Fortum (FORTUM) Q3 2024 earnings summary

Executive summary

• Delivered resilient Q3 performance despite seasonally low Nordic power prices, supported by strong hedging, operational optimization, and a focus on clean energy, decarbonization, and efficiency.

• Strategic divestments of non-core assets, including recycling, waste, Chempolis Oy, and Indian bioethanol and solar businesses, with an €800 million sale expected to close in Q4.

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

• Advanced key projects: Loviisa nuclear plant lifetime extension, Pjelax wind farm commissioning, Espoo Clean Heat program, and €100 million investment in Polish biomass retrofit.

• Finnish and Swedish industrial demand remains subdued, with delays in green transition projects and a downward revision in Finland's 2030 power demand forecast.

Financial highlights

• Q3 2024 sales were €1,094 million (down from €1,220 million in Q3 2023); comparable EBITDA for Jan–Sep 2024 was €1,202 million (2023: €1,443 million); Q3 comparable operating profit was €158 million (Q3 2023: €226 million).

• Comparable net profit for Q3 2024 was €117 million (Q3 2023: €204 million); EPS for Jan–Sep 2024 was €0.91 (2023: €1.23); Q3 EPS was €0.14 (Q3 2023: €0.21).

• Cash flow from operating activities for Jan–Sep 2024 was €1,225 million (2023: €1,561 million); Q3 at €349 million.

• Net debt at end of Q3 was €655 million; financial net debt/comparable EBITDA at 0.4x; liquidity reserves of €7.6 billion.

• Dividend of €1.15 per share for 2023, paid in two instalments in 2024.

Outlook and guidance

• Generation segment hedged: ~80% at €44/MWh for remainder of 2024, ~65% at €42/MWh for 2025, ~40% at €41/MWh for 2026.

• 2024 CapEx expected at €550 million (including €300 million maintenance); €1.6 billion planned for 2024–2026.

• Fixed cost base targeted to reduce by €100 million by end of 2025, with over €50 million reduction expected by end of 2024.

• Optimization premium guidance maintained at €6–8/MWh; effective tax rate guidance unchanged at 18–20%.

• Swedish property tax to increase by €25 million from 2025.