In This Article:
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Comparable Operating Profit (Q3): EUR158 million.
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Comparable Operating Profit (First 9 Months): EUR921 million.
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Comparable EPS (Last 12 Months): EUR1.17, down from EUR1.28 in 2023.
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Operating Cash Flow (First 9 Months): EUR1.2 billion.
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Operating Cash Flow (Q3): EUR349 million.
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Leverage (Financial Net Debt to Comparable EBITDA): 0.4 times.
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Financial Net Debt (End of Q3): EUR655 million.
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Gross Debt: EUR5.3 billion.
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Liquidity Reserve: EUR7.6 billion.
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Capital Expenditures (2024): Expected to be EUR550 million.
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Maintenance CapEx (2024): EUR300 million.
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Hedge Price (Remainder of 2024): EUR44 per megawatt hour, 80% hedged.
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Hedge Price (2025): EUR42 per megawatt hour, 65% hedged.
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Hedge Price (2026): EUR41 per megawatt hour, 40% hedged.
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Corporate Tax Rate Guidance: 18% to 20%.
Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Fortum Oyj (FOJCF) achieved resilient results despite lower spot prices, thanks to successful hedging and a versatile CO2-free generation fleet.
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The company is progressing well with the lifetime extension of the Loviisa nuclear power plant, securing reliable Western alternative fuel supply.
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Fortum Oyj (FOJCF) is committed to exiting coal by 2027, with a significant investment in biomass technology at the CzAstochowa plant in Poland.
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The company is actively developing industrial sites in Finland for data centers and sustainable aviation fuel projects, indicating strong future growth potential.
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Fortum Oyj (FOJCF) has a strong financial position with a low leverage ratio of 0.4 times, providing flexibility for future investments or shareholder returns.
Negative Points
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The generation segment's results were negatively impacted by lower spot and hedge prices, leading to a decline in comparable operating profit.
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Finnish and Swedish industrial power demand is still lagging, with delays in industrial investments, particularly in green transition projects.
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The company faces challenges with lower demand for environmental values, impacting the optimization premium.
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Fortum Oyj (FOJCF) is involved in legal proceedings against its former Russian subsidiary, which could take years to resolve.
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The company has not signed any new long-term power purchase agreements (PPAs) in the third quarter, indicating potential challenges in securing future contracts.
Q & A Highlights
Q: Can you comment on the small modular reactor (SMR) opportunities that Fortum currently sees, including the timeline, CapEx, and potential EPS impact? A: Markus Rauramo, CEO: SMRs are part of our nuclear feasibility study, alongside large conventional nuclear plants. The first commercially available SMR could be the Hitachi 300-megawatt plant in Ontario, expected by 2028-2029. We need to see an operating reference plant before making investment decisions. Currently, production costs are higher than Nordic forward prices, and we are discussing regulatory and market design models with governments. We cannot yet comment on EPS impact.