Fortum Corporation: Interim Report January-September 2004

Fortum Corporation    STOCK EXCHANGE RELEASE
                    21 October 2004

Fortum Corporation
Interim Report January - September 2004


Fortum continues strong financial performance
 - operating profit EUR 1,350 million


January-September in brief
- Operating profit EUR 1,350 million (+35%), incl. non-recurring
items EUR 124 million
- Earnings per share EUR 1.03 (+61%), exceeding the full year 2003
figure
- Net debt EUR 5,229 million (EUR -397 million since end of 2003),
gearing decreased to 73%
- Proposal to separate oil businesses through a share dividend and
a sale of shares


Key figures              III/04 III/03     I-    I-   2003  Last
                                       III/04 III/03           12
                                                           month
                                                               s
                                                           (LTM)
Net sales, EUR million    2,837  2,527  8,490 8,555  11,39 11,32
                                                         2     7
Operating profit, EUR       345    239  1,350 1,000  1,420 1,770
million
- excluding non-            318    231  1,226   974  1,360 1,612
recurring items, EUR
million
Profit before taxes, EUR    289    185  1,151   811  1,184 1,524
million
Earnings per share, EUR    0.27   0.15   1.03  0.64   0.91  1.30
Shareholders’ equity per                 8.18  7.30   7.55      
share, EUR
Capital employed                       12,652 12,773  12,70      
(at end of period), EUR                                  4
million
Interest-bearing net                    5,229 4,420  5,626      
debt
(at end of period), EUR
million *)
Investments, EUR million                  507   889  1,136   754
Net cash from operating                 1,299 1,381  1,577      
activities,
EUR million
Return on capital                        14.5  10.6   11.4  14.2
employed, %
Return on shareholders’                  17.1  10.5   12.3  15.4
equity, % *)
Gearing, % *)                              73    58     85      
Average number of                      13,112 13,594  13,343     
employees                                                
Average number of                    849,823 845,836 846,831 848,5540
shares, 1,000s   
                                    
*) The figures for the full year 2003 and for January-September
2004 include the impact of the redemption of the preference shares
worth EUR 1.2 billion issued by Fortum Capital Ltd.

Fortum's financial performance in January-September improved
significantly compared to last year. The operating profits of all
segments - except for Oil Retail - including and excluding non-
recurring items were higher than during the corresponding period
in 2003.

The developments of key market drivers were diverging. Although
the Nord Pool electricity price was 22% lower than a year ago, the
results of power businesses were significantly stronger. The good
results were due to operational efficiency: utilisation of the
flexible power production portfolio, successful hedging, good
availability at production units, a high-value oil product slate
as well as an improved cost structure.

The international oil refining reference margin was very strong,
66% higher than a year ago, boosting the results of Oil Refining.
In addition, the substantial increase in the price of crude oil
led to inventory gains of EUR 90 million.

The cash flow remained good although it did not reflect the strong
improvement in the operating profit. This was due to a slight
increase in working capital caused mainly by the increase in oil
prices. The balance sheet was strengthened compared to the end of
2003. At the end of the third quarter, net debt had decreased by
EUR 397 million and gearing decreased to 73%.

A proposal was made to separate the oil businesses through a share
dividend and a sale of shares in April 2005. Fortum strengthened
its position in the Russian electricity company, OAO Lenenergo.

Net sales and results

July - September

During the third quarter, the Nord Pool electricity price was
slightly lower than during the third quarter of 2003 whereas the
strong international oil refining reference margin nearly doubled
compared to the corresponding period in 2003. The price of crude
oil continued to increase.

Group net sales stood at EUR 2,837 (EUR 2,527 million in July-
September 2003). The increase was mainly attributable to higher
prices for oil products and an increase in the power volumes.

Group operating profit totalled EUR 345 (239) million. Operating
profit excluding non-recurring items stood at EUR 318 (231)
million. The net amount of non-recurring items was EUR 27 (8)
million, mainly consisting of inventory gains arising from the
increase in the price of crude oil. The results for the power and
heat businesses improved despite lower electricity prices. Typical
for the summer period, the third quarter was weaker than the first
and second quarters of 2004. The results for Markets decreased
somewhat because of lower sales margins and volumes. The high
refining margin had a positive impact on the results of Oil
Refining.

January - September

Group net sales stood at EUR 8,490 (8,555) million. Higher prices
for oil products had an increasing impact, whereas the Group's
exit from gas trading and a weakened US dollar decreased the net
sales.

Group operating profit totalled EUR 1,350 (1,000) million.
Operating profit excluding non-recurring items was EUR 1,226 (974)
million. The net amount of non-recurring items was EUR 124 (26)
million, including a one-time compensation of EUR 29 million from
parties in the new nuclear power unit relating to the existing
nuclear infrastructure, and inventory gains of EUR 90 million
(losses of EUR 0.4 million) resulting from the increase in the
price of crude oil.

The results for Power Generation were up on the corresponding
period last year, despite lower market prices for electricity.
This was mainly due to Fortum's flexible production portfolio,
successful hedging and internal efficiency improvements.

The results for the Heat segment improved because of a rise in
Fortum Värme's results. This was mainly due to a better fuel mix
and good power plant availability.

The results for Distribution, which is a regulated business,
improved slightly over previous year's level thanks to internal
efficiency improvement.

Markets experienced an improvement in its results compared to last
year, despite the decrease in sales prices and somewhat lower
volumes. The main enablers were better risk management and
improved business processes.

The results for Oil Refining reached a record high level due to
strong oil refining margins, higher volumes and a considerable
amount of inventory gains. However, a weaker US dollar than a year
ago had a negative effect on the results. The results were further
boosted by a favourable product slate, competitive feedstocks and
good availability at the refineries.

The results for the Oil Retail segment were at a lower level than
during the corresponding period last year. The sales volumes of
traffic fuels increased slightly, whereas the corresponding
margins decreased somewhat.

The Shipping and other Oil segment enjoyed higher freight rates,
especially for crude oil. However, a weaker US dollar than a year
ago had a negative impact on the results. The contribution from
SeverTEK had a positive impact on the result.

The Group's profit before taxes was EUR 1,151 (811) million.

The Group's net financial expenses were EUR 199 (189) million.
This includes the interest cost attributable to the debt assumed
when redeeming the preference shares issued by Fortum Capital Ltd
as well as approximately EUR 10 million representing the net
present value of the interest rate differential relating to the
prepayment of the private placement bonds issued in the United
States in 1992.

Minority interests accounted for EUR 15 (57) million. The decrease
is mainly due to the redemption of Fortum Capital's preference
shares, accounted for as minority interests before the redemption.
The figure for 2004 is mainly attributable to Fortum Värme
Holding, in which the City of Stockholm has a 50% economic
interest.

Taxes for the period totalled EUR 259 (212) million. The tax rate
according to the income statement was 22.5% (26.1%). Taxes for the
period include a decrease in deferred tax liabilities of EUR 43
million due to the change in the Finnish income tax rate from 29%
to 26% which takes effect from the beginning of the 2005 tax year.
The tax rate would have been 26.2% excluding the above-mentioned
decrease.

Net profit for the period was EUR 877 (542) million. Earnings per
share were EUR 1.03 (0.64). Return on capital employed was 14.5%
(10.6%) and return on shareholders' equity was 17.1% (10.5%).

Reporting structure

In order to improve the transparency of its financial reporting,
Fortum has adopted a new reporting structure in 2004. The number
of reporting segments has been increased from four to seven. The
new segments include the following business units (names of the
business units in brackets after the segment name): Power
Generation (Generation, Portfolio Management and Trading,
Service); Heat (Heat, Värme); Distribution (Distribution); Markets
(Markets); Oil Refining (Oil Refining, Components); Oil Retail
(Oil Retail); Shipping and other Oil (Shipping, other oil
operations including SeverTEK). In addition, the segment Other
includes for example Group administration and shared service
functions.

POWER AND HEAT SEGMENTS

Fortum's power and heat businesses are divided into four reporting
segments. Power is generated in Fortum's own and partly-owned
power plants by the Power Generation segment and in combined heat
and power (CHP) plants by the Heat segment. Power Generation sells
the electricity it generates through the Nordic electricity
exchange, Nord Pool. The Markets segment buys its electricity
through Nord Pool and sells the electricity to private and
business customers. Heat sells steam and district heat mainly to
industrial and municipal customers as well as to real estate
companies, and it sells the power it produces directly to end-
customers and to Nord Pool. Fortum's distribution and regional
network transmissions are reported in the Distribution segment.

Market conditions

According to preliminary statistics, the Nordic countries consumed
287 (283) TWh of electricity during January-September, which was
2% more than the consumption during the corresponding period last
year.

During the third quarter, the average spot price for electricity
on the Nordic power exchange, Nord Pool, was EUR 29.9 (31.0) per
megawatt-hour. The price was about 3% lower than the corresponding
figure in 2003 and 1% higher compared to the second quarter of
2004. During January-September, the average spot price for
electricity was EUR 29.4 (37.6) or 22% lower than the
corresponding figure in 2003.

Very high inflows in the beginning of July lowered the spot price
and ended the increasing trend in the forward prices. The spot
price recovered by August but the high precipitation, resulting in
significantly higher than normal inflows in September, decreased
the spot price again during the latter part of September.

Due to the high inflows the water reservoir deficit decreased by
10 TWh during the third quarter. At the beginning of October, the
water reservoirs were about 6 TWh below average but 10 TWh above
the corresponding level for 2003.

Total power and heat generation figures

Fortum's power generation in the Nordic countries during January-
September was 38.8 (37.1) TWh, 14% (13%) 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  III/04 III/03     I-     I-  2003   LTM
and heat generation,                III/04 III/03
TWh
Power generation        11.5   10.7   39.5   38.9  53.2  53.8
Heat generation          3.4    3.5   17.4   18.3  25.9  25.0


Fortum's own power    III/04 III/03     I-     I-  2003   LTM
generation by source,               III/04 III/03
TWh,
total in the Nordic
countries
Hydropower               4.4    3.5   13.0   11.9  16.9  18.0
Nuclear power            5.2    4.8   18.7   17.5  23.8  25.0
Thermal power            1.8    2.1    7.1    7.7  10.5   9.9
Total                   11.4   10.4   38.8   37.1  51.2  52.9


Share of own          III/04 III/03     I-     I-  2003   LTM
production, %,                      III/04 III/03
total in the Nordic
countries
Hydropower                38     34     34     32    33    34
Nuclear power             46     46     48     47    46    47
Thermal power             16     20     18     21    21    19
Total                    100    100    100    100   100   100


Total electricity and heat sales figures

Fortum's total electricity sales amounted to 44.7 (44.7) TWh.
Sales volumes in the Nordic countries were at 43.5 (42.7) TWh,
representing approximately 15% (15%) of Nordic electricity
consumption during January-September. Heat sales in the Nordic
countries amounted to 13.9 (13.9) TWh and in other countries to
2.4 (2.8) TWh.

The average price of electricity sold by Fortum in the Nordic
countries during the third quarter was 5% higher than the
corresponding figure last year, and 3% lower compared to the
second quarter of 2004. In January-September, the average price of
electricity sold by Fortum in the Nordic countries was 3% lower
than the corresponding figure last year.

The segments sell their electricity to Nord Pool or external
customers and purchase 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 on Group level.


Fortum's total         III/04 III/03      I-    I-   2003   LTM
electricity and heat                  III/04 III/03
sales, EUR million
Electricity sales         427    380   1,439 1,474  2,038 2,003
Heat sales                114    107     558   540    775   793


Fortum's total         III/04 III/03      I-    I-   2003   LTM
electricity sales by                  III/04 III/03
area, TWh
Sweden                    5.5    5.5    19.5  20.7   28.3  27.1
Finland                   7.0    6.3    22.6  21.4   29.1  30.3
Other countries           0.7    0.7     2.6   2.6    3.6   3.6
Total                    13.2   12.5    44.7  44.7   61.0  61.0


Fortum's total heat    III/04 III/03 I-III/04 I-III/   2003   LTM
sales by area, TWh                               03
Sweden                    0.8    0.8      6.4   6.5    9.5   9.4
Finland                   1.7    1.6      7.4   7.4   10.3  10.3
Other countries           0.6    0.6      2.5   2.8    3.9   3.6
Total                     3.1    3.0     16.3  16.7   23.7  23.3


SEGMENT REVIEWS - POWER AND HEAT

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.


EUR million           III/04 III/03     I-     I-  2003   LTM
                                    III/04 III/03
Net sales                453    524  1,505  2,057 2,681 2,129
- electricity sales      357    327  1,208  1,384 1,871 1,695
- other sales             96    197    297    673   810   434
Operating profit         124     82    490    410   603   683
- excluding non-         126     79    470    408   599   661
recurring items
Net assets (at end of                6,236  6,391 6,391      
period)
Return on net assets,                 10.5    8.6   9.5  10.9
%

The segment's power generation during the third quarter amounted
to 10.9 (9.9) TWh in the Nordic countries.

In January-September, the segment's power generation in the Nordic
countries was 35.7 (34.1) TWh, of which about 13.0 (11.9) TWh or
37% (35%) was hydropower-based, 18.7 (17.5) TWh or 52% (51%)
nuclear power-based and 4.0 (4.7) TWh or 11% (14%) thermal power-
based.

Power generation by   III/04 III/03      I-     I-  2003   LTM
area, TWh                            III/04 III/03
Sweden                   5.3    5.0    18.1   17.7  24.6  25.0
Finland                  5.6    4.9    17.6   16.4  22.2  23.4
Other countries          0.1    0.3     0.7    1.8   2.0   0.9
Total                   11.0   10.2    36.4   35.9  48.8  49.3

The yearly revisions of power plants were carried out according to
plan.

In July, Fortum agreed on the acquisition of additional shares in
the Russian OAO Lenenergo. Russian competition authorities
approved the share transaction in August. Fortum's holding in the
company's share capital is 30.7%, and its share of voting rights
is 29.6%.


Heat

The business area comprises heat generation and sales in the
Nordic countries and other parts of the Baltic Rim. Fortum is the
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. In Sweden, Fortum owns the company AB Fortum Värme samägt
med Stockholms stad, in which the City of Stockholm has a 50%
economic interest.

EUR million            III/04  III/03     I-    I-   2003   LTM
                                      III/04 III/03
Net sales                 145     132    701   672    964   993
- heat sales              108     100    536   501    728   763
- electricity sales        20      16    110   124    167   153
- other sales              17      16     55    47     69    77
Operating profit            8      -6    142    93    173   222
- excluding non-            8      -2    142    97    176   225
recurring items
Net assets (at end of                  2,424 2,342  2,466      
period)
Return on net assets,                    7.8   5.3    7.3   9.2
%

The segment's heat sales during the third quarter amounted to 2.6
(2.6) TWh, most of which is generated in the Nordic countries. In
January-September, heat sales totalled 14.9 (14.6) TWh. In the
heat business, the third quarter is usually the weakest of the
year.

The inauguration of Fortum's Nynäshamn combined heat and power
plant in Sweden took place in September. The plant uses biomass
fuels to produce process steam and district heat.

In Sweden, the new waste incineration boiler in the Högdalen
combined heat and power plant was tuned to be taken into operation
during the autumn. The new district heating distribution
connection in Akalla-Upplands Väsby was taken into operation.


Heat sales by area,   III/04 III/03  I-III  I-III  2003   LTM
TWh                                    /04    /03
Sweden                   0.8    0.8    6.4    6.5   9.5   9.4
Finland                  1.7    1.6    7.4    7.4  10.3  10.3
Other countries          0.1    0.2    1.1    0.7   1.3   1.7
Total                    2.6    2.6   14.9   14.6  21.1  21.4


Electricity sales,    III/04 III/03 I-III/ I-III/  2003   LTM
TWh                                     04     03
Total                    0.6    0.5    3.3    3.1   4.5   4.7



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/04 III/03  I-III  I-III  2003   LTM
                                       /04    /03
Net sales                150    143    513    502   688   699
- distribution           122    116    427    410   569   586
network transmission
- regional network        19     21     64     69    88    83
transmission
- other sales              9      6     22     23    31    30
Operating profit          55     47    196    189   247   254
- excluding non-          54     48    195    169   227   253
recurring items
Net assets (at end of                3 088  3 089 3 129      
period)
Return on net assets,                  8,4    8,1   7,9   8,2
%

During January-September, the volume of distribution and regional
network transmissions totalled 15.8 (15.4) TWh and 13.9 (15.4)
TWh, respectively.

Electricity transmissions via the regional distribution network to
customers outside the Group totalled 11.6 (11.5) TWh in Sweden and
2.3 (3.9) TWh in Finland.

Further improvements aiming at better invoicing transparency and
enhanced customer service were developed. One example is the
automated meter-reading system that enables electricity meters to
be read remotely and allows customers to be invoiced according to
their actual electricity consumption. A number of pilot projects
were started in Sweden and Finland to test the system.

The big investment programme to reduce the risks of outages
continued in western Sweden. Within a five-year-period, the risk
will be minimised by isolating cables and installing underground
cables.

In June 2004, the Energy Market Authority in Finland published its
guidelines for transmission and distribution pricing principles.
The new regulation will enter into force in January 2005. The
Authority will make company-specific decisions on the parameters
being used to access the allowable return in accordance with the
new electricity market legislation, which is expected to take
effect in December 2004.

In Sweden, the Energy Authority is developing and implementing a
new model for monitoring distribution prices. Further details are
expected to be published later this year.



Volume of distributed III/04 III/03  I-III  I-III  2003   LTM
electricity by area,                   /04    /03
TWh
Sweden                   2.6    2.5    9.7   10.3  14.2  13.6
Finland                  1.2    1.1    4.4    4.4   6.2   6.2
Norway                   0.4    0.3    1.6    0.6   1.3   2.3
Other countries          0.0    0.1    0.1    0.1   0.2   0.2
Total                    4.2    4.0   15.8   15.4  21.9  22.3


Number of electricity        30.9.2004  30.9.2003       2003
distribution customers by
area, 1,000s
Sweden                             860        850        855
Finland                            405        395        400
Other countries                    115        115        115
Total                            1,380      1,360      1,370


Markets

The Markets segment focuses on the retail sale of electricity to a
total of 1.1 million private and business customers as well as to
other electricity retailers in Sweden, Finland and Norway. The
Markets segment buys its electricity through Nord Pool.

EUR million            III/04 III/03  I-III  I-III  2003   LTM
                                        /04    /03
Net sales                 287    322  1,009  1,212 1,634 1,431
Operating profit           11     13     26     18    35    43
- excluding non-           11     13     26     18    35    43
recurring items
Net assets (at end of                   139     57    23      
period)
Return on net assets,                  28.0   32.7  55.2  38.9
%

During the third quarter, average retail electricity prices on the
Nordic market were lower than during the corresponding period the
previous year. In January-September, the retail prices decreased
slightly. In Norway, due to a different retail contract structure,
the electricity retail prices follow the Nord Pool market prices
more rapidly than in Sweden and Finland.

In July-September, the segment's electricity sales totalled 9.2
(10.1) TWh with sales for January-September standing at 31.6
(34.6) TWh. The decline was mainly due to lower industrial volumes
and a warmer winter than the year before.

Fortum's electricity retail prices decreased during the third
quarter as well as during January-September compared to the
corresponding period last year.

Fortum continued to launch new products on the Nordic market. Post-
debiting for electricity customers will be implemented starting
this autumn. The possibility to use self-meter-reading will also
be expanded during the autumn.

During January-September, competition on the Nordic electricity
market intensified. Also Fortum's sales activity level increased.
The number of private customers switching suppliers increased. The
activity level has traditionally been higher in Norway than in
other Nordic countries, but now the level in Finland and Sweden is
increasing. The number of customers choosing fixed-priced
contracts or individual supply solutions increased.

OIL SEGMENTS

Fortum's oil operations are divided into three reporting segments.
Oil Refining manufactures and sells gasolines, diesel fuels, light
and heavy fuel oils, aviation fuels, base oils, lubricants,
gasoline components and LPG. Oil Retail operates an extensive
retail sales network and has direct sales to private and business
customers. The Shipping and other Oil segment has a tanker fleet
for crude oil and product transports, and includes oil production.

Market conditions

During the third quarter, the international refining margin in
north-western Europe (Brent Complex) averaged USD 4.9 (2.7) /bbl.

During January-September, the international refining margin was
significantly higher than during the corresponding period last
year. The reference margin used by Fortum averaged USD 4.8 (2.9)
/bbl. Fortum’s premium margin continued to average USD 2/bbl
higher than the international reference margin.

Crude oil prices remained high throughout the period under review.
In the third quarter, the Brent crude oil averaged USD 41.5 (28.4)
/bbl. In January-September, the average price was USD 36.4 (28.6)
/bbl. The Brent price continued at over USD 40/bbl throughout
September. At the end of September, Brent crude was about USD
47/bbl. In January- September, inventory gains were EUR 90 million
(losses of EUR 0.4 million).

The refining margins and shipping freights are priced in U.S.
dollars and therefore the weakening of this currency will have an
impact on the profitability of the Oil Refining and the Shipping
and other Oil segments.

SEGMENT REVIEWS - OIL

Oil Refining

The activities of Oil Refining cover the refining of oil and
selling of oil products. The main products are traffic fuels and
heating oils. Fortum is the leading producer of clean traffic
fuels in the Nordic area.

EUR million           III/04  III/03   I-III  I-III   2003   LTM
                                         /04    /03
Net sales              1,641   1,349   4,579  4,311  5,693 5,961
Operating profit         131      89     411    224    281   468
- excluding non-         100      75     315    224    267   358
recurring items*)
Net assets (at end                     1,199  1,052  1,003      
of period)
Return on net                           49.6   27.4   26.2  42.8
assets, %
*) non-recurring items are mainly inventory gains and losses

Fortum refined a total of 10.1 (9.7) million tonnes of crude oil
and other feedstocks. In Finland, oil product sales totalled about
6.2 (5.8) million tonnes. Exports accounted for a total of 3.8
(3.9) million tonnes.

Work on the EUR 500 million investment to increase the sulphur-
free diesel production capacity of the Porvoo refinery continued
as planned, and the work on the foundations for the new production
line started in August. The capital expenditure in 2004 will
amount to slightly more than EUR 100 million. The production line
will be taken into use at the end of 2006.

In May, Fortum initialised the manufacturing of ETBE (ethyl
tertiary butyl ether), containing bioethanol, at the Porvoo
refinery, to replace MTBE.


Deliveries of oil     III/04 III/03   I-III  I-III  2003    LTM
products produced by                    /04    /03
Fortum – by product
group (1,000 t)
Gasoline               1,108  1,075   3,250  3,135 4,434  4,549
Diesel                   959    971   2,931  2,876 3,886  3,941
Aviation fuel            172    159     494    410   611    695
Light fuel oil           316    362   1,054  1,081 1,474  1,447
Heavy fuel oil           251    269     909    951 1,314  1,272
Other                    499    488   1,384  1,276 1,672  1,780
Total                  3,305  3,324  10,022  9,729 13,391 13,684
                                                     


Deliveries of oil     III/04 III/03   I-III  I-III  2003    LTM
products produced by                    /04    /03
Fortum – by area
(1,000 t)
Finland                2,136  2,002   6,199  5,791 7,889  8,297
Other Nordic             528    503   1,593  1,470 1,921  2,044
countries
Baltic countries and      24     33      82     62    62     82
Russia
USA and Canada           254    278     949    795 1,252  1,406
Other countries          363    508   1,199  1,611 2,267  1,855
Total                  3,305  3,324  10,022  9,729 13,391 13,684



Oil Retail

    Oil Retail has a network of service stations and other retail
    sales outlets both in Finland and in other countries in the
    Baltic Rim. The total number of outlets exceeds 1,000.

EUR million           III/04 III/03  I-III  I-III  2003   LTM
                                       /04    /03
Net sales                666    543  1,763  1,650 2,203 2,316
Operating profit          15     21     41     46    44    39
- excluding non-          16     21     36     45    53    44
recurring items
Net assets (at end of                  328    329   329      
period)
Return on net assets,                 18.0   19.4  13.8  12.6
%


During the third quarter, retail sales of the main oil products
totalled 1,025 (972) thousand cubic metres, of which traffic fuels
accounted for 712 (655) thousand cubic metres.

During January-September, retail sales of the main oil products
totalled 2,922 (2,880) thousand cubic metres, of which traffic
fuels accounted for 1,957 (1,838) thousand cubic metres.

The number of oil retail outlets at the end of September was 885
(892) in Finland and 169 (152) in other countries in the Baltic
Rim.

Shipping and other Oil

Shipping operates a tanker fleet for crude oil and product
transports. About 50% of the volumes carried are for third-party
customers. The focus is on the Baltic Sea, the North Sea and the
North Atlantic. Total capacity is about 1 million dead weight
tonnes. In Russia, Fortum owns an oil field jointly with the
Russian company, Lukoil.

EUR million          III/04  III/03   I-III  I-III  2003   LTM
                                        /04    /03
Net sales                69      62     248    243   308   313
Operating profit         16       9      83     55    79   107
- excluding non-         16       8      79     57    69    91
recurring items
Net assets (at end                      184    150   133      
of period)
Return on net                          69.5   52.0  56.7  68.0
assets, %

During the third quarter, deliveries by Shipping were 9.9 (9.9)
million tonnes and in January-September 30.2 (30.3) million
tonnes.

The third quarter freights were at a satisfactory level and higher
than during the corresponding period last year. The freight rates
picked up significantly towards the end of the period under
review. In January-September, the utilisation rate for Fortum's
crude and oil product fleet was high.

During the third quarter, Fortum decided to time-charter two
Panamax-sized tankers for gasoline exports to North America. The
vessels will be built by a joint venture formed by Fortum and
Concordia Maritime and will be completed in 2006 and 2007.
Moreover, four product tankers are currently under construction.
The crude oil tanker Palva was converted into a double-hull vessel
and its sister ship Tervi is currently undergoing a similar
modification.

In total, Fortum owns nine tankers and 20 are time-chartered.
Eight tankers carry crude oil and 21 carry a range of oil
products.

In January-September, the average oil production of SeverTEK in
Russia totalled approximately 26,400 barrels per day (of which
Fortum's share was 50%). Further increase in the production is
subject to the availability of the regional pipeline capacity.

Investments and divestments

Investments in fixed assets in January-September totalled EUR 507
(889) million.

Work on the EUR 500 million investment to increase the sulphur-
free diesel production capacity of the Porvoo refinery continued
as planned. The estimated cost for 2004 is somewhat above EUR 100
million. The investment is expected to be completed by the end of
2006.

Fortum will participate in the new, fifth nuclear power plant unit
in Finland with a share of approximately 25%. Thus Fortum's
investment as an equity share will be EUR 180 million during 2004-
2009, entitling it to approximately 400 MW of the plant's
capacity. During the first quarter, Fortum also provided a
shareholders' loan of EUR 45 million.

The final approval for the purchase of additional shares in the
Russian power company OAO Lenenergo, agreed in July, was received
from the Russian competition authorities in August. As a result of
the deal, Fortum’s holding in the company’s share capital
increased to 30.7% and its share of voting rights to 29.6%.
Fortum's total investment in Lenenergo shares is approximately EUR
150 million.

Financing

Fortum's net debt decreased by EUR 397 million and stood at EUR
5,229 million (EUR 5,626 million at year end), giving a gearing
ratio of 73% (85% at year end).

The Group's net financing expenses were EUR 199 (189) million. The
amount includes the interest cost attributable to the debt assumed
when redeeming the preference shares issued by Fortum Capital Ltd
as well as approximately EUR 10 million representing the net
present value of the interest rate differential relating to the
prepayment of the private placement bonds issued in the United
States in 1992.

Moody's credit rating was upgraded to Baa1 (stable) on 13 February
2004. Standard & Poor's long-term credit rating for Fortum
Corporation continued at BBB+ (stable).

Separation of oil businesses

Fortum announced in September its plan to implement the separation
of Fortum Oil Oy in April 2005 through a distribution of Fortum
Oil shares as a dividend to the shareholders of Fortum Corporation
and a marketed offering of the remaining shares to investors. This
will enable Fortum Oil to simultaneously seek a listing of its
shares. The dividend distribution is subject to an approval by the
Annual General Meeting of Fortum in spring 2005.

The proposal to distribute Fortum Oil shares as a dividend has
been facilitated by Fortum's very strong operating performance in
both the Oil and Power and Heat businesses over the last 12
months. It is designed to allow both Fortum Corporation and Fortum
Oil to maintain their financial strength without raising
significant new capital from the markets. Fortum Oil will be
capitalised with approximately EUR 1 billion of debt including
approximately EUR 130 million of shipping leases.

Approximately 85% of Fortum Oil shares are proposed to be
distributed as a dividend, making the Finnish State a direct
majority shareholder in Fortum Oil, which is in line with the
Parliamentary decision adopted in 2003. The remaining
approximately 15% of the shares are expected to be sold to
investors, subject to market conditions. Following the dividend
distribution and the proposed sale of shares, Fortum Corporation
does not intend to continue as a shareholder in Fortum Oil.

Shares and share capital

Based on the share option schemes, a total of 981,004 Fortum
shares were entered into the trade register on 12 February 2004,
and a total of 448,415 Fortum shares were entered into the trade
register on 1 July 2004. After these increases, Fortum
Corporation's share capital is EUR 2,890,890,439.60, and the total
number of shares is 850,261,894.

A total of 82,070 shares were subscribed for between 2 July and 30
September 2004, based on the share warrants relating to Fortum
Corporation’s 1999 bond loan with warrants to the employees
(Fortum Corp -99 warrant FUM1VEW199). According to the terms of
subscription, the subscription price is EUR 3.63 per share. The
corresponding increase in share capital has not been entered in
the trade register.

A total of 1,025,000 shares were subscribed for between 2 July and
30 September 2004,  based on Fortum Corporation’s 1999 management
stock option scheme (Fortum Corp. warrant 2/99 FUM1VEW299).
According to the terms of subscription, the subscription price is
EUR 5.61 per share. The corresponding increase in share capital
has not been entered in the trade register.

The trading of the share options 2002A for key employees (Fortum
Corp. -02A warrant FUM1VEW102) commenced on the main list of the
Helsinki Stock Exchange on 1 October 2004. The total number of the
options to be listed is 10,767,000. Each option gives the right to
subscribe for one Fortum Corporation share with a nominal value of
EUR 3.40 between 1 October 2004 and 1 May 2007. The share capital
may be increased by a maximum of EUR 36,607,800. The subscription
price for shares on the basis on these options is EUR 4.74 at the
start of listing.

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 13,112 (13,594). The number of
employees at the end of the period was 12,726 (13,201). The
reduction is mainly due to divestments.

Outlook

The key market drivers influencing Fortum's performance are the
market price of electricity and the international oil refining
margin. Other important market drivers are the price of crude oil,
and the exchange rates of the US dollar and the Swedish krona.
Starting in 2005, emissions trading is likely to become a new key
market driver.

During the past five years, the volume of Fortum's CO2-free power
generation has increased from 30 TWh to 41 TWh. Its share was 78%
of Fortum's power generation in 2003. With this production
portfolio, Fortum is in a good position with regard to the
possible impacts of emissions trading.

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 electricity was EUR 29.9 (31.0) per
megawatt-hour (MWh) on the Nordic electricity market. At the
beginning of October, the Nordic water reservoirs were about 6 TWh
below the average, but 10 TWh above the corresponding level for
2003. During the first part of October, the spot price has been at
the level of EUR 27 per MWh while the electricity price in the
forward market for the remainder of 2004, full year of 2005 and
full year 2006 have been in the range of EUR 30 - 31 per MWh and
EUR 30 - 32 per MWh and EUR 28 -30 per MWh, respectively.

The oil market fundamentals are developing according to Fortum's
assumptions: the consumption of clean traffic fuels is increasing
and the demand for heavy fuel oil is decreasing, making the
complex refineries even more competitive. In addition, Fortum’s
position along the new export routes for Russian crude oil gives
it a clear advantage. These developments are in line with Fortum's
profitability assumptions for the ongoing Porvoo refinery upgrade
investment and provide a good starting point for the future
independent oil company.

The oil refining reference margin in north-western Europe (Brent
Complex) averaged USD 4.9 (2.7) /bbl during the third quarter.
During the first half of October, the reference margin has
averaged USD 4.2/bbl. Fortum’s premium margin is expected to
remain at the strong levels of previous years. The next major
maintenance shutdown at the Porvoo refinery is planned to take
place in the fall of 2005.

The average price for Brent crude oil was USD 41.5 (28.4)/bbl
during the third quarter. During the first half of October 2004,
the price has been averaging USD 49.1/bbl while the International
Petroleum Exchange’s Brent futures for the remainder of 2004 and
the first quarter of 2005 have been averaging USD 48.4/bbl and USD
46.2/bbl, respectively. The price of crude oil has an impact on
the results of Oil Refining through inventory gains and losses.

Tanker freight futures indicate that third-quarter rate levels
will increase during the fourth quarter and in the beginning of
2005. Due to demand for ice-classed tonnage, the winter season is
usually most profitable for Fortum Shipping.

The refining margins and shipping freights are exposed to USD
exchange rate volatility and therefore a weakened US dollar will
have a negative impact on the profitability of the oil business.
However, this impact is mitigated because of the forward hedging
policy of the estimated US dollar sales margins.

During January-September, the euro exchange rates against the US
dollar and the Swedish krona were on average 1.225 (1.113) and
9.157 (9.168), respectively. At the end of September, the exchange
rates were 1.241 (1.165) and 9.059 (8.963), respectively.

In September, it was announced that the Fortum Oil separation is
planned to be implemented in April 2005 through a share dividend
and a sale of shares. The dividend distribution is subject to an
approval by the Annual General Meeting of Fortum in spring 2005.

The first and last quarter of the year are usually the strongest
quarters for the continuous operations of the power and heat
businesses. The electricity prices in the forward market for the
remainder of the year are somewhat lower than the corresponding
forward prices for the remainder of 2003 in October last year.
Fortum has hedged approximately 70% of its electricity sales for
the next 12 months. The hedge ratio for the calendar year 2005 is
approximately 60%, the average price being approximately at the
level achieved during the first 9 months in 2004.

Fortum's performance in January-September has been very strong.
Given the current market fundamentals, the company's hedging
positions as well as the operational efficiency of both the power
and heat and the oil businesses, 2004 is set to become a very
satisfactory year for Fortum. This provides a good platform for
the two independent companies after the separation of the oil
businesses.

Espoo, 21 October 2004
Fortum Corporation
Board of Directors


The figures have not been audited.

Fortum will adopt the International Financial Reporting Standards
(IFRS/IAS) as of 2005.

Fortum's financial reporting in 2005:

The 2004 Financial Statements will be published on 3 February 2005

Interim Reports
The report for January-March will be released on 3 May 2005
The report for January-June on 19 July 2005
The report for January-September on 20 October 2005

Fortum Corporation
Carola Teir-Lehtinen
Senior Vice President, Corporate Communications

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


Distribution:
Helsinki Exchanges
Key media

FORTUM GROUP
JANUARY-SEPTEMBER 2004
Interim financial statements are unaudited

CONSOLIDATED INCOME STATEMENT
MEUR                                 Q3/04  Q3/03 Q1-Q3/04  Q1-Q3/03  2003    Last
									    twelve
									     months
Net sales                            2 837  2 527   8 490    8 555  11 392  11 327
    Share of profits of associated
    companies                           24      9      51       29      41      63
    Other operating income              16     19      98       95     151     154
    Materials and services          -2 107 -1 883  -5 860   -6 264  -8 054  -7 650
    Personnel expenses                -158   -145    -511     -499    -654    -666
    Depreciation, amortisation and
    write-downs			      -120   -128    -372     -395    -538    -515                                                0
    Other operating expenses          -147   -160    -546     -521    -918    -943
Operating profit                       345    239   1 350    1 000   1 420   1 770
    Financial income and expenses      -57    -54    -199     -189    -236    -246
Profit before taxes                    288    185   1 151      811   1 184   1 524
    Income taxes                       -65    -45    -259     -212    -325    -372
    Minority interests                   5    -10     -15      -57     -90     -48
Net profit for the period              228    130     877      542     769   1 104

Earnings per share, EUR                0.27   0.15    1.03     0.64    0.91   1.30
Fully diluted earnings per share, EUR  0.26   0.15    1.01     0.63    0.90
Average number of shares, 1,000 shares             849 823  845 836 846 831 848 540
Diluted adjusted average number of
shares, 1000 shares                                870 806  857 249 858 732
CONSOLIDATED BALANCE SHEET


MEUR                                  Sep 30  Sep 30   Dec 31 
					2004	2003   2330
ASSETS
Fixed assets and other long-term
investments
    Intangible assets                    112     151      146
    Property, plant and equipment     11 681  11 681   11 632
    Other long-term investments        1 839   1 714    1 762
    Other interest-bearing long-term
    investments		    	         716     643      632
    Total                             14 348  14 189   14 172
Current assets
    Inventories                          705     541      551
    Trade receivables                    875     846      951
    Short-term receivables               341     311      449
    Cash and cash equivalents            222     277      439
    Total                              2 143   1 975    2 390
Total                                 16 491  16 164   16 562

SHAREHOLDERS' EQUITY AND LIABILITIES

Shareholders' equity
    Share capital                      2 891   2 876    2 886
    Other equity                       4 065   3 297    3 520
    Total                              6 956   6 173    6 406
Minority interests                       245   1 449      232
Provisions for liabilities and
charges				         223     187      207
Deferred tax liabilities               1 804   1 803    1 843
Liabilities
    Long term liabilities
         Interest-bearing              4 289   3 504    4 840
         Interest free                   359     340      346
    Short term liabilities
        Interest-bearing               1 162   1 192    1 225
        Interest free                  1 453   1 516    1 463
Total                                 16 491  16 164   16 562

Equity per share, EUR                  8.18    7.30     7.55
Number of shares, 1,000 shares       850 262 845 898  848 832

CHANGE IN SHAREHOLDERS' EQUITY

MEUR                              Jan-Sep 30 Jan-Sep 30   Dec 31 
				        2004       2003     2003

Shareholders' equity, 1 January        6 406      5 897    5 897
Stock options exercised                   14          1       22
Dividend                                -359       -264     -264
Translation differencies                  18         -3      -18
Net earnings for the period              877        542      769
Total                                  6 956      6 173    6 406

CASH FLOW STATEMENT
                                  Jan-Sep 30 Jan-Sep 30   Dec 31 
MEUR				        2004       2003     2003

Net cash from operating activities     1 299      1 381    1 577
    Capital expenditures                -399       -370     -550
    Acquisition of shares               -108       -504     -570
    Proceeds from sales of fixed
    assets                                34        101      142
    Proceeds from sales of shares         16      1 221    1 227
    Change in other investments          -97        -53      -67
Cash flow before financing activitie     745      1 776    1 759
    Net change in loans                 -612     -1 791     -399
    Dividends paid                      -359       -264     -264
    Other financing items *                8        -40   -1 245
Net cash from financing activities      -963     -2 095   -1 908
Net increase (+)/decrease (-) in cash
and marketable securities               -218       -319     -149

* Includes the redemption of Fortum Capital Ltd preference shares -1 200 million
euros in December 2003

KEY RATIOS
                                    Sep 30    Sep 30   Dec 31   Last twelve
				       2004     2003     2003        months

Capital employed, MEUR                12 652  12 773   12 704
Interest-bearing net debt, MEUR*       5 229   4 420    5 626
Investments, MEUR                        507     889    1 136           754
Return on capital employed, %           14.5    10.6     11.4          14.2
Return on shareholders' equity, %*      17.1    10.5     12.3          15.4
Interest coverage                        7.5     5.1      5.8           7.8
FFO / interest-bearing net debt, % 1)   34.4    35.3     26.1
Gearing, % *                              73      58       85
Equity-to-assets ratio, %                 44      47       40
Average number of employees           13 112  13 594   13 343

1)  FFO = Funds from operations
* Figures include the effect of the redemption of Fortum Capital Ltd preference
shares in December 2003.

NET SALES BY SEGMENTS

MEUR                     Q3/04 Q3/03 Q1-Q3/04 Q1-Q3/03   2003 Last twelve
								months
Power Generation           453   524   1 505   2 057    2 681    2 129
Heat                       145   132     701     672      964      993
Distribution               150   143     513     502      688      699
Markets                    287   322   1 009   1 212    1 634    1 431
Oil Refining             1 641 1 349   4 579   4 311    5 693    5 961
Oil Retail                 666   543   1 763   1 650    2 203    2 316
Shipping and other Oil      69    62     248     243      308      313
Other                       23    24      67      68       93       92
Eliminations              -597  -572  -1 895  -2 160   -2 872   -2 607
Total                    2 837 2 527   8 490   8 555   11 392   11 327

OPERATING PROFIT BY SEGMENTS

MEUR                     Q3/04 Q3/03 Q1-Q3/04 Q1-Q3/03   2003 Last twelve
								months
Power Generation           124    82     490     410      603      683
Heat                         8    -6     142      93      173      222
Distribution                55    47     196     189      247      254
Markets                     11    13      26      18       35       43
Oil Refining               131    89     411     224      281      468
Oil Retail                  15    21      41      46       44       39
Shipping and other Oil      16     9      83      55       79      107
Other                      -15   -16     -39     -35      -42      -46
Total                      345   239   1 350   1 000    1 420    1 770

NON-RECURRING ITEMS IN OPERATING PROFIT BY SEGMENTS

MEUR                     Q3/04 Q3/03 Q1-Q3/04 Q1-Q3/03   2003 Last twelve
								months
Power Generation            -2     3      20       2        4       22
Heat                        -     -4      -       -4       -3       -3
Distribution                 1    -1       1      20       20        1
Markets                     -     -       -       -        -        -
Oil Refining                31    14      96      -        14      110
Oil Retail 2)               -1    -        5       1       -9       -5
Shipping and other Oil 2)   -      1       4      -2       10       16
Other                       -2    -5      -2       9       24       15
Total                       27     8     124      26       60      156

2) Split between segments corrected in 2003 figures

DEPRECIATION, AMORTISATION AND WRITE-DOWNS BY SEGMENTS

MEUR                     Q3/04 Q3/03 Q1-Q3/04 Q1-Q3/03   2003 Last twelve
								months
Power Generation            20    27      76      87      116      105
Heat                        30    29      91      85      116      122                          ¨
Distribution                33    35      99     110      143      132
Markets                      4     3      12      10       14       16
Oil Refining                19    20      56      59       80       77
Oil Retail                   7     8      22      23       41       40
Shipping and other Oil       3     4       8      12       14       10
Other                        4     2       8       9       14       13
Total                      120   128     372     395      538      515

INVESTMENTS BY SEGMENTS

MEUR                     Q3/04 Q3/03 Q1-Q3/04 Q1-Q3/03   2003 Last twelve
								months
Power Generation            93    23     155     351      386      190
Heat                        30    37      80     113      158      125
Distribution                25    17      65     241      339      163
Markets                      2    -        4      26       28        6
Oil Refining                44    16     111      60       97      148
Oil Retail                  10     8      21      21       36       36
Shipping and other Oil      21    23      61      64       71       68
Other                        4     4      10      13       21       18
Total                      229   128     507     889    1 136      754

NET ASSETS BY SEGMENTS

MEUR                                  Sep 30  Sep 30   Dec 31
					2004    2003     2003
Power Generation                       6 236   6 391    6 391
Heat                                   2 424   2 342    2 466
Distribution                           3 088   3 089    3 129
Markets                                  139      57       23
Oil Refining                           1 199   1 052    1 003
Oil Retail                               328     329      329
Shipping and other Oil                   184     150      133
Other                                     53      58       45
Eliminations                              -8      -9       -8
Total                                 13 643  13 459   13 511

RETURN ON NET ASSETS  BY SEGMENTS  3)

%                     Sep 30  Sep 30  Sep 30  Sep 30  Dec 31 Dec 31 Last    Last 
			2004  2004*)    2003  2003*)    2003 2003*) twelve  twelve   
								    months months*)
Power Generation        10.5    10.0    8.6     8.5    9.5    9.4     10.9   10.5
Heat                     7.8     7.8    5.3     5.5    7.3    7.5      9.2    9.2
Distribution             8.4     8.4    8.1     7.2    7.9    7.2      8.2    8.2
Markets                 28.0    28.0   32.7    32.7   55.2   55.2     38.9   38.9
Oil Refining            49.6    38.0   27.4    27.4   26.2   24.9     42.8   32.7
Oil Retail              18.0    15.8   19.4    19.0   13.8   16.6     12.6   14.2
Shipping and other Oil  69.5    66.1   52.0    53.9   56.7   49.5     68.0   57.8

*) Non-recurring items deducted from operating profit
2) December 31 2003*) figures changed due to corrections in non-recurring items.
3) Return on net assets, % = Operating profit/average net assets

CONTINGENT LIABILITIES

MEUR  	                                      Sep 30   Sep 30   Dec 31  
						2004     2003     2003
Contingent liabilities
On own behalf
    For debt
      Pledges                                    163      525      149
      Real estate mortgages                       92      237       91
    For other commitments
      Real estate mortgages                       57       54       55
      Pledges, company and other mortgages         1        1       -
    Sale and leaseback                             8        9        8
    Other contingent liabilities                  78       96      101
    Total                                        399      922      404
On behalf of associated companies
    Pledges and real estate mortgages             11       12       12
    Guarantees                                   357      597      562
    Other contingent liabilities                 182      182      182
    Total                                        550      791      756
On behalf of others
    Guarantees                                     4       15       15
    Other contingent liabilities                   6        5        7
    Total                                         10       20       22
Total                                            959    1 733    1 182
Operating lease liabilities
Due within a year                                 66       55       75
Due after a year                                 105      108      103
Total                                            171      163      178

Liability for nuclear waste disposal             570      545      570
Share of reserves in the Nuclear Waste
Disposal Fund					-560     -535     -560
Liabilities in the balance sheet 4)               10       10       10

4) Mortgaged bearer papers as security

In addition to other contingent liabilities  a guarantee has been given on behalf
of Gasum Oy, which covers 75% of the natural gas commitments arising from the
natural gas supply agreement between Gasum and OOO Gazexport.

Derivatives               Sep 30 2004          Sep 30
2003       Dec 31 2003

			   6)     7)    8)     6)     7)    8)     6)    7)    8)
MEUR
Forward rate agreements    221    -1    -1     335     -     -     330    -     -
Interest rate swaps      3 843   -50   -38   5 784     9    16   4 253   -97   -69
Forward foreign exchange
contracts 5)		 7 466   -38    -1   7 866   -54    33   8 396   129    49
Currency swaps             323    -3    -1     347    13     5     333    -3     1
Purchased currency
options			   525    -9    -9      32     4     4      -     -      -
Written currency options   525     3     3      15     -     -      -     -      -

5) Incl. also contracts used for equity hedging

6) Contract or notional value
7) Fair value
8) Not recognised as an income

Oil futures and forward 
instruments
		      Sep 30 2004          Sep 30
2003          Dec 31 2003
		      	
		        9)    10)    11)    9)      10)   11)    9)     10)   11)
                      1000    MEUR  MEUR   1000    MEUR  MEUR   1000   MEUR  MEUR
		      bbl		   bbl			 bbl
Sales contracts       16 010   -19   -19   11 345    -3    -3   22 304  -11   -11
Purchase contracts    59 825    48    48   26 398     7     7   37 239   14    14
Purchased options     13 495     9     9      100     -     -      150    -     -
Written options       13 993    -8    -8      100     -     -      600    -     -

9) Volume
10) Fair value
11) Not recognised as an income

Electricity derivatives
		      Sep 30 2004         Sep 30 2003         Dec 31 2003
		      	
		       9)    10)    11)    9)     10)   11)    9)     10)   11)

                      TWh   MEUR   MEUR    TWh   MEUR   MEUR   TWh   MEUR   MEUR
Sales contracts        74   -93     -11     58   -349   -218    58   -100    -65
Purchase contracts     42   125      39     57    308    176    50    136    101
Purchased options       1    -       -       1     -1     -2     -      -      -
Written options         -     -       -      3     -4     -3     -      -      -


Natural gas derivatives
    		        Sep 30 2004         Sep 30 2003         Dec 31 2003
		      	
		         9)    10)    11)    9)      10)    11)    9)     10)  11)
                        Mill.  MEUR  MEUR   Mill.    MEUR   MEUR  Mill.  MEUR MEUR
			th.		    th.			  th. 
Sales contracts           -     -      -    2 543     36     -      8      -   -
Purchase contracts        -     -      -    2 543    -34     -      8      -   -
Purchased options         -     -      -      709      1     -      -      -   -
Written options           -     -      -      709     -3     -      -      -   -

The fair values of derivative contracts subject to public trading are based on
market prices as of the balance sheet date. The fair values of other derivatives
are based on the present value of cash flows resulting from the contracts, and,
in respect of options, on evaluation models. The amounts also include unsettled
closed positions. Derivative contracts are mainly used to manage the group's
currency, interest rate and price risk.

QUARTERLY NET SALES BY SEGMENTS

MEUR                     Q3/04 Q2/04   Q1/04   Q4/03    Q3/03    Q2/03   Q1/03

Power Generation           453   488     564     624      524      573     960
Heat                       145   195     361     292      132      182     358
Distribution               150   157     206     186      143      160     199
Markets                    287   303     419     422      322      332     558
Oil Refining             1 641 1 635   1 303   1 382    1 349    1 265   1 697
Oil Retail                 666   566     531     553      543      521     586
Shipping and other Oil      69    78     101      65       62       87      94
Other                       23    24      20      25       24       22      22
Eliminations              -597  -616    -682    -712     -572     -707    -881
Total                    2 837 2 830   2 823   2 837    2 527    2 435   3 593

QUARTERLY OPERATING PROFIT BY SEGMENTS

MEUR                     Q3/04 Q2/04   Q1/04   Q4/03    Q3/03    Q2/03   Q1/03
Power Generation           124   138     228     193       82      116     212
Heat                         8    27     107      80       -6       22      77
Distribution                55    54      87      58       47       61      81
Markets                     11     5      10      17       13       12      -7
Oil Refining               131   187      93      57       89       51      84
Oil Retail                  15    20       6      -2       21       10      15
Shipping and other Oil      16    23      44      24        9       19      27
Other                      -15   -11     -13      -7      -16       -5     -14
Total                      345   443     562     420      239      286     475





















































































































































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. In 2017, our sales were EUR 4.5 billion. Fortum's share is listed on Nasdaq Helsinki. www.fortum.com

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