A good first half of the year
Fortum Corporation
Interim Report January-June 2010
16 July 2010 at 9:00 EEST
A good first half of the year
- Comparable operating profit EUR 990 (1,002) million, -1.2%
- Earnings per share EUR 0.93 (0.78), +19%
- Progress in Russia on track, comparable operating profit EUR 7 (-8) million
--------------------------------------------------------------------------------
| Key figures | II/10 | II/09 | I-II/10 | I-II/09 | 2009 | LTM |
--------------------------------------------------------------------------------
| Sales, EUR million | 1,295 | 1,194 | 3,242 | 2,826 | 5,435 | 5,851 |
--------------------------------------------------------------------------------
| Operating profit, | 351 | 375 | 1,075 | 974 | 1,782 | 1,883 |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Comparable | 339 | 400 | 990 | 1,002 | 1,888 | 1,876 |
| operating profit, | | | | | | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Profit before | 332 | 355 | 1,045 | 889 | 1,636 | 1,792 |
| taxes, EUR million | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.30 | 0.32 | 0.93 | 0.78 | 1.48 | 1.62 |
| share, EUR | | | | | | |
--------------------------------------------------------------------------------
| Net cash from | 422 | 704 | 943 | 1,526 | 2,264 | 1,681 |
| operating | | | | | | |
| activities, EUR | | | | | | |
| million | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | | | 9.19 | 8.42 | 9.04 | |
| equity per share, | | | | | | |
| EUR | | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | | | 6,506 | 6,004 | 5,969 | |
| net debt | | | | | | |
| (at end | | | | | | |
| of period), EUR | | | | | | |
| million | | | | | | |
--------------------------------------------------------------------------------
| Average number of | | | 888,367 | 888,230 | 888,230 | 888,367 |
| shares, 1,000s | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key financial ratios | 2009 | LTM |
--------------------------------------------------------------------------------
| Return on capital employed, % | 12.1 | 12.8 |
--------------------------------------------------------------------------------
| Return on shareholders' equity, % | 16.0 | 18.0 |
--------------------------------------------------------------------------------
| Net debt/EBITDA | 2.6 | 2.7 |
--------------------------------------------------------------------------------
Fortum's President and CEO Tapio Kuula on the January-June 2010 results:
“Fortum had a good first half of the year considering the exceptional market
conditions. The Heat, and Russia Divisions as well as Distribution business area
were able to clearly improve their profits from a year ago. Electricity Sales
had a poor first quarter, but achieved better results in the April-June
reporting period. The Power Division's second quarter financial results were not
quite at the same level as in the excellent first quarter.
The overall Nordic and Russian power consumption figures continued to increase
from last year during the first two quarters of 2010. Industrial activity is
clearly picking up in Fortum's key market areas. The Russian economy sustained
its fast path of recovery.
The first quarter of the year was characterised by an unusually cold winter and
power price peaks at Nord Pool. The market environment was less extreme during
the second quarter, although water and snow reservoir levels remained low and
nuclear modernisation programmes in Sweden still decreased the availability of
nuclear capacity.
Nord Pool spot prices stayed at a higher level in January-June than in the same
period 2009. Also Power Division's achieved Nordic power price increased by EUR
1 per megawatt-hour (MWh) from year ago. However, the achieved Nordic power
price in the second quarter decreased by EUR ~3 per MWh from a year ago. The
decline in the division's profitability stems from the lower achieved price in
the second quarter, less benign power generation mix and also from an increase
in the costs of Fortum's associated (co-owned) nuclear generating companies.
The Russian wholesale power sector reform is progressing. Starting 1 July 2010,
80% of all produced power in Russia was sold on the competitive market. The
wholesale power market is expected to be fully liberalised from the beginning of
2011. The regulation for new capacity is expected to significantly increase the
capacity payments for new capacities to Fortum.
I am satisfied with the results achieved in the first half of 2010, still
remembering there are areas where results could have been better. Thus, the
first priority is to steadily improve our long term performance."
Financial results
April-June
Group sales were EUR 1,295 (1,194) million. Group operating profit totalled EUR
351 (375) million. Comparable operating profit totalled EUR 339 (400) million.
The total of non-recurring items, mark-to-market effects and nuclear fund
adjustments in the second quarter of 2010 amounted to EUR 12 (-25) million. Of
this total, non-recurring items were EUR 4 (10) million.
Sales by division
--------------------------------------------------------------------------------
| EUR million | II/10 | II/09 | I-II/1 | I-II/0 | 2009 | LTM |
| | | | 0 | 9 | | |
--------------------------------------------------------------------------------
| Power | 597 | 608 | 1,366 | 1,296 | 2,531 | 2,601 |
--------------------------------------------------------------------------------
| Heat | 301 | 250 | 952 | 764 | 1,399 | 1,587 |
--------------------------------------------------------------------------------
| Distribution* | 200 | 176 | 480 | 405 | 800 | 875 |
--------------------------------------------------------------------------------
| Electricity Sales* | 327 | 298 | 964 | 767 | 1,449 | 1,646 |
--------------------------------------------------------------------------------
| Russia | 169 | 138 | 413 | 324 | 632 | 721 |
--------------------------------------------------------------------------------
| Other | 16 | 19 | 21 | 38 | 71 | 54 |
--------------------------------------------------------------------------------
| Netting of Nord Pool | -261 | -212 | -944 | -570 | -1,095 | -1,469 |
| transactions | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | -54 | -83 | -10 | -198 | -352 | -164 |
--------------------------------------------------------------------------------
| Total | 1,295 | 1,194 | 3,242 | 2,826 | 5,435 | 5,851 |
--------------------------------------------------------------------------------
* Part of the Electricity Solutions and Distribution Division
Comparable operating profit by division
--------------------------------------------------------------------------------
| EUR million | II/10 | II/09 | I-II/1 | I-II/0 | 2009 | LTM |
| | | | 0 | 9 | | |
--------------------------------------------------------------------------------
| Power | 271 | 340 | 695 | 755 | 1,454 | 1,394 |
--------------------------------------------------------------------------------
| Heat | 33 | 26 | 165 | 140 | 231 | 256 |
--------------------------------------------------------------------------------
| Distribution* | 53 | 54 | 155 | 135 | 262 | 282 |
--------------------------------------------------------------------------------
| Electricity Sales* | 10 | 6 | -3 | 4 | 22 | 15 |
--------------------------------------------------------------------------------
| Russia | -9 | -14 | 7 | -8 | -20 | -5 |
--------------------------------------------------------------------------------
| Other | -19 | -12 | -29 | -24 | -61 | -66 |
--------------------------------------------------------------------------------
| Total | 339 | 400 | 990 | 1,002 | 1,888 | 1,876 |
--------------------------------------------------------------------------------
* Part of the Electricity Solutions and Distribution Division
Operating profit by division
--------------------------------------------------------------------------------
| EUR million | II/10 | II/09 | I-II/1 | I-II/0 | 2009 | LTM |
| | | | 0 | 9 | | |
--------------------------------------------------------------------------------
| Power | 280 | 307 | 747 | 739 | 1,363 | 1,371 |
--------------------------------------------------------------------------------
| Heat | 35 | 39 | 194 | 154 | 252 | 292 |
--------------------------------------------------------------------------------
| Distribution* | 53 | 54 | 166 | 135 | 263 | 294 |
--------------------------------------------------------------------------------
| Electricity Sales* | 23 | 20 | -6 | -1 | 29 | 24 |
--------------------------------------------------------------------------------
| Russia | -9 | -15 | 23 | -9 | -20 | 12 |
--------------------------------------------------------------------------------
| Other | -31 | -30 | -49 | -44 | -105 | -110 |
--------------------------------------------------------------------------------
| Total | 351 | 375 | 1,075 | 974 | 1,782 | 1,883 |
--------------------------------------------------------------------------------
* Part of the Electricity Solutions and Distribution Division
January-June
Group sales were EUR 3,242 (2,826) million. Group operating profit totalled EUR
1,075 (974) million. Comparable operating profit totalled EUR 990 (1,002)
million.
Non-recurring items, mark-to-market effects and nuclear fund adjustments in the
first half of the year amounted to EUR 85 (-28) million. Out of this, the share
of non-recurring items was EUR 50 (14) million and consisted mainly of sales
gains in the first quarter of 2010: The sale of Swedegas and Karlskoga Energi &
Miljö shares in Sweden as well as Kurgan Generating Company and Federal Grid
Company shares in Russia.
The average SEK rate was approximately 10.7% higher in the first half of 2010
than in the first half of 2009. The positive translation effect caused by the
higher average SEK rate was approximately EUR 53 million in the comparable
operating profit compared to last year, the bulk of which was in Power Division
and in the first quarter of the year.
The share of profits/losses of associates and joint ventures was EUR 31 (-4)
million. The improvement from last year was mainly due to the improvement in the
contribution from Hafslund ASA.
The Group's net financial expenses decreased to EUR 61 (81) million. The
decrease is attributable to lower interest expenses. The change in fair value of
financial instruments was EUR 19 (13) million.
Profit before taxes was EUR 1,045 (889) million.
Taxes for the period totalled EUR 191 (172) million. The tax rate according to
the income statement was 18.3% (19.3%).
The profit for the period was EUR 854 (717) million. Fortum's earnings per share
were EUR 0.93 (0.78).
Non-controlling (minority) interests amounted to EUR 32 (22) million. These are
mainly attributable to Fortum Värme Holding AB, in which the city of Stockholm
has a 50% economic interest.
The return on capital employed was 12.8% for the last twelve months (12.1% in
2009), and the return on shareholders' equity was 18.0% for the last twelve
months (16.0% in 2009).
Cash flow from operating activities was affected by the realised foreign
exchange gains and losses, which were EUR -277 (+392) million during the first
half of 2010. The foreign exchange gains and losses mainly relate to the roll
over of foreign exchange contracts hedging loans to Fortum's Swedish
subsidiaries.
Fortum's net debt to EBITDA for the last twelve months was 2.7 (2.6 at the end
of 2009).
Market conditions
Nordic countries
During the second quarter, the average system spot price for power in Nord Pool
was EUR 44.9 (34.0) per MWh. The Finnish and Swedish area prices were below the
system price level, at EUR 41.7 (34.3) per MWh in Finland and EUR 41.9 (34.3)
per MWh in Sweden. The difference between the system price and the Finnish and
Swedish area prices was mainly due to the stronger hydro balance in Sweden
compared to Norway.
In January-June 2010, the average system spot price for power in Nord Pool was
EUR 52.1 (36.1) per MWh. The Finnish and Swedish area prices were above the
system price level, at EUR 56.2 (36.2) per MWh in Finland and EUR 57.0 (36.3)
per MWh in Sweden. The difference between the system price and the Finnish and
Swedish area prices was mainly related to the two days in the first quarter when
transmission capacity between Norway and Sweden was considerably below normal.
Year 2010 started with the Nordic water reservoirs at 7 terawatt-hours (TWh)
below the long-term average. At the end of the second quarter, the Nordic water
reservoirs were 14 TWh below the long-term average and 1 TWh below the
corresponding level last year.
According to preliminary statistics, the Nordic countries consumed 85 (80) TWh
of electricity in the second quarter of 2010, about 6% more than in the previous
year. The increase was mainly due to higher industrial consumption. During the
first half of the year, the Nordic countries consumed about 204 (192) TWh. The
increase is mainly due to the cold weather in the first quarter and higher
industrial consumption.
Russia
According to preliminary statistics, Russia consumed 224 (216) TWh of
electricity in the second quarter of 2010, about 4% more than in the
corresponding period of the previous year. During the first half of the year,
Russia consumed about 506 (481) TWh. The increase is mainly due to the general
recovery of the Russian economy and increased industrial activity.
OAO Fortum operates in the Tyumen and Chelyabinsk areas. In the Tyumen area,
where industrial production is dominated by the oil and gas industries,
electricity demand decreased during the second quarter by about 1% compared to
the previous year.The recession did not affect electricity demand in the Tyumen
region in the previous year. In the Chelyabinsk area, which is dominated by the
metal industry, electricity demand increased by about 11% in the second quarter
compared to the previous year. The increase is mainly due to the recovery in
industrial consumption.
The average electricity spot price, excluding capacity price, in the First price
zone (European and Urals part of Russia) increased 26% to RUB 804 (640) per MWh
in the second quarter of 2010.
More detailed information about the market fundamentals is included in the
tables at the end of the report.
Fortum's CO2 emissions
During the first half of 2010, approximately 66% (69%) of the power generated by
Fortum was CO2-free. The corresponding figure for Fortum's generation within the
EU was 86% (94%).
Fortum's total CO2 emissions during the first half of the year amounted to 13.7
(11.5) million tonnes (Mt), of which 5.7 (3.8) Mt were within the EU's emission
trading scheme (ETS).
Fortum's target in the EU is to decrease its emissions in power generation to
less than 80 grams per kilowatt-hour (g/kWh) by 2020 as a five-year average.
After the first half of 2010, the five-year average performance is below the
target level at 61 g/kWh, but higher than the year before. In heat production,
Fortum aims at reducing the specific emissions in each EU country by at least
10% from 2006 until 2020. Outside the EU, Fortum is committed to increasing
energy efficiency and thereby reducing specific emissions.
--------------------------------------------------------------------------------
| Fortum's total CO2 | II/10 | II/09 | I-II/1 | I-II/0 | 2009 | LTM |
| emissions | | | 0 | 9 | | |
| (million tonnes) | | | | | | |
--------------------------------------------------------------------------------
| Total emissions | 4.6 | 4.5 | 13.7 | 11.5 | 22.0 | 24.2 |
--------------------------------------------------------------------------------
| Emissions subject to | 1.7 | 1.2 | 5.7 | 3.8 | 7.7 | 9.6 |
| ETS | | | | | | |
--------------------------------------------------------------------------------
| Free emissions | - | - | - | - | 5.5 | - |
| allocation | | | | | | |
--------------------------------------------------------------------------------
| Emissions in Russia | 2.7 | 3.1 | 7.6 | 7.2 | 13.8 | 14.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum's specific CO2 | II/10 | II/09 | I-II/1 | I-II/0 | 2009 | LTM |
| emissions of power | | | 0 | 9 | | |
| generation (g/kWh) | | | | | | |
--------------------------------------------------------------------------------
| Total emissions | 154 | 166 | 178 | 155 | 155 | 170 |
--------------------------------------------------------------------------------
| Emissions in the EU | 46 | 29 | 81 | 37 | 41 | 65 |
--------------------------------------------------------------------------------
| Emissions in Russia | 539 | 596 | 496 | 510 | 493 | 497 |
--------------------------------------------------------------------------------
Division reviews
Power
The Power Division consists of Fortum's power generation, physical operation and
trading, operation, maintenance and development of power plants as well as
expert services for power producers.
--------------------------------------------------------------------------------
| EUR million | II/10 | II/09 | I-II/1 | I-II/0 | 2009 | LTM |
| | | | 0 | 9 | | |
--------------------------------------------------------------------------------
| Sales | 597 | 608 | 1,366 | 1,296 | 2,531 | 2,601 |
--------------------------------------------------------------------------------
| - power sales | 564 | 576 | 1,309 | 1,233 | 2,413 | 2489 |
--------------------------------------------------------------------------------
| - other sales | 33 | 32 | 57 | 63 | 118 | 112 |
--------------------------------------------------------------------------------
| Operating profit | 280 | 307 | 747 | 739 | 1,363 | 1,371 |
--------------------------------------------------------------------------------
| Comparable operating | 271 | 340 | 695 | 755 | 1,454 | 1,394 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Net assets (at | | | 5,726 | 5,353 | 5,494 | |
| period-end) | | | | | | |
--------------------------------------------------------------------------------
| Return on net assets, % | | | | | 24.5 | 23.9 |
--------------------------------------------------------------------------------
| Comparable return on net | | | | | 26.4 | 24.4 |
| assets, % | | | | | | |
--------------------------------------------------------------------------------
| Gross investments | 22 | 48 | 55 | 100 | 153 | 108 |
--------------------------------------------------------------------------------
| Number of employees | | | 1,983 | 2,026 | 1,916 | |
--------------------------------------------------------------------------------
The division's power generation during the second quarter of 2010 amounted to
11.4 (10.8) TWh in the Nordic countries. Approximately 95% (97%) of that was
CO2-free.
In January-June, the division's power generation in the Nordic countries was
23.5 (22.9) TWh and approximately 93% (97%) of the division's power generation
was CO2-free.
During the second quarter, the division's power generation in the Nordic
countries increased by 6%. Higher Nord Pool spot prices enabled more thermal
power generation, while increased nuclear production in Oskarshamn 3 resulted in
higher power generation volumes compared to last year.
During the first half of 2010, Nordic power generation was 0.6 TWh higher than
in the corresponding period last year. Increased thermal generation more than
offset lower hydro and nuclear volumes. The decrease in hydropower generation
was mainly due to lower precipitation and inflows into Nordic water reservoirs.
Nuclear power generation was roughly at the same level as last year. The higher
generation at Oskarshamn 3 reactor in Sweden was offset by significantly lower
generation at Forsmark 2 in Sweden.
At Oskarshamn 3, a testing period is ongoing and output power is limited to
about 1,050 megawatt (MW) until further notice. The efforts to reach full
generation are ongoing, but the date it is reached will be confirmed later.
Forsmark 2 has been running at significantly reduced capacity after the capacity
increase modifications.
--------------------------------------------------------------------------------
| Power generation by | II/10 | II/09 | I-II/1 | I-II/09 | 2009 | LTM |
| source, TWh | | | 0 | | | |
--------------------------------------------------------------------------------
| Hydropower, Nordic | 5.1 | 5.2 | 10.5 | 10.9 | 22.1 | 21.7 |
--------------------------------------------------------------------------------
| Nuclear power, Nordic | 6.0 | 5.6 | 11.9 | 12.0 | 21.4 | 21.3 |
--------------------------------------------------------------------------------
| Thermal power, Nordic | 0.3 | 0.0 | 1.1 | 0.0 | 0.2 | 1.3 |
--------------------------------------------------------------------------------
| Total in the Nordic | 11.4 | 10.8 | 23.5 | 22.9 | 43.7 | 44.3 |
| countries | | | | | | |
--------------------------------------------------------------------------------
| Thermal power in other | 0.2 | 0.3 | 0.5 | 0.6 | 1.2 | 1.1 |
| countries | | | | | | |
--------------------------------------------------------------------------------
| Total | 11.6 | 11.1 | 24.0 | 23.5 | 44.9 | 45.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nordic sales volume, | 12.5 | 12.1 | 26.1 | 25.5 | 48.8 | 49.4 |
| TWh | | | | | | |
--------------------------------------------------------------------------------
| of which pass-through | 0.9 | 0.9 | 1.8 | 1.8 | 3.6 | 3.6 |
| sales | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales price, EUR/MWh | II/10 | II/09 | I-II/10 | I-II/09 | 2009 | LTM |
--------------------------------------------------------------------------------
| Power's Nordic power | 44.8 | 48.0 | 49.8 | 48.8 | 49.8 | 50.3 |
| price* | | | | | | |
--------------------------------------------------------------------------------
* For the Power Division in the Nordic countries, excluding pass-through sales.
The Power Division's achieved Nordic power price in the second quarter of 2010
amounted to EUR 44.8 per MWh, which was EUR 3.2 per MWh lower than last year.
The decrease was mainly due to lower hedge prices during quarter; Nord Pool spot
prices were higher than in 2009.
In the first half of 2010, the division's achieved Nordic power price was EUR
49.8 per MWh, which is EUR 1.0 per MWh higher than last year. The increase was
mainly due to higher Nord Pool spot prices.
In the second quarter of 2010 Power's comparable operating profit was lower than
in the corresponding period last year. This was mainly due to the lower achieved
power price, less benign generation mix and the higher costs in associated
nuclear generating companies. Furthermore, an increase in nuclear related
provisions and Loviisa 3 project related costs contributed to the decline in the
comparable operating profit (in total EUR -11 million in the second quarter of
2010).
In the first half of 2010, Power's comparable operating profit was lower than in
the corresponding period last year, despite higher achieved Nordic power price.
The decline in the division's profitability stems from lower hydro and nuclear
volumes (a less benign power generation mix) and also from an increase in the
costs of associated nuclear generating companies. Also the increase in nuclear
related provisions and Loviisa 3 project related costs contributed to the
decline in the comparable operating profit.
Fortum's 308-MW share of the Meri-Pori power plant's production capacity was
reverted to the company's own use on 1 July 2010. Fortum's share has been leased
since 1 January 2007. The fixed-period lease on the share of production capacity
was one of the conditions set by the Finnish Competition Authority for approval
of Fortum's acquisition of E.ON Finland in summer 2006.
Heat
The Heat Division consists of combined heat and power (CHP) generation, district
heating activities and business-to-business heating solutions in the Nordic
countries and other parts of the Baltic Rim.
--------------------------------------------------------------------------------
| EUR million | II/10 | II/09 | I-II/10 | I-II/09 | 2009 | LTM |
--------------------------------------------------------------------------------
| Sales | 301 | 250 | 952 | 764 | 1,399 | 1,587 |
--------------------------------------------------------------------------------
| - heat sales | 218 | 185 | 688 | 582 | 1,055 | 1,161 |
--------------------------------------------------------------------------------
| - power sales | 55 | 37 | 200 | 121 | 224 | 303 |
--------------------------------------------------------------------------------
| - other sales | 28 | 28 | 64 | 61 | 120 | 123 |
--------------------------------------------------------------------------------
| Operating profit | 35 | 39 | 194 | 154 | 252 | 292 |
--------------------------------------------------------------------------------
| Comparable operating | 33 | 26 | 165 | 140 | 231 | 256 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Net assets (at | | | 3,884 | 3,503 | 3,787 | |
| period-end) | | | | | | |
--------------------------------------------------------------------------------
| Return on net assets, | | | | | 7.9 | 8.8 |
| % | | | | | | |
--------------------------------------------------------------------------------
| Comparable return on | | | | | 7.3 | 7.8 |
| net assets, % | | | | | | |
--------------------------------------------------------------------------------
| Gross investments | 59 | 97 | 121 | 167 | 359 | 313 |
--------------------------------------------------------------------------------
| Number of employees | | | 2,549 | 2,666 | 2,552 | |
--------------------------------------------------------------------------------
Heat sales during the second quarter of 2010 amounted to 4.3 (3.7) TWh, mainly
generated in the Nordic countries. During the same period, power sales from CHP
production totalled 1.1 (0.8) TWh. Sales to industrial customers in Finland have
recovered from last year's reductions in production.
Heat sales during the first half of 2010 amounted to 14.9 (13.1) TWh, mainly
generated in the Nordic countries. During the same period, power sales from CHP
production totalled 3.5 (2.4) TWh. The increased volumes were a result of colder
weather during the first quarter, increased industrial sales and new CHP
capacity in Finland (Suomenoja).
The division's second-quarter comparable operating profit was EUR 33 million,
EUR 7 million higher than the corresponding period last year.
The comparable operating profit for the first half of 2010 for the Heat Division
was EUR 165 million, EUR 25 million higher than in the corresponding period last
year. The increase was mainly due to higher volumes and power prices. Fuel costs
were higher than last year.
In Finland, the Finnish Government is proposing significant changes to fuel
taxation as of 2011. Among other measures, the fuel tax for natural gas is
proposed to be lifted by approximately 400% with emissions trading alleviations
taken into account. This is clearly more than the proposed increase for e.g.
coal and peat. The fourfold increase of the gas tax would lead to increases in
Fortum's Finnish district heat pricing.
The Swedish Competition Authority (SCA) is investigating district heating price
setting. The investigation concerns also Fortum Värme, which is jointly owned by
the City of Stockholm.
--------------------------------------------------------------------------------
| Heat sales by area, | II/10 | II/09 | I-II/1 | I-II/0 | 2009 | LTM |
| TWh | | | 0 | 9 | | |
--------------------------------------------------------------------------------
| Finland | 1.8 | 1.4 | 5.3 | 4.5 | 8.0 | 8.8 |
--------------------------------------------------------------------------------
| Sweden | 1.8 | 1.7 | 6.4 | 5.7 | 9.8 | 10.5 |
--------------------------------------------------------------------------------
| Poland | 0.5 | 0.4 | 2.3 | 2.2 | 3.7 | 3.8 |
--------------------------------------------------------------------------------
| Other countries | 0.2 | 0.2 | 0.9 | 0.7 | 1.4 | 1.6 |
--------------------------------------------------------------------------------
| Total | 4.3 | 3.7 | 14.9 | 13.1 | 22.9 | 24.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Power sales, TWh | II/10 | II/09 | I-II/1 | I-II/0 | 2009 | LTM |
| | | | 0 | 9 | | |
--------------------------------------------------------------------------------
| Total | 1.1 | 0.8 | 3.5 | 2.4 | 4.4 | 5.5 |
--------------------------------------------------------------------------------
Electricity Solutions and Distribution
Electricity Solutions and Distribution Division is responsible for Fortum's
electricity sales, solutions and distribution activities. The division consists
of two business areas: Distribution and Electricity Sales.
Distribution
Fortum owns and operates distribution and regional networks and distributes
electricity to a total of 1.6 million customers in Sweden, Finland, Norway and
Estonia.
--------------------------------------------------------------------------------
| EUR million | II/10 | II/09 | I-II/1 | I-II/0 | 2009 | LTM |
| | | | 0 | 9 | | |
--------------------------------------------------------------------------------
| Sales | 200 | 176 | 480 | 405 | 800 | 875 |
--------------------------------------------------------------------------------
| - distribution network | 173 | 152 | 417 | 351 | 685 | 751 |
| transmission* | | | | | | |
--------------------------------------------------------------------------------
| - regional network | 21 | 18 | 47 | 39 | 75 | 83 |
| transmission* | | | | | | |
--------------------------------------------------------------------------------
| - other sales | 6 | 6 | 16 | 15 | 40 | 41 |
--------------------------------------------------------------------------------
| Operating profit | 53 | 54 | 166 | 135 | 263 | 294 |
--------------------------------------------------------------------------------
| Comparable operating | 53 | 54 | 155 | 135 | 262 | 282 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Net assets (at | | | 3,482 | 3,106 | 3,299 | |
| period-end) | | | | | | |
--------------------------------------------------------------------------------
| Return on net assets, % | | | | | 8.7 | 9.2 |
--------------------------------------------------------------------------------
| Comparable return on | | | | | 8.6 | 8.9 |
| net assets, % | | | | | | |
--------------------------------------------------------------------------------
| Gross investments | 47 | 43 | 76 | 79 | 193 | 190 |
--------------------------------------------------------------------------------
| Number of employees | | | 1,144 | 1,169 | 1,088 | |
--------------------------------------------------------------------------------
*) Q1/2010 has been restated.
The volume of distribution and regional network transmissions during the second
quarter of 2010 totalled 5.7 (5.4) TWh and 4.1 (3.7) TWh, respectively.
In the first half of 2010, electricity transmission via the regional
distribution network totalled 7.7 (7.1) TWh in Sweden and 1.4 (1.4) TWh in
Finland.
The comparable operating profit of the Distribution business area was EUR 53
million in the second quarter, at the same level as last year.
In the first half of the year, the comparable operating profit of the
Distribution business area was EUR 155 million, which is EUR 20 million higher
than the previous year. The main reasons for the increase are higher sales due
to the colder weather and a stronger SEK during the first quarter.
--------------------------------------------------------------------------------
| Volume of distributed | II/10 | II/09 | I-II/1 | I-II/0 | 2009 | LTM |
| electricity in | | | 0 | 9 | | |
| distribution network, | | | | | | |
| TWh | | | | | | |
--------------------------------------------------------------------------------
| Sweden | 3.2 | 3.0 | 7.9 | 7.4 | 14.0 | 14.5 |
--------------------------------------------------------------------------------
| Finland | 2.0 | 2.0 | 5.2 | 4.9 | 9.4 | 9.7 |
--------------------------------------------------------------------------------
| Norway | 0.5 | 0.4 | 1.4 | 1.2 | 2.3 | 2.5 |
--------------------------------------------------------------------------------
| Estonia | 0.0 | 0.0 | 0.1 | 0.1 | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Total | 5.7 | 5.4 | 14.6 | 13.6 | 25.9 | 26.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of electricity distribution | 30 June 2010 | 30 June 2009 |
| customers by area, thousands | | |
--------------------------------------------------------------------------------
| Sweden | 888 | 880 |
--------------------------------------------------------------------------------
| Finland | 614 | 607 |
--------------------------------------------------------------------------------
| Other countries | 124 | 124 |
--------------------------------------------------------------------------------
| Total | 1,626 | 1,611 |
--------------------------------------------------------------------------------
Electricity Sales
The Electricity Sales business area 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. Electricity Sales
buys its electricity through Nord Pool. Electricity Sales sells approximately
70% of its volumes to business customers and 30% to retail consumers.
--------------------------------------------------------------------------------
| EUR million | II/10 | II/09 | I-II/ | I-II/0 | 2009 | LTM |
| | | | 10 | 9 | | |
--------------------------------------------------------------------------------
| Sales | 327 | 298 | 964 | 767 | 1,449 | 1,646 |
--------------------------------------------------------------------------------
| - power sales | 321 | 289 | 953 | 751 | 1,417 | 1,619 |
--------------------------------------------------------------------------------
| - other sales | 6 | 9 | 11 | 16 | 32 | 27 |
--------------------------------------------------------------------------------
| Operating profit | 23 | 20 | -6 | -1 | 29 | 24 |
--------------------------------------------------------------------------------
| Comparable operating | 10 | 6 | -3 | 4 | 22 | 15 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Net assets (at | | | 59 | 81 | 125 | |
| period-end) | | | | | | |
--------------------------------------------------------------------------------
| Return on net assets, % | | | | | 28.9 | 26.4 |
--------------------------------------------------------------------------------
| Comparable return on net | | | | | 18.6 | 14.0 |
| assets, % | | | | | | |
--------------------------------------------------------------------------------
| Gross investments | 0 | 0 | 0 | 1 | 1 | 0 |
--------------------------------------------------------------------------------
| Number of employees | | | 549 | 637 | 611 | |
--------------------------------------------------------------------------------
In the second quarter of year 2010, the business area's electricity sales
totalled 6.3 (6.3) TWh. The electricity sales in the period January - June
totalled 16.1 (16.0) TWh.
Electricity Sales' comparable operating profit in the second quarter was
improved by lower fixed costs and better sales margins, especially in Sweden and
Norway. The price peaks during the first quarter of the year had a negative
impact on the business area's profits, leading to a decline in the comparable
operating profit for the first half of the year.
In February 2010, a restructuring of the unprofitable Business Market segment
was initiated. The related union negotiation process ended in May. As a result,
approximately 70 positions will be reduced in the Business Market segment in
Finland, Sweden and Norway.
Russia
The Russia Division consists of power and heat generation and sales in Russia.
It includes OAO Fortum and Fortum's over 25% holding in TGC-1, which is an
associated company and accounted for using the equity method.
--------------------------------------------------------------------------------
| EUR million | II/10 | II/09 | I-II/ | I-II/0 | 2009 | LTM |
| | | | 10 | 9 | | |
--------------------------------------------------------------------------------
| Sales | 169 | 138 | 413 | 324 | 632 | 721 |
--------------------------------------------------------------------------------
| - power sales | 114 | 91 | 244 | 194 | 390 | 440 |
--------------------------------------------------------------------------------
| - heat sales | 52 | 44 | 165 | 125 | 219 | 259 |
--------------------------------------------------------------------------------
| - other sales | 3 | 3 | 4 | 5 | 23 | 22 |
--------------------------------------------------------------------------------
| EBITDA | 13 | 3 | 65 | 28 | 55 | 92 |
--------------------------------------------------------------------------------
| Operating profit | -9 | -15 | 23 | -9 | -20 | 12 |
--------------------------------------------------------------------------------
| Comparable operating | -9 | -14 | 7 | -8 | -20 | -5 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| Net assets (at | | | 2,690 | 2,062 | 2,260 | |
| period-end) | | | | | | |
--------------------------------------------------------------------------------
| Return on net assets, % | | | | | 0.0 | 1.5 |
--------------------------------------------------------------------------------
| Comparable return on net | | | | | 0.0 | 0.8 |
| assets, % | | | | | | |
--------------------------------------------------------------------------------
| Gross investments | 167 | 41 | 258 | 62 | 218 | 414 |
--------------------------------------------------------------------------------
| Number of employees | | | 4,584 | 6,483 | 4,855 | |
--------------------------------------------------------------------------------
OAO Fortum operates in the well-developed industrial regions of the Urals and in
oil-producing western Siberia.
The division's power sales during the second quarter of 2010 amounted to 4.5
(4.6) TWh. During the same period, heat sales totalled 4.0 (4.2) TWh.
During the first half of 2010, OAO Fortum sold 53% of its electricity production
at the liberalised electricity price.
--------------------------------------------------------------------------------
| Key electricity, | II/10 | II/09 | Change | I-II/ | I-II/09 | Change % |
| capacity and gas | | | % | 10 | | |
| prices for OAO | | | | | | |
| Fortum | | | | | | |
--------------------------------------------------------------------------------
| Electricity spot | 770 | 603 | 28 | 794 | 569 | 39 |
| price (market | | | | | | |
| price), Urals hub, | | | | | | |
| RUB/MWh | | | | | | |
--------------------------------------------------------------------------------
| Average regulated | 610 | 525 | 16 | 615 | 534 | 15 |
| electricity price | | | | | | |
| for OAO Fortum, | | | | | | |
| RUB/MWh | | | | | | |
--------------------------------------------------------------------------------
| Average regulated | 169 | 187 | -9 | 169 | 188 | -10 |
| capacity price, | | | | | | |
| tRUB/MW/month | | | | | | |
--------------------------------------------------------------------------------
| Average regulated | 2,221 | 1,730 | 28 | 2,221 | 1,676 | 33 |
| gas price in | | | | | | |
| Urals | | | | | | |
| region, RUB/1000 m3 | | | | | | |
--------------------------------------------------------------------------------
The division booked a comparable operating loss of EUR -9 (-14) million in the
second quarter of 2010. The improvement was mainly due to the efficiency
improvement programme.
Comparable operating profit for January - June 2010, EUR 7 million, was EUR 15
million higher than in the last year due to the efficiency improvement
programme. The positive effect of slightly higher electricity and heat margins
was partly offset by lower capacity income for existing capacities.
OAO Fortum's business is typically very seasonal: Its results are usually
strongest during the first and last quarters of the year.
The Russian wholesale power sector reform is proceeding. Starting 1 January
2010, 60% of all produced power in Russia was sold on the competitive market.
The share increased to 80% at the beginning of July 2010. The wholesale power
market is expected to be fully liberalised from the beginning of 2011.
Currently, approximately one third of Fortum's power sales in Russia comes from
capacity payments, which the generating company receives based on its available
capacity. The rules for the long-term capacity market starting from 2011 have
been approved by the Russian Government. The price parameters for the capacity
market were approved in April.
The generation capacity built after 2007 under government capacity supply
agreements (CSA) will receive higher capacity payments than other, older
capacity, for a period of 10 years. Prices for the new capacities will be set as
economically justified to ensure a sufficient return on investments. Old
capacity (capacity not under CSA) will compete in a capacity market.
OAO Fortum's efficiency improvement programme is proceeding according to plans.
The annual efficiency improvements are expected to be approximately EUR 100
million in 2011.
Capital expenditures, divestments and investments in shares
Capital expenditures and investments in shares in January-June 2010 totalled EUR
513 (412) million. Investments, excluding acquisitions, were EUR 493 (352)
million.
In 2010, Fortum expects to commission new power and heat capacity as follows:
--------------------------------------------------------------------------------
| | Type | Electricity | Heat | Available |
| | | capacity, MW | capacity, | |
| | | | MW | |
--------------------------------------------------------------------------------
| Heat | | | | |
--------------------------------------------------------------------------------
| Częstochowa, | CHP bio, | 65 | 120 | Q3/2010 |
| Poland | coal | | | |
--------------------------------------------------------------------------------
| Pärnu, Estonia | CHP bio, | 20 | 45 | Q4/2010 |
| | peat | | | |
--------------------------------------------------------------------------------
| Power | | | | |
--------------------------------------------------------------------------------
| Hydro | Hydropower | 20-30 | | 2010 |
| refurbishment | | | | |
--------------------------------------------------------------------------------
| Russia | | | | |
--------------------------------------------------------------------------------
| Tyumen 1 | CCGT, gas | 230 | | Q3/2010 |
--------------------------------------------------------------------------------
| Tobolsk | CCGT, gas | 200 | | Q4/2010 |
--------------------------------------------------------------------------------
| Chelyabinsk 3 | CCGT, gas | 220 | | Q4/2010 |
--------------------------------------------------------------------------------
Power
The Finnish Government gave a negative decision-in-principle on Fortum's
application concerning the construction of a new nuclear power plant unit,
Loviisa 3. Fortum is also, with an approximately 25% interest, a shareholder in
TVO, whose decision-in-principle application for a new nuclear power plant unit,
Olkiluoto 4, was approved by the Finnish Government and ratified by the Finnish
Parliament.
Through its interest in Teollisuuden Voima Oyj (TVO) Fortum is participating in
the building of Olkiluoto 3, a 1,600-MW nuclear power plant unit in Finland. The
AREVA-Siemens Consortium, the turnkey supplier of the Olkiluoto 3 for TVO,
announced in June that in light of the current progress most of the works will
be completed in 2012 while regular operation of the plant unit is foreseen
during 2013.
Heat
In January 2010, Fortum acquired the CHP plant in Nokia, Finland. The plant's
capacity is around 85 MW heat and 70 MW electricity.
In February, Fortum decided to invest in a new waste-fuelled CHP plant in
Klaipeda, Lithuania. The value of the investment amounts to approximately EUR
140 million. The power plant is planned to be ready for production by the end of
2013. The fuel will consist of municipal and industrial waste and biomass. The
production capacity will be approximately 50 MW heat and 20 MW electricity.
The CHP projects in Pärnu, Estonia and Czestochowa, Poland are proceeding. The
plant in Pärnu is expected to start commercial operation in December 2010 and
Czestochowa in autumn 2010.
The sale of Fortum's shares in the Swedish gas transmission company Swedegas AB
was closed in February. The gain from the sales was included in the
first-quarter non-recurring items.
Distribution
In early February 2010, Fortum divested its 49% share in Karlskoga Energi &
Miljö in Sweden to the Karlskoga municipality for approximately EUR 42 million.
The sales gain was included in the first- quarter non-recurring items.
The EU's third energy market package entered into force in early September 2009.
One of the consequences is that Fortum will have to divest its 25% ownership in
the Finnish electricity transmission system operator Fingrid Oyj by early 2012.
Consequently, Fortum is investigating alternatives for the sale of the Fingrid
shares. Currently Fortum expects the sales process of the Fingrid shares to take
place during 2010.
Russia
Fortum sold its shares in Federal Grid Company (Fortum's ownership was 0.119%)
and in Kurgan Generating Company (49% of the voting rights) in Russia during the
first quarter of 2010. The sales gains were included in the first-quarter
non-recurring items.
OAO Fortum's ongoing investment programme will increase its power capacity from
the current approximately 2,800 MW to approximately 5,100 MW. The value of the
remaining part of the programme, calculated at the end of June 2010 exchange
rates, is estimated to be EUR 1.7 billion from July 2010 onwards.
Fortum has confirmed its commitment to fulfil the OAO Fortum investment
programme. The first three units are expected to be commissioned during the
current year.
Financing
Net debt increased during the second quarter by EUR 827 million to EUR 6,506
million (year-end 2009: EUR 5,969 million). The increase in net debt is due to
the EUR 888 million dividend payment made in April.
The liquidity position normalised, and, at the end of the second quarter, the
Group's liquid funds totalled EUR 694 million (year-end 2009: EUR 890 million).
Liquid funds include cash and bank deposits held by OAO Fortum amounting to EUR
479 million (year-end 2009: 632 million). In addition to the liquid funds,
Fortum had access to approximately EUR 2.9 billion of undrawn committed credit
facilities.
The Group's net financial expenses were EUR 61 (81) million. The decrease is
mainly attributable to lower average interest rates during the first half of
2010 compared to the corresponding period last year.
Net financial expenses include changes in the fair value of financial
instruments of EUR 19 (13) million. Net debt to EBITDA for the last twelve
months was 2.7 (2.6 at year-end 2009).
Fortum Corporation's long-term credit rating from Moody's and Standard and
Poor's was A2 (stable) and A (stable), respectively.
Shares and share capital
In January-June 2010, a total of 284.6 (344.1) million Fortum Corporation
shares, totalling EUR 5,324 million, were traded on the NASDAQ OMX Helsinki.
Fortum's market capitalisation, calculated using the closing quotation of the
last trading day of the second quarter 2010, was EUR 16,062 million. The highest
quotation of Fortum Corporation shares on the NASDAQ OMX Helsinki during the
reporting period was EUR 19.92, the lowest EUR 17.18, and the volume-weighted
average EUR 18.70. The closing quotation on the last trading day of the second
quarter was EUR 18.08 (16.22).
At the end of the reporting period, Fortum Corporation's share capital was EUR
3,046,185,953 and the total number of registered shares was 888,367,045. Fortum
Corporation did not own its own shares.
The Finnish state's holding in Fortum was 50.8% at the end of the reporting
period. The proportion of nominee registrations and direct foreign shareholders
was 30.1%.
The Board of Directors has no unused authorisations from the Annual General
Meeting of Shareholders to issue convertible loans or bonds with warrants or to
issue new shares.
Group personnel
The number of employees at the end of the period was 11,406 (11,613 at the end
of 2009).
Research and development
Development activities around Smart Grids and Sustainable Cities continued at a
high level. Fortum signed a contract with Skanska with the objective to develop
a new Sustainable Urban Living concept, which will be tested in new apartment
buildings in Espoo, Finland. The new concept will comprise near real-time
measurements of energy consumption in each apartment, tools to affect energy
consumption and cost, electric vehicles, and local power generation with solar
panels on the building.
Fortum is preparing a large Smart Grid initiative, the Royal Seaport of
Stockholm, jointly with partners such as ABB, Ericsson and Electrolux. In
parallel with these and other collaboration activities, Fortum is also stepping
up its own solutions and services development activities towards Smart Home and
electric vehicles charging solutions, targeting market launches still this year.
Next-generation bioenergy technologies, which can be integrated with CHP plants
to generate more value, are one of the R&D priorities at Fortum. For example,
the objective with pyrolysis is to produce bio-oil in parallel with power and
heat in a bio-CHP. This bio-oil can replace fossil oil e.g. in heat production.
The first stage of the integrated pyrolysis project in cooperation with Metso,
UPM, and VTT, the Technical Research Center of Finland, was completed
successfully this spring. This development theme will continue strongly, as
Tekes decided to fund integrated pyrolysis development for a different type of
plant, the Bubbling Fluidized Bed boiler, which is an important plant type in
Fortum's CHP fleet.
Outlook
Key drivers and risks
The key factor influencing Fortum's business performance is the wholesale price
of electricity. The key drivers behind wholesale price development are the
supply-demand balance, fuel and CO2 emissions allowance prices as well as the
hydrological situation. The exchange rates of the Swedish krona and Russian
rouble also affect Fortum's financials. The balance sheet translation effects
from changes in currency exchange rates are booked in Fortum's equity.
Fortum's financial results are exposed to a number of strategic, financial and
operational risks. For further details on Fortum's risks and risk management,
see Fortum's Operating and Financial Review and Financial Statements for 2009.
Nordic market
Fortum currently expects Nordic power demand to recover back to the 2008 level
by 2012-2014. Electricity will continue to gain a higher share of the total
energy consumption.
In mid-July 2010, the electricity forward price in Nord Pool for the rest of
2010 was around EUR 47 per MWh. The electricity forward price for 2011 was
around EUR 44 per MWh and for 2012 around EUR 42 per MWh. At the same time, the
future quotations for coal (ICE Rotterdam) for the rest of 2010 were around USD
94 per tonne and the market price for CO2 emissions allowances (EUA) for 2010
was about EUR 15 per tonne.
In mid-July 2010, Nordic water reservoirs were about 14 TWh below the long-term
average and 1 TWh below the corresponding level of 2009.
Russia
In Russia, one of the key assumptions in the OAO Fortum acquisition is the
continuation of the Russian power sector reform. The share of power sold at a
competitive price was increased from 50% to 60% on 1 January 2010 and further
from 60% to 80% at the beginning of July 2010. The wholesale power market is
expected to be fully liberalised by 2011.
The price parameters for the long-term capacity market were approved in April
2010. According to the rules, new capacity is expected to receive clearly higher
capacity payments than existing, old capacity for a period of ten years.
The average regulated gas price increased by 24% in the first quarter compared
to the average price in 2009. The regulated gas price is expected to remain
unchanged for the rest of 2010. The current official plan for 2011 is to
increase the regulated gas price by 15%. The regulated electricity price is
indexed to the regulated gas price and inflation on an annual basis.
The Russian Government is currently reviewing the investment programmes of the
generating companies in light of the increased power demand stemming from the
current recovery of the Russian economy. Fortum has confirmed its commitment to
fulfil the OAO Fortum investment programme, albeit with some modifications to
the original completion times.
Annual efficiency improvements are expected to be approximately EUR 100 million
in 2011.
Capital expenditure
Fortum expects its annual capital expenditure in the next 4-5 years to be within
a range of EUR 0.8-1.2 billion. Fortum's current forecast for capital
expenditure in 2010 is above the higher end of the range, approximately EUR 1.5
billion. Some investments originally planned for 2009, especially in Russia,
have shifted to 2010 instead.
Taxation
The Swedish Government has made a proposal to increase hydro property tax rates
from the beginning of 2011. Fortum estimates that the additional cost from the
possible tax rate increase would be around EUR 15 million.
Hedging
At the end of June 2010, approximately 80% of the Power Division's estimated
Nordic electricity sales volume for the rest of 2010 was hedged at approximately
EUR 44 per MWh. For the calendar year 2011, approximately 60% of the division's
estimated Nordic electricity sales volume was hedged at approximately EUR 44 per
MWh.
The reported hedge ratios may vary significantly, depending on Fortum's actions
on the electricity derivatives markets. Hedges are mainly financial contracts,
most of them Nord Pool forwards or standardised futures, consisting of several
types of products and maturities.
Profitability
The first and last quarters of the year are usually the strongest quarters for
the power and heat businesses.
Fortum Power Division's achieved Nordic power price typically depends on e.g.
the hedge ratio, hedge price, spot prices, availability and utilisation of
Fortum's flexible production portfolio and currency fluctuations. Excluding the
potential effects from the changes in the power generation mix, a 1 EUR/MWh
change in Power's achieved Nordic sales price results in an approximately EUR 50
million change in Fortum's annual operating profit.
Fortum's results in the first half of the year were good. The company has a
flexible, cost-efficient and climate-benign generation portfolio. Fortum's
financial position and liquidity are strong.
Espoo, 15 July 2010
Fortum Corporation
Board of Directors
Further information:
Tapio Kuula, President and CEO, tel. +358 10 452 4112
Juha Laaksonen, CFO, tel.
+358 10 452 4519
Fortum's Investor Relations, tel. +358 10 452 4138 / investors@fortum.com
The condensed interim financial statements have been prepared in accordance with
International Accounting Standard (IAS) 34, Interim Financial Reporting, as
adopted by the EU. The interim financials have not been audited.
Publication of results in 2010:
Interim Report January-September will be published on 21 October 2010 at approx.
09:00 EET.
Distribution:
NASDAQ OMX Helsinki
Key media
www.fortum.com
More information, including detailed quarterly information, is available on
Fortum's website at www.fortum.com/investors.
Contents to the interim financial statements
Page 18 Condensed consolidated income statement
Page 20 Condensed consolidated balance sheet
Page 21 Condensed consolidated statement of changes in total equity
Page 22 Condensed consolidated cash flow statement
Page 23 Change in net debt and key ratios
Page 24 Notes to the interim financial statements
Page 37 Definitions
Page 39 Market conditions
Page 40 Production and sales volumes
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
| 16 July 2010 at 9:00 |
--------------------------------------------------------------------------------
| Interim Financial Statements are unaudited |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Condensed consolidated income statement |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | Note | Q2 | Q2 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| | | 2010 | 2009 | 2010 | 2009 | | twelve |
| | | | | | | | months |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales | 4 | 1 295 | 1 194 | 3 242 | 2 826 | 5 435 | 5 851 |
--------------------------------------------------------------------------------
| Other income | | 18 | 21 | 55 | 39 | 84 | 100 |
--------------------------------------------------------------------------------
| Materials | | -544 | -411 | -1 461 | -1 067 | -2 027 | -2 421 |
| and services | | | | | | | |
--------------------------------------------------------------------------------
| Employee | | -128 | -129 | -258 | -259 | -495 | -494 |
| benefit | | | | | | | |
| costs | | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | 4, | -139 | -124 | -276 | -246 | -510 | -540 |
| , | 12 | | | | | | |
| amortisation | | | | | | | |
| and | | | | | | | |
| impairment | | | | | | | |
| charges | | | | | | | |
--------------------------------------------------------------------------------
| Other | | -163 | -151 | -312 | -291 | -599 | -620 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Items | | 12 | -25 | 85 | -28 | -106 | 7 |
| affecting | | | | | | | |
| comparabilit | | | | | | | |
| y | | | | | | | |
--------------------------------------------------------------------------------
| Operating | | 351 | 375 | 1 075 | 974 | 1 782 | 1 883 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| Share of | 4, | 15 | 29 | 31 | -4 | 21 | 56 |
| profit/loss | 13 | | | | | | |
| of | | | | | | | |
| associates | | | | | | | |
| and joint | | | | | | | |
| ventures | | | | | | | |
--------------------------------------------------------------------------------
| Interest | | -45 | -64 | -92 | -132 | -241 | -201 |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Interest | | 18 | 22 | 35 | 53 | 98 | 80 |
| income | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fair value gains | 8 | 2 | 19 | 13 | -1 | 5 |
| and losses on | | | | | | |
| financial | | | | | | |
| instruments | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other | | -15 | -9 | -23 | -15 | -23 | -31 |
| financial | | | | | | | |
| expenses - | | | | | | | |
| net | | | | | | | |
--------------------------------------------------------------------------------
| Finance | | -34 | -49 | -61 | -81 | -167 | -147 |
| costs - net | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | 332 | 355 | 1 045 | 889 | 1 636 | 1 792 |
| before | | | | | | | |
| income tax | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | 9 | -61 | -61 | -191 | -172 | -285 | -304 |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| Profit for | | 271 | 294 | 854 | 717 | 1 351 | 1 488 |
| the period | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable | | | | | | | |
| to: | | | | | | | |
--------------------------------------------------------------------------------
| Owners of | | 263 | 289 | 822 | 695 | 1 312 | 1 439 |
| the parent | | | | | | | |
--------------------------------------------------------------------------------
| Non-controll | | 8 | 5 | 32 | 22 | 39 | 49 |
| ing | | | | | | | |
| interests | | | | | | | |
--------------------------------------------------------------------------------
| | | 271 | 294 | 854 | 717 | 1 351 | 1 488 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per | 10 | | | | | | |
| share (in € | | | | | | | |
| per share) | | | | | | | |
--------------------------------------------------------------------------------
| Basic | | 0.30 | 0.32 | 0.93 | 0.78 | 1.48 | 1.62 |
--------------------------------------------------------------------------------
| Diluted | | 0.30 | 0.32 | 0.93 | 0.78 | 1.48 | 1.62 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | | Q2 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| | | 2010 | | 2010 | 2009 | | twelve |
| | | | | | | | months |
--------------------------------------------------------------------------------
| Comparable | | 339 | 400 | 990 | 1 002 | 1 888 | 1 876 |
| operating | | | | | | | |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| Non-recurrin | | 4 | 10 | 50 | 14 | 29 | 65 |
| g items | | | | | | | |
| (capital | | | | | | | |
| gains and | | | | | | | |
| losses) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Changes in fair | -15 | -25 | 21 | -21 | -76 | -34 |
| values of | | | | | | |
| derivatives | | | | | | |
| hedging future | | | | | | |
| cash flow | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nuclear fund | | 23 | -10 | 14 | -21 | -59 | -24 |
| adjustment | | | | | | | |
--------------------------------------------------------------------------------
| Items | | 12 | -25 | 85 | -28 | -106 | 7 |
| affecting | | | | | | | |
| comparabilit | | | | | | | |
| y | | | | | | | |
--------------------------------------------------------------------------------
| Operating | | 351 | 375 | 1 075 | 974 | 1 782 | 1 883 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Condensed consolidated statement of comprehensive income |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | Q2 | Q2 | Q1-Q2 | Q1-Q2 | 2009 | 2008 |
| | 2010 | 2009 | 2010 | 2009 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the period | 271 | 294 | 854 | 717 | 1 351 | 1 596 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Cash flow hedges | | | | | | |
--------------------------------------------------------------------------------
| Fair value | -185 | -282 | -158 | -90 | -195 | 453 |
| gains/losses in the | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
| Transfers to income | -11 | -60 | -3 | -83 | -218 | 160 |
| statement | | | | | | |
--------------------------------------------------------------------------------
| Transfers to | -3 | -6 | -8 | -1 | -4 | -4 |
| inventory/fixed assets | | | | | | |
--------------------------------------------------------------------------------
| Tax effect | 50 | 90 | 39 | 47 | 108 | -168 |
--------------------------------------------------------------------------------
| Net investment hedges | | | | | | |
--------------------------------------------------------------------------------
| Fair value | -6 | -1 | -10 | -2 | -25 | - |
| gains/losses in the | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
| Tax effect | 2 | 0 | 3 | 0 | 6 | - |
--------------------------------------------------------------------------------
| Available for sale | | | | | | |
| financial assets | | | | | | |
--------------------------------------------------------------------------------
| Fair value losses in | 0 | 0 | 0 | 0 | 0 | -1 |
| the period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Exchange differences | 131 | 87 | 444 | -127 | 21 | -621 |
| on translating foreign | | | | | | |
| operations | | | | | | |
--------------------------------------------------------------------------------
| Share of other | -29 | -36 | -80 | -39 | -37 | -628 |
| comprehensive income | | | | | | |
| of associates 1) | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other changes | -1 | -3 | 1 | -7 | 1 | 1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive | -52 | -211 | 228 | -302 | -343 | -808 |
| income for the period, | | | | | | |
| net of tax | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive | 219 | 83 | 1 082 | 415 | 1 008 | 788 |
| income for the year | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive | | | | | | |
| income attributable to | | | | | | |
--------------------------------------------------------------------------------
| Owners of the parent | 201 | 70 | 1 014 | 412 | 971 | 797 |
--------------------------------------------------------------------------------
| Non-controlling | 18 | 13 | 68 | 3 | 37 | -9 |
| interests | | | | | | |
--------------------------------------------------------------------------------
| | 219 | 83 | 1 082 | 415 | 1 008 | 788 |
--------------------------------------------------------------------------------
| 1) Of which fair value | | | | | | |
| change in Hafslund | | | | | | |
| ASA's | | | | | | |
--------------------------------------------------------------------------------
| shareholding in REC | -33 | -24 | -85 | -28 | -37 | -667 |
| incl. translation | | | | | | |
| differences | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Condensed consolidated balance sheet |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | Note | June 30 | June 30 | Dec 31 |
| | | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | | | |
--------------------------------------------------------------------------------
| Intangible assets | 12 | | 411 | 363 | 391 |
--------------------------------------------------------------------------------
| Property, plant and | 12 | | 13 919 | 12 172 | 12 855 |
| equipment | | | | | |
--------------------------------------------------------------------------------
| Participations in associates | 4, 13 | 2 119 | 2 105 | 2 188 |
| and joint ventures | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share in State Nuclear Waste | 16 | 612 | 577 | 570 |
| Management Fund | | | | |
--------------------------------------------------------------------------------
| Pension assets | | 64 | 62 | 59 |
--------------------------------------------------------------------------------
| Other non-current assets | | 67 | 58 | 69 |
--------------------------------------------------------------------------------
| Deferred tax assets | | 61 | 4 | 47 |
--------------------------------------------------------------------------------
| Derivative financial | 6 | 196 | 275 | 195 |
| instruments | | | | |
--------------------------------------------------------------------------------
| Long-term interest-bearing | | 1 050 | 809 | 918 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Total non-current assets | | 18 499 | 16 425 | 17 292 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | | 418 | 431 | 447 |
--------------------------------------------------------------------------------
| Derivative financial | 6 | 142 | 371 | 182 |
| instruments | | | | |
--------------------------------------------------------------------------------
| Trade and other receivables | | 853 | 806 | 1 030 |
--------------------------------------------------------------------------------
| Bank deposits | | 394 | 432 | 397 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 300 | 1 008 | 493 |
--------------------------------------------------------------------------------
| Liquid funds | 15 | 694 | 1 440 | 890 |
--------------------------------------------------------------------------------
| Total current assets | | 2 107 | 3 048 | 2 549 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | | 20 606 | 19 473 | 19 841 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY | | | | |
--------------------------------------------------------------------------------
| Equity attributable to owners | | | | |
| of the parent | | | | |
--------------------------------------------------------------------------------
| Share capital | 14 | 3 046 | 3 046 | 3 046 |
--------------------------------------------------------------------------------
| Share premium | | 73 | 73 | 73 |
--------------------------------------------------------------------------------
| Retained earnings | | 5 100 | 4 009 | 4 762 |
--------------------------------------------------------------------------------
| Other equity components | | -59 | 348 | 153 |
--------------------------------------------------------------------------------
| Total | | 8 160 | 7 476 | 8 034 |
--------------------------------------------------------------------------------
| Non-controlling interests | | 502 | 427 | 457 |
--------------------------------------------------------------------------------
| Total equity | | 8 662 | 7 903 | 8 491 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 15 | 5 681 | 7 061 | 6 002 |
--------------------------------------------------------------------------------
| Derivative financial | 6 | 163 | 174 | 191 |
| instruments | | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | | 1 784 | 1 762 | 1 750 |
--------------------------------------------------------------------------------
| Nuclear provisions | 16 | 612 | 577 | 570 |
--------------------------------------------------------------------------------
| Other provisions | | 242 | 201 | 209 |
--------------------------------------------------------------------------------
| Pension obligations | | 24 | 48 | 23 |
--------------------------------------------------------------------------------
| Other non-current liabilities | | 464 | 460 | 472 |
--------------------------------------------------------------------------------
| Total non-current liabilities | | 8 970 | 10 283 | 9 217 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 15 | 1 519 | 383 | 857 |
--------------------------------------------------------------------------------
| Derivative financial | 6 | 531 | 125 | 276 |
| instruments | | | | |
--------------------------------------------------------------------------------
| Trade and other payables | | 924 | 779 | 1 000 |
--------------------------------------------------------------------------------
| Total current liabilities | | 2 974 | 1 287 | 2 133 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total liabilities | | 11 944 | 11 570 | 11 350 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total equity and liabilities | | 20 606 | 19 473 | 19 841 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum Corporation |
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Condensed consolidated statement of changes in total equity |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Share | Sha | Retained | Other equity | Owners | Non-c | Total |
| | capita | re | earnings | components | of the | ontro | equity |
| | l | pre | | | parent | lling | |
| | | miu | | | | inter | |
| | | m | | | | ests | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR | | | Retai | Tran | Cash | Oth | OCI | | | |
| mil | | | ned | slat | flow | er | item | | | |
| lio | | | earni | ion | hedg | OCI | s | | | |
| n | | | ngs | of | es | ite | asso | | | |
| | | | and | fore | | ms | ciat | | | |
| | | | other | ign | | | ed | | | |
| | | | funds | oper | | | comp | | | |
| | | | | atio | | | anie | | | |
| | | | | ns | | | s | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Tot | 3 046 | 73 | 5 329 | -567 | 21 | 1 | 131 | 8 034 | 457 | 8 491 |
| al | | | | | | | | | | |
| equ | | | | | | | | | | |
| ity | | | | | | | | | | |
| 31 | | | | | | | | | | |
| Dec | | | | | | | | | | |
| emb | | | | | | | | | | |
| er | | | | | | | | | | |
| 200 | | | | | | | | | | |
| 9 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | 822 | | | | | 822 | 32 | 854 |
| pro | | | | | | | | | | |
| fit | | | | | | | | | | |
| for | | | | | | | | | | |
| the | | | | | | | | | | |
| per | | | | | | | | | | |
| iod | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tra | | | | 403 | 8 | | 8 | 419 | 41 | 460 |
| nsl | | | | | | | | | | |
| ati | | | | | | | | | | |
| on | | | | | | | | | | |
| dif | | | | | | | | | | |
| fer | | | | | | | | | | |
| enc | | | | | | | | | | |
| es | | | | | | | | | | |
--------------------------------------------------------------------------------
| Oth | | | 1 | | -133 | -7 | -88 | -227 | -5 | -232 |
| er | | | | | | | | | | |
| com | | | | | | | | | | |
| pre | | | | | | | | | | |
| hen | | | | | | | | | | |
| siv | | | | | | | | | | |
| e | | | | | | | | | | |
| inc | | | | | | | | | | |
| ome | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tot | | | 823 | 403 | -125 | -7 | -80 | 1 014 | 68 | 1 082 |
| al | | | | | | | | | | |
| com | | | | | | | | | | |
| pre | | | | | | | | | | |
| hen | | | | | | | | | | |
| siv | | | | | | | | | | |
| e | | | | | | | | | | |
| inc | | | | | | | | | | |
| ome | | | | | | | | | | |
| for | | | | | | | | | | |
| the | | | | | | | | | | |
| per | | | | | | | | | | |
| iod | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cas | | | -888 | | | | | -888 | | -888 |
| h | | | | | | | | | | |
| div | | | | | | | | | | |
| ide | | | | | | | | | | |
| nd | | | | | | | | | | |
--------------------------------------------------------------------------------
| Div | | | | | | | | 0 | -22 | -22 |
| ide | | | | | | | | | | |
| nds | | | | | | | | | | |
| to | | | | | | | | | | |
| non | | | | | | | | | | |
| -co | | | | | | | | | | |
| ntr | | | | | | | | | | |
| oll | | | | | | | | | | |
| ing | | | | | | | | | | |
| int | | | | | | | | | | |
| ere | | | | | | | | | | |
| sts | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cha | | | | | | | | 0 | -1 | -1 |
| nge | | | | | | | | | | |
| s | | | | | | | | | | |
| due | | | | | | | | | | |
| to | | | | | | | | | | |
| bus | | | | | | | | | | |
| ine | | | | | | | | | | |
| ss | | | | | | | | | | |
| com | | | | | | | | | | |
| bin | | | | | | | | | | |
| ati | | | | | | | | | | |
| ons | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tot | 3 046 | 73 | 5 264 | -164 | -104 | -6 | 51 | 8 160 | 502 | 8 662 |
| al | | | | | | | | | | |
| equ | | | | | | | | | | |
| ity | | | | | | | | | | |
| 30 | | | | | | | | | | |
| Jun | | | | | | | | | | |
| e | | | | | | | | | | |
| 201 | | | | | | | | | | |
| 0 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Tot | 3 044 | 73 | 4 888 | -576 | 321 | 36 | 168 | 7 954 | 457 | 8 411 |
| al | | | | | | | | | | |
| equ | | | | | | | | | | |
| ity | | | | | | | | | | |
| 31 | | | | | | | | | | |
| Dec | | | | | | | | | | |
| emb | | | | | | | | | | |
| er | | | | | | | | | | |
| 200 | | | | | | | | | | |
| 8 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | 695 | | | | | 695 | 22 | 717 |
| pro | | | | | | | | | | |
| fit | | | | | | | | | | |
| for | | | | | | | | | | |
| the | | | | | | | | | | |
| per | | | | | | | | | | |
| iod | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tra | | | | -120 | -4 | | 12 | -112 | -7 | -119 |
| nsl | | | | | | | | | | |
| ati | | | | | | | | | | |
| on | | | | | | | | | | |
| dif | | | | | | | | | | |
| fer | | | | | | | | | | |
| enc | | | | | | | | | | |
| es | | | | | | | | | | |
--------------------------------------------------------------------------------
| Oth | | | -2 | | -116 | -2 | -51 | -171 | -12 | -183 |
| er | | | | | | | | | | |
| com | | | | | | | | | | |
| pre | | | | | | | | | | |
| hen | | | | | | | | | | |
| siv | | | | | | | | | | |
| e | | | | | | | | | | |
| inc | | | | | | | | | | |
| ome | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tot | | | 693 | -120 | -120 | -2 | -39 | 412 | 3 | 415 |
| al | | | | | | | | | | |
| com | | | | | | | | | | |
| pre | | | | | | | | | | |
| hen | | | | | | | | | | |
| siv | | | | | | | | | | |
| e | | | | | | | | | | |
| inc | | | | | | | | | | |
| ome | | | | | | | | | | |
| for | | | | | | | | | | |
| the | | | | | | | | | | |
| per | | | | | | | | | | |
| iod | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cas | | | -888 | | | | | -888 | | -888 |
| h | | | | | | | | | | |
| div | | | | | | | | | | |
| ide | | | | | | | | | | |
| nd | | | | | | | | | | |
--------------------------------------------------------------------------------
| Div | | | | | | | | 0 | -19 | -19 |
| ide | | | | | | | | | | |
| nds | | | | | | | | | | |
| to | | | | | | | | | | |
| non | | | | | | | | | | |
| -co | | | | | | | | | | |
| ntr | | | | | | | | | | |
| oll | | | | | | | | | | |
| ing | | | | | | | | | | |
| int | | | | | | | | | | |
| ere | | | | | | | | | | |
| sts | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cha | | | -4 | | | | | -4 | -14 | -18 |
| nge | | | | | | | | | | |
| s | | | | | | | | | | |
| due | | | | | | | | | | |
| to | | | | | | | | | | |
| bus | | | | | | | | | | |
| ine | | | | | | | | | | |
| ss | | | | | | | | | | |
| com | | | | | | | | | | |
| bin | | | | | | | | | | |
| ati | | | | | | | | | | |
| ons | | | | | | | | | | |
--------------------------------------------------------------------------------
| Sto | 2 | | 16 | | | -16 | | 2 | | 2 |
| ck | | | | | | | | | | |
| opt | | | | | | | | | | |
| ion | | | | | | | | | | |
| s | | | | | | | | | | |
| exe | | | | | | | | | | |
| rci | | | | | | | | | | |
| sed | | | | | | | | | | |
| 1) | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tot | 3 046 | 73 | 4 705 | -696 | 201 | 18 | 129 | 7 476 | 427 | 7 903 |
| al | | | | | | | | | | |
| equ | | | | | | | | | | |
| ity | | | | | | | | | | |
| 30 | | | | | | | | | | |
| Jun | | | | | | | | | | |
| e | | | | | | | | | | |
| 200 | | | | | | | | | | |
| 9 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Tot | 3 044 | 73 | 4 888 | -576 | 321 | 36 | 168 | 7 954 | 457 | 8 411 |
| al | | | | | | | | | | |
| equ | | | | | | | | | | |
| ity | | | | | | | | | | |
| 31 | | | | | | | | | | |
| Dec | | | | | | | | | | |
| emb | | | | | | | | | | |
| er | | | | | | | | | | |
| 200 | | | | | | | | | | |
| 8 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | 1 312 | | | | | 1 312 | 39 | 1 351 |
| pro | | | | | | | | | | |
| fit | | | | | | | | | | |
| for | | | | | | | | | | |
| the | | | | | | | | | | |
| per | | | | | | | | | | |
| iod | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tra | | | | 9 | -4 | | 28 | 33 | 12 | 45 |
| nsl | | | | | | | | | | |
| ati | | | | | | | | | | |
| on | | | | | | | | | | |
| dif | | | | | | | | | | |
| fer | | | | | | | | | | |
| enc | | | | | | | | | | |
| es | | | | | | | | | | |
--------------------------------------------------------------------------------
| Oth | | | 6 | | -296 | -19 | -65 | -374 | -14 | -388 |
| er | | | | | | | | | | |
| com | | | | | | | | | | |
| pre | | | | | | | | | | |
| hen | | | | | | | | | | |
| siv | | | | | | | | | | |
| e | | | | | | | | | | |
| inc | | | | | | | | | | |
| ome | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tot | | | 1 318 | 9 | -300 | -19 | -37 | 971 | 37 | 1 008 |
| al | | | | | | | | | | |
| com | | | | | | | | | | |
| pre | | | | | | | | | | |
| hen | | | | | | | | | | |
| siv | | | | | | | | | | |
| e | | | | | | | | | | |
| inc | | | | | | | | | | |
| ome | | | | | | | | | | |
| for | | | | | | | | | | |
| the | | | | | | | | | | |
| per | | | | | | | | | | |
| iod | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cas | | | -888 | | | | | -888 | | -888 |
| h | | | | | | | | | | |
| div | | | | | | | | | | |
| ide | | | | | | | | | | |
| nd | | | | | | | | | | |
--------------------------------------------------------------------------------
| Div | | | | | | | | 0 | -19 | -19 |
| ide | | | | | | | | | | |
| nds | | | | | | | | | | |
| to | | | | | | | | | | |
| non | | | | | | | | | | |
| -co | | | | | | | | | | |
| ntr | | | | | | | | | | |
| oll | | | | | | | | | | |
| ing | | | | | | | | | | |
| int | | | | | | | | | | |
| ere | | | | | | | | | | |
| sts | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cha | | | -5 | | | | | -5 | -18 | -23 |
| nge | | | | | | | | | | |
| s | | | | | | | | | | |
| due | | | | | | | | | | |
| to | | | | | | | | | | |
| bus | | | | | | | | | | |
| ine | | | | | | | | | | |
| ss | | | | | | | | | | |
| com | | | | | | | | | | |
| bin | | | | | | | | | | |
| ati | | | | | | | | | | |
| ons | | | | | | | | | | |
--------------------------------------------------------------------------------
| Sto | 2 | | 16 | | | -16 | | 2 | | 2 |
| ck | | | | | | | | | | |
| opt | | | | | | | | | | |
| ion | | | | | | | | | | |
| s | | | | | | | | | | |
| exe | | | | | | | | | | |
| rci | | | | | | | | | | |
| sed | | | | | | | | | | |
| 1) | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tot | 3 046 | 73 | 5 329 | -567 | 21 | 1 | 131 | 8 034 | 457 | 8 491 |
| al | | | | | | | | | | |
| equ | | | | | | | | | | |
| ity | | | | | | | | | | |
| 31 | | | | | | | | | | |
| Dec | | | | | | | | | | |
| emb | | | | | | | | | | |
| er | | | | | | | | | | |
| 200 | | | | | | | | | | |
| 9 | | | | | | | | | | |
--------------------------------------------------------------------------------
1) Accounting effect of the last stock option program (2002B) upon ending of the
subscription period on 1 May 2009.
Translation differences
Translation differences impacted equity attributable to owners of the parent
company with EUR 419 million during Q1-Q2 2010 (Q1-Q2 2009: -112) including net
effect from SEK, NOK and RUB amounting to EUR 411 million in Q1-Q2 2010 (Q1-Q2
2009:
-112). Part of the translation differences is arising from the NOK effect
in fair valuation of Hafslund's REC shares, EUR 4 million accumulated until
Q1-Q2 2010 (Q1-Q2 2009: 10), which is shown together with the change in fair
value in OCI items associated companies.
Translation of financial information from subsidiaries in foreign currency is
done using average rate for the income statement and end rate for the balance
sheet. The exchange rate differences occurring from translation to EUR are
booked to equity. For information regarding exchange rates used, see Note 8
Exchange rates.
Cash flow hedges
The impact on equity attributable to owners of the parent from fair valuation of
cash flow hedges, EUR -125 million during Q1-Q2 2010 (Q1-Q2 2009: -120), mainly
relates to cash flow hedges hedging electricity price for future transactions.
When electricity price is lower/higher than the hedging price, the impact on
equity is positive/negative.
Cash dividend
The dividend for 2009 was decided at the Annual General Meeting on 25 March
2010. The dividend was paid on 8 April 2010.
The dividend for 2008 was decided at the Annual General Meeting on 7 April 2009.
--------------------------------------------------------------------------------
| Fortum Corporation |
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Condensed consolidated cash flow statement |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR | Note | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| million | | | | 2010 | 2009 | | twelve |
| | | | | | | | months |
--------------------------------------------------------------------------------
| Cash | | | | | | | |
| flow | | | | | | | |
| from | | | | | | | |
| operatin | | | | | | | |
| g | | | | | | | |
| activiti | | | | | | | |
| es | | | | | | | |
--------------------------------------------------------------------------------
| Operatin | | 490 | 499 | 1 351 | 1 220 | 2 292 | 2 423 |
| g profit | | | | | | | |
| before | | | | | | | |
| deprecia | | | | | | | |
| tions | | | | | | | |
| (EBITDA) | | | | | | | |
--------------------------------------------------------------------------------
| Non-cash | | -6 | 18 | -73 | 19 | 46 | -46 |
| flow | | | | | | | |
| items | | | | | | | |
| and | | | | | | | |
| divestin | | | | | | | |
| g | | | | | | | |
| activiti | | | | | | | |
| es | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial items | -146 | 160 | -323 | 299 | 146 | -476 |
| and 53ealized | | | | | | |
| foreign | | | | | | |
| exchange gains | | | | | | |
| and losses | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Taxes | -73 | -117 | -155 | -131 | -239 | -263 |
--------------------------------------------------------------------------------
| Funds from | 265 | 560 | 800 | 1 407 | 2 245 | 1 638 |
| operations | | | | | | |
--------------------------------------------------------------------------------
| Change in | 157 | 144 | 143 | 119 | 19 | 43 |
| working capital | | | | | | |
--------------------------------------------------------------------------------
| Total net cash | 422 | 704 | 943 | 1 526 | 2 264 | 1 681 |
| from operating | | | | | | |
| activities | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | 4, 12 | -263 | -171 | -486 | -351 | -845 | -980 |
| expendit | | | | | | | |
| ures 1) | | | | | | | |
--------------------------------------------------------------------------------
| Acquisit | 7 | -1 | -3 | -1 | -22 | -27 | -6 |
| ion of | | | | | | | |
| subsidia | | | | | | | |
| ries, | | | | | | | |
| net of | | | | | | | |
| cash | | | | | | | |
| acquired | | | | | | | |
--------------------------------------------------------------------------------
| Acquisit | 13 | 0 | 0 | 0 | -31 | -58 | -27 |
| ion of | | | | | | | |
| associat | | | | | | | |
| es 2) | | | | | | | |
--------------------------------------------------------------------------------
| Acquisit | | 0 | -1 | 0 | -1 | -2 | -1 |
| ion of | | | | | | | |
| other | | | | | | | |
| long-ter | | | | | | | |
| m | | | | | | | |
| investme | | | | | | | |
| nts | | | | | | | |
--------------------------------------------------------------------------------
| Proceeds | | 1 | 10 | 3 | 11 | 48 | 40 |
| from | | | | | | | |
| sales of | | | | | | | |
| fixed | | | | | | | |
| assets | | | | | | | |
--------------------------------------------------------------------------------
| Proceeds | 7 | 0 | 0 | 0 | 11 | 11 | 0 |
| from | | | | | | | |
| sales of | | | | | | | |
| subsidia | | | | | | | |
| ries, | | | | | | | |
| net of | | | | | | | |
| cash | | | | | | | |
| disposed | | | | | | | |
--------------------------------------------------------------------------------
| Proceeds | 13 | 5 | 0 | 111 | 0 | 2 | 113 |
| from | | | | | | | |
| sales of | | | | | | | |
| associat | | | | | | | |
| es | | | | | | | |
--------------------------------------------------------------------------------
| Proceeds | | 0 | 1 | 11 | 1 | 1 | 11 |
| from | | | | | | | |
| sales of | | | | | | | |
| other | | | | | | | |
| non-curr | | | | | | | |
| ent | | | | | | | |
| assets | | | | | | | |
--------------------------------------------------------------------------------
| Change | | -22 | -13 | -53 | -32 | -104 | -125 |
| in | | | | | | | |
| interest | | | | | | | |
| -bearing | | | | | | | |
| receivab | | | | | | | |
| les | | | | | | | |
--------------------------------------------------------------------------------
| Total | | -280 | -177 | -415 | -414 | -974 | -975 |
| net cash | | | | | | | |
| used in | | | | | | | |
| investin | | | | | | | |
| g | | | | | | | |
| activiti | | | | | | | |
| es | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash | | 142 | 527 | 528 | 1 112 | 1 290 | 706 |
| flow | | | | | | | |
| before | | | | | | | |
| financin | | | | | | | |
| g | | | | | | | |
| activiti | | | | | | | |
| es | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash | | | | | | | |
| flow | | | | | | | |
| from | | | | | | | |
| financin | | | | | | | |
| g | | | | | | | |
| activiti | | | | | | | |
| es | | | | | | | |
--------------------------------------------------------------------------------
| Net | | -62 | -1 242 | 113 | -35 | -758 | -610 |
| change | | | | | | | |
| in loans | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | -888 | -888 | -888 | -888 | -888 | -888 |
| s paid | | | | | | | |
| to the | | | | | | | |
| Company' | | | | | | | |
| s equity | | | | | | | |
| holders | | | | | | | |
--------------------------------------------------------------------------------
| Other | | -14 | -21 | -19 | -8 | -25 | -36 |
| financin | | | | | | | |
| g items | | | | | | | |
--------------------------------------------------------------------------------
| Total | | -964 | -2 151 | -794 | -931 | -1 671 | -1 534 |
| net cash | | | | | | | |
| used in | | | | | | | |
| financin | | | | | | | |
| g | | | | | | | |
| activiti | | | | | | | |
| es | | | | | | | |
--------------------------------------------------------------------------------
| Total | | -822 | -1 624 | -266 | 181 | -381 | -828 |
| net | | | | | | | |
| increase | | | | | | | |
| (+)/decr | | | | | | | |
| ease (-) | | | | | | | |
| in | | | | | | | |
| liquid | | | | | | | |
| funds | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liquid | | 1 498 | 3 041 | 890 | 1 321 | 1 321 | 1 440 |
| funds at | | | | | | | |
| the | | | | | | | |
| beginnin | | | | | | | |
| g of the | | | | | | | |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Foreign | | 18 | 23 | 70 | -62 | -50 | 82 |
| exchange | | | | | | | |
| differen | | | | | | | |
| ces in | | | | | | | |
| liquid | | | | | | | |
| funds | | | | | | | |
--------------------------------------------------------------------------------
| Liquid | | 694 | 1 440 | 694 | 1 440 | 890 | 694 |
| funds at | | | | | | | |
| the end | | | | | | | |
| of the | | | | | | | |
| period | | | | | | | |
--------------------------------------------------------------------------------
1) Capital expenditures in cash flow do not include investments not yet paid.
Capitalised borrowing costs are included in interest costs paid.
2) Acquisition of associates includes paid share issues.
Non-cash flow items and divesting activities
Non-cash flow items and divesting activities mainly consist of adjustments for
capital gains. The actual proceeds for divestments, EUR 125 million for Q1-Q2
2010 (Q1-Q2 2009: 23), are shown under cash flow from investing activities.
--------------------------------------------------------------------------------
| Financial items and realised foreign exchange gains and losses |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | | Q2 | Q2 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| | | 2010 | 2009 | 2010 | 2009 | | twelve |
| | | | | | | | months |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest and finance | -54 | -61 | -97 | -115 | -185 | -167 |
| cost paid, net | | | | | | |
--------------------------------------------------------------------------------
| Dividends received | 48 | 21 | 51 | 22 | 33 | 62 |
--------------------------------------------------------------------------------
| Realised foreign | -140 | 200 | -277 | 392 | 298 | -371 |
| exchange gains and | | | | | | |
| losses | | | | | | |
--------------------------------------------------------------------------------
| Total | -146 | 160 | -323 | 299 | 146 | -476 |
--------------------------------------------------------------------------------
Realised foreign exchange gains and losses arise from currency forwards hedging
balance sheet exposure, which mainly relates to financing of Swedish
subsidiaries in SEK and the fact, that the Group's main external financing
currency is EUR. Major part of these forwards are entered into with short
maturities i.e. less than twelve months.
--------------------------------------------------------------------------------
| Fortum Corporation |
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in net debt |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| | | | 2010 | 2009 | | twelve |
| | | | | | | months |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net debt | 5 679 | 5 634 | 5 969 | 6 179 | 6 179 | 6 004 |
| beginning of | | | | | | |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Foreign | 17 | 7 | 72 | 44 | 144 | 172 |
| exchange rate | | | | | | |
| differences | | | | | | |
--------------------------------------------------------------------------------
| EBITDA | 490 | 499 | 1 351 | 1 220 | 2 292 | 2 423 |
--------------------------------------------------------------------------------
| Paid net | | | | | | |
| financial | | | | | | |
| costs, taxes | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| and | -225 | 61 | -551 | 187 | -47 | -785 |
| adjustments | | | | | | |
| for non-cash | | | | | | |
| and | | | | | | |
| divestment | | | | | | |
| items | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in | 157 | 144 | 143 | 119 | 19 | 43 |
| working | | | | | | |
| capital | | | | | | |
--------------------------------------------------------------------------------
| Capital | -263 | -171 | -486 | -351 | -845 | -980 |
| expenditures | | | | | | |
--------------------------------------------------------------------------------
| Acquisitions | -1 | -4 | -1 | -54 | -87 | -34 |
--------------------------------------------------------------------------------
| Divestments | 6 | 11 | 125 | 23 | 62 | 164 |
--------------------------------------------------------------------------------
| Change in | -22 | -13 | -53 | -32 | -104 | -125 |
| interest-bear | | | | | | |
| ing | | | | | | |
| receivables | | | | | | |
--------------------------------------------------------------------------------
| Dividends | -888 | -888 | -888 | -888 | -888 | -888 |
--------------------------------------------------------------------------------
| Other | -14 | -21 | -19 | -8 | -25 | -36 |
| financing | | | | | | |
| activities | | | | | | |
--------------------------------------------------------------------------------
| Net cash flow | -760 | -382 | -379 | 216 | 377 | -218 |
| (- increase | | | | | | |
| in net debt) | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fair value | 50 | -19 | 86 | -3 | 23 | 112 |
| change of | | | | | | |
| bonds,amortis | | | | | | |
| ed cost | | | | | | |
| valuation and | | | | | | |
| other | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net debt end | 6 506 | 6 004 | 6 506 | 6 004 | 5 969 | 6 506 |
| of period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key ratios |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | June 30 | March | Dec 31 | Sept 30 | June 30 | March | Last |
| | 2010 | 31 | 2009 | 2009 | 2009 | 31 | twelve |
| | | 2010 | | | | 2009 | months |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBIT | 1 351 | 861 | 2 292 | 1 634 | 1 220 | 721 | 2 423 |
| DA, | | | | | | | |
| EUR | | | | | | | |
| mill | | | | | | | |
| ion | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earn | 0.93 | 0.63 | 1.48 | 1.02 | 0.78 | 0.46 | 1.62 |
| ings | | | | | | | |
| per | | | | | | | |
| shar | | | | | | | |
| e | | | | | | | |
| (bas | | | | | | | |
| ic), | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capi | 15 862 | 15 642 | 15 350 | 15 184 | 15 347 | 17 404 | N/A |
| tal | | | | | | | |
| empl | | | | | | | |
| oyed | | | | | | | |
| , | | | | | | | |
| EUR | | | | | | | |
| mill | | | | | | | |
| ion | | | | | | | |
--------------------------------------------------------------------------------
| Inte | 6 506 | 5 679 | 5 969 | 6 041 | 6 004 | 5 634 | N/A |
| rest | | | | | | | |
| -bea | | | | | | | |
| ring | | | | | | | |
| net | | | | | | | |
| debt | | | | | | | |
| , | | | | | | | |
| EUR | | | | | | | |
| mill | | | | | | | |
| ion | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capi | 513 | 216 | 929 | 634 | 412 | 181 | 1 030 |
| tal | | | | | | | |
| expe | | | | | | | |
| ndit | | | | | | | |
| ure | | | | | | | |
| and | | | | | | | |
| gros | | | | | | | |
| s | | | | | | | |
| inve | | | | | | | |
| stme | | | | | | | |
| nts | | | | | | | |
| in | | | | | | | |
| shar | | | | | | | |
| es, | | | | | | | |
| EUR | | | | | | | |
| mill | | | | | | | |
| ion | | | | | | | |
--------------------------------------------------------------------------------
| Capi | 493 | 196 | 862 | 571 | 352 | 150 | 1 003 |
| tal | | | | | | | |
| expe | | | | | | | |
| ndit | | | | | | | |
| ure, | | | | | | | |
| EUR | | | | | | | |
| mill | | | | | | | |
| ion | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Retu | 14.3 | 18.7 | 12.1 | 11.4 | 13.1 | 14.5 | 12.8 |
| rn | | | | | | | |
| on | | | | | | | |
| capi | | | | | | | |
| tal | | | | | | | |
| empl | | | | | | | |
| oyed | | | | | | | |
| , % | | | | | | | |
| 1) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Retu | 19.3 | 25.7 | 16.0 | 14.6 | 17.4 | 19.6 | 18.0 |
| rn | | | | | | | |
| on | | | | | | | |
| shar | | | | | | | |
| ehol | | | | | | | |
| ders | | | | | | | |
| ' | | | | | | | |
| equi | | | | | | | |
| ty, | | | | | | | |
| % 1) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net | 2.5 | 1.7 | 2.6 | 2.8 | 2.5 | 2.0 | 2.7 |
| debt | | | | | | | |
| / | | | | | | | |
| EBIT | | | | | | | |
| DA | | | | | | | |
| 1) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Inte | 18.7 | 24.2 | 12.4 | 11.3 | 12.3 | 16.0 | 15.5 |
| rest | | | | | | | |
| cove | | | | | | | |
| rage | | | | | | | |
--------------------------------------------------------------------------------
| Inte | 13.7 | 18.7 | 10.3 | 9.5 | 10.5 | 12.9 | 11.9 |
| rest | | | | | | | |
| cove | | | | | | | |
| rage | | | | | | | |
| incl | | | | | | | |
| udin | | | | | | | |
| g | | | | | | | |
| capi | | | | | | | |
| tali | | | | | | | |
| sed | | | | | | | |
| borr | | | | | | | |
| owin | | | | | | | |
| g | | | | | | | |
| cost | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Fund | 28.8 | 44.9 | 37.6 | 35.7 | 38.9 | 45.1 | 25.2 |
| s | | | | | | | |
| from | | | | | | | |
| oper | | | | | | | |
| atio | | | | | | | |
| ns/i | | | | | | | |
| nter | | | | | | | |
| est- | | | | | | | |
| bear | | | | | | | |
| ing | | | | | | | |
| net | | | | | | | |
| debt | | | | | | | |
| , % | | | | | | | |
| 1) | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gear | 75 | 67 | 70 | 73 | 76 | 65 | N/A |
| ing, | | | | | | | |
| % | | | | | | | |
--------------------------------------------------------------------------------
| Equi | 9.19 | 8.96 | 9.04 | 8.89 | 8.42 | 9.34 | N/A |
| ty | | | | | | | |
| per | | | | | | | |
| shar | | | | | | | |
| e, | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Equi | 42 | 40 | 43 | 43 | 41 | 40 | N/A |
| ty-t | | | | | | | |
| o-as | | | | | | | |
| sets | | | | | | | |
| rati | | | | | | | |
| o, % | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Numb | 11 406 | 11 290 | 11 613 | 12 054 | 13 586 | 14 267 | N/A |
| er | | | | | | | |
| of | | | | | | | |
| empl | | | | | | | |
| oyee | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Aver | 11 393 | 11 435 | 13 278 | 13 737 | 14 310 | 14 644 | N/A |
| age | | | | | | | |
| numb | | | | | | | |
| er | | | | | | | |
| of | | | | | | | |
| empl | | | | | | | |
| oyee | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Aver | 888 | 888 367 | 888 230 | 888 230 | 888 230 | 888 095 | 888 367 |
| age | 367 | | | | | | |
| numb | | | | | | | |
| er | | | | | | | |
| of | | | | | | | |
| shar | | | | | | | |
| es, | | | | | | | |
| 1 | | | | | | | |
| 000 | | | | | | | |
| shar | | | | | | | |
| es | | | | | | | |
--------------------------------------------------------------------------------
| Dilu | 888 | 888 367 | 888 230 | 888 230 | 888 230 | 888 250 | 888 367 |
| ted | 367 | | | | | | |
| adju | | | | | | | |
| sted | | | | | | | |
| aver | | | | | | | |
| age | | | | | | | |
| numb | | | | | | | |
| er | | | | | | | |
| of | | | | | | | |
| shar | | | | | | | |
| es, | | | | | | | |
| 1 | | | | | | | |
| 000 | | | | | | | |
| shar | | | | | | | |
| es | | | | | | | |
--------------------------------------------------------------------------------
| Numb | 888 | 888 367 | 888 367 | 888 367 | 888 367 | 888 166 | N/A |
| er | 367 | | | | | | |
| of | | | | | | | |
| regi | | | | | | | |
| ster | | | | | | | |
| ed | | | | | | | |
| shar | | | | | | | |
| es, | | | | | | | |
| 1 | | | | | | | |
| 000 | | | | | | | |
| shar | | | | | | | |
| es | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Quarterly figures are annualised. |
--------------------------------------------------------------------------------
| For definitions, see Note 24. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum Corporation | Notes to the condensed |
| | consolidated interim financial |
| | statements |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Notes to the condensed consolidated interim financial statements |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1. Basis of preparation |
--------------------------------------------------------------------------------
The condensed interim financial statements have been prepared in accordance with
International Accounting Standard (IAS) 34, Interim Financial Reporting, as
adopted by the EU. The condensed interim financial report should be read in
conjunction with the annual financial statements for the year ended 31 December
2009. The interim financial statements have not been audited.
--------------------------------------------------------------------------------
| 2. Accounting Policies |
--------------------------------------------------------------------------------
The same accounting policies and presentation have been followed in these
condensed interim financial statements as were applied in the preparation of the
consolidated financial statements as at and for the year ended 31 December 2009,
except for the effects of the adoption of the standards and presentation changes
described below:
- IFRS 3 (revised) Business combinations (effective for annual periods beginning
on or after 1 July 2009.) The amendment effects the accounting of transaction
costs, step acquisitions, goodwill and non-controlling interest and contingent
consideration. Fortum applies the revised standard to business combinations
taking place on or after 1 January 2010.
- IAS 27 (amended) Consolidated and separate financial statements (to be adopted
for annual periods beginning on or after 1 July 2009). The amendments to IAS 27
require the effects of all transactions with non-controlling interests to be
recorded in equity if there is no change in control. Fortum applies the amended
standard prospectively to transactions with non-controlling interests from 1
January 2010.
- IAS 17 (amendment) Leases (effective for annual periods beginning on or after
1 January 2010). The amendment is part of the IASB's annual improvements project
published in April 2009. The requirements of IAS 17 Leases regarding the
classification of leases of land were amended. Prior to amendment, IAS 17
generally required leases of land with an indefinite useful life to be
classified as operating leases. Following the amendments, leases of land are
classified as either ‘finance' or ‘operating' in accordance with the general
principles of IAS 17. Fortum has adopted the amendment as of 1 January 2010. The
amendment did not have a material impact on Fortum's financial statements as the
classification of major land lease agreements did not change.
For changes in accounting practice relating to TGC-1 results, see Note 13 below.
Additional line item in the income statement
Items affecting comparability are excluded from relevant income statement line
items and disclosed separately in Fortum's income statement as they are
necessary for understanding the financial performance when comparing results for
the current period with previous periods.
The following items are included in the line "Items affecting comparability":
- non-recurring items, consisting of capital gains and losses;
- effects from fair valuations of derivatives hedging future cash flows where
hedge accounting is not applied according to IAS 39. The major part of Fortum´s
cash flow hedges obtain hedge accounting status and the fair value changes are
thus recorded in equity;
- effects from the accounting of Fortum´s part of the State Nuclear Waste
Management Fund where the assets in the balance sheet cannot exceed the related
liabilities according to IFRIC 5.
In segment disclosures these items have been deducted from operating profit to
arrive to comparable operating profit, because that is considered to reflect
better the segments' business performance.
--------------------------------------------------------------------------------
| 3. Critical accounting estimates and judgements |
--------------------------------------------------------------------------------
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts of assets
and liabilities, income and expense. Annual results may differ from these
estimates.
In preparing these interim financial statements, the significant judgements made
by management in applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the consolidated
financial statements as at and for the year ended 31 December 2009.
--------------------------------------------------------------------------------
| 4. Segment information |
--------------------------------------------------------------------------------
In October 2009 Fortum restructured its organisation into four business
divisions and four staff functions in order to increase the organisation's
efficiency, performance accountability and simplicity. The new business
divisions are Power, Heat, Russia and Electricity Solutions and Distribution.
The Electricity Solutions and Distribution (ESD) division consists of business
areas Distribution and Electricity Sales (former Markets). The reportable
segments under IFRS have been renamed correspondingly.
The reorganisation did not lead to a change in Fortum's external financial
reporting structure as the reportable segments have remained the same. However
there have been some minor changes to the composition of the segments that have
taken effect from beginning of January 2010. Changes relate mainly to the
transfer of the Power division's Power Solutions business area to Russia and
Heat divisions as well as the establishment of the centralised Trading and
Industrial Intelligence unit.
Please see the attachment to Q1 2010 press release for the new and old segment
information.
--------------------------------------------------------------------------------
| Sales | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| EUR million | | | 2010 | 2009 | | twelve |
| | | | | | | months |
--------------------------------------------------------------------------------
| Power sales | 759 | 711 | 1 826 | 1 598 | 3 192 | 3 420 |
| excluding | | | | | | |
| indirect | | | | | | |
| taxes | | | | | | |
--------------------------------------------------------------------------------
| Heating sales | 280 | 239 | 873 | 727 | 1 314 | 1 460 |
--------------------------------------------------------------------------------
| Network | 194 | 170 | 464 | 390 | 760 | 834 |
| transmissions | | | | | | |
--------------------------------------------------------------------------------
| Other sales | 62 | 74 | 79 | 111 | 169 | 137 |
--------------------------------------------------------------------------------
| Total | 1 295 | 1 194 | 3 242 | 2 826 | 5 435 | 5 851 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Sales by | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| segment | | | 2010 | 2009 | | twelve |
| EUR million | | | | | | months |
--------------------------------------------------------------------------------
| Power 1) | 597 | 608 | 1 366 | 1 296 | 2 531 | 2 601 |
--------------------------------------------------------------------------------
| - of which | -10 | 64 | -134 | 134 | 254 | -14 |
| internal | | | | | | |
--------------------------------------------------------------------------------
| Heat 1) | 301 | 250 | 952 | 764 | 1 399 | 1 587 |
--------------------------------------------------------------------------------
| - of which | 2 | 4 | -4 | 13 | 23 | 6 |
| internal | | | | | | |
--------------------------------------------------------------------------------
| Distribution | 200 | 176 | 480 | 405 | 800 | 875 |
--------------------------------------------------------------------------------
| - of which | 3 | 3 | 7 | 4 | 13 | 16 |
| internal | | | | | | |
--------------------------------------------------------------------------------
| Electricity | 327 | 298 | 964 | 767 | 1 449 | 1 646 |
| Sales 1) | | | | | | |
--------------------------------------------------------------------------------
| - of which | 19 | 8 | 80 | 30 | 67 | 117 |
| internal | | | | | | |
--------------------------------------------------------------------------------
| Russia | 169 | 138 | 413 | 324 | 632 | 721 |
--------------------------------------------------------------------------------
| - of which | - | - | - | - | - | - |
| internal | | | | | | |
--------------------------------------------------------------------------------
| Other 1) | 16 | 19 | 21 | 38 | 71 | 54 |
--------------------------------------------------------------------------------
| - of which | 40 | 4 | 61 | 17 | -5 | 39 |
| internal | | | | | | |
--------------------------------------------------------------------------------
| Netting of | -261 | -212 | -944 | -570 | -1 095 | -1 469 |
| Nord Pool | | | | | | |
| transactions | | | | | | |
| 2) | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | -54 | -83 | -10 | -198 | -352 | -164 |
--------------------------------------------------------------------------------
| Total | 1 295 | 1 194 | 3 242 | 2 826 | 5 435 | 5 851 |
--------------------------------------------------------------------------------
1) Sales, both internal and external, includes effects from realised hedging
contracts. Effect on sales can be negative or positive depending on the average
contract price and realised spot price.
2) Sales and purchases with Nord Pool 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 | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| by segment | | | 2010 | 2009 | | twelve |
| EUR million | | | | | | months |
--------------------------------------------------------------------------------
| Power | 280 | 307 | 747 | 739 | 1 363 | 1 371 |
--------------------------------------------------------------------------------
| Heat | 35 | 39 | 194 | 154 | 252 | 292 |
--------------------------------------------------------------------------------
| Distribution | 53 | 54 | 166 | 135 | 263 | 294 |
--------------------------------------------------------------------------------
| Electricity | 23 | 20 | -6 | -1 | 29 | 24 |
| Sales | | | | | | |
--------------------------------------------------------------------------------
| Russia | -9 | -15 | 23 | -9 | -20 | 12 |
--------------------------------------------------------------------------------
| Other | -31 | -30 | -49 | -44 | -105 | -110 |
--------------------------------------------------------------------------------
| Total | 351 | 375 | 1 075 | 974 | 1 782 | 1 883 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Comparable | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| operating profit | | | 2010 | 2009 | | twelve |
| by segment | | | | | | months |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Power | 271 | 340 | 695 | 755 | 1 454 | 1 394 |
--------------------------------------------------------------------------------
| Heat | 33 | 26 | 165 | 140 | 231 | 256 |
--------------------------------------------------------------------------------
| Distribution | 53 | 54 | 155 | 135 | 262 | 282 |
--------------------------------------------------------------------------------
| Electricity | 10 | 6 | -3 | 4 | 22 | 15 |
| Sales | | | | | | |
--------------------------------------------------------------------------------
| Russia | -9 | -14 | 7 | -8 | -20 | -5 |
--------------------------------------------------------------------------------
| Other | -19 | -12 | -29 | -24 | -61 | -66 |
--------------------------------------------------------------------------------
| Comparable | 339 | 400 | 990 | 1 002 | 1 888 | 1 876 |
| operating profit | | | | | | |
--------------------------------------------------------------------------------
| Non-recurring | 4 | 10 | 50 | 14 | 29 | 65 |
| items | | | | | | |
--------------------------------------------------------------------------------
| Other items | 8 | -35 | 35 | -42 | -135 | -58 |
| affecting | | | | | | |
| comparability | | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 351 | 375 | 1 075 | 974 | 1 782 | 1 883 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-recurring | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| items by segment | | | 2010 | 2009 | | twelve |
| EUR million | | | | | | months |
--------------------------------------------------------------------------------
| Power | 1 | 1 | 1 | 5 | 6 | 2 |
--------------------------------------------------------------------------------
| Heat | 3 | 9 | 22 | 9 | 21 | 34 |
--------------------------------------------------------------------------------
| Distribution | 0 | 0 | 11 | 0 | 1 | 12 |
--------------------------------------------------------------------------------
| Electricity | - | 0 | - | 0 | 0 | 0 |
| Sales | | | | | | |
--------------------------------------------------------------------------------
| Russia | 0 | -1 | 16 | -1 | 0 | 17 |
--------------------------------------------------------------------------------
| Other | 0 | 1 | 0 | 1 | 1 | 0 |
--------------------------------------------------------------------------------
| Total | 4 | 10 | 50 | 14 | 29 | 65 |
--------------------------------------------------------------------------------
Non-recurring items include capital gains and losses.
--------------------------------------------------------------------------------
| Other items | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| affecting | | | 2010 | 2009 | | twelve |
| comparability by | | | | | | months |
| segment | | | | | | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Power 1) | 8 | -34 | 51 | -21 | -97 | -25 |
--------------------------------------------------------------------------------
| Heat | -1 | 4 | 7 | 5 | 0 | 2 |
--------------------------------------------------------------------------------
| Distribution | 0 | 0 | 0 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Electricity | 13 | 14 | -3 | -5 | 7 | 9 |
| Sales | | | | | | |
--------------------------------------------------------------------------------
| Russia | - | - | 0 | - | - | 0 |
--------------------------------------------------------------------------------
| Other | -12 | -19 | -20 | -21 | -45 | -44 |
--------------------------------------------------------------------------------
| Total | 8 | -35 | 35 | -42 | -135 | -58 |
--------------------------------------------------------------------------------
| 1) Including | 23 | -10 | 14 | -21 | -59 | -24 |
| effects from the | | | | | | |
| accounting of | | | | | | |
| Fortum's part of | | | | | | |
| the Finnish | | | | | | |
| State Nuclear | | | | | | |
| Waste Management | | | | | | |
| Fund with (EUR | | | | | | |
| million): | | | | | | |
--------------------------------------------------------------------------------
Other items affecting comparability mainly include effects from financial
derivatives hedging future cash-flows where hedge accounting is not applied
according to IAS 39. In Power segment there are also effects from the accounting
of Fortum's part of the Finnish State Nuclear Waste Management Fund where the
asset in the balance sheet cannot exceed the related liabilities according to
IFRIC interpretation 5.
--------------------------------------------------------------------------------
| Depreciation, amortisation and impairment | | |
| charges by segment | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | Q2 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| | 2010 | | 2010 | 2009 | | twelve |
| | | | | | | months |
--------------------------------------------------------------------------------
| Power | 24 | 22 | 48 | 45 | 93 | 96 |
--------------------------------------------------------------------------------
| Heat | 46 | 38 | 91 | 76 | 162 | 177 |
--------------------------------------------------------------------------------
| Distribution | 44 | 41 | 87 | 80 | 164 | 171 |
--------------------------------------------------------------------------------
| Electricity Sales | 1 | 2 | 2 | 3 | 6 | 5 |
--------------------------------------------------------------------------------
| Russia | 22 | 18 | 42 | 37 | 75 | 80 |
--------------------------------------------------------------------------------
| Other | 2 | 3 | 6 | 5 | 10 | 11 |
--------------------------------------------------------------------------------
| Total | 139 | 124 | 276 | 246 | 510 | 540 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share of profit/loss in associates and joint | | |
| ventures by segment | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | Q2 2010 | Q2 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| | | 2009 | 2010 | 2009 | | twelve |
| | | | | | | months |
--------------------------------------------------------------------------------
| Power 1), 2) | -15 | -5 | -23 | -11 | -35 | -47 |
--------------------------------------------------------------------------------
| Heat | 1 | 7 | 19 | 12 | 30 | 37 |
--------------------------------------------------------------------------------
| Distribution | 6 | 5 | 11 | 9 | 10 | 12 |
--------------------------------------------------------------------------------
| Electricity Sales | 2 | 1 | 1 | 1 | 0 | 0 |
--------------------------------------------------------------------------------
| Russia | 9 | 5 | 9 | 5 | 20 | 24 |
--------------------------------------------------------------------------------
| Other | 12 | 16 | 14 | -20 | -4 | 30 |
--------------------------------------------------------------------------------
| Total | 15 | 29 | 31 | -4 | 21 | 56 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Including effects from the accounting of Fortum's associates |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| part of Finnish | 2 | -3 | 0 | -6 | -5 | 1 |
| and Swedish | | | | | | |
| Nuclear Waste | | | | | | |
| Management | | | | | | |
| Funds with (EUR | | | | | | |
| million): | | | | | | |
--------------------------------------------------------------------------------
2) The main part of the associated companies in Power are power production
companies from which Fortum purchases produced electricity at production costs
including interest costs, production taxes and income taxes.
--------------------------------------------------------------------------------
| Participation in associates and joint ventures | | |
| by segment | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | June 30 | June 30 | Dec 31 |
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Power | 881 | 864 | 863 |
--------------------------------------------------------------------------------
| Heat | 157 | 166 | 178 |
--------------------------------------------------------------------------------
| Distribution | 209 | 218 | 230 |
--------------------------------------------------------------------------------
| Electricity Sales | 12 | 12 | 12 |
--------------------------------------------------------------------------------
| Russia | 454 | 405 | 425 |
--------------------------------------------------------------------------------
| Other | 406 | 440 | 480 |
--------------------------------------------------------------------------------
| Total | 2 119 | 2 105 | 2 188 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| expenditure by | | | 2010 | 2009 | | twelve |
| segment | | | | | | months |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Power | 22 | 23 | 35 | 44 | 96 | 87 |
--------------------------------------------------------------------------------
| Heat | 59 | 97 | 121 | 167 | 358 | 312 |
--------------------------------------------------------------------------------
| Distribution | 47 | 43 | 76 | 79 | 188 | 185 |
--------------------------------------------------------------------------------
| Electricity Sales | 0 | 0 | 0 | 1 | 1 | 0 |
--------------------------------------------------------------------------------
| Russia 1) | 167 | 38 | 258 | 59 | 215 | 414 |
--------------------------------------------------------------------------------
| Other | 2 | 1 | 3 | 2 | 4 | 5 |
--------------------------------------------------------------------------------
| Total | 297 | 202 | 493 | 352 | 862 | 1 003 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Of which | 12 | 5 | 21 | 14 | 30 | 37 |
| capitalised | | | | | | |
| borrowing costs | | | | | | |
--------------------------------------------------------------------------------
1) Increase is due to the progressing of OAO Fortum's ongoing investment
program.
--------------------------------------------------------------------------------
| Gross | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| investments in | | | 2010 | 2009 | | twelve |
| shares by | | | | | | months |
| segment | | | | | | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Power | - | 25 | 20 | 56 | 57 | 21 |
--------------------------------------------------------------------------------
| Heat | 0 | 0 | 0 | 0 | 1 | 1 |
--------------------------------------------------------------------------------
| Distribution | - | 0 | - | 0 | 5 | 5 |
--------------------------------------------------------------------------------
| Electricity | - | - | - | - | - | - |
| Sales | | | | | | |
--------------------------------------------------------------------------------
| Russia | - | 3 | - | 3 | 3 | 0 |
--------------------------------------------------------------------------------
| Other | 0 | 1 | 0 | 1 | 1 | 0 |
--------------------------------------------------------------------------------
| Total | 0 | 29 | 20 | 60 | 67 | 27 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross investments in shares during Q1 2010 include additional share capital |
| to be paid to Teollisuuden Voima Oyj. See Note 13. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets by segment | June 30 | June 30 | Dec 31 |
| EUR million | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Power | 5 726 | 5 353 | 5 494 |
--------------------------------------------------------------------------------
| Heat | 3 884 | 3 503 | 3 787 |
--------------------------------------------------------------------------------
| Distribution | 3 482 | 3 106 | 3 299 |
--------------------------------------------------------------------------------
| Electricity Sales | 59 | 81 | 125 |
--------------------------------------------------------------------------------
| Russia | 2 690 | 2 062 | 2 260 |
--------------------------------------------------------------------------------
| Other | 285 | 476 | 382 |
--------------------------------------------------------------------------------
| Total | 16 126 | 14 581 | 15 347 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on net assets by segment | | Last | Dec 31 |
| % | | twelve | 2009 |
| | | months | |
--------------------------------------------------------------------------------
| Power | | 23.9 | 24.5 |
--------------------------------------------------------------------------------
| Heat | | 8.8 | 7.9 |
--------------------------------------------------------------------------------
| Distribution | | 9.2 | 8.7 |
--------------------------------------------------------------------------------
| Electricity Sales | | 26.4 | 28.9 |
--------------------------------------------------------------------------------
| Russia | | 1.5 | 0.0 |
--------------------------------------------------------------------------------
| Other | | -21.7 | -19.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Comparable return on net | | | Last | Dec 31 |
| assets by segment | | | twelve | 2009 |
| % | | | months | |
--------------------------------------------------------------------------------
| Power | | | 24.4 | 26.4 |
--------------------------------------------------------------------------------
| Heat | | | 7.8 | 7.3 |
--------------------------------------------------------------------------------
| Distribution | | | 8.9 | 8.6 |
--------------------------------------------------------------------------------
| Electricity Sales | | | 14.0 | 18.6 |
--------------------------------------------------------------------------------
| Russia | | | 0.8 | 0.0 |
--------------------------------------------------------------------------------
| Other | | | -7.9 | -17.0 |
--------------------------------------------------------------------------------
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. Average net assets are calculated using the opening balance and end of
each quarter values.
--------------------------------------------------------------------------------
| Assets by segments | | June 30 | June 30 | Dec 31 |
| EUR million | | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Power | | 6 680 | 6 081 | 6 260 |
--------------------------------------------------------------------------------
| Heat | | 4 237 | 3 844 | 4 244 |
--------------------------------------------------------------------------------
| Distribution | | 3 929 | 3 553 | 3 765 |
--------------------------------------------------------------------------------
| Electricity Sales | | 379 | 448 | 475 |
--------------------------------------------------------------------------------
| Russia | | 3 024 | 2 327 | 2 542 |
--------------------------------------------------------------------------------
| Other | | 534 | 726 | 621 |
--------------------------------------------------------------------------------
| Eliminations | | -242 | -272 | -293 |
--------------------------------------------------------------------------------
| Assets included in Net | | 18 541 | 16 707 | 17 614 |
| assets | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | | 1 079 | 837 | 943 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Deferred taxes | | 61 | 4 | 47 |
--------------------------------------------------------------------------------
| Other assets | | 231 | 485 | 347 |
--------------------------------------------------------------------------------
| Liquid funds | | 694 | 1 440 | 890 |
--------------------------------------------------------------------------------
| Total assets | | 20 606 | 19 473 | 19 841 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities by segments | | June 30 | June 30 | Dec 31 |
| EUR million | | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Power | | 954 | 728 | 766 |
--------------------------------------------------------------------------------
| Heat | | 353 | 341 | 456 |
--------------------------------------------------------------------------------
| Distribution | | 447 | 447 | 466 |
--------------------------------------------------------------------------------
| Electricity Sales | | 320 | 367 | 350 |
--------------------------------------------------------------------------------
| Russia | | 334 | 265 | 282 |
--------------------------------------------------------------------------------
| Other | | 249 | 250 | 240 |
--------------------------------------------------------------------------------
| Eliminations | | -242 | -272 | -293 |
--------------------------------------------------------------------------------
| Liabilities included in Net | | 2 415 | 2 126 | 2 267 |
| assets | | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | | 1 784 | 1 762 | 1 750 |
--------------------------------------------------------------------------------
| Other liabilities | | 545 | 238 | 474 |
--------------------------------------------------------------------------------
| Total liabilities included | | 4 744 | 4 126 | 4 491 |
| in Capital employed | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | | 7 200 | 7 444 | 6 859 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Total equity | | 8 662 | 7 903 | 8 491 |
--------------------------------------------------------------------------------
| Total equity and | | 20 606 | 19 473 | 19 841 |
| liabilities | | | | |
--------------------------------------------------------------------------------
Other assets and Other liabilities not included in segment's Net assets consists
mainly of income tax receivables and liabilities, accrued interest expenses,
derivative receivables and liabilities qualifying as hedges and receivables and
liabilities for interest rate derivatives.
--------------------------------------------------------------------------------
| Number of employees | | June 30 | June 30 | Dec 31 |
| | | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Power | | 1 983 | 2 026 | 1 916 |
--------------------------------------------------------------------------------
| Heat | | 2 549 | 2 666 | 2 552 |
--------------------------------------------------------------------------------
| Distribution | | 1 144 | 1 169 | 1 088 |
--------------------------------------------------------------------------------
| Electricity Sales | | 549 | 637 | 611 |
--------------------------------------------------------------------------------
| Russia | | 4 584 | 6 483 | 4 855 |
--------------------------------------------------------------------------------
| Other | | 597 | 605 | 591 |
--------------------------------------------------------------------------------
| Total | | 11 406 | 13 586 | 11 613 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average number of employees | | June 30 | June 30 | 2009 |
| | | 2010 | 2009 | |
--------------------------------------------------------------------------------
| Power | | 1 900 | 2 164 | 2 068 |
--------------------------------------------------------------------------------
| Heat | | 2 516 | 2 704 | 2 652 |
--------------------------------------------------------------------------------
| Distribution | | 1 134 | 1 202 | 1 166 |
--------------------------------------------------------------------------------
| Electricity Sales | | 551 | 632 | 629 |
--------------------------------------------------------------------------------
| Russia | | 4 701 | 7 018 | 6 170 |
--------------------------------------------------------------------------------
| Other | | 591 | 590 | 593 |
--------------------------------------------------------------------------------
| Total | | 11 393 | 14 310 | 13 278 |
--------------------------------------------------------------------------------
Average number of employees is based on a monthly average for the whole period
in question.
--------------------------------------------------------------------------------
| Fortum Corporation | Notes to the condensed |
| | consolidated interim |
| | financial statements |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 5. Quarterly segment information |
--------------------------------------------------------------------------------
Extended quarterly information is available on Fortum's website www.fortum.com
(about Fortum/Investors/Interim reports).
--------------------------------------------------------------------------------
| Quarterly sales by | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| segment | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Power | 597 | 769 | 663 | 572 | 608 | 688 |
--------------------------------------------------------------------------------
| - of which internal | -10 | -124 | 50 | 70 | 64 | 70 |
--------------------------------------------------------------------------------
| Heat | 301 | 651 | 458 | 177 | 250 | 514 |
--------------------------------------------------------------------------------
| - of which internal | 2 | -6 | 8 | 2 | 4 | 9 |
--------------------------------------------------------------------------------
| Distribution | 200 | 280 | 227 | 168 | 176 | 229 |
--------------------------------------------------------------------------------
| - of which internal | 3 | 4 | 7 | 2 | 3 | 1 |
--------------------------------------------------------------------------------
| Electricity Sales | 327 | 637 | 410 | 272 | 298 | 469 |
--------------------------------------------------------------------------------
| - of which internal | 19 | 61 | 28 | 9 | 8 | 22 |
--------------------------------------------------------------------------------
| Russia | 169 | 244 | 197 | 111 | 138 | 186 |
--------------------------------------------------------------------------------
| - of which internal | - | - | - | - | - | - |
--------------------------------------------------------------------------------
| Other | 16 | 5 | 17 | 16 | 19 | 19 |
--------------------------------------------------------------------------------
| - of which internal | 40 | 21 | -9 | -13 | 4 | 13 |
--------------------------------------------------------------------------------
| Netting of Nord Pool | -261 | -683 | -325 | -200 | -212 | -358 |
| transactions | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | -54 | 44 | -84 | -70 | -83 | -115 |
--------------------------------------------------------------------------------
| Total | 1 295 | 1 947 | 1 563 | 1 046 | 1 194 | 1 632 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Quarterly operating | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| profit by segments | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Power | 280 | 467 | 327 | 297 | 307 | 432 |
--------------------------------------------------------------------------------
| Heat | 35 | 159 | 109 | -11 | 39 | 115 |
--------------------------------------------------------------------------------
| Distribution | 53 | 113 | 81 | 47 | 54 | 81 |
--------------------------------------------------------------------------------
| Electricity Sales | 23 | -29 | 37 | -7 | 20 | -21 |
--------------------------------------------------------------------------------
| Russia | -9 | 32 | 8 | -19 | -15 | 6 |
--------------------------------------------------------------------------------
| Other | -31 | -18 | -40 | -21 | -30 | -14 |
--------------------------------------------------------------------------------
| Total | 351 | 724 | 522 | 286 | 375 | 599 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Quarterly comparable | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| operating profit by | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 |
| segments | | | | | | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Power | 271 | 424 | 391 | 308 | 340 | 415 |
--------------------------------------------------------------------------------
| Heat | 33 | 132 | 104 | -13 | 26 | 114 |
--------------------------------------------------------------------------------
| Distribution | 53 | 102 | 80 | 47 | 54 | 81 |
--------------------------------------------------------------------------------
| Electricity Sales | 10 | -13 | 11 | 7 | 6 | -2 |
--------------------------------------------------------------------------------
| Russia | -9 | 16 | 8 | -20 | -14 | 6 |
--------------------------------------------------------------------------------
| Other | -19 | -10 | -24 | -13 | -12 | -12 |
--------------------------------------------------------------------------------
| Total | 339 | 651 | 570 | 316 | 400 | 602 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Quarterly | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| non-recurring items | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 |
| by segment | | | | | | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Power | 1 | 0 | 1 | 0 | 1 | 4 |
--------------------------------------------------------------------------------
| Heat | 3 | 19 | 6 | 6 | 9 | 0 |
--------------------------------------------------------------------------------
| Distribution | 0 | 11 | 1 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Electricity Sales | - | - | 0 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Russia | 0 | 16 | 0 | 1 | -1 | 0 |
--------------------------------------------------------------------------------
| Other | 0 | 0 | 0 | 0 | 1 | 0 |
--------------------------------------------------------------------------------
| Total | 4 | 46 | 8 | 7 | 10 | 4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Quarterly other | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| items affecting | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 |
| comparability | | | | | | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Power 1) | 8 | 43 | -65 | -11 | -34 | 13 |
--------------------------------------------------------------------------------
| Heat | -1 | 8 | -1 | -4 | 4 | 1 |
--------------------------------------------------------------------------------
| Distribution | 0 | 0 | 0 | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Electricity Sales | 13 | -16 | 26 | -14 | 14 | -19 |
--------------------------------------------------------------------------------
| Russia | - | - | - | - | - | - |
--------------------------------------------------------------------------------
| Other | -12 | -8 | -16 | -8 | -19 | -2 |
--------------------------------------------------------------------------------
| Total | 8 | 27 | -56 | -37 | -35 | -7 |
--------------------------------------------------------------------------------
| 1) Including effects | 23 | -9 | -33 | -5 | -10 | -11 |
| from the accounting | | | | | | |
| of Fortum's part of | | | | | | |
| the Finnish State | | | | | | |
| Nuclear Waste | | | | | | |
| Management Fund with | | | | | | |
| (EUR million) | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum Corporation | Notes to the condensed consolidated |
| | interim financial statements |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 6. Financial risk management |
--------------------------------------------------------------------------------
The Group has not made any significant change in policies regarding risk
management during the period. Aspects of the Group's financial risk management
objectives and policies are consistent with those disclosed in the consolidated
financial statements as at and for the year ended 31 December 2009.
The tables below disclose the notional values or volumes and net fair values for
the Group's derivatives used in different areas mainly for hedging purposes.
--------------------------------------------------------------------------------
| Derivative | | June 30 | | June 30 | | Dec 31 |
| s | | 2010 | | 2009 | | 2009 |
--------------------------------------------------------------------------------
| Interest | Notiona | Net fair | Notiona | Net fair | Notional | Net fair |
| and | l value | value | l value | value | value | value |
| currency | | | | | | |
| derivative | | | | | | |
| s | | | | | | |
--------------------------------------------------------------------------------
| | MEUR | MEUR | MEUR | MEUR | MEUR | MEUR |
--------------------------------------------------------------------------------
| Interest | 3 710 | 72 | 3 406 | -15 | 3 995 | 41 |
| rate swaps | | | | | | |
--------------------------------------------------------------------------------
| Forward | 6 585 | -232 | 5 111 | 23 | 6 334 | -123 |
| foreign | | | | | | |
| exchange | | | | | | |
| contracts | | | | | | |
--------------------------------------------------------------------------------
| Forward | - | - | 139 | 0 | - | - |
| rate | | | | | | |
| agreements | | | | | | |
--------------------------------------------------------------------------------
| Interest | 930 | -25 | 1 669 | 164 | 1 454 | 65 |
| rate and | | | | | | |
| currency | | | | | | |
| swaps | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Electricit | Volume | Net fair | Volume | Net fair | Volume | Net fair |
| y | | value | | value | | value |
| derivative | | | | | | |
| s | | | | | | |
--------------------------------------------------------------------------------
| | TWh | MEUR | TWh | MEUR | TWh | MEUR |
--------------------------------------------------------------------------------
| Sales | 151 | -419 | 176 | 1 107 | 157 | 9 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
| Purchase | 91 | 255 | 118 | -911 | 102 | -79 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
| Purchased | 1 | -1 | 11 | -12 | 1 | -1 |
| options | | | | | | |
--------------------------------------------------------------------------------
| Written | 2 | 3 | 13 | 2 | 3 | 1 |
| options | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Oil | Volume | Net fair | Volume | Net fair | Volume | Net fair |
| deriva | | value | | value | | value |
| tives | | | | | | |
| | | | | | | |
--------------------------------------------------------------------------------
| | 1000 | MEUR | 1000 | MEUR | 1000 bbl | MEUR |
| | bbl | | bbl | | | |
--------------------------------------------------------------------------------
| Sales | 11 311 | 64 | 1 274 | -5 | 1 555 | -4 |
| swaps | | | | | | |
| and | | | | | | |
| future | | | | | | |
| s | | | | | | |
--------------------------------------------------------------------------------
| Purcha | 11 341 | -83 | 1 437 | 0 | 1 450 | 4 |
| se | | | | | | |
| swaps | | | | | | |
| and | | | | | | |
| future | | | | | | |
| s | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Coal | Volume | Net fair | Volume | Net fair | Volume | Net fair |
| deriva | | value | | value | | value |
| tives | | | | | | |
--------------------------------------------------------------------------------
| | kt | MEUR | kt | MEUR | kt | MEUR |
--------------------------------------------------------------------------------
| Sold | 4 860 | -25 | 795 | 2 | 1 259 | -3 |
--------------------------------------------------------------------------------
| Bought | 5 596 | 29 | 1 108 | -10 | 1 762 | -1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CO2 | Volume | Net | Volume | Net | Volume | Net fair | |
| emissi | | fair | | fair | | value | |
| on | | value | | value | | | |
| allowa | | | | | | | |
| nce | | | | | | | |
| deriva | | | | | | | |
| tives | | | | | | | |
--------------------------------------------------------------------------------
| | ktCO2 | MEUR | ktCO2 | MEUR | ktCO2 | MEUR | |
--------------------------------------------------------------------------------
| Sold | 8 226 | -6 | 1 620 | 5 | 366 | 1 | |
--------------------------------------------------------------------------------
| Bought | 9 569 | 11 | 1 886 | -5 | 686 | -2 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share | Notion | Net | Notion | Net | Notional | Net fair |
| deriva | al | fair | al | fair | value | value |
| tives | value | value | value | value | | |
--------------------------------------------------------------------------------
| | MEUR | MEUR | MEUR | MEUR | MEUR | MEUR |
--------------------------------------------------------------------------------
| Share | 19 | 16 | 24 | 16 | 24 | 21 |
| forwar | | | | | | |
| ds 1) | | | | | | |
--------------------------------------------------------------------------------
1) Cash-settled share forwards are used as a hedging instrument for Fortum
Group's performance share arrangement.
--------------------------------------------------------------------------------
| 7. Acquisitions and disposals |
--------------------------------------------------------------------------------
There were no material investments or disposals of subsidiary shares during the
first half of 2010.
--------------------------------------------------------------------------------
| Fortum Corporation | Notes to the condensed |
| | consolidated interim financial |
| | statements |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 8. Exchange rates |
--------------------------------------------------------------------------------
The balance sheet date rate is based on exchange rate published by the European
Central Bank for the closing date. The average exchange rate is calculated as an
average of each months ending rate from the European Central Bank during the
year and ending rate previous year.
Key exchange rates for Fortum Group applied in the accounts:
--------------------------------------------------------------------------------
| Average | Jan-Jun | Jan-Marc | Jan-Dec | Jan-Sept | Jan-June | Jan-March |
| rate | e | h | 2009 | 2009 | 2009 | 2009 |
| | 2010 | 2010 | | | | |
--------------------------------------------------------------------------------
| Sweden | 9.8144 | 9.9826 | 10.6092 | 10.6830 | 10.8633 | 10.9679 |
| (SEK) | | | | | | |
--------------------------------------------------------------------------------
| Norway | 8.0464 | 8.1423 | 8.7708 | 8.8817 | 9.0049 | 9.1034 |
| (NOK) | | | | | | |
--------------------------------------------------------------------------------
| Poland | 4.0186 | 3.9970 | 4.3321 | 4.3827 | 4.4764 | 4.5018 |
| (PLN) | | | | | | |
--------------------------------------------------------------------------------
| Russia | 40.1535 | 41.4799 | 44.0684 | 44.2745 | 44.1087 | 44.3928 |
| (RUB) | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance | June 31 | March 31 | Dec 31 | Sept 30 | June 30 | March 31 |
| sheet | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 |
| date | | | | | | |
| rate | | | | | | |
--------------------------------------------------------------------------------
| Sweden | 9.5259 | 9.7135 | 10.2520 | 10.2320 | 10.8125 | 10.9400 |
| (SEK) | | | | | | |
--------------------------------------------------------------------------------
| Norway | 7.9725 | 8.0135 | 8.3000 | 8.4600 | 9.0180 | 8.8900 |
| (NOK) | | | | | | |
--------------------------------------------------------------------------------
| Poland | 4.1470 | 3.8673 | 4.1045 | 4.2295 | 4.4520 | 4.6885 |
| (PLN) | | | | | | |
--------------------------------------------------------------------------------
| Russia | 38.2820 | 39.6950 | 43.1540 | 43.9800 | 43.8810 | 45.0320 |
| (RUB) | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9. Income tax expense |
--------------------------------------------------------------------------------
Tax rate according to the income statement for the period Q1-Q2 2010 was 18.3%
(Q1-Q2 2009: 19.3%). The tax rate for the period is lower than in the comparable
period mainly due to the tax exempt capital gains.
The tax rate for the period Q1-Q2 2010, excluding the impact of share of profits
of associated companies and joint ventures, non- taxable capital gains and other
one-time items was 19.5% (Q1-Q2 2009: 19.3%). The tax rate used in the income
statement is always impacted by the fact that share of profits of associates and
joint ventures is recorded based on Fortum's share of profits after tax.
The tax rate for the full year 2009, excluding the impact of share of profits of
associated companies and joint ventures, non- taxable capital gains and other
one-time items was 18.5%.
--------------------------------------------------------------------------------
| 10. Earnings per share |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The calculation of basic and diluted earnings per share is based on the |
| following data: |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | Q1-Q2 | Q1-Q2 | 2009 |
| | | 2010 | 2009 | |
--------------------------------------------------------------------------------
| Earnings (EUR million): | | | | |
--------------------------------------------------------------------------------
| Profit attributable to the owners | | 822 | 695 | 1 312 |
| of the parent | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Number of shares (thousands): | | | | |
--------------------------------------------------------------------------------
| Weighted average number of shares for the | | | |
| purpose of | | | |
--------------------------------------------------------------------------------
| basic earnings per share | | 888 367 | 888 230 | 888 230 |
--------------------------------------------------------------------------------
| Effect of dilutive share options | | - | - | - |
--------------------------------------------------------------------------------
| Weighted average number of shares for the | | | |
| purpose of | | | |
--------------------------------------------------------------------------------
| diluted earnings per share | | 888 367 | 888 230 | 888 230 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 11. Dividend per share |
--------------------------------------------------------------------------------
A dividend in respect of 2009 of EUR 1.00 per share, amounting to a total
dividend of EUR 888 million based on the number of shares registered as of 30
March 2010, was decided at the Annual General Meeting on 25 March 2010. The
dividend was paid on 8 April 2010.
A dividend in respect of 2008 of EUR 1.00 per share, amounting to EUR 888
million based on the number of shares registered as of 14 April 2009, was
decided at the Annual General Meeting on 7 April 2009. The dividend was paid on
21 April 2009.
--------------------------------------------------------------------------------
| 12. Changes in intangible assets and | | | |
| property, plant and equipment | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | | June 30 | June 30 | Dec 31 |
| | | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Opening balance | | 13 246 | 12 533 | 12 533 |
--------------------------------------------------------------------------------
| Increase through acquisition of subsidiary | - | - | 2 |
| companies | | | |
--------------------------------------------------------------------------------
| Capital expenditures | | 493 | 352 | 862 |
--------------------------------------------------------------------------------
| Changes of nuclear asset retirement | | 15 | -1 | -7 |
| cost | | | | |
--------------------------------------------------------------------------------
| Changes of emission rights | | -12 | -13 | 0 |
--------------------------------------------------------------------------------
| Disposals | | -2 | -3 | -26 |
--------------------------------------------------------------------------------
| Depreciation, amortisation and | | -276 | -246 | -510 |
| impairment | | | | |
--------------------------------------------------------------------------------
| Sale of subsidiary companies | | - | -5 | -5 |
--------------------------------------------------------------------------------
| Translation differences and other | | 866 | -82 | 397 |
| adjustments | | | | |
--------------------------------------------------------------------------------
| Closing balance | | 14 330 | 12 535 | 13 246 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Goodwill included in closing | | 321 | 280 | 285 |
| balance | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in goodwill during the | | 36 | -18 | -13 |
| period due to translation | | | | |
| differences | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 13. Changes in participations in associates and joint | |
| ventures | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | June 30 | June 30 | Dec 31 |
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Opening balance | 2 188 | 2 112 | 2 112 |
--------------------------------------------------------------------------------
| Share of profits of associates and joint | 31 | -4 | 21 |
| ventures | | | |
--------------------------------------------------------------------------------
| Investments | - | 31 | 33 |
--------------------------------------------------------------------------------
| Share issues and shareholders' | 20 | 25 | 25 |
| contributions | | | |
--------------------------------------------------------------------------------
| Reclassifications | - | -5 | -7 |
--------------------------------------------------------------------------------
| Divestments | -87 | - | -1 |
--------------------------------------------------------------------------------
| Dividend income received | -51 | -22 | -32 |
--------------------------------------------------------------------------------
| OCI items associated companies | -80 | -39 | -36 |
--------------------------------------------------------------------------------
| Translation differences | 98 | 7 | 73 |
--------------------------------------------------------------------------------
| Closing balance | 2 119 | 2 105 | 2 188 |
--------------------------------------------------------------------------------
Share of profits from associates and joint ventures
Share of profits from associates in Q2 2010 was EUR 15 million (Q2 2009: 29) of
which Fortum's share of profits in Hafslund ASA was EUR 12 million (Q2 2009:
16). Hafslund sold 26 million shares in REC in May 2010. In accordance with the
accounting policy Fortum recognised EUR 2 million in relation to Hafslund's
divestment of REC shares as a part of the share of profit from associates and
joint ventures in Q2 2010. Fortum's share of profits for the period from January
to June 2010 amounted to EUR 31 million (Q1-Q2 2009: -4), of which Hafslund
represented EUR 14 million (Q1-Q2 2009: -20) and Gasum EUR 18 million (Q1-Q2
2009: 9). Fortum's share of profits for the full year 2009 amounted to EUR 21
million, of which Hafslund represented EUR -4 million. According to Fortum Group
accounting policies the share of profits from Hafslund has been included in
Fortum Group figures based on the previous quarter information since updated
interim information is not normally available. Hafslund published their interim
report for Q2 2010 on 14 July 2010. The effect of Hafslund's Q2 is not included
in Fortum's Q2 results.
In Q2 2010 Fortum changed its accounting practice for recognition of TGC-1
results. Previously Fortum has booked its share of results including any
impairment losses and reversals of prior impairments recognised by TGC-1. In the
future Fortum is eliminating the impairment losses or reversals of prior
impairments from its share of results and assessing the need for impairment
separately. The accounting practice change was done prospectively adjusting for
previous periods as the impact on the comparative year information is
immaterial.
TGC-1 has previously published IFRS financial information twice a year. The 2009
IFRS consolidated financial statements were released in June 2010. After that
the company informed that it will release IFRS financial information quarterly.
The first quarter 2010 IFRS results were published in the beginning of July
2010. These interim accounts include Fortum's share of TGC-1's results for the
second half of 2009 as well as for the first quarter of 2010.
Investments and share issues
Teollisuuden Voima Oyj's (TVO) Annual General meeting in March 2010 decided to
raise the company's share capital by EUR 79.3 million of which Fortum's share is
EUR 19.8 million. The increase in Fortum's participation in TVO has been booked
in Q1 2010 and will be paid in 2010 at a date to be decided by TVO's Board of
Directors.
Divestments
In early February Distribution business area divested Fortum's 49% shareholding
in Karlskoga Energi & Miljö AB. In the first quarter of 2010 Heat Division
divested Fortum's 20.4% shareholding in Swedegas AB and Russia Division divested
OAO Fortum's 49% shareholding in Kurgan Generating Company.
OCI items in associated companies
OCI items in associated companies mainly represents the fair value change in
Hafslund's shareholding in REC. In Q2 2010 the fair value change of the
remaining REC shares was EUR -29 million (Q2 2009: -24) and the fair value
change since year-end was
EUR -80 million (Q1-Q2 2009: -28). The cumulative fair value change in Fortum's
equity, based on the remaining number of shares reported by Hafslund, was EUR 4
million at 30 June 2010.
--------------------------------------------------------------------------------
| 14. Share capital |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | Number | Share | Number | Share |
| | of | capita | of | capital |
| | shares | l | shares | Dec 31 |
| | June 30 | June | Dec 31 | 2009 |
| | 2010 | 30 | 2009 | |
| | | 2010 | | |
--------------------------------------------------------------------------------
| Registered shares at 1 January | 888 367 | 3 046 | 887 638 | 3 044 |
| | 045 | | 080 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shares subscribed with options and | - | - | 728 965 | 2 |
| registered at the end of the | | | | |
| period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Registered shares at the end of | 888 367 | 3 046 | 888 367 | 3 046 |
| the period | 045 | | 045 | |
--------------------------------------------------------------------------------
| Unregistered shares | - | | - | |
--------------------------------------------------------------------------------
There were no unexercised stock options remaining on 30 June 2010.
--------------------------------------------------------------------------------
| 15. Interest-bearing liabilities |
--------------------------------------------------------------------------------
The reported interest-bearing debt increased during the quarter by EUR 23
million from EUR 7,177 million to EUR 7,200 million. Total liquid funds
decreased by EUR 804 million from EUR 1,498 million to EUR 694 million.
During the first quarter Fortum increased the amount of re-borrowing from the
Finnish nuclear waste fund by EUR 61 million to EUR 835 million. During the
second quarter Fortum Oyj raised a 10 year loan from Nordic Investment Bank of
EUR 60 million. The loan will partially finance investments in automatic meter
reading equipment. Fortum Oyj regularly issues short term Commercial Papers
(CPs) in the Finnish and Swedish markets. Per quarter end the amount of short
term CPs outstanding was EUR 332 (year-end 2009: 250 million).
--------------------------------------------------------------------------------
| 16. Nuclear related assets and liabilities |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | | June 30 | June 30 | Dec 31 |
| | | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Carrying values in the balance | | | | |
| sheet | | | | |
--------------------------------------------------------------------------------
| Nuclear provisions | | 612 | 577 | 570 |
--------------------------------------------------------------------------------
| Share in the State Nuclear Waste Management | 612 | 577 | 570 |
| Fund | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Legal liability and actual share of the | | | |
| State Nuclear Waste Mangement Fund | | | |
--------------------------------------------------------------------------------
| Liability for nuclear waste management | 913 | 895 | 913 |
| according to the Nuclear Energy Act | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Funding obligation target | 830 | 767 | 830 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum's share of the State Nuclear Waste | 830 | 767 | 786 |
| Management Fund | | | |
--------------------------------------------------------------------------------
Nuclear related provisions
According to the renewed Nuclear Energy Act Fortum submits the proposal for the
nuclear waste management liability regarding the Loviisa nuclear power plant to
the Ministry of Employment and the Economy by the end of June every third year.
Earlier this was done annually by end September. The liability is based on a
technical plan, which is also made every third year. The new technical plan and
the updated cost estimates were completed in Q2 2010. The future costs are
estimated to increase mainly due to updated technical plans related to interim
and final storage of spent fuel. The liability will be decided by the Ministry
of the Employment and the Economy by end of year 2010.
The legal liability on 30 June 2010, decided by the Ministry of Employment and
the Economy in January 2010 is EUR 913 million. The legal liability at the end
of 2010, based on the proposal to the Ministry of Employment and the Economy is
EUR 944 million.The provision in the balance sheet related to nuclear waste
management is based on cash flows for future costs which uses the same basis as
the legal liability. The carrying value of the nuclear provision, calculated
according to IAS 37, has increased due to new technical plan by EUR 42 million
compared to 31 December 2009, totalling EUR 612 million on 30 June 2010. The
main reason for the difference between the carrying value of the provision and
the legal liability is the fact that the legal liability is not discounted to
net present value.
Fortum's share in the State Nuclear Waste Management Fund
Fortum contributes funds to the State Nuclear Waste Management Fund based on the
yearly funding obligation target decided by the governmental authorities in
December in connection with the decision of size of the legal liability. The
current funding obligation target based on the legal liability decided in
January 2010 and approved periodising of the payments to the Fund is EUR 830
million. The Fund is from an IFRS perspective overfunded with EUR 218 million,
since Fortum's share of the Fund on 30 June 2010 is EUR 830 million and the
carrying value in the balance sheet is EUR 612 million.
Effects to comparable operating profit and operating profit
Following the updated cost estimates, Fortum had in Q2 2010 a one-time effect to
Comparable operating profit of EUR -9 million in Power segment due to higher
nuclear waste management costs related to already spent fuel. Any cost increase
which is related to already spent fuel is always recognised immediately in
Comparable operating profit.
Operating profit in Power segment is affected by the accounting principle for
Fortum's share of the Finnish Nuclear Waste Management Fund, since the carrying
value of the Fund in Fortum's balance sheet can in maximum be equal to the
amount of the provisions according to IFRS. As long as the Fund is overfunded
from an IFRS perspective, the effects to operating profit from this adjustment
will be positive if the provisions increase more than the Fund and negative if
actual value of the fund increases more than the provisions. This accounting
effect is not included in Comparable operating profit in Fortum financial
reporting, see Other items affecting comparability in Note 4. Fortum had an
effect from this adjustment in Q2 2010 of EUR +23 million, compared to EUR -10
million in Q2 2009. The cumulative effect 2010 was EUR +14 million compared to
EUR -21 million in 2009.
Associated companies
Fortum has minority shareholdings in associated Finnish and Swedish nuclear
production companies. Fortum has for these companies accounted for its share of
the effects from nuclear related assets and provisions according to Fortum
accounting principles.
--------------------------------------------------------------------------------
| 17. Pledged assets |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | | June 30 | June 30 | Dec 31 |
| | | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| On own behalf | | | | |
--------------------------------------------------------------------------------
| For debt | | | | |
--------------------------------------------------------------------------------
| Pledges | | 293 | 292 | 293 |
--------------------------------------------------------------------------------
| Real estate mortgages | | 137 | 137 | 137 |
--------------------------------------------------------------------------------
| For other commitments | | | | |
--------------------------------------------------------------------------------
| Real estate mortgages | | 181 | 220 | 220 |
--------------------------------------------------------------------------------
| On behalf of associated companies and joint | | | |
| ventures | | | |
--------------------------------------------------------------------------------
| Pledges and real estate mortgages | | 2 | 2 | 2 |
--------------------------------------------------------------------------------
Pledged assets for debt
Finnish participants in the State Nuclear Waste Management Fund are allowed to
borrow from the Fund. During Q1 2010 Fortum increased its borrowing from the
Fund (see Note 15) and therefore pledged additional Kemijoki shares as security.
The value of the pledged shares amount to EUR 269 million (2009: 263 million) as
of 30 June 2010 (and 31 December 2009 respectively).
Pledged assets for other commitments
Fortum has given real estate mortgages in Naantali and Inkoo power plants in
Finland, total value of EUR 181 million (2009: 220 million), as a security to
the State Nuclear Waste Management Fund for the uncovered part of the legal
liability and unexpected events relating to future costs for 53ecommissioning
and disposal of spent fuel in Loviisa nuclear power plant. The size of the
securities given is updated yearly in Q2 based on the decisions regarding the
legal liabilities and the funding target which takes place around year end every
year. Due to the yearly update, the amount of real estate mortgages given as a
security have decreased by EUR 39 million in Q2 2010 (see also note 16 Nuclear
related assets and liablities).
--------------------------------------------------------------------------------
| 18. Operating lease commitments |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | June 30 | June 30 | Dec 31 |
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Due within a year | 23 | 22 | 23 |
--------------------------------------------------------------------------------
| Due after one year and within five years | 42 | 40 | 35 |
--------------------------------------------------------------------------------
| Due after five years | 97 | 81 | 93 |
--------------------------------------------------------------------------------
| Total | 162 | 143 | 151 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The increase in operating lease commitments from the end of 2009 is mainly |
| due to exchange rate differences. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 19. Capital commitments |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | June 30 | June 30 | Dec 31 |
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1 248 | 1 120 | 1 326 |
--------------------------------------------------------------------------------
| Intangible assets | 8 | 7 | 5 |
--------------------------------------------------------------------------------
| Total | 1 256 | 1 127 | 1 331 |
--------------------------------------------------------------------------------
Capital commitments have decreased compared to year end 2009. Commitments have
decreased due to acquisition of combined heat and power plant (CHP) in Nokia,
Finland and progressing of OAO Fortum's investment program as well as
Czestochowa power plant investment. On the other hand a stronger Russian rouble
and commitments relating to CHP investment in Klaipeda, Lithuania have increased
commitments.
--------------------------------------------------------------------------------
| 20. Contingent liabilities |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | | June 30 | June 30 | Dec 31 |
| | | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| On own behalf | | | | |
--------------------------------------------------------------------------------
| Other contingent liabilities | | 234 | 340 | 321 |
--------------------------------------------------------------------------------
| On behalf of associated companies and joint | | | |
| ventures | | | |
--------------------------------------------------------------------------------
| Guarantees | | 338 | 565 | 592 |
--------------------------------------------------------------------------------
| Other contingent liabilities | | 125 | 125 | 125 |
--------------------------------------------------------------------------------
| On behalf of others | | | | |
--------------------------------------------------------------------------------
| Guarantees | | 8 | 13 | 12 |
--------------------------------------------------------------------------------
| Other contingent liabilities | | 0 | 1 | 1 |
--------------------------------------------------------------------------------
Guarantees on own behalf
Other contingent liabilities on own behalf, EUR 234 million, have decreased by
EUR 87 million compared to year-end 2009. The decrease is due to progressing of
the investments in Russia and Poland.
Guarantees on behalf of associated companies
According to law, nuclear companies operating in Finland and Sweden shall give
securities to the Finnish State Nuclear Waste Management Fund and the Swedish
Nuclear Waste Fund respectively, to guarantee that sufficient funds exist to
cover future expenses of decommissioning of power plant and disposal of spent
fuel.
The guarantee given on behalf of Teollisuuden Voima Oyj (TVO) to the Finnish
fund amount to EUR 58 million at 30 June 2010 (EUR 67 at year-end 2009). The
size of the guarantee was updated in Q2, based on the decisions regarding legal
liability and the funding target made in January 2010 (see note 16).
In Sweden, Fortum has given guarantees on behalf of Forsmarks Kraftgrupp AB
(FKA) and OKG AB (OKG) to the Swedish Nuclear Waste Fund to cover Fortum's part
of FKA's and OKG's liability. The guarantees for 2010 and 2011 were decided in
December 2009 by the Swedish government and they are effective from June 2010.
The total amount of guarantees for FKA and OKG has decreased from SEK 5,314
million (EUR 518 million) at year-end 2009 to SEK 2,574 million (EUR 270
million) in June 2010. The decrease is due to a change made by the Swedish
government in the calculation method of the guarantees. The guarantees were
previously based on nominal values, but from June 2010 onwards they are based on
discounted cash flows.
--------------------------------------------------------------------------------
| 21. Legal actions and official proceedings |
--------------------------------------------------------------------------------
No material changes in legal actions and official proceedings have occurred
during the first half of 2010 compared to 2009.
Fortum is, through its interest in TVO, participating in the building of a 1,600
MW nuclear power plant unit (Olkiluoto 3) in Finland. The AREVA-Siemens
Consortium, the turnkey supplier of the Olkiluoto 3 nuclear power plant unit to
TVO, announced in June that in light of the current progress most of the works
will be completed in 2012 while regular operation of the plant unit is foreseen
during 2013.
--------------------------------------------------------------------------------
| 22. Related party transactions |
--------------------------------------------------------------------------------
Related party transactions are described in the annual financial statements as
of the year ended 31 December 2009. No material changes have occurred during the
period.
The Finnish State owned 50.76% of the shares in Fortum 31 December 2009. There
has been no change in the amount of shares during 2010.
--------------------------------------------------------------------------------
| Associated company transactions | | | |
--------------------------------------------------------------------------------
| EUR million | Q1-Q2 | Q1-Q2 | 2009 |
| | 2010 | 2009 | |
--------------------------------------------------------------------------------
| Sales to associated companies | 27 | 48 | 86 |
--------------------------------------------------------------------------------
| Interest on associated company loan | 18 | 17 | 37 |
| receivables | | | |
--------------------------------------------------------------------------------
| Purchases from associated companies | 384 | 275 | 555 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Associated company balances | | | |
--------------------------------------------------------------------------------
| EUR million | June 30 | June 30 | Dec 31 |
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| Long-term interest-bearing loan | 964 | 736 | 852 |
| receivables | | | |
--------------------------------------------------------------------------------
| Trade receivables | 6 | 6 | 14 |
--------------------------------------------------------------------------------
| Other receivables | 21 | 6 | 5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Long-term loan payables | 213 | 199 | 199 |
--------------------------------------------------------------------------------
| Trade payables | 11 | 31 | 23 |
--------------------------------------------------------------------------------
| Other payables | 24 | 4 | 22 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transactions and balances with joint ventures |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Transactions and balances with joint ventures as at and for the period ended |
| 30 June 2010 are not material |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| for the group. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum Corporation | Notes to the condensed consolidated |
| | interim financial statements |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 23. Events after the balance sheet date |
--------------------------------------------------------------------------------
Fortum's 308-megawatt share of the Meri-Pori power plant's production capacity
was reverted to the company's own use on 1 July 2010. Fortum's share has been
leased since 1 January 2007. The fixed-period lease on the share of production
capacity was one of the conditions set by the Finnish Competition Authority for
approval of Fortum's acquisition of E.ON Finland in summer 2006.
--------------------------------------------------------------------------------
| 24. | | | | | | | | | | | | | |
| Definition | | | | | | | | | | | | | |
| of key | | | | | | | | | | | | | |
| figures | | | | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EBITDA | = | Operating profit + Depreciation, amortisation and |
| (Earnings | | impairment charges |
| before | | |
| interest, | | |
| taxes, | | |
| depreciatio | | |
| n and | | |
| amortisatio | | |
| n) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Comparable | = | Operating profit - non-recurring items - other items |
| operating | | affecting comparability |
| profit | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-recurri | = | Capital gains and | | | | | | | |
| ng items | | losses | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other items | = | Includes effects from financial derivatives hedging |
| affecting | | future cash-flows where hedge accounting |
| comparabili | | |
| ty | | |
--------------------------------------------------------------------------------
| | | 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. | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Funds from | = | Net cash from operating activities before change in |
| operations | | working capital |
| (FFO) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | = | Capitalised investments in property, plant and equipment |
| expenditure | | and intangible assets |
--------------------------------------------------------------------------------
| | | including maintenance, productivity, growth and |
| | | investments required by legislation |
--------------------------------------------------------------------------------
| | | including borrowing costs capitalised during the |
| | | construction period. Maintenance |
--------------------------------------------------------------------------------
| | | investments expand the lifetime of an existing asset, |
| | | maintain useage/availability and/or |
--------------------------------------------------------------------------------
| | | maintains reliability. Productivity investment improves |
| | | productivity in an existing asset. Growth |
--------------------------------------------------------------------------------
| | | investments' purpose is to build new assets and/or to |
| | | increase customer base within |
--------------------------------------------------------------------------------
| | | existing businesses. Legislation investments are done at |
| | | certain point of time due to |
--------------------------------------------------------------------------------
| | | legal | | | | | | | | |
| | | requirements. | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross | = | Investments in subsidiary shares, shares in associated |
| investments | | companies and other shares in |
| in shares | | |
--------------------------------------------------------------------------------
| | | available for sale financial assets. Investments in |
| | | subsidiary shares are net of cash and |
--------------------------------------------------------------------------------
| | | grossed with interest-bearing liabilities in the | |
| | | acquired company. | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | = | Profit for the | | | | | | | x | |
| shareholder | | year | | | | | | | 100 | |
| s' equity, | | | | | | | | | | |
| % | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | Total equity | | | | | | | | |
| | | average | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | = | Profit before taxes + interest and other | x | |
| capital | | financial expenses | 100 | |
| employed, % | | | | |
--------------------------------------------------------------------------------
| | | Capital employed | | | | | | | |
| | | average | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on | = | Operating profit + Share of profit (loss) in | x | |
| net assets, | | associated companies and joint ventures | 100 | |
| % | | | | |
--------------------------------------------------------------------------------
| | | Net assets | | | | | | | | |
| | | average | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Comparable | = | Comparable operating profit + Share of profit | x | |
| return on | | (loss) in associated companies and joint | 100 | |
| net assets, | | ventures (adjusted for IAS 39 effects and | | |
| % | | major sales gains or losses) | | |
--------------------------------------------------------------------------------
| | | Comparable net assets | | | | | | |
| | | average | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | = | Total assets - non-interest bearing liabilities - |
| employed | | 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 adjusted for non-interest bearing assets and |
| net assets | | liabilities arising from financial |
--------------------------------------------------------------------------------
| | | derivatives hedging future cash flows where hedge |
| | | accounting is not applied according |
--------------------------------------------------------------------------------
| | | to IAS | | | | | | | | | | |
| | | 39 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest-be | = | Interest-bearing liabilities | | | | | |
| aring net | | - liquid funds | | | | | |
| debt | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gearing, % | = | Interest-bearing net | | | | | | x | |
| | | debt | | | | | | 100 | |
--------------------------------------------------------------------------------
| | | Total | | | | | | | | | |
| | | equity | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity-to-a | = | Total equity including | | | x | |
| ssets | | non-controlling interest | | | 100 | |
| ratio, % | | | | | | |
--------------------------------------------------------------------------------
| | | Total | | | | | | | | | |
| | | assets | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net debt / | = | Interest-bearing net | | | | | | | |
| EBITDA | | debt | | | | | | | |
--------------------------------------------------------------------------------
| | | Operating profit + Depreciation, amortisation and |
| | | impairment charges |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest | = | Operating | | | | | | | | | |
| coverage | | profit | | | | | | | | | |
--------------------------------------------------------------------------------
| | | Net interest | | | | | | | | |
| | | expenses | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest | = | Operating | | | | | | | | | |
| coverage | | profit | | | | | | | | | |
| including | | | | | | | | | | | |
| capitalised | | | | | | | | | | | |
| borrowing | | | | | | | | | | | |
| costs | | | | | | | | | | | |
--------------------------------------------------------------------------------
| | | Net interest expenses - capitalised | | | |
| | | borrowing costs | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings | = | Profit for the period - | | | | |
| per share | | non-controlling interest | | | | |
| (EPS) | | | | | | |
--------------------------------------------------------------------------------
| | | Average number of shares during the | | | | |
| | | period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity per | = | Shareholder's | | | | | | | | |
| share | | equity | | | | | | | | |
--------------------------------------------------------------------------------
| | | Number of shares excluding treasury shares at the end of |
| | | the period |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Last twelve | = | Twelve months preceding the | | | | |
| months | | reporting date | | | | |
| (LTM) | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum Corporation |
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Market conditions |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Power consumption | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| TWh | | | 2010 | 2009 | | twelve |
| | | | | | | months |
--------------------------------------------------------------------------------
| Nordic countries | 85 | 80 | 204 | 192 | 374 | 386 |
--------------------------------------------------------------------------------
| Russia | 224 | 216 | 506 | 481 | 964 | 989 |
--------------------------------------------------------------------------------
| Tyumen | 19 | 19 | 41 | 41 | 82 | 82 |
--------------------------------------------------------------------------------
| Chelyabinsk | 8 | 7 | 18 | 16 | 32 | 34 |
--------------------------------------------------------------------------------
| Russia Urals area | 56 | 54 | 123 | 117 | 236 | 242 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Avarage prices | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| | | | 2010 | 2009 | | twelve |
| | | | | | | months |
--------------------------------------------------------------------------------
| Spot price for | 45 | 34 | 52 | 36 | 35 | 43 |
| power in Nord Pool | | | | | | |
| power exchange, | | | | | | |
| eur/MWh | | | | | | |
--------------------------------------------------------------------------------
| Spot price for | 42 | 34 | 56 | 36 | 37 | 47 |
| power in Finland, | | | | | | |
| eur/MWh | | | | | | |
--------------------------------------------------------------------------------
| Spot price for | 42 | 34 | 57 | 36 | 37 | 47 |
| power in Sweden, | | | | | | |
| eur/MWh | | | | | | |
--------------------------------------------------------------------------------
| Spot price for | 804 | 640 | 836 | 610 | 667 | 780 |
| power in European | | | | | | |
| and Urals part of | | | | | | |
| Russia, RUB/MWh 1) | | | | | | |
--------------------------------------------------------------------------------
| Spot price for | 770 | 603 | 794 | 569 | 633 | 745 |
| power (market | | | | | | |
| price), Urals hub, | | | | | | |
| RUB/MWh 1) | | | | | | |
--------------------------------------------------------------------------------
| Average regulated | 610 | 525 | 615 | 534 | 533 | 570 |
| electricity price | | | | | | |
| for OAO Fortum, | | | | | | |
| RUB/MWh 1) | | | | | | |
--------------------------------------------------------------------------------
| Average regulated | 169 | 187 | 169 | 188 | 187 | 178 |
| capacity price, | | | | | | |
| tRUB/MW/month | | | | | | |
--------------------------------------------------------------------------------
| Spot price for | 42 | 32 | 41 | 40 | 39 | 40 |
| power in Germany, | | | | | | |
| eur/MWh | | | | | | |
--------------------------------------------------------------------------------
| Average regulated | 2 221 | 1 730 | 2 221 | 1 676 | 1 781 | 2 054 |
| gas price in Urals | | | | | | |
| region, RUB/1000 | | | | | | |
| m3 | | | | | | |
--------------------------------------------------------------------------------
| CO2, (ETS EUA), | 15 | 14 | 14 | 13 | 13 | 14 |
| eur/tonne CO2 | | | | | | |
--------------------------------------------------------------------------------
| Coal (ICE | 88 | 65 | 83 | 68 | 70 | 78 |
| Rotterdam), | | | | | | |
| USD/tonne | | | | | | |
--------------------------------------------------------------------------------
| Oil (Brent Crude), | 79 | 60 | 78 | 53 | 76 | 75 |
| USD/bbl | | | | | | |
--------------------------------------------------------------------------------
| 1) Excluding | | | | | | |
| capacity tariff | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Water reservoirs | | | Q2 2010 | Q2 | 2009 | |
| TWh (at period | | | | 2009 | | |
| end) | | | | | | |
--------------------------------------------------------------------------------
| Nordic water | | | 70 | 71 | 74 | |
| reservoirs level | | | | | | |
--------------------------------------------------------------------------------
| Nordic water | | | 84 | 84 | 81 | |
| reservoirs level, | | | | | | |
| long-term average | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Export/import | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| between Nordic | | | 2010 | 2009 | | twelve |
| Area and | | | | | | months |
| Continental Europe | | | | | | |
| TWh (+ = import | | | | | | |
| to, - = export | | | | | | |
| from Nordic area) | | | | | | |
--------------------------------------------------------------------------------
| Export / import | 3 | 3 | 10 | 3 | 8 | 15 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Power market | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| liberalisation in | | | 2010 | 2009 | | twelve |
| Russia | | | | | | months |
| '% | | | | | | |
--------------------------------------------------------------------------------
| Share of power | 60 | 30 | 60 | 30 | 40 | 55 |
| sold on the | | | | | | |
| liberalised market | | | | | | |
--------------------------------------------------------------------------------
| Share of power | 48 | 27 | 53 | 29 | 34 | 47 |
| sold at the | | | | | | |
| liberalised price | | | | | | |
| by OAO Fortum | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Fortum Corporation |
--------------------------------------------------------------------------------
| January-June 2010 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Production and sales volumes |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Power | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| Generation | | | 2010 | 2009 | | twelve |
| TWh | | | | | | months |
--------------------------------------------------------------------------------
| Power | 12.7 | 11.8 | 27.5 | 25.8 | 49.3 | 51.0 |
| generation in | | | | | | |
| the EU and | | | | | | |
| Norway | | | | | | |
--------------------------------------------------------------------------------
| Power | 3.5 | 3.6 | 8.2 | 8.3 | 16.0 | 15.9 |
| generation in | | | | | | |
| Russia | | | | | | |
--------------------------------------------------------------------------------
| Total | 16.2 | 15.4 | 35.7 | 34.1 | 65.3 | 66.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Heat | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| production | | | 2010 | 2009 | | twelve |
| TWh | | | | | | months |
--------------------------------------------------------------------------------
| Heat | 4.5 | 4.2 | 14.8 | 13.3 | 23.2 | 24.4 |
| production in | | | | | | |
| the EU and | | | | | | |
| Norway | | | | | | |
--------------------------------------------------------------------------------
| Heat | 4.0 | 4.2 | 15.0 | 14.4 | 25.6 | 26.4 |
| production in | | | | | | |
| Russia | | | | | | |
--------------------------------------------------------------------------------
| Total | 8.5 | 8.4 | 39.8 | 27.7 | 48.8 | 50.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Power | Q2 2010 | | | | 2009 | |
| generation | | | | | | |
| capacity by | | | | | | |
| division | | | | | | |
| MW (at period | | | | | | |
| end) | | | | | | |
--------------------------------------------------------------------------------
| Power | 9 709 | | | | 9 709 | |
--------------------------------------------------------------------------------
| Heat | 1 518 | | | | 1 446 | |
--------------------------------------------------------------------------------
| Russia | 2 785 | | | | 2 785 | |
--------------------------------------------------------------------------------
| Total | 14 012 | | | | 13 940 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Heat | Q2 2010 | | | | 2009 | |
| production | | | | | | |
| capacity by | | | | | | |
| division | | | | | | |
| MW (at period | | | | | | |
| end) | | | | | | |
--------------------------------------------------------------------------------
| Power | 250 | | | | 250 | |
--------------------------------------------------------------------------------
| Heat | 10 182 | | | | 10 284 | |
--------------------------------------------------------------------------------
| Russia | 13 796 | | | | 13 796 | |
--------------------------------------------------------------------------------
| Total | 24 228 | | | | 24 330 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Power | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| generation by | | | 2010 | 2009 | | twelve |
| source in the | | | | | | months |
| Nordic | | | | | | |
| countries | | | | | | |
| TWh | | | | | | |
--------------------------------------------------------------------------------
| Hydropower | 5.1 | 5.2 | 10.5 | 10.9 | 22.1 | 21.7 |
--------------------------------------------------------------------------------
| Nuclear power | 6.0 | 5.6 | 11.9 | 12.0 | 21.4 | 21.3 |
--------------------------------------------------------------------------------
| Thermal power | 1.4 | 0.8 | 4.6 | 2.4 | 4.6 | 6.8 |
--------------------------------------------------------------------------------
| Total | 12.5 | 11.6 | 27.0 | 25.3 | 48.1 | 49.8 |
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| Power | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| generation by | | | 2010 | 2009 | | twelve |
| source in the | | | | | | months |
| Nordic | | | | | | |
| countries | | | | | | |
| % | | | | | | |
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| Hydropower | 41 | 45 | 39 | 43 | 46 | 43 |
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| Nuclear power | 48 | 48 | 44 | 48 | 44 | 43 |
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| Thermal power | 11 | 7 | 17 | 9 | 10 | 14 |
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| Total | 100 | 100 | 100 | 100 | 100 | 100 |
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| Power sales | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| EUR million | | | 2010 | 2009 | | twelve |
| | | | | | | months |
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| Power sales | 645 | 620 | 1 582 | 1 404 | 2 802 | 2 982 |
| in the EU and | | | | | | |
| Norway | | | | | | |
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| Power sales | 114 | 91 | 244 | 194 | 390 | 440 |
| in Russia | | | | | | |
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| Total | 759 | 711 | 1 826 | 1 598 | 3 192 | 3 422 |
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| Heat sales | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| EUR million | | | 2010 | 2009 | | twelve |
| | | | | | | months |
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| Heat sales in | 228 | 195 | 708 | 602 | 1 095 | 1 201 |
| the EU and | | | | | | |
| Norway | | | | | | |
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| Heat sales in | 52 | 44 | 165 | 125 | 219 | 259 |
| Russia | | | | | | |
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| Total | 280 | 239 | 873 | 727 | 1 314 | 1 460 |
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| Power sales by | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| area | | | 2010 | 2009 | | twelve |
| TWh | | | | | | months |
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| Finland | 6.8 | 6.3 | 15.4 | 13.7 | 26.1 | 27.8 |
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| Sweden | 7.0 | 6.6 | 14.4 | 14.1 | 26.9 | 27.2 |
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| Russia | 4.5 | 4.6 | 10.0 | 10.2 | 19.5 | 19.3 |
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| Other countries | 0.7 | 0.7 | 1.7 | 1.6 | 3.2 | 3.3 |
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| Total | 19.0 | 18.2 | 41.5 | 39.6 | 75.7 | 77.6 |
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| NordPool transactions are calculated as a net amount of hourly sales and |
| purchases at the Group level |
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| Heat sales by | Q2 2010 | Q2 2009 | Q1-Q2 | Q1-Q2 | 2009 | Last |
| area | | | 2010 | 2009 | | twelve |
| TWh | | | | | | months |
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| Russia | 4.0 | 4.2 | 15.5 | 14.4 | 25.6 | 26.7 |
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| Finland | 1.8 | 1.4 | 5.3 | 4.5 | 8.0 | 8.8 |
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| Sweden | 1.8 | 1.7 | 6.4 | 5.7 | 9.8 | 10.5 |
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| Poland | 0.5 | 0.4 | 2.3 | 2.2 | 3.7 | 3.8 |
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| Other countries | 0.7 | 0.7 | 1.9 | 1.8 | 3.5 | 3.6 |
| 1) | | | | | | |
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| Total | 8.8 | 8.4 | 31.4 | 28.6 | 50.6 | 53.4 |
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| 1) Including the UK, which is reported in the Power Division, other sales. |
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