Fortum Corporation Interim report January June July 2014

Transcription

1 Fortum Corporation Interim report January June July 2014

2 Disclaimer This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Fortum shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser. 2

3 Q Results Key figures (EUR) II/14 II/13 I-II/14 I-II/ LTM Sales, million 1,016 1,205 2,489 2,858 5,309 4,940 Comparable EBITDA, million ,009 1,093 1,975 1,892 Operating profit, million , ,508 3,232 Comparable operating profit, million ,403 1,322 Profit before taxes, million , ,398 3,146 Earnings per share Items affecting comparability Net cash from operating activities, million , ,548 1,821 3

4 Summary of the second quarter of 2014 Good results despite seasonality, low spot prices and rouble Strong cash flow from operations Norwegian electricity distribution business sale completed The target for the Russia Segment in Russian roubles (RUB 18.2 billion) to be reached during 2015 is intact, but the euro result level will be volatile and with current exchanges rates lower than EUR 500 million Finnish Government decided not to introduce the power plant tax (so called windfall tax) 4

5 Market conditions in the second quarter 2014 Nordic countries Power consumption in the Nordic countries declined marginally compared to the same period in 2013 Hydro reservoirs at long-term average Nordic system spot prices EUR 13 per MWh lower compared to 2013, while Finnish and Swedish area prices approximately EUR 5-7 per MWh lower European business environment and carbon market The European Parliament election held in May New EU energy and environment state aid guideline came into force Energy security and efficiency in focus in EU triggered by the political crises in Ukraine Russia Power consumption in Fortum s operating areas on same level as in corresponding period in 2013 Spot price for power increased by 15% (in RUB) in the First price zone compared to the same period in

6 Nordic water reservoirs reservoir content (TWh) reference level Q1 Q2 Q3 Q4 Source: Nord Pool Spot 6

7 Wholesale price for electricity EUR/MWh Nord Pool Spot System Price Forwards July Source: Nord Pool Spot, NASDAQ OMX Commodities Europe

8 Fuel and CO 2 allowance prices 150 Crude oil price (ICE Brent) 35 CO 2 price (ICE ECX EUA) USD / bbl EUR / tco Coal price (ICE Rotterdam) 100 Gas price (ICE NBP) USD / t GBp / therm Source: ICE Market prices 15 July 2014; future quotations

9 Price development in the Nordic region and Russia -34% +17% -10% +2% Includes capacity income 9

10 Q2: Low spot prices burdened Power and Technology - Russia improved Comparable operating profit, EUR million * 10 * The divested distribution operations are included in the segment information until the closing of the transactions

11 January- June: Good results despite seasonality, low spot prices and weak rouble Comparable operating profit, EUR million * 11 * The divested distribution operations are included in the segment information until the closing of the transactions

12 Financials

13 Comparable and reported operating profit MEUR Comparable operating profit Reported operating profit Comparable operating profit Reported operating profit II/2014 II/2013 II/2014 II/2013 I-II/2014 I-II/2013 I-II/2014 I-II/2013 Power and Technology Heat, Electricity Sales and Solutions Russia Distribution , Other Total , Non-recurring items (mainly to the sale of the Finnish electricity distribution business), IFRS accounting treatment (IAS 39) of derivatives and nuclear fund adjustments had an impact on the reported operating profit EUR 41 (140) million in the second quarter and 1,897 (93) million in the first half year. 13 Note: The divested distribution operations are included in the segment information until the closing of the transactions.

14 Power and Technology Q Lower achieved power price average spot price EUR 13 per MWh lower, area prices EUR 5-7 per MWh lower Higher hydro production Nuclear volumes lower due to timing and length of annual maintenance outages 6/10 annual nuclear maintenance outages completed H Lower achieved power price average spot price EUR 12.5 per MWh lower, area prices EUR 6-10 per MWh lower Higher hydro production normalised hydro inflow and reservoir levels Nuclear availability high in all reactors expect Oskarshamn 2 MEUR II/2014 II/2013 I-II/2014 I-II/ LTM Sales ,072 1,213 2,252 2,111 Comparable operating profit Net assets 6,113 6,402 6,355 Comparable RONA % Gross investments

15 Heat, Electricity Sales and Solutions Q Divestments made in Finland in 2013 burdened CHP volumes (despite new capacity) Divestment of the Norwegian heat business completed H Exceptionally warm weather, and divestments made in Finland in 2013 burdened both CHP volumes (despite new capacity) and retail sales. Fortum Värme contributed associated company result with EUR 48 million. MEUR II/2014 II/2013 I-II/2014 I-II/ LTM Sales ,516 1,392 Comparable operating profit Net assets 2,176 2,287 2,295 Comparable RONA % Gross investments

16 Russia Q Comparable operating profit improved due to CSA capacity payments, better electricity and heat spreads and increased efficiency Reversal of provisions EUR 4 (10) included Overall, weakened rouble affected negatively approximately EUR 3 million H Positive effect from CSA capacity payments, better electricity and heat spreads, improved bad debt collections and increased efficiency Overall, weakened rouble affected negatively approximately EUR 17 million MEUR II/2014 II/2013 I-II/2014 I-II/ LTM Sales ,119 1,091 Comparable operating profit Net assets 3,870 3,793 3,846 Comparable RONA % Gross investments

17 Distribution Q Norwegian electricity networks sale finalised Volumes in Sweden in line with last year H Finnish and Norwegian electricity networks sale finalised Fortum continues evaluating the possible future divestment opportunity of the Swedish electricity distribution business MEUR II/2014 II/2013 I-II/2014 I-II/ LTM Sales , Comparable operating profit Net assets 2,642 3,742 3,745 Comparable RONA % Gross investments Note: The divested distribution operations are included in the segment information until the closing of the transactions 17

18 Income statement MEUR II/2014 II/2013 I-II/2014 I-II/ LTM Sales 1,016 1,205 2,489 2,858 5,309 4,940 Other income and expenses ,758 2,046 3,906 3,618 Comparable operating profit ,403 1,322 Items affecting comparability , ,910 Operating profit , ,508 3,232 Share of profit of associates and jv s Financial expenses, net Profit before taxes , ,398 3,146 Income tax expense Net profit for the period , ,212 2,996 Non-controlling interests EPS, basic (EUR) EPS, diluted (EUR)

19 Cash flow statement MEUR II/2014 II/2013 I-II/2014 I-II/ LTM Operating profit before depreciations ,909 1,196 2,129 3,842 Non-cash flow items and divesting activities , ,020 Financial items and fx gains/losses Taxes Funds from operations (FFO) ,469 1,725 Change in working capital Total net cash from operating activities , ,548 1,821 Paid capital expenditures , Divestments of shares * , ,924 Other investing activities Cash flow before financing activities , , * Including Proceeds from the interest-bearing receivables relating to divestments

20 Key ratios MEUR LTM 2013 EBITDA 3,843 2,129 Comparable EBITDA 1,892 1,975 Interest-bearing net debt 5,008 7,793 Comparable net debt/ebitda Return on capital employed, ROCE (%) Return on shareholders equity, ROE (%) Good liquidity committed credit lines total EUR 2.2 billion 20

21 Debt Maturity Profile Bonds Financial institutions Other long-term debt CPs Other short-term debt MEUR , , TOTAL 1,245 7,166 per 30 Jun, 2014 per 31 Dec, 2013 Average Interest Rate (incl. swaps and forwards) 4.0 % 3.6 % Portion of floating / fixed debt 39 / 61 % 51 / 49 % 21

22 Fortum's efficiency programme Efficiency programme proceeding according to plan Total annual cost savings visible in all divisions Improved working capital efficiency Divestments of non-core assets totalling approximately EUR 400 million WHY WHAT WHEN SPEED - Cash flow improved by EUR 1 billion FLEXIBILITY CAPEX EUR million WORKING CAPITAL Reduction DIVESTMENTS EUR 500 million FIXED COSTS Reduce EUR 150 million compared to

23 Outlook

24 Outlook Nordic markets Fortum continues to expect that the annual electricity demand growth will average 0.5% in the coming years Electricity is expected to continue to gain share of total energy consumption Russia The target for the Russia Segment in Russian roubles (RUB 18.2 billion) to be reached during 2015 is intact, but the euro result level will be volatile and with current exchanges rates lower than EUR 500 million Key drivers and risks Wholesale price of electricity and volumes demand and supply fuels hydrological situation power plant availability CO2 emissions allowance prices 24

25 Outlook Annual capex estimate excluding potential acquisitions 2014 EUR 0.9 to 1.1 billion (incl. Finnish distribution Q1/2014, Norway 1H/2014, excluding Fortum Värme) Hedging Rest of the year 2014 approx. 55% hedge ratio at approx. EUR 45/MWh 2015 approx. 30% hedge ratio at approx. EUR 41/MWh Target for efficiency programme is to improve cash flow by EUR 1 billion during Taxation Effective tax rate for the Group 19-21% In Finland, the power plant tax (so called windfall tax) has been revoked 25

26 For more information