, oil and CO2 improved, as
did the forward prices of electricity for the upcoming twelve months both in
the Nordic area and in Germany.
In mid-October 2013, the future quotation for coal (ICE Rotterdam) for the rest
of 2013 was around USD 83 per tonne, and the price for CO2 for year 2013 about
EUR 5 per tonne.
In mid-October 2013, the electricity forward price in Nord Pool for the rest of
2013 was around EUR 40 per MWh. For 2014, the price was around EUR 38 per MWh
and for 2015 around EUR 36 per MWh. In Germany, the electricity forward price
for the rest of 2013 was around EUR 40 per MWh and for 2014 EUR 38 per MWh.
In mid-October 2013, Nordic water reservoirs were about 12 TWh below the
long-term average and 19 TWh below the corresponding level of 2012.
Power
The Power Division's Nordic power price typically depends on such factors as
hedge ratios, hedge prices, spot prices, availability and utilisation of
Fortum's flexible production portfolio, and currency fluctuations. Excluding
the potential effects from the changes in the power generation mix, a 1 EUR/MWh
change in the Power Division's Nordic power sales (achieved) price will result
in an approximately EUR 45 million change in Fortum's annual comparable
operating profit. In addition, the comparable operating profit of the Power
Division will be affected by the possible thermal power generation volumes and
its profits.
The on-going Swedish nuclear investment programmes, lasting for several years,
will enhance safety, improve availability and increase the capacity of the
current nuclear fleet. The implementation of the investment programmes could,
however, affect availability. Fortum's power procurement costs from co-owned
nuclear companies are affected by these investment programmes through increased
depreciation and finance costs of associated companies.
Russia
The generation capacity built after 2007 under the Russian Government's
Capacity Supply Agreements (CSA - “new capacity”) receives guaranteed capacity
payments for a period of 10 years. Prices for capacity under CSA are defined in
order to ensure a sufficient return on investments.
Capacity not under CSA competes in the competitive capacity selection (CCS -
“old capacity”). The capacity selection for 2014 was held in September 2013. In
the selection auction, the majority of Fortum's power plants were selected,
with a capacity price level higher than the level received in 2013. The volume
of Fortum's installed capacity not selected in the auction totalled 132 MW,
which is 4.6% of Fortum's total installed capacity. All Fortum's capacity was
allowed to participate in the selection for year 2014.
The Russia Division's new capacity will be a key driver for earnings growth in
Russia as it will bring income from new volumes sold and also receive
considerably higher capacity payments than the old capacity. However, the
received capacity payment will differ depending on the age, location, size and
type of the plants as well as seasonality and availability. The return on the
new capacity is guaranteed as regulated in the CSA. The regulator will review
the earnings from the electricity-only market three years and six years after
the commissioning of a unit and could revise the CSA payments accordingly. CSA
payments can vary somewhat annually because they are linked to Russian
Government long-term bonds with 8 to 10 years maturity.
Fortum estimates that the commissioning of the Nyagan unit 2 will take place at
the end of 2013 and that Nyagan 3 will be finalised at the end of 2014 at the
latest. This will optimise the investment with regard to both capital and
operational expenditures, received electricity sales and capacity payments. The
capacity payments for Nyagan unit 3 will start as of 1 January 2015, one year
earlier than originally planned in 2008. In accordance with the CSA terms, no
penalties for unit 3 can start to run before 1 January 2016.
The last two units of Fortum's Russian investment programme under construction
are being built in Chelyabinsk instead of Tyumen, as originally planned. The
units constructed at the Chelyabinsk GRES power plant, originally planned to be
commissioned by the end of 2014, have been slightly delayed and are scheduled
to be finalised during the first half of 2015 mainly due to extensive
groundwork at the brownfield site. The delay will not cause any penalties. In
addition, Fortum plans to modernise and upgrade the existing equipment of the
power plant.
The value of the remaining part of the investment programme, calculated at the
exchange rates prevailing at the end of September 2013, is estimated to be
approximately EUR 440 million, as of October 2013.
After completing the on-going investment programme by mid 2015, Fortum's goal
is to achieve an operating profit level (EBIT) of about EUR 500 million
run-rate in its Russia Division during 2015 and to create positive economic
added value in Russia. The Russian government earlier target to increase gas
prices by 15% annually to reach netback price parity with European prices by
2018 has recently been changed. The forecast by the Russian Ministry of
Economic Development now suggests much lower annual increases. The Russia
Division's profits are impacted by possible changes in gas prices, currency
exchange rates and other regulations. The suggested gas price development and
the weaker Russian rouble make the about EUR 500 million operating profit level
(EBIT) goal more challenging for the Division, but the company is making every
effort to mitigate the negative impacts.
A commission for heat business development has been set up by the Russian
Government. The top priorities will be issues regarding heat regulation,
centralised district heating and co-generation efficiency.
Since the beginning of 2013, wholesale gas prices (except for private household
and industrial consumers) have been reviewed quarterly. In February 2013, the
Board of Russia's Federal Tariff Service (FTS) adopted a decision according to
which the wholesale gas price for industrial consumers decreased by 3% as of
the second quarter 2013, compared to first quarter. As of 1 July 2013, the
Russian Government increased gas prices by 15% compared to June 2013, and in
October 2013 they were further increased by 1.9% in order to reach the planned
total increase of approximately 15% in 2013 compared to 2012. According to a
forecast made by the Russian Ministry of Economic Development, Russian gas
price indexation will not take place as of July 2014. However, year-on-year gas
price growth is estimated to be 7.6% in 2014.
Capital expenditure and divestments
Fortum currently expects its capital expenditure in 2013 to be EUR 1.1-1.4
billion and in 2014 EUR 0.9-1.1 billion, excluding potential acquisitions. The
annual maintenance capital expenditure is estimated to be about EUR 500-550
million in 2013, somewhat below the level of depreciation.
Taxation
The effective corporate tax rate for Fortum in 2013 is estimated to be 19-21%,
excluding the impact of the share of profits of associated companies and joint
ventures, non-taxable capital gains and non-recurring items. In Finland, a plan
to reduce the corporate tax rate from 24.5% to 20% as of 1 January 2014 has
been presented. The decrease would cause a one-time positive effect that would
be booked in the fourth quarter 2013. In Sweden, the corporate tax rate was
decreased from 26.3% to 22% as of 1 January 2013.
The process to update the real estate taxation values, in Sweden, for the year
2013 was finalised in the third quarter 2013. The update is done on a six-year
cycle and Fortum estimates that its costs would increase by approximately EUR
45 million in 2013 compared to 2012. At the end of April, Fortum filed a
complaint with the EU Commission on the Swedish hydro tax to find out whether
the structure of the tax is in line with the EU tax and state aid regulations.
The EU Commission informed Fortum in June that it will investigate the case in
more detail.
In March 2013, the Finnish Government announced that the planned power plant
tax (so-called windfall tax), to be introduced in 2014, will be cut to a total
of EUR 50 million from EUR 170 million. The Government submitted the respective
Government Bill to the Parliament on 26 September. If implemented, the
estimated impact on Fortum would be approximately EUR 25 million annually. The
proposal is currently under EU Commission scrutiny.
Hedging
At the end of September 2013, approximately 85% of the Power Division's
estimated Nordic power sales volume was hedged at approximately EUR 44 per MWh
for the rest of the calendar year 2013. The corresponding figures for the
calendar year 2014 were about 65% at approximately EUR 42 per MWh. The
corresponding figures for the calendar year 2015 were about 20% at
approximately EUR 41 per MWh.
The hedge price for the Power Division's Nordic generation excludes hedging of
the condensing power margin. In addition, the hedge ratio excludes the
financial hedges and physical volume of Fortum's coal-condensing generation as
well as the division's imports from Russia.
The reported hedge ratios may vary significantly, depending on Fortum's actions
on the electricity derivatives markets. Hedges are mainly financial contracts,
most of them Nord Pool forwards.
Espoo, 22 October 2013
Fortum Corporation
Board of Directors
Further information:
Markus Rauramo, CFO, tel. +358 10 452 1909
Fortum's Investor Relations, Sophie Jolly, tel. +358 10 453 2552, Rauno
Tiihonen, tel. +358 10 453 6150, Janna Haahtela, tel. +358 10 453 2538 and
investors@fortum.com
The condensed interim financial statements have been prepared in accordance
with International Accounting Standard (IAS) 34, Interim Financial Reporting,
as adopted by the EU. The interim financials have not been audited.
Publication of financial results in 2014:
-- Financial statements bulletin for the year 2013 will be published on 4
February 2014 at approximately 9.00 EET
-- Interim Report January-March on 29 April 2014 at approximately 9.00 EEST
-- Interim Report January-June on 18 July 2014 at approximately 9.00 EEST
-- Interim Report January-September on 23 October 2014 at approximately 9.00
EEST
Fortum's Financial statements and Operating and financial review for 2013 will
be published in week 12 at the latest.
Fortum's Annual General Meeting is planned to take place on 8 April 2014 and
the possible dividend-related dates planned for 2014 are:
-- Ex-dividend date 9 April 2014
-- Record date for dividend payment 11 April 2014
-- Dividend payment date 22 April 2014
Distribution:
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Key media
www.fortum.com
More information, including detailed quarterly information, is available on
Fortum's website at www.fortum.com/investors.
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