Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
  1. Homepage
  2. Equities
  3. Finland
  4. Nasdaq Helsinki
  5. Fortum Oyj
  6. News
  7. Summary
    FORTUM   FI0009007132


SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Fortum's gain from booming power price capped by hedging

11/12/2021 | 02:28am EST
FILE PHOTO: Finnish energy company Fortum sign is seen at their headquarters in Espoo

* Underlying operating profit jumps

* Hedging levels limit profit

HELSINKI, Nov 12 (Reuters) - Finnish energy company Fortum on Friday posted a bigger-than-expected rise in underlying third-quarter operating profit, but extensive hedging limited the windfall from rising energy prices.

Fortum's comparable operating profit rose to 260 million euros ($298 million) from a loss of 179 million a year ago, beating the 203 million expected by analysts in a company-provided poll.

Nordic power prices are highly volatile and the high level of hedging applied by the company's key Generation business, which sells a large portion of its electricity output on forward contracts, acted as a constraint on profits.

While spot prices surged, Generation's achieved third-quarter power price rose only 18%, offset by the hedging designed to lock in predictable revenues for the months ahead.

"The increased gas prices reflect a tight supply-demand balance for the winter, but forward prices indicate gradually normalizing conditions thereafter," Chief Executive Markus Rauramo said in a statement.

For the remainder of the year, the Generation unit has sold around 75% of its output at 34 euros per megawatt hour, only around half the current market level of Nordic front-quarter baseload power.

For 2022, Generation increased its hedging level to 65% from 60% previously, with the price of its contracts averaging 32 euros per megawatt hour, while Nordic front-year power contracts currently trade at close to 40 euros.

"The outlook is slightly weaker in terms of hedging, I would have expected Generation's hedge prices to be raised a bit more," Inderes analyst Juha Kinnunen said, adding that he sees the market remaining favorable for Fortum in the last three months of the year.

Fortum's German subsidiary Uniper a week ago swung to a comparable third-quarter operating profit of 9 million euros from a loss of 310 million last year. The result was hit though by 6.1 billion euros in negative fair value changes in non-hedge derivatives.

Majority owned by the Finnish government, Fortum last December announced a new strategy, saying it aims to divest its retail businesses and become carbon neutral by 2050.

The deadline prompted several environmental organizations to urge the Finnish government to push for a faster exit from coal.

In April 2020, the world's largest asset manager Blackrock which owns 0.97% of Fortum voted against the discharge of the board because of the acquisition of coal-heavy Uniper.

During the third-quarter Fortum completed divesting its Baltic district heating business and a 50% stake at Stockholm Exergi.

Fortum's shares fell 2.8% to 25.62 euros by 1050 GMT. ($1 = 0.8739 euros) (Reporting by Essi Lehto and Boleslaw Lasocki, editing by Terje Solsvik, Elaine Hardcastle)

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
FORTUM OYJ 0.58% 24.37 Delayed Quote.-10.15%
UNIPER SE 2.66% 40.94 Delayed Quote.-4.74%
All news about FORTUM OYJ
03:26aElectricity production at Finland's long-delayed OL3 reactor pushed back
01/26FORTUM OYJ : Sasu Valkamo appointed Vice President of Fortum's Loviisa nuclear power plant..
01/26Proposals by Shareholders' Nomination Board of Fortum to the 2022 Annual General Meetin..
01/23S&P Keeps Uniper's Stable Outlook Amid High Commodity Costs, Volatile Market
01/23S&P Maintains Fortum's Ratings On Expected Steady Credit Metrics
01/20FORTUM OYJ : best Finnish listed company in European gender equality study ranking 22nd .
01/19Fortum Teams Up With Fjernvarme Fyn To Study CO2 Capture
01/19FORTUM OYJ : and Danish Fjernvarme Fyn launch feasibility study on CO₂ capture for r..
01/19Uniper CEO eyes slice of German gas plant pie
01/18FORTUM OYJ : and Telia agree on new data center connection to the electricity market .
More news
Analyst Recommendations on FORTUM OYJ
More recommendations
Sales 2021 71 243 M 79 508 M 79 508 M
Net income 2021 2 310 M 2 578 M 2 578 M
Net Debt 2021 5 188 M 5 790 M 5 790 M
P/E ratio 2021 8,62x
Yield 2021 4,70%
Capitalization 21 541 M 24 305 M 24 040 M
EV / Sales 2021 0,38x
EV / Sales 2022 0,37x
Nbr of Employees 19 452
Free-Float -
Duration : Period :
Fortum Oyj Technical Analysis Chart | FORTUM | FI0009007132 | MarketScreener
Technical analysis trends FORTUM OYJ
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 18
Last Close Price 24,25 €
Average target price 26,56 €
Spread / Average Target 9,55%
EPS Revisions
Managers and Directors
Markus Heikki Erdem Rauramo President & Chief Executive Officer
Bernhard GŘnther Chief Financial Officer
Veli-Matti Reinikkala Chairman
Anja McAlister Deputy Chairman
Essimari Kairisto Independent Director
Sector and Competitors
1st jan.Capi. (M$)
FORTUM OYJ-10.15%24 305
NEXTERA ENERGY-22.19%142 530
ENEL S.P.A.-4.70%76 990
IBERDROLA, S.A.-3.94%69 675