Fortum (FORTUM) Q2 2024 earnings summary

Executive summary

• Resilient Q2 and H1 2024 performance despite lower power prices, supported by successful hedging, higher hydro volumes, and physical optimization.

• Strategic focus on reliable, clean energy, decarbonization, efficiency improvements, early coal exit, and new wind and nuclear investments.

• Major divestments included the sale of the Indian solar portfolio and agreement to sell the recycling and waste business, strengthening the balance sheet.

• Efficiency improvement programme targets €100 million annual fixed cost reduction by end of 2025, with over €50 million reduction expected by end of 2024.

• Pjelax wind farm reached full capacity; industrial site development and hydrogen pilot plant progressing.

Financial highlights

• H1 2024 sales were €3,270 million (H1 2023: €3,632 million); Q2 2024 sales €1,255 million (Q2 2023: €1,368 million).

• Comparable EBITDA for H1 2024 was €948 million (H1 2023: €1,125 million); Q2 2024 €326 million (Q2 2023: €344 million).

• Comparable operating profit for H1 2024 was €763 million (H1 2023: €960 million); Q2 2024 €233 million (Q2 2023: €262 million).

• Net profit after non-controlling interests for H1 2024 was €688 million (H1 2023: €916 million); EPS €0.77 (H1 2023: €1.02).

• Operating cash flow for H1 2024 was €876 million (H1 2023: €1,132 million); Q2 2024 €338 million.

Outlook and guidance

• For the rest of 2024, 75% of Nordic generation hedged at €43/MWh; for 2025, 60% hedged at €42/MWh.

• 2024 capital expenditure expected at €550 million; 2024–2026 capex guidance up to €1.6 billion.

• Maintenance capex to be €250 million from 2025 onwards.

• Effective income tax rate expected at 18–20% for 2024–2026; property tax in Sweden to increase by €25 million annually from 2025.

• Target to reduce annual fixed costs by €100 million by end of 2025, with over €50 million reduction expected by end of 2024.