Fortum (FORTUM) Q3 2024 earnings summary

Executive summary

• Resilient Q3 2024 performance despite lower Nordic power prices and volumes, supported by strong hedging, operational optimization, and efficiency initiatives.

• Strategic focus on decarbonization, clean energy, and efficiency, with major divestments in recycling, waste, and biobased solutions, and progress in cost reduction programs.

• Advanced key projects: Pjelax wind farm commissioning, Loviisa nuclear plant lifetime extension and Western fuel milestone, and Espoo Clean Heat program.

• Decarbonization efforts include €100 million investment in Polish biomass retrofit and coal exit by 2027.

• Legal proceedings initiated to recover €800 million from former Russian subsidiary, with no impairment risk.

Financial highlights

• Q3 2024 sales were €1,094 million (down from €1,220 million in Q3 2023); comparable EBITDA €254 million (Q3 2023: €318 million); comparable operating profit €158 million (Q3 2023: €226 million).

• Comparable operating profit for Jan–Sep 2024 was €921 million (2023: €1,186 million); net profit after non-controlling interests for Jan–Sep 2024 was €820 million (2023: €1,104 million).

• Earnings per share for Jan–Sep 2024 was €0.91 (2023: €1.23); Q3 at €0.14 (Q3 2023: €0.21).

• Operative cash flow for Jan–Sep 2024 was €1,225 million (2023: €1,561 million); Q3 at €349 million.

• Leverage (net debt to comparable EBITDA) improved to 0.4x; financial net debt at end of Q3 was €655 million.

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.

• Optimization premium guidance maintained at €6-8/MWh for 47TWh annual volume.

• Comparable effective income tax rate estimated at 18–20% for 2024–2026; Swedish property tax to increase by €25 million annually from 2025.

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

• Fixed cost reduction target of €100 million by end of 2025, with over €50 million reduction expected by end of 2024.