Fortum (FORTUM) Q4 2024 earnings summary

Executive summary

• 2024 focused on optimizing core businesses, divesting non-core assets, and implementing efficiency improvements, laying the foundation for future growth amid lower power prices and a challenging operating environment.

• Major divestments included the recycling and waste business (EUR 800m sale, EUR 176m gain) and Indian solar portfolio (EUR 33m sale, EUR 16m gain), strengthening liquidity and reducing fixed costs.

• SBTi-verified net zero target by 2040 announced, aiming for an 85% reduction in Scope 1 and 2 emissions by 2030.

• Board proposes a total dividend of EUR 1.40 per share, including a EUR 0.50 special dividend, resulting in a 10.4% yield and 140% payout ratio.

• Strong financial position maintained with financial net debt to comparable EBITDA at 0.2x and liquidity reserves of EUR 8.2bn.

Financial highlights

• Comparable operating profit for 2024 was EUR 1,178m, down from EUR 1,544m in 2023, mainly due to lower power prices and volumes.

• Sales from continuing operations were EUR 5,800m, down from EUR 6,711m year-over-year.

• Comparable EBITDA was EUR 1,556m (EUR 1,903m in 2023); comparable EPS was EUR 1.00 (EUR 1.28 in 2023).

• Operating cash flow for 2024 was EUR 1,392m; Q4 cash flow was EUR 167m.

• Fixed costs decreased below EUR 1bn despite inflation, with over EUR 60m recurring cost reductions in 2024.

Outlook and guidance

• CapEx guidance for 2025–2027 is EUR 1.4bn, with annual maintenance CapEx at EUR 250m and growth CapEx EUR 150–300m per year.

• For 2025, 75% of Nordic outright generation hedged at EUR 42/MWh; for 2026, 45% hedged at EUR 41/MWh.

• Comparable effective tax rate estimated at 18–20% for 2025–2027; Swedish property tax to increase by EUR 30m annually from 2025.

• Efficiency improvement programme targets EUR 100m fixed cost reduction by end of 2025, with EUR 60m already achieved in 2024.

• Focus remains on prudent cost allocation and readiness for new investments if market conditions improve.