This article first appeared on GuruFocus .
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Achieved Power Price:EUR44.9 per megawatt hour in Q2, down from EUR48.1 last year.
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Realized Market Price:EUR53.1 per megawatt hour, up from EUR26.4 one year ago.
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Outright Generation Volume:9.1 terawatt hours, 0.6 terawatt hours more than last year.
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Comparable Operating Profit:EUR106 million in Q2, a decrease of EUR9 million.
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Comparable EPS:Decreased from EUR0.09 to EUR0.08 per share in Q2.
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Operative Cash Flow:Increased to EUR324 million due to decreased working capital.
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Net Debt to Comparable EBITDA Ratio:1.4x.
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Consumer Solutions Operating Profit:Declined by EUR5 million to EUR42 million.
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Generation Segment Operating Profit:Declined by EUR11 million to EUR110 million.
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Net Debt:EUR1.8 billion at the end of Q2.
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Gross Debt:EUR3.8 billion excluding leases.
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Liquidity Reserves:EUR6.5 billion, including EUR2.1 billion of liquid funds.
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Hedge Price for 2026:EUR40 with an 80% hedge ratio.
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Capital Expenditure Guidance:EUR550 million for 2026, excluding potential acquisitions.
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Effective Income Tax Rate:Expected to be in the range of 18% to 20% for 2026.
Release Date: July 21, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Fortum Oyj ( FOJCF ) maintained a strong balance sheet and good liquidity, with a leverage ratio of 1.4x.
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The company announced a strategic acquisition of Elmera, which is expected to create a stronger Nordic business with significant synergies.
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Fortum Oyj ( FOJCF ) continues to see robust underlying customer demand from various industrial sectors, indicating long-term power demand growth.
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The company has committed to ending coal-fired power generation in Finland by 2027, aligning with its goal to reach net zero by 2040.
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Fortum Oyj ( FOJCF ) reported an increase in operative cash flow to EUR324 million due to a decrease in working capital.
Negative Points
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The achieved power price in Q2 was lower than the previous year, primarily due to lower income from ancillary services and high hedge ratios.
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Comparable operating profit and EPS developed negatively in Q2, with a decrease in operating profit by EUR9 million.
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There were more planned nuclear outage days compared to the previous year, impacting generation volumes.
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The company experienced higher fixed costs, which contributed to a decline in Consumer Solutions' comparable operating profit.
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Fortum Oyj ( FOJCF ) faces uncertainty in the operating environment, with volatility in the Nordic power market and challenges in ancillary services.
Q & A Highlights
Q: How should we think about Fortum's ability to capture the increase in Nordic power prices this winter, given the hedge ratios for Q4 and Q1 of 2027? A: Markus Rauramo, CEO, explained that Fortum does not disclose quarterly hedging levels but noted that the 80% hedge for the current year and 65% for the next year indicate room for optimization. The hedging strategy aims to provide cash flow visibility and stabilize income over time.
Q: Are there any updates on Fortum's interest in Uniper assets, and would Fortum consider raising equity to fund such a transaction? A: Markus Rauramo, CEO, stated that Fortum remains interested in Uniper's Nordic assets, particularly nuclear and hydro. The interest is not limited to the right of first refusal. Fortum plans to maintain a strong investment-grade rating and leverage level, with no current plans for an equity raise.
Q: Can you quantify the synergies expected from the Elmera acquisition? A: Markus Rauramo, CEO, mentioned that the synergies are expected to be meaningful, leveraging scale advantages and platform integration. However, specific targets will be disclosed after regulatory approvals and shareholder acceptance.
Q: Why did Fortum experience higher fixed costs despite a cost-cutting program? A: Tiina Tuomela, CFO, noted that fixed costs remain a focus, with a target of EUR870 million per year. The increase in Q2 was EUR11 million, attributed to variations between quarters and segments. Fortum is on track with its cost targets.
Q: What is the outlook for Nordic power demand and the impact of data centers and industrial demand growth? A: Markus Rauramo, CEO, indicated that Nordic power demand remains stable at around 400 terawatt hours annually. Interest in the Nordics continues, driven by EU's Electrification Action Plan, with data centers and industrial sectors showing robust demand.
Q: How does Fortum view the potential for increased earnings visibility and optimization premium in light of the Nordic forward curve and hedge position? A: Tiina Tuomela, CFO, explained that while hydro reservoirs are currently below average, volatility remains high due to renewables. Fortum maintains its optimization premium guidance of EUR8 to EUR10 per megawatt hour for the year.
Q: How confident is Fortum in returning to normal nuclear volumes by 2027? A: Markus Rauramo, CEO, expressed confidence in improving nuclear availability, particularly at Oskarshamn 3 and Olkiluoto 3, following recent issues.
Q: Why is Fortum cautious about the optimization premium for next year despite expected price volatility? A: Tiina Tuomela, CFO, noted that predicting volatility is challenging, and ancillary services' development is a factor in the cautious outlook. The long-term optimization premium guidance remains at EUR68.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
