Interim Report January-March 2024

Fortum Corporation

30 April 2024

Markus Rauramo

President and CEO

Quarterly highlights Q1 2024

  • Solid performance, good results and strong financial position
  • Strong optimisation premium
  • Credit rating upgrade by S&P to BBB+
  • Arbitration proceedings against the Russian Federation
  • SBTi due diligence process

Deliver reliable clean

energy

Pjelax wind farm

operational

Espoo CHP coal exit and

electric boilers

Transform and

develop

Efficiency

improvement

programme

Drive

decarbonisation of

industries

Development of industrial sites

3

Q1 2024

Operating profit

The Generation segment result declined, while Consumer Solutions and Other Operations segments improved.

Cash flow

Cash flow improved from last year supported by decreased working capital.

Leverage

Despite lower EBITDA, leverage improved due to lower financial net debt.

Solid financial performance and good results despite lower power prices in Nordics

Key financial indicators for continuing operations

Comp. OP

Comp. EPS

OCF

Leverage

0.54

0.48

474

538

2-2.5x

698

530

0.3x

Q1 2023

Q1 2024

Q1 2023

Q1 2024

Q1 2023

Q1 2024

Maximum

LTM

level

4

After a cold start of the year, Nordic power prices eased off

Source: NordPool, BloombergNEF

Daily market prices 25 April 2024; 2024 and 2025 future quotations

Volatile weather drove Nordic power in Q1

  • Nordic spot prices overall developed sideways during Q1, whereas the futures market softened with a mild ending of the winter period.
  • Power prices were elevated by very cold weather in January, with Finnish and Estonian areas peaking at 890 EUR/MWh as a daily price. Market conditions normalised quickly as a shift in the weather regime took place.
  • European gas prices continued to decline in Q1 on low demand, stable supply and record high storage levels. However, resurfacing security of supply concerns in both gas and coal slowed down the price decline in the latter part of Q1.

5

Tiina Tuomela

CFO

Lower result but stronger cash flow

MEUR, continuing operations

I/2024

I/2023

LTM

2023

Sales

2,015

2,265

6,461

6,711

Comparable EBITDA

622

781

1,744

1,903

Comparable operating profit

530

698

1,376

1,544

Comparable net profit

430

483

1,097

1,150

Comparable EPS

0.48

0.54

1.22

1.28

1,774

1,710

Net cash from operating activities

538

474

0.3

0.5

Financial net debt / Comp. EBITDA

Lower power prices reflected in the result (LTM)

  • Comparable operating profit at EUR 1,376 m
  • Comparable EPS at EUR 1.22
  • Excellent credit metrics with Financial net debt-to-Comparable EBITDA ratio at 0.3 times
  • Net cash from operating activities slightly improved to EUR 1,774 m

7

Q1/2024

Generation

Lower earnings down mainly due to lower spot and hedge power prices, somewhat offset by higher hydro generation and higher optimisation premium. Achieved power price of 63.9 €/MWh.

Consumer Solutions

Higher earnings mainly due to higher electricity sales margins

Other Operations

Improved earnings due to efficiency improvement measures, partly offset by lower results in Circular Solutions

Group results mainly impacted by lower achieved power price

Comparable operating profit

(EUR million)

€m

Q1/2024

Q1/2023

Generation

513

723

Consumer Solutions

42

6

Other Operations

-25

-31

Total

530

698

Balanced maturity profile and strong liquidity position

942

Financial net debt

538

0

44

34

528

114

Financial net

CF from

Investments

Dividends

Change in

FX and other

Financial net

debt 31 Dec

operating

paid

paid

interest-bearing

debt 31 Mar

2023

activities

receivables

2024

1 500

Loan maturities as per 31 March 2024

Bonds

Loans from financial institutions*

Other long-term loans

Commercial papers

1 000

Collateral liabilities

Other short-term loans

500

0

9

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034+

Solid credit metrics

'BBB+' long-term issuer credit rating, Stable outlook

'BBB' long-term issuer credit rating, Stable outlook

Fortum's objective:

Maintain solid investment grade rating of at least BBB to maintain financial strength, preserve financial flexibility and good access to capital.

As per 31 March 2024:

Total loans of € 5.7 bn excl. lease

  • Average interest rate for Fortum Group loan portfolio incl. derivatives hedging financial net at 4.4%
  • Liquidity reserves of € 8.2 bn
  • Liquid funds of € 4.9 bn with average interest rate of 3.9%
  • Undrawn credit facilities of € 3.3 billion

*Bilateral loan, EUR 500 million, maturing in 2025 includes 1 year extension option by Fortum.

Outlook

Generation's Nordic outright (47 TWh/a):

Hedges

  • For the rest of 2024: 70% hedged at 43 €/MWh
    (previously reported: N/A)
  • For 2025: 50% hedged at 42 €/MWh
    (previously reported: 40% at 43 €/MWh)

Optimisation premium

  • Annual 6-8 €/MWh depending on market conditions

Tax guidance for 2024-2026:

Comparable effective income tax rate estimated to be 18-20%

Capital expenditure guidance:

2024: Capital expenditure, including maintenance capex, (excluding potential acquisitions) expected to be ~€ 550 million

Annual maintenance capital expenditure expected to be ~€ 300 million

2024-2026: Total capital expenditure can be up to € 1,700 million

Fixed cost reduction:

Fortum targets to gradually reduce its annual fixed costs by € 100 million until end of 2025 with full run rate from the beginning of 2026

Fortum expects to reduce its fixed cost base by more than EUR 50 million by the end of 2024

10

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Fortum Oyj published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 06:23:11 UTC.