Fortum beats expectations, shares climb
Investing.com -- Fortum (HE:FORTUM) shares were up on Thursday after it posted its earnings report for the first half of 2024, surpassing market expectations.
At 5:05 am (0905 GMT), Fortum was trading 2.3% higher at €14.61.
In the first half of 2024, the Finnish utility company reported EBIT of €763 million, which was 5% above consensus estimates and 6% higher than UBS Global Research's forecast.
This was further reflected in the earnings per share (EPS), which exceeded UBS's estimates by 6% and consensus by 8%.
The Generation segment, which traditionally constitutes a significant portion of Fortum’s earnings, reported EBIT of €777 million. Although this represents a 24% decrease from the previous year, it is crucial that the decline was driven by a lower achieved power price of €49/MWh compared to €72/MWh in H1 2023.
Despite this decrease, the segment benefited from a 7% increase in volumes, bolstered by contributions from the Pjelax wind farm and higher hydro volumes.
In contrast, the Customer Solutions segment showed remarkable improvement, with EBIT climbing to €54 million from €16 million in the same period last year. This notable increase was attributed to better electricity sales margins and the end of the regulated electricity price cap in Poland.
While Fortum does not provide specific earnings guidance, the company has updated its hedging positions. For the remainder of 2024, Fortum is hedged 75% at €43/MWh, up from 70% at the end of Q1 2024, aligning with the five-year average.
For 2025, the company is hedged 60% at €42/MWh, compared to a prior 50% hedging level, which is consistent with historical averages. Additionally, Fortum disclosed an increase in property tax in Sweden by €25 million starting from 2025, a change that will remain until 2030.
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