Fortum disappoints markets due to low power price

Fortum has not been awarded after its sale of its swedish distribtutions assets. Its divestment is now over and its book value stands at 16,76. Above today price at 16.

The market is disappointed with both the report and the outlook. We remain calm,

 

FORTUM CORPORATION INTERIM REPORT JANUARY-JUNE 2015 17 JULY 2015 at 9:00 EET

 

April−June 2015, continuing operations

  • Comparable operating profit EUR 143 (210) million, -32%
  • Operating profit EUR 144 (233) million, of which EUR 1 (23) million relates to items affecting comparability and sales gains
  • Earnings per share EUR 0.13 (0.22), -41%, of which EUR 0.00 (0.03) per share relates to items affecting comparability and sales gains. EPS for total Fortum including the effect from discontinued operations, is EUR 4.98 (0.28)
  • Cash flow from operating activities totalled EUR 229 (394) million, -42%
  • Fortum’s Distribution divestment finalised

January−June 2015, continuing operations

  • Comparable operating profit EUR 486 (568) million, -14%
  • Operating profit EUR 494 (599) million, of which EUR 8 (30) million relates to items affecting comparability and sales gains
  • Earnings per share EUR 0.46 (0.57), -19%, of which EUR 0.01 (0.04) per share relates to items affecting comparability and EPS for total Fortum, including the effect from discontinued operations, is EUR 5.38 (2.81)
  • Cash flow from operating activities totalled EUR 745 (799) million, -7%
  • Distribution business treated as discontinued operations from Q1/2015, consistent with IFRS 5
  • Pekka Lundmark appointed Fortum’s President and CEO as of the beginning of September 2015

Summary of outlook

  • Fortum continues to expect the annual electricity demand to grow in the Nordic countries by approximately 0.5% on average in the coming years
  • Power and Technology segment’s Nordic generation hedges: for the rest of 2015, approximately 45% hedged at EUR 41 per MWh; and for 2016, approximately 25% hedged at EUR 35 per MWh
  • The run-rate operating profit level (EBIT) for the Russia segment, RUB 18.2 billion, is targeted to be reached during 2015. The euro-denominated result level will be volatile, due to the translation effect