Fortum Corporation - Interim Report January - September 2005

Fortum Corporation        STOCK EXCHANGE RELEASE    20 October 2005 at 9.00 am

Fortum Corporation
Interim Report January - September 2005


Strong performance continues
 - Good results and cash flow in the third quarter

January-September in brief

- Profit before taxes from continuing operations 801 (674) million, up by 19%
- Comparable operating profit* 874 (799) million, up by 9%
- Earnings per share from continuing operations EUR 0.65 (0.58), up by 12%
- Strong net cash from operating activities in continuing operations of EUR 331
(233) million in the third quarter, net debt decreased to EUR 3,333 million.
- Solid third quarter performance with clearly higher operating profit and
earnings per share.

Items related to the oil businesses (separated from Fortum in April 2005) are
reported on a separate line as discontinued operations in the income statement
and are not included in net sales or in operating profit. The discontinued
operations impact only the first two quarters of 2005 and historical figures.
All figures are reported according to IFRS.

Key figures                     III/05 III/04  I-III/05 I-III/04    2004  Last 12
Income statement and cash flow                                             months
for continuing operations                                                   (LTM)
Net sales, EUR million             774    765     2,765    2,751   3,835    3,849
Operating profit, EUR million      240    177       873      832   1,195    1,236
Comparable operating profit,       220    191       874      799   1,148    1,223
EUR million*)
Profit before taxes, EUR           230    136       801      674     962    1,089
million
Earnings per share, continuing    0.20   0.13      0.65     0.58    0.79     0.86
operations, EUR                              
Total earnings per share, EUR     0.20   0.29      1.19     1.09    1.48     1.58
**)
Total net cash from operating      331    256       980    1,303   1,758          
activities, EUR million
Net cash from operating            331    233       847      989   1,232          
activities, continuing
operations, EUR million
Average number of shares, 000s                  872,438  849,823 852,625  868,515

*) Comparable operating profit represents the underlying business performance by
excluding items affecting comparability. These are mainly caused by the
accounting effects from fair valuation of financial derivatives for future cash
flows where hedge accounting is not applied (IAS 39) or non-recurring items.

Comparable           III/05 III/04  I-III/05  I-III/04   2004   Last 12
operating profit                                                 months
EUR million                                                       (LTM)
Comparable              220    191       874       799  1,148     1,223
operating profit
Non-recurring items       2     -4        20       -11     18        49
Other items              18    -10       -21        44     29       -36
effecting
comparability
Operating profit        240    177       873       832  1,195     1,236
See accounting principles for definitions and segment information for further
details.

**) Total earnings per share in II/04 included a EUR 0.05 positive one-time
effect from a change in the Finnish tax rate from 29% to 26%.

Key figures                          I-III/05   I-III/04     2004    Last 12
Balance sheet                                                         months
                                                                       (LTM)
Shareholders’ equity per share, EUR      7.86       8.19     8.62           
Interest-bearing net debt               3,333      5,445    5,095           
(at end of period), EUR million
Return on capital employed, %            15.3       15.0     15.8       17.2
Return on shareholders’ equity, %        17.6       18.4     18.2       20.1
Gearing, %                                 47         77       67           

During the first nine months of the year, Fortum's comparable operating and
reported operating profit improved from the previous year. The comparable
operating profit was EUR 75 million higher than a year ago, EUR 874 (799)
million. Also the reported operating profit was higher at EUR 873 (832) million.

Items that affect comparability in the operating profit are mainly caused by the
accounting effects from fair valuation of financial derivatives for hedging
future cash-flows where hedge accounting is not applied (IAS 39) and by non-
recurring items. Fortum applies hedge accounting for the major part of future
cash-flow hedges, but some volatility will always affect the income statement.

The slight weakening in electricity forward prices and the weakening in EUR/SEK
and EUR/NOK exchange rates have caused positive effects stemming from the fair
value changes on reported operating profit in the third quarter.


Net sales and results

July - September

Group net sales stood at EUR 774 (765) million.

Group operating profit totalled EUR 240 (177) million. Comparable operating
profit stood at EUR 220 (191) million.

During the third quarter, the average spot price for power in Nord Pool was EUR
29.7 (29.9), or 1% lower than during the corresponding period in 2004.

The comparable operating profit of the Power generation segment was higher than
last year, mainly due to Fortum's higher achieved Nordic Generation power price,
which increased 6% to EUR 29.9 (28.2) per megawatt-hour, mainly thanks to
favourable hedging. The impact of lower thermal production volume was more than
offset by higher hydro and nuclear generation volumes. The reported operating
profit of the Power Generation segment was clearly higher than a year ago, as
items affecting comparability (mainly due to IAS 39) were positive.

The comparable operating profit of the Heat segment was slightly better than
last year. This was mainly due to good results in Fortum Värme. Värme's fuel mix
has improved from last year as the share of bio fuels and waste has increased.
However, higher prices for fuels like oil and coal had a negative effect on the
Heat segment's results.

The Distribution segment's comparable operating profit decreased slightly from
last year. This was mainly due to higher depreciation charges.
Markets' operating profit was slightly lower compared to last year. This was
mainly due to slightly lower sales and somewhat higher costs stemming from
actions to improve customer service quality.

Net sales from continuing operations, by segment
EUR million                      III/05     III/04   I-III/05    I-III/04
Power Generation                    450        453      1,460       1,501
Heat                                147        149        738         709
Distribution                        149        150        511         513
Markets                             284        287        974        1009
Other                                26         22         71          67
Eliminations                       -282       -296       -989      -1,048
Total                               774        765      2,765       2,751

Comparable operating profit from continuing operations, by segment
EUR million                      III/05     III/04   I-III/05    I-III/04
Power Generation                    161        135        557         498
Heat                                 12          7        156         132
Distribution                         47         51        168         183
Markets                               7         10         22          24
Other                                -7        -12        -29         -38
Total                               220        191        874         799

Operating profit from continuing operations, by segment
EUR million                      III/05     III/04   I-III/05    I-III/04
Power Generation                    181        128        529         522
Heat                                 13         12        175         143
Distribution                         48         45        175         183
Markets                               7         13         21          34
Other                                -9        -21        -27         -50
Total                               240        177        873         832


January - September

Group net sales from continuing operations stood at EUR 2,765 (2,751) million.
Group operating profit from continuing operations totalled EUR 873 (832)
million. Comparable operating profit stood at EUR 874 (799) million.

In January-September, the average Nord Pool spot price was EUR 28.3 (29.4) per
megawatt-hour, or 4% lower than during the corresponding period in 2004.

The comparable operating profit of the Power Generation segment was higher,
mainly due to Fortum's 6% higher achieved Nordic Generation power price of EUR
30.5 (28.8) per megawatt-hour and higher amount of nuclear and hydropower
generation. Also the reported operating profit of the Power Generation segment
was higher than last year, the difference in reported and comparable operating
profit being mainly due to the accounting effects from IAS 39.

The Heat segment's net sales were higher than last year, mainly due to the
acquisitions in Poland and Lithuania. The Heat segment's power sales volume was
lower than last year. The segment's comparable operating profit was higher,
mainly due to the relatively strong second quarter of the year.

The Distribution segment's net sales were at the same level as last year. The
segment's operating profit was lower than last year, mainly due to the EUR 11
million in costs from the January storms in Sweden and Norway, which were booked
in the first-quarter earnings.

Market's net sales were lower mainly due to the termination of some large
contracts at the end of 2004. At the same time Markets has been able to retain
its sales margin level mainly due to successful procurement of electricity from
Nord Pool. The first nine months operating profit is affected by the somewhat
higher fixed cost base stemming from customer service quality improvement
actions.

Profit before taxes from continuing operations was EUR 801 (674) million.

The Group's net financial expenses from continuing operations amounted to EUR
100 (167) million. Net financial expenses include a positive EUR 27 (12) million
change in the fair value of certain derivatives that do not qualify for hedge
accounting under IFRS (IAS 39).

The share of profit of associates and joint ventures from continuing operations
was EUR 28 (9) million. This is mainly explained by Hafslund's results in the
first half of the year.

Minority interests accounted for EUR 31 (19) million. The minority interests are
mainly attributable to Fortum Värme Holding, in which the City of Stockholm has
a 50% economic interest.

Taxes for the period totalled EUR 206 (163) million. The tax rate according to
the income statement was 25.7 % (24.2%). In 2004, taxes for the period included
a decrease in deferred tax liabilities of EUR 43 million of which EUR 27 million
relates to continuing operations due to the change in the Finnish income tax
rate from 29% to 26%.

Total net profit for the period was EUR 1,069 (943) million. The net profit from
continuing operations was EUR 595 (511) million. Total Fortum earnings per share
were EUR 1.19 (1.09), and earnings per share from continuing operations were EUR
0.65 (0.58). Total earnings per share last year included a positive effect of
EUR 0.05 from the corporate tax rate change in Finland. Return on capital
employed was 15.3% (15.0%) and return on shareholders' equity was 17.6% (18.4%).


Market conditions

According to preliminary statistics, the Nordic countries consumed 82 (80) TWh
of electricity during the third quarter of the year, which was 3% more than
during the corresponding period of the previous year.

During the third quarter, the average spot price for power in Nord Pool, the
Nordic power exchange, was EUR 29.7 (29.9) per megawatt-hour, or 1% lower than
in the corresponding period in 2004 and 1% higher than in the previous quarter.
During the third quarter, the average market price for CO2 emissions was higher
than during the previous quarter and the hydrological situation changed from a
deficit to a surplus. Power prices in the forward market had an increasing trend
during the first six months of the year and in the beginning of July because of
the increasing trend in the CO2 prices. During the rest of the third quarter,
the forward prices have stayed below the highest levels in July due to
decreasing CO2 prices and a strengthening hydrological situation. In January -
September, the average spot price was EUR 28.3 (29.4) per megawatt-hour, or 4%
lower than during the corresponding period in 2004.

The market price for CO2 emissions allowances increased from around EUR 7 per
tonne at the beginning of the year to nearly EUR 30 per tonne by mid-July. Since
mid-July, the price has been at a rather stable level of EUR 21-24 per tonne.
The emergence of the CO2 emissions allowances market and a strengthening
hydrological situation have decreased thermal power generation and increased
hydro power generation in the Nordic countries compared to the last year.

In Continental Europe the spot price for power has been higher than in Nord
Pool, resulting in exports from the Nordic countries to Germany. Despite the
high Nordic hydro production, the Nordic water reservoirs have recovered during
the first nine months of the year. At the beginning of October, the Nordic water
reservoirs were 6 TWh above the average and 13 TWh above the corresponding level
in 2004.

Fortum's power generation in the Nordic countries during January-September was
37.1 (38.8) TWh, 13% (14%) of Nordic electricity consumption.

Fortum's total power and heat generation figures are presented below. In
addition, the segment reviews include the respective figures by segment.

Fortum's total power and     III/05   III/04  I-III/05 I-III/04    2004    LTM
heat generation, TWh
Power generation               11.2     11.5      38.0     39.5    55.5   54.0
Heat generation                 3.3      3.4      17.5     17.4    25.4   25.5


Fortum's own power           III/05   III/04  I-III/05 I-III/04    2004    LTM
generation by source, TWh,
total in the Nordic
countries
Hydropower                      4.6      4.4      15.4     13.0    19.1   21.6
Nuclear power                   5.9      5.2      18.8     18.7    25.8   25.9
Thermal power                   0.4      1.8       2.9      7.1     9.5    5.3
Total                          10.9     11.4      37.1     38.8    54.4   52.8


Fortum's own power           III/05   III/04  I-III/05 I-III/04    2004    LTM
generation by source, %,
total in the Nordic
countries
Hydropower                       42       38        41       34      35     43
Nuclear power                    54       46        51       48      47     50
Thermal power                     4       16         8       18      18      7
Total                           100      100       100      100     100    100


Total electricity and heat sales figures

Fortum's total electricity sales amounted to 43.5 (44.7) TWh. Sales volumes in
the Nordic countries were at 41.7 (43.5) TWh, representing approximately 15%
(15%) of Nordic electricity consumption during January-September. Heat sales in
the Nordic countries amounted to 13.5 (13.9) TWh and in other countries to 3.1
(2.4) TWh.

The segments sell their electricity to Nord Pool or external customers and
purchase electricity from Nord Pool or other external sources. In the table
below, Fortum's Nord Pool transactions are calculated as a net amount of hourly
sales and purchases at the Group level.


Fortum's total electricity   III/05   III/04  I-III/05 I-III/04    2004    LTM
and heat sales, EUR million
Electricity sales               427      427     1,427    1,439   2,017  2,004
Heat sales                      122      113       603      553     809    859

Fortum's total electricity   III/05   III/04  I-III/05 I-III/04    2004    LTM
sales by area, TWh
Sweden                          6.9      5.5      22.0     19.5    27.6   30.1
Finland                         5.7      7.0      19.1     22.6    31.1   27.6
Other countries                 0.7      0.7       2.4      2.6     3.6    3.4
Total                          13.3     13.2      43.5     44.7    62.3   61.1

Fortum's total heat sales    III/05   III/04  I-III/05 I-III/04    2004    LTM
by area, TWh
Sweden                          0.9      0.8       6.5      6.4     9.6    9.7
Finland                         1.6      1.7       6.9      7.4    10.5   10.0
Other countries                 0.7      0.6       3.2      2.5     3.7    4.4
Total                           3.2      3.1      16.6     16.3    23.8   24.1


SEGMENT REVIEWS

Power Generation

The business area comprises power generation and sales in the Nordic countries
and the provision of operation and maintenance services in the Nordic area and
selected international markets. The Power Generation segment sells its
production to Nord Pool. The segment includes the Generation, the Portfolio
Management and Trading (PMT), and the Service business units.

EUR million                    III/05 III/04   I-III/05 I-III/04   2004   LTM
Net sales                         450    453      1,460    1,501  2,084 2,043
- power sales                     361    357      1,195    1,208  1,695 1,682
- other sales                      89     96        265      293    389   361
Operating profit                  181    128        529      522    763   770
Comparable operating profit       161    135        557      498    730   789
Net assets (at end of period)                     6,037    6,183  6,218      
Return on net assets, %                            11.7     11.0   12.1  11.5
Comparable return on net                           12.5     10.5   11.5  11.9
assets,%

The segment's power generation during the third quarter amounted to 10.5 (10.9)
TWh in the Nordic countries.

In January-September, the segment's power generation in the Nordic countries was
34.4 (35.7) TWh, of which about 15.4 (13.0) TWh or 44% (37%) was hydropower-
based, 18.8 (18.7) TWh or 55% (52%) nuclear power-based, and 0.2 (4.0) TWh or 1%
(11%) thermal power-based. The increase in hydro power generation was due to a
strengthened hydrological situation compared to the corresponding period last
year. The decrease in thermal power generation was due to lower power prices
during the first quarter and higher fuel and CO2 allowance prices.


Power generation by area,    III/05 III/04  I-III/05  I-III/04   2004     LTM
TWh
Sweden                          6.5    5.3      20.5      18.1   25.8    28.2
Finland                         4.0    5.6      13.9      17.6   24.0    20.3
Other countries                 0.2    0.1       0.8       0.7    1.1     1.2
Total                          10.7   11.0      35.2      36.4   50.9    49.6


Nordic sales volume, TWh       11.7   12.1      38.4      40.1   55.7    54.0
 of which pass-through          0.9    0.9       3.3       3.5    4.7     4.5
sales


Sales price, EUR/MWh         III/05 III/04  I-III/05  I-III/04   2004     LTM
Nordic Generation power        29.9   28.2      30.5      28.8   29.2    30.4
price*
*) For the Power Generation segment in the Nordic area, excluding pass-through
sales.


Fortum's average achieved Nordic Generation power price (excluding pass-through
items) in the third quarter was 6% higher than a year ago, mainly due to
improved hedging prices. In the third quarter, the average spot price for power
in Nord Pool was 1% lower than a year ago. During the first nine months of the
year, Fortum's achieved Nordic Generation power price was 6% higher, although
the average spot price in Nord Pool was 4% lower than during the corresponding
period in 2004. The related sales volume was 10.8 (11.2) TWh in the third
quarter and 35.1 (36.6) TWh for the first nine months of the year.

The regional power generation company of north-west Russia, Territorial
Generation Company 1 (TGC-1), started its operations on the first of October.
Fortum is an indirect owner of this company through its ownership in Lenenergo.

In August, Fortum Service signed a 15-year operation and maintenance agreement
with Trianel Energie of Germany. The agreement covers the 800-MW combined cycle
gas turbine power plant in Hamm-Uentrop, Germany, which will be ready for
commercial use in September 2007.

Heat

The business area comprises heat generation and sales in the Nordic countries
and other parts of the Baltic Rim. Fortum is a leading heat producer in the
region. The segment also generates power in the combined heat and power plants
(CHP) and sells it to end-customers mainly by long-term contracts, as well as to
Nord Pool. The segment includes the Heat and Värme business units.

EUR million                    III/05 III/04 I-III/05   I-III/04    2004    LTM
Net sales                         147    149     738        709   1,025  1,054
- heat sales                      115    107     580        532     779    827
- power sales                      14     20      97        110     159    146
- other sales                      18     22      61         67      87     81
Operating profit                   13     12     175        143     218    250
Comparable operating profit        12      7     156        132     207    231
Net assets (at end of period)                  2,336      2,362   2,440       
Return on net assets, %                         10.3        8.6     9.8   11.1
Comparable return on net                         9.3        8.0     9.3   10.3
assets, %

The segment's heat sales during the third quarter amounted to 2.7 (2.6) TWh,
most of which was generated in the Nordic countries. In January-September, heat
sales totalled 15.1 (14.9) TWh.  In the same period, power sales at combined
heat and power plants (CHP) totalled 2.8 (3.3) TWh. The decrease was due to the
strike and lock-out in the Finnish paper industry and also due to the lower
thermal generation volumes stemming from higher fuel and CO2 allowance prices.

In May, Fortum continued the restructuring of its gas assets and sold its 50%
stake in North Transgas Oy to OAO Gazprom.


Heat sales by area, TWh      III/05 III/04  I-III/05  I-III/04   2004     LTM
Sweden                          0.9    0.8       6.5       6.4    9.6     9.7
Finland                         1.6    1.7       6.9       7.4   10.5    10.0
Other countries                 0.2    0.1       1.7       1.1    1.7     2.3
Total                           2.7    2.6      15.1      14.9   21.8    22.0

Power sales, TWh             III/05 III/04  I-III/05  I-III/04   2004     LTM
Total                           0.4    0.6       2.8       3.3    4.8     4.3


Distribution

Fortum owns and operates distribution and regional networks and distributes
electricity to a total of 1.4 million customers in Sweden, Finland, Norway and
Estonia.

EUR million                    III/05 III/04   I-III/05 I-III/04   2004   LTM
Net sales                         149    150        511      513    707   705
- distribution network            122    123        428      431    593   590
transmission
- regional network                 18     18         60       60     83    83
transmission
- other sales                       9      9         23       22     31    32
Operating profit                   48     45        175      183    234   226
Comparable operating profit        47     51        168      183    240   225
Net assets (at end of period)                     3,033    3,086  3,091      
Return on net assets, %                             8.2      8.3    8.1   7.9
Comparable return on net                            7.9      8.3    8.3   7.9
assets,%

During the first nine months of the year, the volume of distribution and
regional transmissions totalled 16.5 (16.4) TWh and 13.0 (13.3) TWh,
respectively.

Electricity transmissions via the regional distribution network to customers
outside the Group totalled 10.7 (11.0) TWh in Sweden and 2.3 (2.3) TWh in
Finland.

The Energy Authority in Sweden (EMI) has for the first time utilised the new
regulation model ('Nätnyttomodell') during its supervision of net prices for
2003. The model compares real revenues and the performance of distribution
companies to the performance of a theoretical distribution network. In June, the
authority notified 16 companies of overcharging customers. All of these
companies have filed a complaint.

Three of Fortum's grid areas have been affected by the supervision of 2003
tariffs. In one case the EMI has made a decision on too high invoicing during
2003 and Fortum's subsidiary in question has filed a complaint. The two
remaining Fortum areas in Stockholm and on the West Coast are still pending.
Final court decisions on prices in 2003 are expected during 2007 at the
earliest.

The EMI has also announced the distribution areas that will be supervised based
on 2004 tariffs. In the list of totally 55 areas, four belong to Fortum and one
is owned by a subsidiary of Fortum.

The Fortum Reliability Program to accelerate the work to upgrade the reliability
of electricity distribution was kicked off in September. The Nordic-wide plan
spans a 5-year period with a total investment of EUR 700 million. The first
scheduled phase is 3 years long. After gaining experience from the first phase,
the program will be planned in more detail.

Fortum has launched a project to provide an Automatic Meter Management system to
all its customers. The system will be implemented in phases starting in 2006.



Volume of distributed        III/05 III/04 I-III/05  I-III/04   2004     LTM
electricity in distribution
network, TWh
Sweden                          2.7    2.8     10.3      10.3   14.2    14.2
Finland                         1.2    1.2      4.5       4.4    6.2     6.3
Norway                          0.4    0.4      1.6       1.6    2.1     2.1
Estonia                         0.0    0.0      0.1       0.1    0.2     0.2
Total                           4.3    4.4     16.5      16.4   22.7    22.8


Number of electricity distribution      30.9.2005     30.9.2004         2004
customers by area, 000s
Sweden                                        860           860          860
Finland                                       410           405          405
Other countries                               115           115          115
Total                                       1,385         1,380        1,380


Markets

Markets is responsible for retail sales of electricity to a total of 1.2 million
private and business customers as well as to other electricity retailers in
Sweden, Finland and Norway. Markets buys its electricity through Nord Pool.


EUR million                      III/05 III/04 I-III/05 I-III/04   2004    LTM
Net sales                           284    287      974    1,009  1,387  1,352
Operating profit                      7     13       21       34     34     21
Comparable operating profit           7     10       22       24     23     21
Net assets (at end of period)                       143      137    194       
Return on net assets, %                            15.6     37.9   25.3   15.8
Comparable return on net assets,                   16.4     26.7   17.1   15.8
%

During the third quarter, Markets' electricity sales totalled 8.7 (9.2) TWh with
sales for the first nine months of the year amounting to 29.5 (31.6) TWh. The
decrease was due to the termination of some large contracts at the end of 2004.

Retail electricity prices on the Nordic market during the third quarter
increased slightly. The retail price development has not fully followed the
market price increase. Overall, the retail prices are at the same level as the
corresponding period of the previous year.

The positive inflow of customers continued during the third quarter. There have
been successful campaigns for both consumers and business customers. The overall
customer satisfaction shows positive development on the Nordic level.


Capital expenditures and investments in shares

Capital expenditures and investments in shares for continuing operations in
January-September totalled EUR 213 (306) million. Investments excluding
acquisitions were EUR 207 (201) million.

As a result of the redemption of Lenenergo's own shares relating to its
reorganisation, Fortum's shareholding in Lenenergo has increased to 33.2% of the
outstanding voting shares. Fortum secured four of the total of 11 seats in the
Board of Directors of Lenenergo on 30 June.


Group restructuring

In April 2005, Neste Oil was successfully separated by distributing 85% of its
shares as dividends to Fortum's shareholders and by selling the remaining 15% of
Neste Oil shares to institutional and individual investors. Neste Oil was
subsequently listed on the Helsinki Stock Exchange on April 18.


Financing

Net debt at the end of the third quarter stood at EUR 3,333 million (EUR 3,595
million on 30 June 2005). The reduction in net debt is due to strong cash flow
generation during the third quarter.

Net cash from operating activities was EUR 331 (233) million for the continuing
activities in the third quarter.

The Group's net financial expenses were EUR 100 (167) million. The decrease is
mainly attributable to the lower net debt following the spin-off of the Oil
businesses. Net financial expenses include a positive EUR 27 (12) million change
in the fair value of certain derivatives that do not qualify for hedge
accounting under IFRS (IAS 39).

During August, Fortum's long-term credit rating from Standard & Poor's was
upgraded from BBB+ (stable) to A- (stable). Fortum's long-term credit rating
from Moody's is A2 (stable).


Shares and share capital

In January-September, a total of 692.6 million Fortum Corporation shares
totalling EUR 9,372 million were traded. Fortum's market capitalisation,
calculated using the closing quotation of the last trading day of the quarter,
was EUR 14,579 million. The highest quotation of Fortum Corporation shares on
the Helsinki Stock Exchange in the three first quarters of the year was EUR
16.90, the lowest EUR 10.45, and the average quotation EUR 13.53. The closing
quotation on the last trading day of the third quarter was EUR 16.70.

A total of 187,500 shares subscribed for based on share option schemes were
entered into the trade register in the third quarter of 2005. After these
subscriptions, Fortum's share capital is EUR 2,968,135,315 and the total number
of registered shares is 872,980,975.

At the end of the third quarter, the Finnish state's holding in Fortum was
51.7%. The proportion of international shareholders stood at 33.3%.

Currently the Board of Directors has no unused authorisations from the General
Meeting of Shareholders to issue convertible loans or bonds with warrants, issue
new shares or acquire the company's own shares.


Group personnel

The average number of employees in the Group during the period from January to
September was 10,279 (13,112). The number of employees at the end of the period
was 8,657 (12,726). The decrease is due to the separation of Neste Oil.


Events after the period under review

The regional power generation company of North-West Russia, Territorial
Generation Company No. 1 (TGC-1), started its operations on the first of
October. Fortum is an indirect owner of this company through its ownership in
Lenenergo. As the result of the reorganization procedure, Fortum's current
ownership in Lenenergo is 33.2% of its outstanding voting shares. Fortum has got
three of the total of 11 seats in Board of Directors of TGC-1. The final
ownership structure of TGC-1 will be set up in connection to the merger of the
generation assets of Lenenergo, Karelenergo and Kolenergo into TGC-1 scheduled
for the end of 2006.

TGC-1 has been founded by Lenenergo, Karelenergo and Kolenergo. It leases and
operates the generation and heat assets of its three owners. TGC-1's installed
power generation capacity is around 5,750 MW, of which hydro power generation is
2,874 MW and the rest is mainly natural gas based power generation. TGC-1 has
14,688 MW of heat generation capacity.

Outlook

The key market driver influencing Fortum's business performance is the market
price of power. Starting in 2005, emissions trading has become an important new
factor affecting the market price of power. The exchange rate of the Swedish
krona can also influence Fortum's results.

According to general market information, electricity consumption in the Nordic
countries is predicted to increase by about 1% a year over the next few years.
During the third quarter, the average spot price for power was EUR 29.7 (29.9)
per megawatt-hour on the Nordic power exchange, or 1% lower than the
corresponding figure in 2004.

In mid-October, the Nordic water reservoirs were about 6 TWh above the average
and 12 TWh above the corresponding level for 2004. In mid-October, the market
price for emissions allowances for 2005 ranged between EUR 23-24 per tonne of
CO2. At the same time, the power price in the forward market for the rest of
2005 was around EUR 38-40 per megawatt-hour and for 2006 around EUR 37-38 per
megawatt-hour.

At the beginning of October, Fortum had hedged approximately two thirds of its
Nordic Power Generation sales volume for the calendar year 2006 at a slightly
higher price than achieved during the last 12 months. For the last quarter of
2005, the hedge ratio was approximately 70%, and the hedge price was
approximately the same as the achieved Nordic Generation power price during the
last 12 months.

New nuclear and hydro power tax proposals have been made in Sweden and Finland
in conjunction with the governments' 2006 budget proposals. These taxes, if
accepted, will be an additional cost element in nuclear and hydro power
production. If the proposals are accepted, Fortum estimates that its additional
generation costs due to these taxes will be approximately EUR 60 million in
2006.

Fortum's financial position continued to strengthen during the third quarter.
Market fundamentals remain favourable and power forward prices trend upwards.
The foundations for good future performance are in place.


Espoo, 20 October 2005
Fortum Corporation
Board of Directors


The figures have not been audited.

Fortum's financial reporting:
- Financial statements January-December on 3 February 2006

Further information:
Mikael Lilius, President and CEO, tel. +358 10 452 9100
Juha Laaksonen, CFO, tel. +358 10 452 4519

Distribution:
Helsinki Stock Exchange
Key media


FORTUM GROUP                                                                       
JANUARY-SEPTEMBER 2005  
                                                                    
Interim financial statements are unaudited
                                                                                   
CONDENSED CONSOLIDATED  INCOME STATEMENT
MEUR                           Q3/2005  Q3/2004    Q1-Q3    Q1-Q3     2004     Last
                                                    2005     2004            twelve
                                                                             months
Continuing operations:                                                       
Sales                              774      765    2 765    2 751    3 835    3 849
Other income                        24       -2       34       80       91       45
Materials and services            -258     -301     -970   -1 087   -1 507   -1 390
Employee benefit costs            -106     -106     -359     -346     -462     -475
Depreciation, amortisation and    -101      -90     -305     -282     -388     -411
impairment charges
Other expenses                     -93      -89     -292     -284     -374     -382
Operating profit                   240      177      873      832    1 195    1 236
Share of profit of associates and   12        1       28        9       12       31
joint ventures
Finance costs-net                  -22      -42     -100     -167     -245     -178
Profit before income tax           230      136      801      674      962    1 089
Income tax expense                 -57      -32     -206     -163     -259     -277
Profit for the period from         173      104      595      511      703      812
continuing operations
Discontinued operations:                                                           
Profit for the period from           -      137      474      432      589      768
discontinued operations
Profit for the period              173      241    1 069      943    1 292    1 580
                                                                                   
Attributable to:                                                                   
Equity holders of the Company      174      244    1 038      924    1 259    1 443
Minority interest                   -1       -3       31       19       33       43

                                   173      241    1 069      943    1 292    1 486
                                                                                   
Earnings per share for profit from                                                 
total Fortum Group attributable
to the equity holders of the company                                              
during the year (in € per share)
Basic                             0.20     0.29     1.19     1.09     1.48     1.58
Diluted                           0.19     0.29     1.17     1.07     1.46         
                                                                                   
Earnings per share for profit from                                                 
continuing operations attributable
to the equity holders of the company                                              
during the year (in € per share)
Basic                             0.20     0.13     0.65     0.58     0.79     0.86
Diluted                           0.19     0.13     0.63     0.57     0.78         
                                                                                   
Earnings per share for profit from                                                 
discontinued operations attributable
to the equity holders of the company                                              
during the year (in € per share)
Basic                                -     0.16     0.54     0.51     0.69     0.72
Diluted                              -     0.16     0.54     0.50     0.68         
                                                                                   
                                                                                   
CONDENSED CONSOLIDATED BALANCE SHEET                                               
MEUR                                            Sept  30     Sept 30      Dec 31
                                                    2005        2004        2004
ASSETS                                                                            
Non-current assets                                                              
Intangible assets                                     82         122         116
Property, plant and equipment                     10 039      11 783      11 925
Other long-term investments                        2 117       2 197       2 355
Other long-term receivables                           79         103          90
Long-term interest bearing receivables               625         758         727
Total non-current assets                          12 942      14 963      15 213
                                                                                 
Current assets                                                                  
Inventories                                          258         701         654
Trade and other receivables                          859       1 348       1 555
Cash and cash equivalents                            782         219         145
Total current assets                               1 899       2 268       2 354
                                                                                
Total assets                                      14 841      17 231      17 567
                                                                                
EQUITY                                                                          
Capital and reserves attributable the                                           
Company's equity holders
Share capital                                      2 968       2 891       2 948
Other equity                                       3 894       4 071       4 552
Total                                              6 862       6 962       7 500
Minority interest                                    177         136         150
Total equity                                       7 039       7 098       7 650
                                                                                
LIABILITIES                                                                     
Non-current liabilities                                                         
Interest-bearing liabilities                       3 828       4 501       4 450
Deferred tax liabilities                           1 611       1 751       1 841
Provisions                                           582         586         608
Other liabilities                                    511         509         507
Total non-current liabilities                      6 532       7 347       7 406
                                                                                
Current liabilities                                                             
Interest-bearing liabilities                         287       1 163         790
Trade and other payables                             983       1 623       1 721
Total current liabilities                          1 270       2 786       2 511
                                                                                
Total liabilities                                  7 802      10 133       9 917
                                                                                
Total equity and liabilities                      14 841      17 231      17 567
                                                                                
                                                                                 
CHANGE IN TOTAL  EQUITY                                                          
MEUR                         Share    Share    Other  Fair   Retained  Minor  Total
                           capital  premium  restric value   earnings    ity
                                                       ted       and
                                                     funds     other
                                                               reserves
                                                                                   
Total equity at 31.12.2004   2 948       62       13   134      4 343    150  7 650
Stock options excercised        20        7      -12                             15
Translation and other                                             -57     -6    -63
differences
Cash dividend                                                    -506          -506
Share dividend *)                                                -920          -920
Cash flow hedges                                      -245         34      2   -209
Other fair value adjustments                             3                        3
Net profit for the period                                       1 038     31  1 069
Total equity at 30.9.2005    2 968       69        1  -108      3 932    177  7 039
                                                                                   
Total equity at 31.12.2003   2 886       36        5    63      3 399    120  6 509
Stock options excercised         5        2        1                6            14
Translation and other                                              24     -2     22
differences
Cash dividend                                                    -359          -359
Cash flow hedges                                       -46         13     -1    -34
Other fair value adjustments                             3                        3
Net profit for the period                                         924     19    943
Total equity at 30.9.2004    2 891       38        6    20      4 007    136  7 098

*) The effect from the share dividend on Fortum Group equity is EUR 920 million.
In the parent company the effect on retained earnings is EUR 969 million.

                                                                                   
CONSOLIDATED CASH FLOW STATEMENT                                                   
MEUR                                                   Q1-Q3       Q1-Q3           
                                                        2005        2004       2004
Cash flow from operating activities                                                
Operating profit before depreciations continuing       1 206       1 123      1 595
operations
Non-cash flow items and divesting activities             -41         -51        -49
Financial items and realised foreign exchange gains      -62         -57       -181
and losses
Taxes                                                   -226        -130       -160
Funds form operations continuing operations              877         885      1 205
Change in working capital                                -30         104         27
Net cash from operating activities continuing            847         989      1 232
operations
Net cash from operating activities discontinued          133         314        526
operations
Total net cash from operating activities                 980       1 303      1 758
                                                                                   
Cash flow from investing activities                                                
Capital expenditures                                    -207        -201       -335
Acquisition of shares                                     -7        -105       -179
Proceeds from sales of fixed assets                       11          11         60
Proceeds from sales of shares                             26           9         15
Change in other investments                               20         -88        -20
Net cash used in investing activities continuing        -157        -374       -459
operations
Net cash used in investing activities discontinued     1 155        -176       -277
operations
Total net cash used in investing activities              998        -550       -736
                                                                                   
Cash flow before financing activities                  1 978         753      1 022
                                                                                   
Cash flow from financing activities                                                
Net change in loans                                     -877        -494       -811
Dividends paid to the Company´s equity                  -506        -357       -357
holders
Other financing items                                     13           6         94
Net cash used in financing activities continuing      -1 370        -845     -1 074
operations
Net cash used in financing activities discontinued        29        -123       -236
operations *)
Total net cash used in financing activities           -1 341        -968     -1 310
                                                                                   
Total net increase (+)/decrease (-) in cash                                        
and marketable securities, continuing                    637        -215       -288
operations

*) The cash flow from financing activities, discontinued operations in 2004 is
shown as used to repay loans since the Treasury operations have been centralised for
the total Fortum Group.
                                                                                   
KEY RATIOS 1)                                                                      
MEUR                  Sept 30 June 30  March  Dec 31  Sept 30  June 30  March Last
                         2005    2005     31    2004     2004     2004    31  twelve
                                            2005                         2004  months

Earnings per share
total 			1.19    0.99   0.38    1.48     1.09     0.80    0.36  1.58
Fortum (basic), EUR
Earnings per share      0.65    0.45   0.28    0.79     0.58     0.45    0.24  0.86
continuing operations
(basic), EUR
                                                                                 
Capital employed, 
MEUR  2) 	      11 154  10 987 11 891  12 890   12 762   12 447  12 156    -
Interest-bearing net
debt, MEUR	       3 333   3 595  4 878   5 095    5 445    5 512   5 526    -
Capital expenditure
and investments                                                               
in shares continuing
operations, MEUR         213     123     49     514      306      158      57   421
Capital expenditure      207     123     49     335      201      128      57   341
continuing operations,
MEUR
                                                                                   
Return on capital       15.3    16.7   18.2    15.8     15.0     17.0    18.6  17.2
employed, %
Return on shareholders' 17.6    19.2   19.5    18.2     18.4     20.9    19.9  20.1
equity, %
Interest coverage       10.6    11.3   11.6     8.0      7.8      8.3     7.1  10.0
Funds from              42.9    44.2   39.3    36.4     33.1     38.2    44.4  47.3
operations/interest-
bearing net debt, %
Gearing, %               47      53     71      67       77       82      86     -
Equity per share, EUR  7.86    7.64   7.67    8.62     8.19     7.77    7.41     -
Equity-to-assets ratio,
 %    			 47      43     43      44       41       40      38     -
                                                                                  
Average number of    10 279  11 066 13 135  12 859   13 112   13 097  13 023     -
employees
Average number of 
shares, 	    872 438 872 316 871 710 852 625  849 823  849 698 849 698 868515
1 000 shares
Diluted adjusted 
average  	    889 157 883 629  883 774 861 772  870 806  867 907 867 344   -
number of shares, 
1 000
shares
Number of shares, 
1 000   	    872 981 872 793  871 854 869 749  850 262  849 813 849 813   -
shares

1) Key ratios are based on Fortum total numbers including continuing and         
discontinued operations if otherwise not stated.
2) Capital employed at March 31 2005 does not represent continuing operations since
15% of the shares in Neste Oil and the interest-bearing receivable from Neste Oil
are included

                                                                                 
SALES BY SEGMENTS                                                                 
MEUR                               Q3       Q3    Q1-Q3    Q1-Q3     2004     Last
                                 2005     2004     2005     2004            twelve
                                                                            months
Power Generation                  450      453    1 460    1 501    2 084    2 043
- of which internal                 6       11       74       73      128      134
Heat                              147      149      738      709    1 025    1 054
- of which internal                 1        1       12       40       49       21
Distribution                      149      150      511      513      707      705
- of which internal                 2        3        6        7       10       10
Markets                           284      287      974    1 009    1 387    1 352
- of which internal                19       17       66       64       92       94
Other                              26       22       71       67       90       94
- of which internal                13       22       50       65       93       87
Eliminations *)                  -282     -296     -989   -1 048   -1 458   -1 399
Sales from continuing operations  774      765    2 765    2 751    3 835    3 849
Sales from discontinued operations       2 091    2 061    5 801    7 909         
Eliminations                               -20      -20      -68      -85         
Total                             774    2 836    4 806    8 484   11 659  
       
*) Eliminations include sales and purchases with Nordpool that is netted on Group
level on an hourly basis and posted either as revenue or cost depending on if
Fortum is a net seller or net buyer during any particular hour
                                                                                 
OPERATING PROFIT BY SEGMENTS                                                      
MEUR                                Q3       Q3    Q1-Q3    Q1-Q3     2004     Last
                                  2005     2004     2005     2004            twelve
                                                                             months

Power Generation                   181      128      529      522      763      770
Heat                                13       12      175      143      218      250
Distribution                        48       45      175      183      234      226
Markets                              7       13       21       34       34       21
Other                               -9      -21      -27      -50      -54      -31
Operating profit from continuing   240      177      873      832    1 195    1 236
operations
Operating profit from discontinued          165      517      538      721         
operations
Total                              240      342    1 390    1 370    1 916         
                                                                                   
COMPARABLE OPERATING PROFIT BY SEGMENTS, CONTINUING OPERATIONS

MEUR                                Q3       Q3    Q1-Q3    Q1-Q3     2004     Last
                                  2005     2004     2005     2004            twelve
                                                                             months

Power Generation                   161      135      557      498      730      789
Heat                                12        7      156      132      207      231
Distribution                        47       51      168      183      240      225
Markets                              7       10       22       24       23       21
Other                               -7      -12      -29      -38      -52      -43
Comparable operating profit from   220      191      874      799    1 148    1 223
continuing operations
Non-recurring items                  2       -4       20      -11       18       49
Other items effecting comparability 18      -10      -21       44       29      -36
Operating profit from continuing   240      177      873      832    1 195    1 236
operations
                                                                                   
                                                                                   
NON-RECURRING ITEMS BY SEGMENTS                                                    
MEUR                                Q3       Q3    Q1-Q3    Q1-Q3     2004     Last
                                  2005     2004     2005     2004            twelve
                                                                             months

Power Generation                     3       -2        3       -9        9       21
Heat                                 1        0       12        0        4       16
Distribution                         0        0        1        0        2        3
Markets                              0        0        0        0        0        0
Other                               -2       -2        4       -2        3        9
Total                                2       -4       20      -11       18       49
                                                                                   
                                                                                   
OTHER ITEMS EFFECTING COMPARABILITY BY                                             
SEGMENTS
MEUR                                Q3       Q3    Q1-Q3    Q1-Q3     2004     Last
                                  2005     2004     2005     2004            twelve
                                                                             months

Power Generation                   17       -5      -31       33       24      -40
Heat                                0        5        7       11        7        3
Distribution                        1       -6        6        0       -8       -2
Markets                             0        3       -1       10       11        0
Other                               0       -7       -2      -10       -5        3
Total                              18      -10      -21       44       29      -36
                                                                                  
DEPRECIATION, AMORTISATION AND IMPAIRMENT CHARGES BY SEGMENTS

MEUR                               Q3       Q3    Q1-Q3    Q1-Q3     2004     Last
                                 2005     2004     2005     2004            twelve
                                                                            months

Power Generation                  27       20       83       74      104      113
Heat                              30       30       92       89      124      127
Distribution                      36       33      109       99      133      143
Markets                            3        4       11       12       16       15
Other                              5        4       10        8       11       13
Total depreciation, amortisation
and                                                           
impairment charges
from continuing operations       101       90      305      282      388      411
Total depreciation, amortisation and                                             
impairment charges from
discontinued operations            -       33       36      101      139         
Total                            101      123      341      383      527         
                                                                                 
SHARE OF PROFITS IN ASSOCIATES AND JOINT VENTURES BY SEGMENTS

MEUR                               Q3       Q3    Q1-Q3    Q1-Q3     2004     Last
                                 2005     2004     2005     2004            twelve
                                                                            months

Power Generation *)                10       -2        6      -10      -18       -2
Heat                                0        1        8        9       15       14
Distribution                        1        3       14       11       16       19
Markets                             1        0        1        0        0        1
Other                               0       -1       -1       -1       -1       -1
Share of profits in associates 
and joint    		           12        1       28        9       12       31
ventures from continuing
operations                                                                        
Share of profits in associates
and joint         		    -       18       -2       29       36         
ventures from discontinued
operations
Total                              12       19       26       38       48   
      
*) The main part of the associated companies in Power Generation are power
production companies from which Fortum purchase produced electricity at cost.
The share of profit according to IFRS also includes depreciations on fair value
adjustments made when acquiring the shareholdings.
                                                                               
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES BY SEGMENTS                       
MEUR                                                     
					             Sept 30  Sept 30   Dec 31
                                                        2005     2004     2004
Power Generation                                       1 203    1 196    1 208
Heat                                                     130       92      127
Distribution                                             205      193      196
Markets                                                    9        7        8
Other                                                      0        1        0
Investments in associates and joint ventures from      1 547    1 489    1 539
continuing operations
Investments in associates and joint ventures from          -      134      140
discontinued operations
Total                                                  1 547    1 623    1 679

                                                                             
CAPITAL EXPENDITURE AND INVESTMENTS IN SHARES BY SEGMENTS                      
MEUR                                                         
						    Q3     Q3  Q1-Q3  Q1-Q3  2004
                                                  2005   2004   2005   2004

Power Generation                                    21     92     60    152   210
Heat                                                38     25     71     75   175
Distribution                                        25     25     65     65   106
Markets                                              3      2      7      4     6
Other                                                3      4     10     10    17
Capital expenditure and investments in shares from  90    148    213    306   514
continuing operations
Capital expenditure and investments in shares from   -     77     99    195   316
discontinuing operations
Total                                               90    225    312    501   830
                                                                                 

NET ASSETS BY SEGMENTS                                                          
MEUR                                            Sept 30    Sept 30    Dec 31
                                                   2005       2004      2004

Power Generation                                 6 037      6 183     6 218
Heat                                             2 336      2 362     2 440
Distribution                                     3 033      3 086     3 091
Markets                                            143        137       194
Other and Eliminations                             139         25       -43
Net assets from continuing operations           11 688     11 793    11 900
Net assets from discontinued operations              -      1 963     2 011
Eliminations                                         -          1         2
Total                                           11 688     13 757    13 913
                                                                               
RETURN ON NET ASSETS  BY SEGMENTS

%                 Sept 30  June 30    March   Dec 31 Sept 30  June 30 March  Last
                     2005     2005       31     2004    2004     2004    31  twelve
                                          2005                         2004  months

Power Generation     11.7     11.3     14.6     12.1    11.0     12.5  14.0  11.5
Heat                 10.3     14.2     19.3      9.8     8.6     11.8  18.3  11.1
Distribution          8.2      9.1     10.1      8.1     8.3      9.4  11.3   7.9
Markets              15.6     14.6     11.5     25.3    37.9     36.8  77.6  15.8
                                                                                 
COMPARABLE RETURN ON NET ASSETS  BY SEGMENTS

%                 Sept 30  June 30    March   Dec 31 Sept 30  June 30 March  Last
                     2005     2005       31     2004    2004     2004    31  twelve
                                          2005                         2004  months

Power Generation     12.5     13.2     14.9     11.5    10.5     11.5  13.8  11.9
Heat                  9.3     12.7     18.5      9.3     8.0     11.3  17.8  10.3
Distribution          7.9      8.7      9.4      8.3     8.3      9.0  11.1   7.9
Markets              16.4     15.7     13.5     17.1    26.7     24.5  43.4  15.8
                                                                                 
Return on net assets is calculated by dividing the sum of operating profit and
share of profit of associated companies and joint ventures with average net assets.

                                                                                
ASSETS BY SEGMENTS                                                               
MEUR                                                 Sept 30    Sept 30    Dec 31
                                                        2005       2004      2004

Power Generation                                       6 575      7 123     7 108
Heat                                                   2 581      2 589     2 742
Distribution                                           3 431      3 483     3 514
Markets                                                  400        377       375
Other and Eliminations                                   225       -198      -156
Assets from continuing operations                     13 212     13 374    13 583
Assets from discontinuing operations                       -      2 775     2 756
Eliminations                                               -        -37       -32
Assets included in Net assets                          13 212     16 112    16 307
Interest-bearing receivables                              630        758       728
Deferred taxes                                             54         15       106
Other assets                                              163        127       281
Cash and cash equivalents                                 782        219       145
Total assets                                           14 841     17 231    17 567
                                                                                  
LIABILITIES BY SEGMENTS                                                           
MEUR                                                  Sept 30    Sept 30    Dec 31
                                                         2005       2004      2004

Power Generation                                          538        940       890
Heat                                                      245        227       302
Distribution                                              398        397       423
Markets                                                   257        240       181
Other and Eliminations                                     86       -223      -113
Liabilities from continuing                             1 524      1 581     1 683
operations
Liabilities from discontinuing                              -        812       745
operations
Eliminations                                                -        -38       -34
Liabilities included in Net assets                       1 524      2 355     2 394
Deferred tax liabilities                                 1 611      1 751     1 841
Other                                                      552        363       442
Total liabilities included in capital                    3 687      4 469     4 677
employed
Interest-bearing liabilities                             4 115      5 664     5 240
Total equity                                             7 039      7 098     7 650
Total equity and liabilities                            14 841     17 231    17 567
                                                                                   
                                                                                   
CHANGES IN INTANGIBLE ASSETS AND PROPERTY, PLANT AND                               
EQUIPMENT
MEUR                                                   Sept 30    Sept 30   Dec  31
                                                          2005       2004      2004

Opening balance                                         12 041     11 923    11 923
Acquisition of subsidiary companies                          7          -        31
Capital expenditures                                       306        377       648
Disposals                                                  -16        -34      -152
Depreciation, amortisation and                            -341       -383      -527
impairment
Translation differences                                   -267         22       118
Closing balance before de-                              11 730     11 905    12 041
consolidation of Neste Oil
De-consolidation of Neste Oil                           -1 609                     
Closing balance                                         10 121     11 905    12 041

                                                                                   
QUARTERLY SALES BY SEGMENTS                                                        
MEUR                       Q3       Q2       Q1       Q4       Q3       Q2       Q1
                         2005     2005     2005     2004     2004     2004     2004

Power Generation         450      476      534      583      453      488      560
- of which internal        6       13       55       55       11       26       36
Heat                     147      206      385      316      149      198      361
- of which internal        1       -1       12        9        1        3       36
Distribution             149      160      202      194      150      157      206
- of which internal        2        2        2        3        3        1        3
Markets                  284      298      392      378      287      303      419
- of which internal       19       22       25       28       17       22       25
Other                     26       22       23       23       22       25       20
- of which internal       13       15       22       11        7        9       10
Eliminations            -282     -304     -403     -410     -296     -314     -437
Sales from continuing    774      858    1 133    1 084      765      857    1 129
operations
Sales from discontinued   -        -    2 061    2 108    2 091    2 000    1 710
operations
Eliminations              -        -      -20      -17      -20      -27      -21
Total                   774      858    3 174    3 175    2 836    2 830    2 818
                                                                                 
QUARTERLY OPERATING PROFIT BY                                                     
SEGMENTS
MEUR                      Q3       Q2       Q1       Q4       Q3       Q2       Q1
                        2005     2005  2005 *)     2004     2004     2004     2004

Power Generation         181      125      223      241      128      172      222
Heat                      13       50      112       75       12       27      104
Distribution              48       56       71       51       45       55       83
Markets                    7        8        6        0       13        5       16
Other                     -9      -12       -6       -4      -21      -11      -18
Operating profit from    240      227      406      363      177      248      407
continuing operations
Operating profit from      -      390      127      183      165      223      150
discontinued operations
Total                    240      617      533      546      342      471      557
                                                                                  
*) The accounting treatment of CO2 emission allowances was changed in Q2 according
to the decision of IASB to withdraw the IFRIC 3 Emission rights with immediate
                                                                               
QUARTERLY COMPARABLE OPERATING PROFIT BY SEGMENTS, CONTINUING OPERATIONS

MEUR                     Q3       Q2       Q1       Q4       Q3       Q2       Q1
                       2005     2005     2005     2004     2004     2004     2004

Power Generation        161      172      224      232      135      145      218
Heat                     12       37      107       75        7       24      101
Distribution             47       55       66       57       51       51       81
Markets                   7        8        7       -1       10        5        9
Other                    -7      -11      -11      -14      -12      -14      -12
Comparable operating 
profit from             220      261      393      349      191      211      397
continuing operations
Non-recurring items       2       12        6       29       -4       -1       -6
Other items effecting    18      -46        7      -15      -10       38       16
comparability
Operating profit from   240      227      406      363      177      248      407
continuing operations
                                                                                 
                                                                                 
QUARTERLY NON-RECURRING ITEMS IN OPERATING BY SEGMENTS

MEUR                     Q3       Q2       Q1       Q4       Q3       Q2       Q1
                       2005     2005     2005     2004     2004     2004     2004

Power Generation          3        0        0       18       -2       -1       -6
Heat                      1       11        0        4        0        0        0
Distribution              0        1        0        2        0        0        0
Markets                   0        0        0        0        0        0        0
Other                    -2        0        6        5       -2        0        0
Total                     2       12        6       29       -4       -1       -6
                                                                                 
Includes positive one-time effects of change in treatment of Finnish TEL
disability pension liability in Q4 2004.
                                                                                
QUARTERLY OTHER ITEMS EFFECTING COMPARABILITY

MEUR                     Q3       Q2       Q1       Q4       Q3       Q2       Q1
                       2005     2005     2005     2004     2004     2004     2004

Power Generation         17      -47       -1       -9       -5       28       10
Heat                      0        2        5       -4        5        3        3
Distribution              1        0        5       -8       -6        4        2
Markets                   0        0       -1        1        3        0        7
Other                     0       -1       -1        5       -7        3       -6
Total                    18      -46        7      -15      -10       38       16

DISCONTINUED OPERATIONS (including eliminations between Fortum and discontinued
operations)

MEUR                                   Q3        Q3     Q1-Q3    Q1-Q3    2 004
                                     2005      2004   2005 *)     2004

Sales                                   -     2 091     2 061    5 801    7 909
Other income                            -        21       395       52       66
Materials and services                  -    -1 820    -1 726   -4 829   -6 439
Employee benefit costs                  -       -46       -57     -152     -211
Depreciation, amortisation and          -       -33       -36     -101     -139
impairment charges
Other expenses                          -       -48      -120     -233     -465
Operating                               -       165       517      538      721
profit
Share of profit of associates and       -        18        -2       29       36
joint ventures
Finance costs-net                       -        -7        -6      -27      -19
Profit before income tax                -       176       509      540      738
Income tax expense                      -       -39       -35     -108     -149
Profit for the year from discontinued   -       137       474      432      589
operations
                                                                               
*) The accounting treatment of CO2 emission allowances was changed in Q2
according to the decision of IASB to withdraw the IFRIC 3 Emission rights with
immediate effect.
                                                                            
Other income includes the capital gain, EUR 390 million, from the          
sale of 15% of the shares in Neste Oil Oyj.

                                                                               
CONTINGENT LIABILITIES                                                         
MEUR                                                 Sept 30  Sept 30    Dec 31
                                                        2005     2004      2004
Contingent liabilities                                                        
On own behalf                                                                  
        For debt                                                               
                 Pledges                                 150      163       160
                 Real estate mortgages                    63       92       113
               For other commitments                                         
                 Real estate mortgages                    56       57        59
                 Pledges, company and other                         1          
                 mortgages
               Sale and leaseback                          -        8         -
               Other contingent liabilities               91       78        76
               Total                                     360      399       408
On behalf of associated companies and joint                                    
ventures
               Pledges and real estate                     3       11        12
               mortgages
               Guarantees                                211      357       335
               Other contingent liabilities              182      182       182
               Total                                     396      550       529
On behalf of others                                                            
               Guarantees                                 63        4         3
               Other contingent liabilities               12        6         5
               Total                                      75       10         8
Total                                                    831      959       945
                                                                               
Operating lease liabilities                                                    
Due within a year                                         11       82        87
Due after one year and within five years                  35       96        81
Due after five years                                       9       60        64
Total                                                     55      238       232

NUCLEAR                                                                          
MEUR                                                   Sept 30  Sept 30    Dec 31
                                                          2005     2004      2004
Liability for nuclear waste disposal according to the Nuclear                   
Energy Act in Finland
Liability 1)                                              596      570       596
Share of reserves in the Nuclear                         -596     -570      -581
Waste Fund 2)
Liabilities in the balance sheet 3)                         0        0        15
                                                                                
1) Discounted liability in the balance sheet is EUR 415 (389) million as of     
30 September 2005 (and 2004 respectively).
2) Value of the fund asset in the balance sheet is EUR 415 (389) million as of 30
September 2005 (and 2004 respectively) due to IFRIC Interpretation 5, which states
that it can not exceed the value of the related liabilities
3) Mortgaged bearer papers as                                                   
security.
                                                                                    
The company has a collective contingent liability with Neste Oil Oyj of the demerged
Fortum Oil and Gas Oy's liabilities based on the Finnish Companies Act's Chapter 14a
Paragraph 6.

                                                                                
DERIVATIVES                                                                     
MEUR                                     Sept 30           Sept 30         
                                            2005              2004   Dec 31
                                                                       2004
Interest and currency derivatives   Notional   Net  Notional  Net  Notional  Net
                                      value   fair     value  fair    value  fair
                                              value           value          value

Forward interest rate agreements          -      -       221     1         -    -
Interest rate swaps                   2 845     36     3 843   -50     1 218  -28
Forward foreign exchange contracts    5 987     85     7 466   -38     8 176  -32
Interest rate and currency swaps        936      0       323    -3       310   -7
Purchased currency options                -      -       525    -9       438   17
Written currency options                  -      -       525     3       438    6
                                                                                 
Electricity derivatives              Volume    Net    Volume   Net    Volume  Net
                                              fair            fair            fair
                                              value            value          value
                                        TWh   MEUR       TWh   MEUR       TWh MEUR

Sales contracts                          81   -388        74   -93        70  204
Purchase contracts                       44    256        42   125        42  -53
Purchased options                         2      0         1     0         1   -1
Written options                          11    -12         -     -         1    -
                                                                                 
Oil derivatives                      Volume    Net    Volume   Net    Volume  Net
                                               fair            fair           fair
                                              value            value          value
                                    1000 bbl   MEUR  1000 bbl  MEUR  1000 bbl MEUR

Sales contracts                          60     -1    16 010   -19    44 588   26
Purchase contracts                      730     11    59 825    48    70 258    7
Purchased options                         -      -    13 495     9     4 797    2
Written options                           -      -    13 993    -8     6 784   -2
Accounting principles                                                            

This interim report has been prepared in accordance with IAS 34, Interim Financial 
Reporting. As of 2005 Fortum is applying International Financial reporting Standards
(IFRS).
                                                                                
The most important changes for Fortum                                          
continuing operations are:
- Derivatives are being carried at fair value in the balance sheet. Fair value
changes effects the income statement if hedge accounting is not applied. (IAS 39)
- Fortum´s part of the Finnish nuclear waste fund and the future liabilities for spent
fuel and decomissioning regarding nuclear production are disclosed gross in the
balance sheet according to IFRIC Interpretation 5.
- The minority preference shares with option agreement in Nybroviken Kraft AB Group
accounted for as minority interest under Finnish GAAP is reclassified as interest-
bearing liabilities under IFRS.
- The accounting of pension liabilities according to IAS 19 creates a change to
Finnish GAAP, but impacts mainly 2004 since the accounting treatment of the Finnish
TEL´s disability pension component changed during the year.
- The oil operations in Fortum are regarded as discontinued operations as of March
31, 2005. Discontinued operations are disclosed on one line in the income statement
and shown separately in the cash-flow. 2004 comparison financials are restated.
                                                                               
Fortum has in a press release on April 26, 2005, described the impact of the
transition to IFRS on 2004 financial information. The document also included restated
quarterly information and reconciliations of equity and net profit between Finnish
GAAP and IFRS.
                                                                            
The detailed accounting principles used can be found on the Fortum website: 
www.fortum.com/Investors/Financial Information
                                                                                  
Emission allowances                                                                
                                                                                   
As of January 1, 2005 Fortum implemented IFRIC interpretation 3 in accounting for CO2
emission allowances. In June 2005 the IASB decided to withdraw IFRIC 3 with immediate
effect.
                                                                              
Following this decision, Fortum has changed accounting treatment for emission
allowances. Fortum accounts for the CO2 allowances based on currently valid IFRS
standards where purchased CO2 emission allowances are accounted for as intangible
assets at cost, whereas CO2 emission allowances received free of charge are accounted
for at nominal value. A provision is recognised to cover the obligation to return
emission allowances and it is measured at its probable settlement amount. This means
that the effect in operating profit will reflect the difference between what has been
emitted and received emission allowances. This difference is valued at fair value or
the value of the purchased allowances.
                                                                                  
The effects from the change of accounting principle on previously reported income 
statement as of March 31, 2005 are:
MEUR                                                         Reported     Current
                                                              earlier   reporting
Operating profit                                                   -3     -1     
                                                                                 
Profit for the period from continuing operations                   -2     -1     
Profit for the period from discontinued operations                 -3      0     
Total profit for the period                                        -5     -1     

Definitions of key figures                                                       
                                                                                  
Comparable operating profit             =   Operating profit - non-recurring items
                                            - other items effecting comparability
                                                                                 
Non-recurring items                     =   Mainly capital gains and losses     

                                                                            
Other items effecting comparability     =  Includes effects from financial
                                           derivatives hedging future cash-flows
                                           where hedge accounting is not applied
                                           according to IAS 39 and effects from
                                           the accounting of Fortum´s part of the
                                           Finnish Nuclear Waste Fund where the
                                           asset in the balance sheet cannot
                                           exceed the related liabilities
                                           according to IFRIC interpretation 5.

                                                                              
Return on shareholders'      =     100 x    Profit for the year               
equity, %
                                            Total equity average              

                                                                                    
Return on capital            =     100 x    Profit before taxes + interest and other
employed, %                                 financial expenses
                                            Capital employed average                   
                                                                                       
Return on net assets, %      =     100 x    Operating profit + Share of profit (loss)
                                            in associated companies and joint ventures
                                            Net assets average                       
                                                                                     
Comparable return on net     =     100 x    Comparable operating profit + Share of
assets, %                                   profit (loss) in associated companies and 
                                            joint ventures (adjusted for IAS 39
                                            effects)	
					    Comparable net assets average            
                                                                                     
Capital employed             =              Total assets - non-interest bearing
                                            liabilities - deferred tax liabilities
                                            - provisions                           
                                                                                   
Net assets                   =              Non-interest bearing assets + interest-
                                            bearing assets related to the Nuclear
                                            Waste Fund - non-interest bearing
                                            liabilities - provisions
                                            (non-interest bearing assets and 
                                            liabilities do not include finance related
                                            items, tax and deferred tax and assets and
                                            liabilities from fair valuations of
                                            derivatives where hedge accounting is
                                            applied)
                                                                                  
Comparable net assets        =              Net assets adjusted for non-interest
                                            bearing assets and liabilities
                                            arising from financial derivatives hedging
                                            future cash-flows where hedge
                                            accounting is not applied according to
                                            IAS 39
                                                                                      
Interest-bearing net debt    =              Interest-bearing liabilities - cash and
                                            cash equivalents
                                                                              
Gearing, %                   =     100 x    Interest-bearing net debt     
                                            Total equity                  
                                                                          
Equity per share, EUR        =              Shareholder's equity           
                                            Number of shares at the close of the 
                                            period
                                                                                   
Equity-to-assets ratio, %    =     100 x    Total equity including minority interest
                                            Total assets          
                                                                                     
Interest coverage            =              Operating profit                        
                                            Net interest expenses                   
                                                                                     
Earnings per share (EPS)     =              Profit for the period - minority interest  
                                            Adjusted average number of shares during 
                                            the period





About Us

Fortum is a leading clean-energy company that provides its customers with electricity, heating and cooling as well as smart solutions to improve resource efficiency. We want to engage our customers and society to join the change for a cleaner world. We employ some 9,000 professionals in the Nordic and Baltic countries, Russia, Poland and India, and 62% of our electricity generation is CO2 free. In 2016, our sales were EUR 3.6 billion. Fortum's share is listed on Nasdaq Helsinki. www.fortum.com

Subscribe