Fortum Corporation Interim Report January-March Conference call 26 April 2012

Transcription

1 Fortum Corporation Interim Report January-March 2012 Conference call 26 April

2 Disclaimer This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Fortum shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser. 2

3 Highlights in the first quarter 2012 Overall good operative result Strong cash flow, increased by 22% to EUR 553 million Fortum s achieved power price close to last year s levels Strong reservoir levels increased hydro generation significantly Commissioning of Nyagan 1 and 2 postponed by some months 3

4 Challenging environment The Nordic water reservoir level was well above the long-term average levels throughout the first quarter The CO 2 -emission allowance prices were clearly lower Nordic system spot prices were clearly lower than in the first quarter last year Electricity prices were lower also in Russia Warmer weather Nordic consumption declined by approximately 3% 4

5 Nordic water reservoirs levels higher than long-term average reservoir content (TWh) reference level Q1 Q2 Q3 Q4 Source: Nord Pool Spot 5

6 CO 2 allowance prices 35 CO 2 price (ICE ECX EUA) EUR / tco Source: ICE Market prices 23 April 2012; future quotations

7 Price development in the Nordic region and Russia Spot price for power in NordPool power exchange eur/mwh 72 66,2-42% 60 52, ,3 36,0 34, RUB/MWh Spot price for power (market price), Urals hub -11% Q1/2011 Q2/2011 Q3/2011 Q4/2011 Q1/ Q1/2011 Q2/2011 Q3/2011 Q4/2011 Q1/2012 eur/mwh Power's Nordic power price 60-1% 47, ,4 44,3 45, ,2 Achieved power price for OAO Fortum eur/mwh 36 +0% 29,2 29,0 30, ,9 29, Q1/2011 Q2/2011 Q3/2011 Q4/2011 Q1/ Q1/2011 Q2/2011 Q3/2011 Q4/2011 Q1/2012 Includes capacity income 7

8 Q1: Results Comparable operating profit, EUR 651 (649) million Earnings per share EUR 0.56 (0.76) Net cash from operating activities 553 (454) million 8

9 Q1: Comparable operating profit on last year s level Comparable operating profit, EUR million Q1/2011 Power Heat Russia Distribution Electricity Sales Other Q1/2012 9

10 10 Financials

11 Comparable and reported operating profit Comparable operating Reported operating Comparable operating Reported operating MEUR profit profit profit profit I/2012 I/2011 I/2012 I/ Power Heat Russia Distribution Electricity Sales Other Total IFRS accounting treatment (IAS 39) of derivatives had an impact on the reported operating profit. In the first quarter EUR -16 (173) million, or earnings per share EUR (0.14). 11

12 Power Q1 Significantly increased hydro generation Nuclear availability good, except for Oskarshamn 1 Fortum s achieved power price close to last year s level MEUR I/2012 I/ LTM Sales Comparable operating profit Net Assets Comparable RONA, % Gross Investments

13 Heat Q1 Lower heat volumes due to divestments and restructuring Good availability and fuel flexibility impacted positively on the result, especially in Sweden MEUR I/2012 I/ LTM Sales Comparable operating profit Net Assets Comparable RONA, % Gross Investments

14 Russia Q1 Positive effect from "new capacity" Somewhat decreased old capacity volume and income Nyagan units 1 and 2 estimated to be delayed by some months MEUR I/2012 I/ LTM Sales Comparable operating profit Net Assets Comparable RONA, % Gross Investments

15 Distribution Q1 Result decreased warmer weather impacted volumes Smart metering rollout in Finland proceeding well MEUR I/2012 I/ LTM Sales Comparable operating profit Net Assets Comparable RONA, % Gross Investments

16 Electricity Sales Q1 Business Market restructuring completed Leading seller of eco-labelled and CO2- free electricity in the Nordic countries MEUR I/2012 I/ LTM Sales Comparable operating profit Net Assets Comparable RONA, % Gross Investments

17 Income statement MEUR I/2012 I/ LTM Sales Expenses Comparable operating profit Items affecting comparability Operating profit Share of profit of associates and jv's Financial expenses, net Profit before taxes Income tax expense Net profit for the period Non-controlling interests EPS, basic (EUR) EPS, diluted (EUR)

18 Cash flow statement MEUR I/2012 I/ LTM Operating profit before depreciations Non-cash flow items and divesting activities Financial items and fx gains/losses Taxes Funds from operations (FFO) Change in working capital Total net cash from operating activities Paid capital expenditures Acquisition of shares Other investing activities Cash flow before financing activities

19 Key ratios MEUR LTM Q1'12 EBITDA Comparable EBITDA Interest-bearing net debt Comparable Net debt/ebitda Return on capital employed (%) Return on shareholders' equity (%) Good liquidity committed credit lines total EUR 2.7 billion Note: LTM does not reflect dividend paid in April

20 Debt maturity profile MEUR , , ,021 Bonds Financial institutions Other long-term debt CPs Other short-term debt per 31 Mar, 2012 per 31 Dec, 2011 Average Interest Rate (incl. swaps and forwards) 4.6% 4.4% Portion of floating / fixed debt 43 / 57% 47 / 53% 20

21 21 Outlook

22 Outlook Key drivers and risks Wholesale price of electricity Demand Fuels CO 2 emissions prices Water reservoirs Power plant availability Nordic markets Annual electricity demand growth estimated to be approximately 0.5% Electricity continues to gain share of total energy consumption Russia Profits from Russia build up in pace with the capacity increase The commissioning of the new units Nyagan 1 and 2 postponed Fortum s goal is to achieve an operating profit level of about EUR 500 million and to create positive economic value added after completing the ongoing investment programme 22

23 Outlook Annual capex (excluding potential acquisitions) 2012 around EUR 1.6 to 1.8 billion 2013 and 2014 around EUR 1.1 to 1.4 billion annually Hedging rest of 2012 approximately 70% hedge ratio at approximately EUR 48/MWh (Q4: 65% at EUR 48/MWh) 2013 approximately 45% hedge ratio at approximately EUR 46/MWh (Q4: 40% at EUR 46/MWh) In Finland, the Government announced that a so-called windfall tax will be introduced in

24 Strong position continuously challenging business environment Electricity will continue to gain a higher share of the total energy consumption Good production portfolio going forward Hedges create stability Strong financial position 24

25 Q & A Conference call