Fortum (FORTUM) Q4 2024 earnings summary

Executive summary

• Focused on core business optimization, divestment of non-core assets, and efficiency improvements, laying groundwork for future growth amid volatile and lower power prices in 2024.

• Achieved strong operational performance and robust underlying customer demand despite challenging market conditions and lower Nordic spot power prices.

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

• SBTi-verified climate targets introduced, aiming for net-zero emissions by 2040 and 85% reduction in Scope 1 and 2 emissions by 2030.

• Proposed total dividend of EUR 1.40 per share, including a special dividend to adjust the overcapitalized balance sheet, resulting in a 10.4% yield.

Financial highlights

• Comparable operating profit: EUR 1,178 million for 2024 (down from EUR 1,544 million in 2023) due to lower power prices and volumes.

• Comparable EBITDA: EUR 1,556 million (EUR 1,903 million in 2023); sales: EUR 5,800 million (EUR 6,711 million in 2023).

• Comparable EPS: EUR 1.00 for 2024 (EUR 1.28 in 2023); net profit after non-controlling interests: EUR 1,164 million.

• Operating cash flow: EUR 1,392 million for 2024, with Q4 at EUR 167 million.

• Fixed costs decreased below EUR 1 billion despite inflation.

Outlook and guidance

• CapEx guidance for 2025–2027: EUR 1.4 billion, with annual maintenance CapEx at EUR 250 million and growth CapEx EUR 150–300 million per year.

• Generation segment hedges: ~75% at EUR 42/MWh for 2025, ~45% at EUR 41/MWh for 2026.

• Optimization premium guidance maintained at EUR 6–8/MWh; 2024 outcome was EUR 8.7/MWh.

• Corporate tax rate expected at 18–20%; property tax in Sweden to increase by EUR 30 million annually from 2025.

• Fixed cost reduction program targets EUR 100 million annual savings by end of 2025, with over EUR 60 million already achieved in 2024.