Fortum Corporation Interim Report January - March 2005

Fortum Corporation  Stock Exchange Release 3 May 2005

Fortum Corporation
Interim Report January - March 2005


Good first-quarter results
 - Neste Oil separation successfully completed

January-March in brief
- Profit before taxes from continuing operations EUR 384 (333) million
- Fortum total EPS EUR 0.37 (0.36), net profit EUR 349 (324) million
- Successful hedging and portfolio optimisation - achieved Nordic Generation
power price up by 6%
- The separation and listing of Neste Oil successfully executed

Oil operations in Fortum are reported on a separate line as discontinued
operations in the income statement, and are not included in net sales or in
operating profit. All figures are reported according to IFRS.

Key figures                        I/05     I/04     2004  Last 12
Income statement and cash flow                              months
for continuing operations                                    (LTM)

Net sales, EUR million            1,133    1,129    3,835    3,839
Operating profit, EUR million       404      407    1,195    1,192
- excluding non-recurring           398      413    1,177    1,162
items, EUR million
Profit before taxes, EUR            384      333      962    1,013
million
Earnings per share, Fortum         0.28     0.24     0.79     0.83
continuing operations, EUR
Total earnings per share, EUR      0.37     0.36     1.48     1.49
*)
Total net cash from operating       214      453    1,758    1,519
activities,
EUR million *)
Net cash from operating              62      357    1,232      937
activities, Fortum continuing
operations, EUR million
Average number of shares, 000s  871,710  849,698  852,625  856,404

*) Including Oil operations related items, reported as discontinued operations
in income statement. EUR 21 million transfer tax on Neste Oil shares dividend
distribution is booked in discontinued operations. The gain on the sale of Neste
Oil shares, currently estimated at EUR 389 million, will be recorded in the
second quarter discontinued operations.

Key figures                       I/05    I/04   2004 Last 12
Balance sheet                                         months
                                                       (LTM)
Shareholders’ equity per share,   7.69    7.41   8.62       
EUR
Interest-bearing net debt        4,878   5,526  5,095       
(at end of period), EUR million
*)
Return on capital employed, %     18.0    18.6   15.8   16.8
Return on shareholders’ equity,   19.2    19.9   18.2   19.8
%
Gearing, %*)                        71      86     67       

*) The balance sheet includes an interest-bearing receivable from Neste Oil of
EUR 804 million which Neste Oil repaid in April. In the second quarter net debt
will also be effected by received net proceeds (estimated to EUR 553 million)
from the sale of 15% shareholding in Neste Oil and the paid out cash dividend
(EUR 506 million). Adjusting for these effects, Fortum's pro forma net debt
would have been EUR 4,027 million at the end of the quarter and the gearing
would have been 59%.

The first quarter of 2005 was a good quarter for Fortum. The company's operating
results were at the same level as last year, despite the average market price
for power being 9% lower. Neste Oil was successfully separated and subsequently
listed in the Helsinki Stock Exchange on 18 April.

The average Nordic Generation power price (the achieved sales price in the Power
Generation segment in the Nordic area, excluding pass-through sales) was EUR
31.6 per MWh, 6% higher than a year ago due to successful hedging and power
generation portfolio optimisation.

The operating profit of the Power Generation segment was at the same level as
last year, while Heat segment improved slightly. The Distribution segment's
operating profit was weaker, mainly due to the costs arising from the January
storms in Sweden and Norway. The Markets segment reported weaker profit than
last year.

First quarter net debt decreased by EUR 217 million compared to year-end, of
which EUR 150 million is due to the deconsolidation of Neste Oil.

Due to the separation of Neste Oil, and to the adoption of International
Financial Reporting Standards (IFRS), Fortum's financial reporting has changed
significantly. All Oil business-related figures are reported as discontinued
operations in the income statement and in the cash flow statement. At the end of
the quarter, Fortum still held approximately 15% of the shares in Neste Oil. The
shareholding was valued at fair value (sales price reduced by transaction
costs). The fair value adjustment is included in equity in the first quarter and
will be shown in the income statement as a capital gain in the second quarter,
disclosed in discontinued operations.

Net sales and results

Group sales from continuing operations stood at EUR 1,133 (1,129) million.

Net sales from continuing operations, by segment

EUR million                           I/05              I/04
Power Generation                       534               560
Heat                                   385               361
Distribution                           202               206
Markets                                392               419
Other                                   23                20
Eliminations                          -403              -437
Total                                1,133             1,129

Group operating profit from continuing operations totalled EUR 404 (407)
million.

Operating profit from continuing operations, by segment

EUR million                           I/05              I/04
Power Generation                       222               222
Heat                                   111               104
Distribution                            71                83
Markets                                  6                16
Other                                  - 6               -18
Total                                  404               407

Despite the 9% decrease in the average market price for power and the lower
generation volume in the first quarter, the Power Generation segment reached
last year's operating profit level of EUR 222 million. This was due to higher
hydropower generation and successful hedging.

The Heat segment's sales were slightly higher than last year, mainly due to the
acquisition of a district heating company in the city of Czestochowa in Poland
last December. The operating profit for the segment improved to EUR 111 million.
Heat segment's power sales volume was lower than last year.

The Distribution segment's sales were EUR 202 (206) million. The segment's
operating profit of EUR 71 (83) million was negatively impacted by the EUR 11
million in costs from the January storms in Sweden and Norway.

Markets' sales decline was mainly due to the termination of some large
contracts. In the first quarter of 2005, the segment experienced a positive
inflow of customers. The lower operating profit of EUR 6 (16) million mainly
stems from increased costs related to customer service quality improvement
actions and tighter competition.

Profit before taxes from continuing operations was EUR 384 (333) million.

The Group's net financial expenses from continuing operations were lower than
last year and amounted to EUR 35 (78) million. The main reasons for the decrease
were lower interest rate, lower level of net debt and a positive approximately
EUR 10 million change in the fair value of certain SEK derivatives which do not
qualify for hedge accounting under IFRS.

The share of profit of associates and joint ventures from continuing operations
was EUR 15 (4) million.

Minority interests accounted for EUR 25 (20) million. The minority interests are
mainly attributable to Fortum Värme Holding, in which the City of Stockholm has
a 50% economic interest.

Taxes for the period totalled EUR 116 (111) million. The tax rate according to
the income statement was 30.3% (33.3%).

Total net profit for the period was EUR 349 (324) million. The net profit from
continuing operations was EUR 268 (222) million. Total Fortum earnings per share
were EUR 0.37 (0.36), and earnings per share from continuing operations were EUR
0.28 (0.24). Return on capital employed was 18.0% (18.6%) and return on
shareholders' equity was 19.2% (19.9%).


Market conditions

According to preliminary statistics, the Nordic countries consumed 115 (114) TWh
of electricity during the first quarter of the year, which was 1% more than
during the corresponding period of the previous year.

During the first quarter, the average spot price for power in Nord Pool, the
Nordic power exchange, was EUR 25.9 (28.6) per megawatt-hour, or 9% lower than
during the corresponding period in 2004.

In the first quarter of 2005, the average market price for emissions allowances
for 2005 was around EUR 9 per ton of CO2, ranging between EUR 7 and EUR 15 per
ton. The average market price for coal was around EUR 51 per ton,
ranging between EUR 49 and EUR 57 per ton. During first quarter of 2004,
the market price for coal varied between EUR 50 and EUR 57 per ton.

The year started out with mild and rainy weather and a surplus in the Nordic
water reservoirs. Continuously high hydro production combined with a cold and
dry period starting in mid-February brought the water reservoirs to a deficit
level. At the same time, the spot price rose and the power forward prices
started to increase. The increasing trend in the forward market was further
supported by higher prices for emissions allowances in March.  In mid-April, the
Nordic water reservoirs were about 3 TWh below the average and 9 TWh above the
corresponding level in 2004.

Fortum's power generation in the Nordic countries during January-March was 14.3
(15.2) TWh, 12% (13%) of Nordic electricity consumption.

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


Fortum's total power        I/05      I/04     2004      LTM
and heat generation,
TWh
Power generation            14.7      15.4     55.5     54.8
Heat generation              9.7       9.3     25.4     25.8


Fortum's own power          I/05      I/04     2004      LTM
generation by source,
TWh,
total in the Nordic
countries
Hydropower                   5.6       4.7     19.1     20.0
Nuclear power                7.0       7.0     25.8     25.8
Thermal power                1.7       3.5      9.5      7.7
Total                       14.3      15.2     54.4     53.5


Share of own                I/05      I/04     2004      LTM
production, %,
total in the Nordic
countries
Hydropower                    39        31       35       37
Nuclear power                 49        46       47       48
Thermal power                 12        23       18       15
Total                        100       100      100      100


Total electricity and heat sales figures

Fortum's total electricity sales amounted to 16.6 (17.7) TWh. Sales volumes in
the Nordic countries were at 16.2 (17.3) TWh, representing approximately 14%
(15%) of Nordic electricity consumption during January-March. Heat sales in the
Nordic countries amounted to 7.5 (7.6) TWh and in other countries to 1.6 (1.2)
TWh.

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

Fortum's total              I/05      I/04     2004      LTM
electricity and heat
sales, EUR million
Electricity sales            546       564    2,017    1,999
Heat sales                   314       284      809      839

Fortum's total              I/05      I/04     2004      LTM
electricity sales by
area, TWh
Sweden                       8.2       8.1     27.6     27.7
Finland                      7.4       8.5     31.1     30.0
Other countries              1.0       1.1      3.6      3.5
Total                       16.6      17.7     62.3     61.2

Fortum's total heat         I/05      I/04     2004      LTM
sales by area, TWh
Sweden                       3.9       4.0      9.6      9.5
Finland                      3.6       3.5     10.5     10.6
Other countries              1.6       1.2      3.7      4.1
Total                        9.1       8.7     23.8     24.2



SEGMENT REVIEWS

Power Generation

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

EUR million                 I/05      I/04     2004      LTM

Net sales                    534       560    2,084    2,058
- power sales                453       466    1,695    1,682
- other sales                 81        94      389      376
Operating profit             222       222      763      763
- excluding non-             222       228      754      748
recurring items
Net assets (at end of      6,106     6,087    6,218         
period)
Return on net assets, %     14.5      14.0     12.1     12.2

In January-March, the segment's power generation in the Nordic countries was
12.8 (13.3) TWh, of which about 5.6 (4.7) TWh or 44% (35%) was hydropower-based,
7.0 (7.0) TWh or 55% (53%) nuclear power-based and 0.2 (1.6) TWh or 1% (12%)
thermal power-based. The increase in hydro power generation was due to a
strengthened hydrological situation. The decrease in thermal power generation
was due to lower power prices and higher fuel and CO2 allowance prices.

Power generation by         I/05      I/04     2004      LTM
area, TWh
Sweden                       7.5       7.0     25.8     26.3
Finland                      5.3       6.3     24.0     23.0
Other countries              0.3       0.3      1.1      1.1
Total                       13.1      13.6     50.9     50.4


Nordic sales volume,        14.4      15.2     55.7     54.9
TWh
 of which pass-through       1.4       1.5      4.7      4.6
sales

Sales price, EUR/MWh        I/05      I/04     2004      LTM
Nordic Generation power     31.6      29.9     29.2     29.7
price*

*) For the Power Generation segment in the Nordic area, excluding pass-through
sales.

The average Nordic Generation power price (excluding pass-through items) was 6%
higher than a year ago due to successful hedging and power production portfolio
optimisation. The corresponding sales volume was 13.0 (13.7) TWh.

In February the shareholders of Lenenergo, Kolenergo and RAO UES agreed on the
formation of TGC-1, the regional power generation company of North-Western
Russia. This company will initially lease the generation assets of Lenenergo,
Karelenergo and Kolenergo and is preparing to start operating them as of 1 July
2005. Fortum will become a shareholder in the company.

In January, Fortum started the modernisation of automation systems at the
Loviisa nuclear power plant. The work will be carried out during normal outages.
All new automation systems related to the programme will be implemented by 2014.

Fortum service has been heavily involved in storm related maintenance work in
Sweden during the first quarter.


Heat

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

EUR million                 I/05      I/04     2004      LTM

Net sales                    385       361    1,025    1,049
- heat sales                 306       276      779      809
- power sales                 55        63      159      151
- other sales                 24        22       87       89
Operating profit             111       104      218      225
- excluding non-             111       104      214      221
recurring items
Net assets (at end of      2,457     2,373    2,440         
period)
Return on net assets, %     19.1      18.3      9.8     10.1

The segment's heat sales during the first quarter amounted to 8.6 (8.2) TWh,
most of which was generated in the Nordic countries. In January-March, power
sales at combined heat and power plants (CHP) totalled 1.6 (1.8) TWh.

Last December, Fortum acquired an 85% share of a Polish district heating company
PESC Czestochowa, with annual sales of some 780 GWh. This had a minor, but
positive impact in the first-quarter operating profit.

Heat sales by area, TWh     I/05      I/04     2004      LTM

Sweden                       3.9       4.0      9.6      9.5
Finland                      3.6       3.5     10.5     10.6
Other countries              1.1       0.7      1.7      2.1
Total                        8.6       8.2     21.8     22.2

Power sales, TWh            I/05      I/04     2004      LTM
Total                        1.6       1.8      4.8      4.6


Distribution

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

EUR million                 I/05      I/04     2004      LTM

Net sales                    202       206      707      703
- distribution network       173       176      593      590
transmission
- regional network            23        23       83       83
transmission
- other sales                  6         7       31       30
Operating profit              71        83      234      222
- excluding non-              71        83      232      220
recurring items
Net assets (at end of      3,113     3,095    3,091         
period)
Return on net assets, %     10.1      11.3      8.1      7.7

During the first quarter, the volume of distribution and regional transmissions
totalled 7.2 (7.2) TWh and 5.1 (5.2) TWh, respectively.

Electricity transmissions via the regional distribution network to customers
outside the Group totalled 4.2 (4.3) TWh in Sweden and 0.9 (0.9) TWh in Finland.

In January, storms caused major power outages on the west coast of Sweden and
Norway, leaving approximately 80,000 Fortum customers in Sweden and 12,800 in
Norway without electricity. Customers who suffered from long distribution
interruptions will be compensated and the total cost, including fault
restoration and temporary solutions, was approximately EUR 11 million and booked
in the first-quarter results. The government of Sweden addressed the question of
reliability to the Energy Market Inspection, which has proposed actions on how
to improve the future reliability of electricity distribution.

In Sweden, the dialogue continues with the Energy Market Authority about
supervision of the year 2003 distribution tariffs in selected distribution
areas. Further details are expected to be published later this year.

Volume of distributed       I/05      I/04     2004      LTM
electricity in
distribution network,
TWh
Sweden                       4.4       4.4     14.2     14.2
Finland                      2.0       2.0      6.2      6.2
Norway                       0.7       0.7      2.1      2.1
Estonia                      0.1       0.1      0.2      0.2
Total                        7.2       7.2     22.7     22.7


Number of electricity        31.3.2005  31.3.2004       2004
distribution customers by
area, 000s
Sweden                             860        860        860
Finland                            405        400        405
Other countries                    115        115        115
Total                            1,380      1,375      1,380


Markets

Markets is responsible for retail sales of electricity to a total of 1.1 million
private and business customers as well as to other electricity retailers in
Sweden, Finland and Norway. Markets buys its electricity through Nord Pool.

EUR million                    I/05     I/04    2004     LTM

Net sales                       392      419   1,387   1,360
Operating profit                  6       16      34      24
- excluding non–recurring         6       16      34      24
items
Net assets (at end of           222      153     194        
period)
Return on net assets, %        11.5     77.6    25.3    13.6

During the first quarter, Markets' electricity sales totalled 11.8 (12.8) TWh.
The decrease was due to the termination of some large contracts.

Retail electricity prices on the Nordic market during the first quarter were
lower than during the corresponding period the previous year. Fortum lowered the
retail prices of current priced contracts in February. Prices for new fixed term
contracts followed the price development of Nord Pool's financial market.

Development of the customer interface and the improvement of customer
satisfaction are starting to generate positive results and lead to a positive
inflow of customers during the last quarter. Some examples of these activities
are the new products for both private and business customers and enhanced
Internet services. The customer ombudsman function is now operational in
Finland, Sweden and Norway.

Improvements in customer service and the new customer guarantees have resulted
in increased costs compared to the corresponding period of the previous year.


Capital expenditure and investments in shares

Investments in capital expenditure and investments in shares for continuing
operations in January-March totalled EUR 49 (57) million. There were no
investments in shares in the first quarter of 2005.


Financing

First quarter 2005 net debt decreased with EUR 150 million by the de-
consolidation of Neste Oil and stood at EUR 4,878 million (EUR 5,095 million at
year-end). The balance sheet includes an interest-bearing receivable against
Neste Oil of EUR 804 million which has been repaid on 12 April. In the second
quarter net debt will also be effected by received net proceeds (estimated to
EUR 553 million) from the sale of 15% shareholding in Neste Oil and the paid out
cash dividend (EUR 506 million). Adjusting for these effects, Fortum's pro forma
net debt would have been EUR 4,027 million at the end of the quarter.

The net cash from operating activities decreased to EUR 62 (357) million for the
continuing activities. The reasons for the low cash flow were relatively high
paid taxes, a EUR 20 million realised foreign exchange loss and a significant
increase in working capital. This was mainly attributable to the change in
invoicing practices. Fortum changed from pre-debiting to post-debiting of its
retail customers during the winter.

The Group's net financial expenses were EUR 35 (78) million. The main reasons
for the decrease were lower interest rate and lower level of net debt and a
positive approximately EUR 10 million change in the fair value of certain SEK
derivatives which do not qualify for hedge accounting under IFRS.

Fortum's long-term credit rating from Moody's is Baa1 (stable). Fortum's long-
term credit rating from Standard & Poor's is BBB+ (stable). Both ratings were
unchanged in the first quarter of 2005.


Separation of oil businesses

The separation of Fortum Oil, renamed Neste Oil Corporation in February, was
executed successfully. The final decision to separate the oil company by
distributing 85% of Neste Oil shares as dividends to shareholders was taken by
the Annual General Meeting on 31 March. The remaining 15% of shares, a total of
38,440,137 shares, were sold to institutional and individual investors in April.
Both the institutional offering and the retail offering were priced at EUR 15
per share.

The impact of the sale of Neste Oil shares on the income statement and net debt
will be recorded in the second quarter. The gross proceeds from the sale of the
shares were EUR 577 million and the tax-free capital gain is estimated to amount
to EUR 389 million after fees and expenses. In the first quarter, the capital
gain is included in equity as a fair value adjustment and will in the second
quarter be booked in discontinuing operations in the income statement. Fortum's
equity has in the first quarter been effected also by the share dividend
distribution through de-consolidation of Neste Oil. Transfer taxes related to
the share dividend distribution, EUR 21 million, were recorded in discontinuing
operations in the first quarter.

The listing of Neste Oil Corporation shares commenced on the Helsinki Stock
Exchange Prelist on 18 April and on the Main List on 21 April.


Group management

After the separation of oil businesses, responsibilities within the Group
management were adjusted. The members in the Fortum Management Team, formerly
Corporate Executive Committee, as of 1 April are:

Mikael Lilius - President and CEO
Mikael Frisk - SVP, Human Resources
Timo Karttinen - SVP, Corporate Development, Heat
Tapio Kuula - SVP, Generation, PMT, Värme, Service
Juha Laaksonen - CFO
Christian Lundberg - SVP, Markets, Distribution
Carola Teir-Lehtinen - SVP, Corporate Communications


Shares and share capital

During the first quarter, a total of 186.3 million Fortum Corporation shares
totalling EUR 2,714 million were traded. Fortum's market capitalisation,
calculated using the closing quotation of the last trading day of the quarter,
was EUR 13,095 million. The highest quotation of Fortum Corporation shares on
the Helsinki Stock Exchange in the first quarter was EUR 16.05, the lowest EUR
12.70, and the average quotation EUR 14.57. The closing quotation on the last
trading day of the quarter was EUR 15.02.

A total of 4,770,293 shares subscribed for based on the share option schemes
were entered into the trade register in the first quarter of 2005. After these
subscriptions, Fortum's share capital is EUR 2,964,304,273 and the total number
of registered shares is 871,854,198.

At the end of the quarter, the Finnish state's holding in Fortum was 58.9%. The
proportion of international shareholders stood at 25.7%.

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


Annual General Meeting

At the Annual General Meeting held on 31 March 2005, a cash dividend of EUR 0.58
(0.42) per share was approved.

In addition the Annual General Meeting resolved to distribute as a dividend a
total of 217,963,549 Neste Oil Corporation shares so that each shareholder of
Fortum Corporation receives as a dividend one (1) Neste Oil Corporation share
for each four (4) Fortum Corporation shares, which have a par value of EUR 3.40.

The number of members of Fortum's Supervisory Board was confirmed to be 12. The
following persons were re-elected to the Supervisory Board: Members of
Parliament Lasse Hautala, Rakel Hiltunen, Mikko Immonen, Timo Kalli, Kimmo
Kiljunen, Jari Koskinen, Ben Zyskowicz, Industrial Counsellor Kimmo Kalela, and
Director General Jorma Huuhtanen. Members of Parliament Jouni Backman and Oras
Tynkkynen as well as the second vice chairman of the City Council Martti
Alakoski were elected as new members. Timo Kalli was elected as Chairman and
Jouni Backman as Deputy Chairman of the Supervisory Board. The Supervisory Board
was elected until the end of the following Annual General Meeting.

The number of members in the Board of Directors was confirmed to be seven. The
following persons were re-elected to the Board of Directors: Peter Fagernäs
(Chairman), Birgitta Kantola (Deputy Chairman), Birgitta Johansson-Hedberg,
Lasse Kurkilahti and Erkki Virtanen. Matti Lehti and Marianne Lie were elected
as new members. The Board of Directors was elected until the end of the
following Annual General Meeting.

Authorised Public Accountant PricewaterhouseCoopers Oy was re-elected as
auditor.


Group personnel

The average number of employees in the Group during the period from January to
March was 13,135 (13,023). The number of employees at the end of the period was
8,731 (13,029). The decrease is due to the separation of Neste Oil.


Events after the period under review

Kotkan Energia and Nordic Environment Finance Corporation sold their 60 percent
and 20 percent ownerships of the company UAB Suomijos Energija to Fortum. After
these transactions Fortum will own 90 % of the shares in the company. The
acquisition supports the growth targets of Fortum's heat business in Lithuania.
The new name of the company will be UAB Fortum Heat Lietuva.

Fortum decided to extend the period of validity regarding its offer to buy the
shares of E.ON Finland Oyj owned by the City of Espoo to 30 June 2005.


Outlook

The key market driver influencing Fortum's business performance is the market
price of power. Starting in 2005, emission trading has become an important new
factor affecting the market price of power.

According to general market information, electricity consumption in the Nordic
countries is predicted to increase by about 1% a year over the next few years.
During the first quarter, the average spot price for power was EUR 25.9 (28.6)
per megawatt-hour on the Nordic power exchange, or 9% lower than the corresponding
figure in 2004.

In mid-April, the Nordic water reservoirs were about 3 TWh below the average and
9 TWh above the corresponding level for 2004. At the end of April, the market
price for emissions allowances for 2005 was around EUR 16 -18 per tonne of CO2
and the market price for coal for the rest of 2005 was around EUR 54 per tonne.
At the same time, the power price in the forward market for the rest of 2005 was
in the range of EUR 32 - 33 per MWh.

At the beginning of April, Fortum had hedged approximately 60% of its Nordic
Power Generation sales volume for the next 12 months at approximately the same
level as the achieved Nordic Generation power price during the last 12 months.

The Oil separation has been completed successfully. Fortum's Nordic strategy
remains unchanged and the company's financial position is strong. The
prerequisites for future good performance are in place.


Espoo, 3 May 2005
Fortum Corporation
Board of Directors


The figures have not been audited.


Fortum's financial reporting in 2005:

Interim Reports
- January-June on 19 July 2005
- January-September on 20 October 2005



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


FORTUM GROUP                                             
JANUARY-MARCH 2005  
                                     
Interim financial statements are unaudited                            

                                                         
CONDENSED CONSOLIDATED INCOME STATEMENT   
               
MEUR                                Q1       Q1     2004        Last
                                  2005     2004               twelve
                                                              months
Continuing operations:                                   
Sales                             1133     1129     3835        3839
Other income                        38       32       91          97
Materials and services            -438     -446    -1507       -1499
Employee benefit costs            -129     -115     -462        -476
Depreciation, amortisation and    -103      -93     -388        -398
impairment charges
Other expenses                     -97     -100     -374        -371
Operating                          404      407     1195        1192
profit
Share of profit of associates       15        4       12          23
and joint ventures
Finance costs-net                  -35      -78     -245        -202
Profit before income tax           384      333      962        1013
Income tax expense                -116     -111     -259        -264
Profit for the period from         268      222      703         749
continuing operations

Discontinued                                             
operations:
Profit for the period from          81      102      589         568
discontinued operations
Profit for the period              349      324     1292        1317
                                                         
Attributable to:                                           
Equity holders of the  company     324      304     1259        1279

Minority interest                   25       20       33          38
                                   349      324     1292        1317
                                                         
Earnings per share for profit from total Fortum Group    
attributable to the equity holders of the company during
the year (in € per share)
                                                         
Basic                             0,37     0,36     1,48        1,49
Diluted                           0,36     0,35     1,46        1,47
                                                         
Earnings per share for profit from continuing operations 
attributable to the equity holders of the company during
the year (in € per share)
                                                         
Basic                             0,28     0,24     0,79        0,83
Diluted                           0,27     0,23     0,78        0,82
                                                         
Earnings per share for profit from discontinued 
operations attributable to the equity holders of the
company during the year (in € per share)
                                                         
Basic                             0,09     0,12     0,69        0,66
Diluted                           0,09     0,12     0,68        0,65


CONDENSED CONSOLIDATED BALANCE SHEET                            
MEUR                                 March  31    March 31   Dec 31
                                          2005        2004     2004
ASSETS                                                    
Non-current assets                                         
Intangible assets                          185        160       116
Property, plant and equipment            10241      11583     11925
Other long-term investments               2122       2119      2355
Other long-term receivables                 73        100        90
Long-term interest bearing                 649        711       727
receivables
Total non-current assets                 13270      14673     15213
                                                           
Current assets                                             
Inventories                                231        578       654
Trade and other receivables               1129       1527      1555
Interest-bearing receivable                804        -          -
Available for sale financial assets        553        -          -
Cash and cash equivalents                  158        193       145
Total current assets                      2875       2298      2354
                                                           
Total assets                             16145      16971     17567
                                                           
EQUITY                                                     
Capital and reserves attributable the                         
Company's equity holders                                   
Share capital                             2964       2889      2948
Other equity                              3736       3412      4552
Total                                     6700       6301      7500
Minority interest                          171        136       150
Total equity                              6871       6437      7650
                                                           
LIABILITIES                                                
Non-current liabilities                                    
Interest-bearing liabilities              4063       4468      4450
Deferred tax liabilities                  1645       1796      1841
Provisions                                 577        566       608
Other liabilities                          503        535       507
Total non-current liabilities             6788       7365      7406
                                                           
Current liabilities                                        
Interest-bearing liabilities               973       1251       790
Trade and other payables 1)               1513       1918      1721
Total current liabilities                 2486       3169      2511
                                                           
Total liabilities                         9274      10534      9917
                                                           
Total equity and liabilities             16145      16971     17567

1) Dividends to Fortum shareholders EUR 506 million (EUR 357
million in 2004) are booked as a liability at the end of the first
quarter. The cash-flow impact is shown in the second quarter.

CHANGE IN TOTAL  EQUITY  
                                                
MEUR             Share  Share    Share   Other    Fair Retained  Minority Total
               capital  issue    premium restrict value earnings        
                                         ed funds   and 
                                                  other     
                                               reserves
                                                                          
Total equity      2948    13       62               134    4343     150    7650
at 31.12.2004
 Stock options      16   -13        7                                        10
 excercised
 Translation and other                       -2             -11       1     -12
 differences
 Cash dividend                                             -506            -506
 Share dividend 2)                                         -927      -6    -933
 Cash flow and fair value                          -119      28       1     -90
 hedges
 Other fair value                                   410      -7             403
 adjustments
 Net profit for the period                                  324      25     349

Total equity      2964     0       69        -2     425    3244     171    6871
at 31.3.2005
                                                                         
Total equity      2886     5       36         0      63    3399     120    6509
at 31.12.2003
 Stock options       3    -5        2                                         0
 excercised
 Translation and other                                       14      -4      10
 differences
 Cash dividend                                             -357            -357
 Cash flow and fair value                           -54       2             -52
 hedges
 Other fair value                                     3                       3
 adjustments
 Net profit for the period                                  304      20     324

Total equity      2889     0       38         0      12    3362     136    6437
at 31.3.2004
                                                                               
2) The effect from the share dividend on Fortum Group equity is EUR 927
million. In the parent company the effect on retained earnings is EUR 969
million.


CONSOLIDATED CASH FLOW STATEMENT                                      
MEUR                                                                          
                                               March  31    March 31    Dec 31
                                                    2005        2004      2004
Cash flow from operating activities                                   
Operating profit before depreciations                521         504      1595
continuing operations
Non-cash flow items and divesting activities         -30          -1       -49
Financial items and realised foreign                 -84           5      -181
exchange gains and losses
Taxes                                               -121         -33      -160
Funds form operations continuing operations          286         475      1205
Change in working capital                           -224        -118        27
Net cash from operating activities                    62         357      1232
continuing operations
Net cash from operating activities                   152          96       526
discontinued operations
Total net cash from operating activities             214         453      1758
                                                                      
Cash flow from investing activities                                   
Capital expenditures                                 -49         -57      -335
Acquisition of shares                                                     -179
Proceeds from sales of fixed assets                    6           6        60
Proceeds from sales of shares                          2           1        15
Change in other investments                           -4         -45       -20
Net cash used in investing activities                -45         -95      -459
continuing operations
Net cash used in investing activities               -137         -47      -277
discontinued operations
Total net cash used in investing activities         -182        -142      -736
                                                                      
Cash flow from financing activities                                   
Net change in loans                                  -15        -508      -811
Dividends paid to the Company´s equity holders                            -357
Other financing items                                 10          -2        94
Net cash used in financing activities                 -5        -510     -1074
continuing operations
Net cash used in financing activities                 49         -41      -236
discontinued operations 3)
Total net cash used in financing activities           44        -551     -1310
                                                                      
Total net increase (+)/decrease (-) in cash                           
and marketable securities                             76        -240      -288
De-consolidation of Neste Oil                        -63              
Total net increase (+)/decrease (-) in cash                           
and marketable securities, continuing                 13              
operations
                                                                      
3) The cash flow from financing activities discontinued operations is shown as
used to repay loans since the Treasury operations have been centralised for
the total Fortum Group. In first quarter 2005 the effect on cash from de-
consolidation of Neste Oil is netted in financing activities.

KEY RATIOS 4)                                                               
MEUR                        March    March  June 30 Sept 30   Dec 31    Last
                               31       31     2004    2004     2004  twelve
                             2005     2004                            months

Earnings per share total     0,37     0,36      0,8    1,09     1,48    1,49
Fortum (basic), EUR
Earnings per share           0,28     0,24     0,45    0,58     0,79        
continuing operations
(basic), EUR
                                                                            
Capital employed, MEUR 5)   11907    12156    12447   12762    12890        
Interest-bearing net         4878     5526     5512    5445     5095        
debt, MEUR
Capital expenditure and        49       57      158     306      514     506
investments in shares
continuing operations, MEUR    
Capital expenditure            49       57      128     201      335     327
continuing operations, MEUR
                                                             
Return on capital            18,0     18,6     17,0    15,0     15,8    16,8
employed, %
Return on shareholders'      19,2     19,9     20,9    18,4     18,2    19,8
equity, %
Interest coverage            11,5      7,1      8,3     7,8      8,0     9,2
Funds from                   39,3     44,4     38,2    33,1     36,4    35,3
operations/interest-
bearing net debt, %
Gearing, %                     71       86       82      77       67        
Equity per share, EUR        7,69     7,41     7,77    8,19     8,62        
Equity-to-assets ratio, %      43       38       40      41       44        
                                                                            
Average number of           13135    13023    13097   13112    12859        
employees
Average number of          871710   849698   849698  849823   852625        
shares, 1 000 shares
Diluted adjusted average   883774   867344   867907  870806   861772        
number of shares, 1 000
shares
Number of shares, 1 000    871854   849813   849813  850262   869749   856404     
shares

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

CHANGES IN INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT
 
MEUR                                        March 31   March 31       Dec 31
                                                2005       2004         2004

Opening balance                                12041      11923        11923
Acquistion of subsidiary companies                -2                      31
Capital expenditures                             148        107          648
Emission rights                                  144             
Disposals                                         -2        -14         -152
Depreciation, amortisation and  impairment      -139       -125         -527
Translation differences                         -111       -148          118
Closing balance before de-consolidation        12079      11743        12041
of Nest Oil
De-consolidation of Neste Oil                  -1653             
Closing balance                                10426      11743        12041
                                                                 
SALES BY SEGMENTS                                                
MEUR                                 Q1           Q1       2004  Last twelve
                                   2005         2004                  months

Power Generation                    534          560       2084         2058
- of which internal                  55           36        128          147
Heat                                385          361       1025         1049
- of which internal                  12           36         49           25
Distribution                        202          206        707          703
- of which internal                   2            3         10            9
Markets                             392          419       1387         1360
- of which internal                  25           25         92           92
Other                                23           20         90           93
- of which internal                  22           19         93           96
Eliminations 6)                    -403         -437      -1458        -1424
Sales from continuing operations   1133         1129       3835         3839
Sales from discontinued            2061         1710       7909         8260
operations
Eliminations                        -20          -21        -85          -84
Total                              3174         2818      11659        12015
                                                                            
6) Eliminations include sales and purchases with Nordpool that is netted on
Group level on an hourly basis and posted either as revenue or cost
depending on if Fortum is a net seller or net buyer during any particular hour

OPERATING PROFIT BY SEGMENTS                                     
MEUR                                 Q1           Q1       2004  Last twelve
                                   2005         2004                  months

Power Generation                    222          222        763          763
Heat                                111          104        218          225
Distribution                         71           83        234          222
Markets                               6           16         34           24
Other                                -6          -18        -54          -42
Operating profit from               404          407       1195         1192
continuing operations
Operating profit from               124          150        721          695
discontinued operations
Total                               528          557       1916         1887
                                                                 
NON-RECURRING ITEMS IN OPERATING PROFIT BY SEGMENTS  
            
MEUR                                 Q1           Q1       2004  Last twelve
                                   2005         2004                  months

Power Generation                      0           -6          9           15
Heat                                  0            0          4            4
Distribution                          0            0          2            2
Markets                               0            0          0            0
Other                                 6            0          3            9
Non-recurring items from              6           -6         18           30
continuing operations
Non-recurring items from             59            9         97          147
discontinued operations
Total                                65            3        115          177
                                                                            
Includes positive one-time effects of change in treatment of Finnish TEL
disability pension liability in Q4 2004.
                                                                 
DEPRECIATION, AMORTISATION AND IMPAIRMENT CHARGES BY SEGMENTS

MEUR                                 Q1           Q1       2004  Last twelve
                                   2005         2004                  months
 
Power Generation                     28           28        104          105
Heat                                 31           28        124          127
Distribution                         37           33        133          137
Markets                               4            4         16           16
Other                                 3            0         11           14
Depr., amort. and imp.              103           93       388           398
charges from continuing operations
Depr., amort. and imp.               36           32        139          143
charges from discontinued operations
Total                               139          125        527          541
                                                                 
SHARE OF PROFITS IN ASSOCIATES AND JOINT VENTURES BY SEGMENTS

MEUR                                 Q1           Q1       2004  Last twelve
                                   2005         2004                  months

Power Generation 7)                   2           -5        -18          -11
Heat                                  6            5         15           16
Distribution                          7            5         16           18
Markets                               0            0          0            0
Other                                 0           -1         -1            0
Share of profits in ass.             15            4         12           23
from continuing operations
Share of profits in ass.             -2            3         36           31
from discontinued operations
Total                                13            7         48           54
                                                                            
7) The main part of the associated companies in Power Generation are power
production companies from which Fortum purchase produced electricity at
cost. The share of profit according to IFRS also includes depreciations on
fair value adjustments made when acquiring the shareholdings (in FAS
included in Other expenses)

INVESTMENTS IN ASSOCIATES AND JOINT VENTURES BY SEGMENTS

MEUR                                           March                        
                                                  31   March 31       Dec 31
                                                2005       2004         2004

Power Generation                                1204       1084         1208
Heat                                             140         92          127
Distribution                                     200        189          196
Markets                                            8         10            8
Other                                              0          0            0
Investments in associated from continuing       1552       1375         1539
operations
Investments in associates from discontinued       -         114          140
operations
Total                                           1552       1489         1679
                                                                 
CAPITAL EXPENDITURE AND INVESTMENTS IN SHARES BY SEGMENTS

MEUR                                              Q1         Q1         2004
                                                2005       2004

Power Generation                                  18         14          210
Heat                                              12         23          175
Distribution                                      15         14          106
Markets                                            1          2            6
Other                                              3          4           17
Capital expenditure and investments in            49         57          514
shares from continuing operations
Capital expenditure and investments in            99         50          316
shares from discontinuing operations
Total                                            148        107          830
                                                                 
NET ASSETS BY SEGMENTS                                           
MEUR                                        March 31   March 31       Dec 31
                                                2005       2004         2004
                                               
Power Generation                                6106       6087         6218
Heat                                            2457       2373         2440
Distribution                                    3113       3095         3091
Markets                                          222        153          194
Other and Eliminations                           163        128          -43
Net assets from continuing operations          12061      11836        11900
Net assets from discontinued operations          -         1808         2011
Eliminations                                     -           14            2
Total                                          12061      13658        13913

RETURN ON NET ASSETS  BY SEGMENTS                                     
%               March   March    March   March   Dec    Dec     Last     Last
                   31      31       31      31    31     31   twelve   twelve
                 2005  2005*)     2004  2004*)  2004  2004*)  months months*)
                                                                         
Power            14,5    14,5     14,0    14,4  12,1   11,9     12,2     12,0
Generation
Heat             19,1    19,1     18,3    18,3   9,8    9,6     10,1      9,9
Distribution     10,1    10,1     11,3    11,3   8,1    8,0      7,7      7,7
Markets          11,5    11,5     77,6    77,6  25,3   25,3     13,6     13,6
                                                                      
Return on net assets is calculated by dividing the sum of operating profit
and share of profit of associated companies and joint venturers with average
net assets.

*) Non-recurring items deducted from operating profit                 
                                                                      
ASSETS BY SEGMENTS                                                    
MEUR                                                  March    March      Dec
                                                         31       31       31
                                                       2005     2004     2004

Power Generation                                       7015     6960     7108
Heat                                                   2798     2644     2742
Distribution                                           3537     3494     3514
Markets                                                 476      500      375
Other and Eliminations                                  -42     -221     -156
Assets from continuing operations                     13784    13377    13583
Assets from discontinuing operations                    -       2495     2756
Eliminations                                            -        -24      -32
Assets included in Net assets                         13784    15848    16307
Interest-bearing receivables                           1453      711      728
Deferred taxes                                           61       21      106
Other assets                                            136      198      281
Available for sale financial assets                     553           
Cash and cash equivalents                               158      193      145
Total assets                                          16145    16971    17567
                                                                      
LIABILITIES BY SEGMENTS                                               
MEUR                                                  March    March      Dec
                                                         31       31       31
                                                       2005     2004     2004

Power Generation                                        909      873      890
Heat                                                    341      271      302
Distribution                                            424      399      423
Markets                                                 254      347      181
Other and Eliminations                                 -205     -349     -113
Liabilities from continuing operations                 1723     1541     1683
Liabilities from discontinuing operations               -        687      745
Eliminations                                            -        -38      -34
Liabilities included in Net assets                     1723     2190     2394
Deferred tax liabilities                               1645     1796     1841
Other 8)                                                870      829      442
Total liabilities included in capital employed         4238     4815     4677
Interest-bearing liabilities                           5036     5719     5240
Total equity                                           6871     6437     7650
Total equity and liabilities                          16145    16971    17567
                                                                             
8) Cash dividends to Fortum shareholders, EUR 506 million in 2005 (EUR 357
million in 2004), are booked as a liability at the end of the first quarter.
The cash-flow impact is shown in the second quarter.

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

Power Generation                      534       583      453      488     560
- of which internal                    55        55       11       26      36
Heat                                  385       316      149      198     361
- of which internal                    12         9        1        3      36
Distribution                          202       194      150      157     206
- of which internal                     2         3        3        1       3
Markets                               392       378      287      303     419
- of which internal                    25        28       17       22      25
Other                                  23        23       22       25      20
- of which internal                    22        11        7        9      10
Eliminations                         -403      -410     -296     -314    -437
Sales from continuing operations     1133      1084      765      857    1129
Sales from discontinued              2061      2108     2091     2000    1710
operations
Eliminations                          -20       -17      -20      -27     -21
Total                                3174      3175     2836     2830    2818

QUARTERLY OPERATING PROFIT BY SEGMENTS                                
MEUR                                   Q1        Q4       Q3       Q2      Q1
                                     2005      2004     2004     2004    2004

Power Generation                      222       241      128      172     222
Heat                                  111        75       12       27     104
Distribution                           71        51       45       55      83
Markets                                 6         0       13        5      16
Other                                  -6        -4      -21      -11     -18
Operating profit from continuing      404       363      177      248     407
operations
Operating profit from                 124       183      165      223     150
discontinued operations
Total                                 528       546      342      471     557
                                                                             
FAS operating profit is not comparable with previously reported. Share of
profit in associated companies and joint ventures is according to IFRS
recorded
after operating profit.

DISCONTINUED OPERATIONS (including eliminations between Fortum and
discontinued operations)
MEUR                                                Q1           Q1       2004
                                                  2005         2004
                                                                    
Sales                                             2061         1710       7909
Other income                                        12           12         66
Materials and services                           -1736        -1444      -6439
Employee benefit costs                             -57          -52       -211
Depreciation, amortisation and impairment          -36          -32       -139
charges
Other expenses                                    -120          -44       -465
Operating profit                                   124          150        721
Share of profit of associates and joint             -2            3         36
ventures
Finance costs-net                                   -6          -20        -19
Profit before income tax                           116          133        738
Income tax expense                                 -35          -31       -149
Profit for the year from discontinued               81          102        589
operations
                                                                    
CONTINGENT LIABILITIES                                              
MEUR                                         March  31     March 31     Dec 31
                                                  2005         2004       2004
Contingent liabilities                                              
On own behalf                                                       
   For debt                                                         
                            Pledges                156          161        160
                            Real estate             71           91        113
                            mortgages
   For other commitments                                            
                            Real estate             70           55         59
                            mortgages
   Sale and leaseback                                -            8          -
   Other contingent liabilities                     72          101         76
   Total                                           369          416        408
On behalf of associated companies
and joint ventures                                   
   Pledges and real estate mortgages                 3           12         12
   Guarantees                                      247          478        335
   Other contingent liabilities                    182          182        182
   Total                                           432          672        529
On behalf of others                                                 
   Guarantees                                        3           16          3
   Other contingent liabilities                      2            6          5
   Total                                             5           22          8
Total                                              806         1110        945
						
							
Operating lease liabilities							
Due within a year				   15   	 73 	    87
Due after one year and within five years	   39	         76         81
Due after five years				   10		 65	    64
Total					 	   64  	        214        232

                                                                    
NUCLEAR                                                             
MEUR                                         March  31     March 31     Dec 31
                                                  2005         2004       2004

Liability for nuclear waste disposal according
to the Nuclear Energy Act in Finland
Liability 1)                                       596          570        596
Share of reserves in the Nuclear Waste            -596         -570       -581
Disposal Fund 2)
Liabilities in the balance sheet 3)                  0            0         15
                                                                    
1) Discounted liability in the balance sheet is EUR 404 (366) million as of 31
March 2005 (and 2004 respectively).
2) Value of the Fund Asset in the balance sheet is EUR 404 (366) million as of
31 March 2005 (and 2004 respectively) due to IFRIC Interpretation 5, which
states that it can not exceed the value of the related liabilities
3) Mortgaged bearer papers as security.                             

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

DERIVATIVES                                                            
MEUR                                  March  31         March 31     Dec 31
                                      2005              2004         2004
                                                     

Interest and currency        Notional     Net  Notional   Net Notional    Net
derivatives                     value    fair     value  fair    value   fair
                                        value           value           value
Forward interest rate            -       -         330    -      -       -
agreements
Interest rate swaps              3359      -41    4178   -104     1218    -28
Forward foreign exchange         8338       44    8076     86     8176    -32
contracts4)
Interest rate and currency        317      -15     339      8      310     -7
swaps
Purchased currency options        727       -7     425     -5      438     17
Written currency options          357        5     425     -4      438      6

4) Include also contracts for equity hedging                           
                                                                       
Electricity derivatives        Volume      Net  Volume    Net   Volume     Net
                                          fair           fair             fair
                                         value          value            value

                                  TWh     MEUR     TWh   MEUR      TWh    MEUR

Sales contracts                    74     -125      66   -198       70     204
Purchase contracts                 46      162      42    194       42     -53
Purchased options                   1       -1      -      -         1      -1
Written options                     7       -3      -      -         1      -
                                                                       
Oil derivatives                Volume      Net  Volume    Net   Volume     Net
                                          fair           fair             fair
                                         value          value            value

                                 1000     MEUR    1000   MEUR     1000    MEUR
                                  bbl              bbl             bbl

Sales contracts                    50       -1   30596      1    44588      26
Purchase contracts                770       11   33712      9    70258       7
Purchased options                 -        -      3650      -     4797       2
Written options                   -        -      2598      -     6784      -2

Accounting principles							
This interim report has been prepared in accordance with IAS 34, Interim
Financial Reporting. As of 2005 Fortum is applying 	
International Financial reporting Standards (IFRS).
The most important changes for Fortum continuing operations are:	
								
- Derivatives are being carried at fair value in the balance sheet. Fair
value changes effects the income statement if hedge accounting is not applied.
(IAS 39)	
									
- Fortum´s part of the Finnish nuclear waste fund and the future liabilities
for spent fuel and decomissioning regarding nuclear production are disclosed
gross in the balance sheet according to IFRIC Interpretation 5.	

- The minority preference shares with option agreement in Nybroviken Kraft
AB Group accounted for as minority interest under Finnish GAAP is reclassified
as interest-bearing liabilities under IFRS.
									
- The accounting of pension liabilities according to IAS 19 creates a change
to Finnish GAAP, but impacts mainly 2004 since the accounting treatment of the
Finnish TEL´s disability pension component changed during the year.
	
- The oil operations in Fortum are regarded as discontinued operations as of
March 31, 2005. Discontinued operations are disclosed on one line in the income 
statement and shown separately in the cash-flow. 2004 comparison financials are
restated.								
								
Fortum has in a press release on April 26, 2005, described the impact of the
trabnsition to IFRS on 2004 financial information. The document also included
restated quarterly information and reconciliations of equity and net profit
between Finnish GAAP and IFRS. The detailed accounting principles used can be
found on the Fortum website: www.fortum.com/Investors/Financial Information
									
Emission rights								
As of January 1, 2005 Fortum is applying IFRIC Interpreatation 3 in accounting
for emission rights. The emission rights scheme gives rise to an asset for
emission rights held, a government grant and a liability for the obligation
to deliver emission rights equal to actual emissions as well as recordings of
applicable deferred taxes. Emission rights received are accounted as government
grants in accordance with IAS 20 (Accounting for Government Grants and
Disclosure of Government Assistance) i.e. is recognized as deferred income at
current market value of the allowance at receipt and amortized in proportion
to actual and estimated emissions during the year. Emission rights are
recognized in the balance sheet as intangible assets according to IAS 38
(Intangible assets) and valued at fair value. Reductions in fair value are
charged to income statement and increases to equity. Liability for the
obligation to deliver emission rights is accounted for in accordance with
IAS 37 (Provisions, Contingent Liabilities and Contingent Assets).
The liability is recognized based on actual emissions and at current market
value of the emission rights. Changes in the liability are charged to income.


Definitions of key figures in IFRS reporting                             
                                                                          
Return on            = 100 x   Profit for the period                        
shareholders'
equity, %
                               Total equity                               
                               average
                                                                          
Return on capital    = 100 x   Profit before taxes + interest and other
employed, %                    financial expenses
                               Capital employed average                   
                                                                          
Return on net        = 100 x   Operating profit + share of profit (loss) in
assets, %                      associated companies and joint ventures
                               Net assets average                         
                                                                          
Capital employed     =         Total assets - non-interest bearing liabilities
                               -  deferred tax liabilities - provisions
                                                                          
Net assets           =         Non-interest bearing assets + interest-bearing
                               assets related to the Nuclear Waste Fund
                               - non-interest bearing liabilities -       
                               provisions
                               (excluding finance related items, tax and
                               deferred tax and assets and liabilities from
                               fair
                               valuations of derivatives where hedge
                               accounting is applied)
                                                                          
Interest-bearing     =         Interest-bearing liabilities - cash and cash
net debt                       equivalents
                                                                          
Gearing, %           = 100 x   Interest-bearing net debt                  
                               Total equity                               
                                                                          
Equity per share,    =         Shareholder´s                              
EUR                            equity
                               Number of shares at the close of the       
                               period
                                                                          
Equity-to-assets     = 100 x   Total equity including minority interest   
ratio, %
                               Total assets                               
                                                                          
Interest coverage    =         Operating profit                           
                               Net interest expenses                      
                                                                          
Earnings per share   =         Profit for the period                        
(EPS)
                               Adjusted average number of shares during the
                               period

About Us

FortumFortum is a leading clean-energy company that provides its customers with electricity, heating and cooling as well as smart solutions to improve resource efficiency. We want to engage our customers and society to join the change for a cleaner world. We employ some 8,000 professionals in the Nordic and Baltic countries, Russia, Poland and India. In 2019, our sales were EUR 5.4 billion and 59% of our electricity generation was CO2 free. Fortum's share is listed on Nasdaq Helsinki. www.fortum.com

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