Fortum Oyj (FOJCF) Q1 2026 Earnings Call Highlights: Strong Market Prices and Strategic Growth Plans
This article first appeared on GuruFocus .
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Achieved Power Price:EUR62.5 per megawatt hour, up from EUR60.1 last year.
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Realized Market Price:EUR85.7 per megawatt hour, compared to EUR46 in Q1 2025.
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Hydro Generation Output:5.9 terawatt hours.
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Outright Generation Volume:12.2 terawatt hours, an increase of 0.6 terawatt hours from last year.
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Comparable Operating Profit:EUR521 million, an increase of EUR59 million.
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Comparable Earnings Per Share (EPS):EUR0.45, up from EUR0.42 last year.
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Operating Cash Flow:EUR355 million, decreased due to higher working capital.
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Net Debt to Comparable EBITDA Ratio:1.1x.
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Net Debt:EUR1.5 billion at the end of the quarter.
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Gross Debt:EUR3.8 billion, excluding leases.
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Liquidity Reserves:EUR6.4 billion, with EUR2.5 billion in liquid funds.
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Hedge Price for 2026:EUR39 with a 75% hedge ratio.
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Capital Expenditure Guidance for 2026:EUR550 million.
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Corporate Tax Rate Guidance for 2026:18% to 20%.
Release Date: April 29, 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 ) achieved a higher power price in Q1 2026, with EUR62.5 per megawatt hour compared to EUR60.1 in the previous year.
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The company reported a significant increase in realized market price, reaching EUR85.7 per megawatt hour from EUR46 in Q1 2025.
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Hydro generation output was maximized due to high spot prices, resulting in 5.9 terawatt hours of output.
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Fortum Oyj ( FOJCF ) maintained a strong balance sheet and good liquidity, with a new EUR2.7 billion revolving credit facility signed.
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The company's comparable operating profit increased by EUR59 million to EUR521 million, and comparable earnings per share rose from EUR0.42 to EUR0.45.
Negative Points
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Operating cash flow decreased to EUR355 million due to increased working capital, reflecting higher sales prices.
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Nuclear generation faced challenges with an unplanned outage in Oskarshamn 3, affecting overall generation volume.
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The Other Operations segment saw a decline in comparable operating profit by EUR8 million, resulting in a negative result of EUR28 million.
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There are concerns about future power availability in Finland due to high activity levels from data centers and projected demand growth.
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The company's leverage increased to 1.6x after dividend payments, although it remains below the maximum leverage ratio.
Q & A Highlights
Q: Can you provide insights into your achieved pricing for the full year, considering the strong Q1 performance? A: Markus Rauramo, CEO, explained that while they do not comment on specific numbers, they provide components like normalized production levels, hedge ratios, and expected optimization premiums. The achieved power price will reflect these elements, and they expect power consumption to increase, necessitating higher prices for full-load production.
Q: How does the current geopolitical situation, such as the Middle East crisis, impact your optimization premium and market outlook? A: Markus Rauramo noted that geopolitical crises impact customer demand and sentiment, particularly affecting gas and coal prices. The Nordics export energy to the continent, which can positively impact Nordic prices. The main driver of volatility is the high penetration of renewables, and they maintain their optimization premium guidance based on these analyses.
Q: What is Fortum's approach to site development agreements with data centers, and do these include PPAs? A: Markus Rauramo stated that site development is aimed at attracting new demand, with potential for PPAs depending on competitive situations. The majority of their 5 GW potential capacity is still available for development, and they focus on selling electricity from their existing portfolio.
Q: Could you elaborate on the potential impact of the EU ETS revision and taxation changes on data centers? A: Markus Rauramo emphasized strong support for the energy market design and ETS as core to EU's climate policy. Tiina Tuomela added that Finland's electricity tax for data centers will increase, but the predictability of the environment is crucial for investment decisions.
Q: How does Fortum plan to utilize its strong balance sheet, and what are the priorities for capital allocation? A: Markus Rauramo highlighted that Fortum's leverage allows for investments in additional capacity, acquisitions, and maintaining a dividend policy. They are interested in Consumer Solutions, district heating, cooling, and renewables, and would consider nuclear or hydropower opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
