Good generation optimisation in warm, wet and windy conditions in 2024
This release is a summary of Fortum's January-December 2024 Financial Statements Bulletin. The complete report is attached to this release as a PDF file. It is also available on the company's website at www.fortum.com/investors
October-December 2024
- Comparable EBITDA was EUR 355 (459) million.
- Comparable operating profit was EUR 257 (359) million.
- Operating profit was EUR 390 (376) million. Items affecting comparability included the tax-exempt capital gain of EUR 176 million from the divestment of the recycling and waste business.
- Comparable earnings per share were EUR 0.18 (0.35).
- Earnings per share were EUR 0.39 (0.45).
- Cash flow from operating activities totalled EUR 167 (149) million.
January-December 2024
- Comparable EBITDA was EUR 1,556 (1,903) million.
- Comparable operating profit was EUR 1,178 (1,544) million.
- Operating profit was EUR 1,325 (1,662) million. Items affecting comparability included the tax-exempt capital gain of EUR 176 million from the divestment of the recycling and waste business.
- Comparable earnings per share were EUR 1.00 (1.28).
- Earnings per share were EUR 1.30 (1.68).
- Cash flow from operating activities totalled EUR 1,392 (1,710) million.
- In the second quarter of 2024, Fortum recorded in the comparable operating profit a sales gain of EUR 16 million from the divestment of its remaining share of its Indian 185 MW solar power portfolio.
- In July, Fortum signed an agreement to sell its recycling and waste business for approximately EUR 800 million. In November, the divestment was completed and a tax-exempt gain of EUR 176 million was recorded. The net cash flow received was approximately EUR 720 million.
- Fortum's Board of Directors proposes a dividend of EUR 1.40 (1.15) per share and that the dividend will be paid in the second quarter.
Summary of outlook
- The Generation segment's estimated Nordic generation hedges: approximately 75% at EUR 42 per MWh for 2025 and approximately 45% at EUR 41 per MWh for 2026.
- The current annual outright portfolio amounts to approximately 47 TWh.
- Capital expenditure for 2025-2027, including maintenance but excluding acquisitions, is expected to be approximately EUR 1.4 billion of which annual growth capital expenditure is expected to be EUR 150-300 million and annual maintenance capital expenditure EUR 250 million.
Key figures, continuing operations
| EUR million or as indicated | IV/2024 | IV/2023 | 2024 | 2023 |
| Reported | ||||
| Sales | 1,435 | 1,858 | 5,800 | 6,711 |
| Operating profit | 390 | 376 | 1,325 | 1,662 |
| Share of profit of associates and joint ventures | -38 | 89 | 19 | 59 |
| Net profit | 338 | 413 | 1,160 | 1,515 |
| Net profit (after non-controlling interests) | 344 | 410 | 1,164 | 1,514 |
| Earnings per share, EUR | 0.39 | 0.45 | 1.30 | 1.68 |
| Net cash from operating activities | 167 | 149 | 1,392 | 1,710 |
| EUR million or as indicated | IV/2024 | IV/2023 | 2024 | 2023 |
| Comparable | ||||
| EBITDA | 355 | 459 | 1,556 | 1,903 |
| Operating profit | 257 | 359 | 1,178 | 1,544 |
| Share of profit of associates and joint ventures | -35 | 31 | -30 | 7 |
| Net profit (after non-controlling interests) | 169 | 317 | 900 | 1,150 |
| Earnings per share, EUR | 0.18 | 0.35 | 1.00 | 1.28 |
EUR million or as indicated | 2024 | 2023 |
| Financial position | ||
| Financial net debt (at period-end) | 367 | 942 |
| Financial net debt/comparable EBITDA | 0.2 | 0.5 |
Key figures, total of continuing and discontinued operations
Fortum's condensed consolidated income statement and consolidated cash flow statement include the Russia segment as discontinued operations in 2023.
| EUR million or as indicated | IV/2024 | IV/2023 | 2024 | 2023 |
| Reported | ||||
| Net profit (after non-controlling interests) | 344 | 410 | 1,164 | -2,069 |
| Earnings per share, EUR | 0.39 | 0.45 | 1.30 | -2.31 |
| Net cash from operating activities | 167 | 149 | 1,392 | 1,819 |
| Comparable | ||||
| Net profit (after non-controlling interests) | 169 | 317 | 900 | 1,184 |
| Earnings per share, EUR | 0.18 | 0.35 | 1.00 | 1.32 |
Fortum's President and CEO Markus Rauramo:
"For Fortum, 2024 was a year dedicated to focusing on our core businesses, optimising our best-in-class operations, divesting non-core operations, and implementing efficiency improvement actions. With these measures, among others, we are building the foundation of preparedness for our future growth. We continue to see robust underlying customer demand which we believe reflects the power demand growth longer term. Our goal is to be ready for the growth phase while ensuring strong financial performance, even in a turbulent operating environment.
In 2024, the power market was characterised by volatile but lower power prices compared to the previous year. The cold start to 2024 gave the Nordic spot price a strong beginning to the year, particularly in Finland, with extreme hourly price spikes reaching close to 1,900 EUR/MWh during the first quarter. However, after the first quarter, the high share of onshore wind power and high hydro inflows pressured the Nordic spot prices until the end of the year. In the fourth quarter, Nordic spot prices were lower than a year ago due to the significantly higher reservoir levels, increased renewable power output and warm weather. This was partly offset by the ongoing recovery in Nordic power demand, especially as non-industrial demand increased in 2024.
The lower Nordic spot power prices were reflected especially in our Generation segment's financial results throughout the year. However, due to our versatile and competitive CO2-free fleet, our achieved power price reached a good level in 2024 through successful hedging and physical optimisation. In the fourth quarter, the Generation segment's comparable operating profit declined due to lower hydro and nuclear volumes and lower spot and hedge prices. The result improved in the Consumer Solutions and Other Operations segments both in the fourth quarter and for the full-year 2024.
Supported by the divestment of our recycling and waste business, our financial position continues to be strong with very low leverage of 0.2 times and we continued to have sufficient liquidity and credit line buffers at the end of the year. During 2024, we were happy to have S&P Global Ratings upgrade our long-term credit rating to BBB+ with Stable Outlook and Fitch Ratings affirm our long-term rating of BBB with Stable Outlook. We also introduced our Green Finance Framework and signed our first green loan in June.
Based on our Group results and strong financial position, Fortum's Board of Directors is proposing to the Annual General Meeting a dividend of EUR 1.40 per share comprising EUR 0.90 corresponding to a 90% payout of comparable EPS and a special dividend of EUR 0.50. In Fortum's dividend policy, the payout ratio is 60-90% of the Group's comparable EPS. In situations with strong balance sheet and low investments, Fortum applies the upper end of the range of the payout ratio. Through the proposed special dividend Fortum activates its balance sheet and rectifies its current very strong liquidity position. Adding the proposed dividend payment to the net debt-to-comparable EBITDA at the end of 2024, it would be above 1.0 time.
In February 2024, we clarified our strategic focus and targets in response to the changed operating environment. At the core of our strategy is our commitment to the clean transition. Throughout 2024, we worked on our science-based climate targets to have them validated by the international Science Based Targets initiative (SBTi). In January 2025, we were excited to introduce our ambitious SBTi-verified targets, which include net-zero greenhouse gas emissions across our value chain by 2040 and an 85% reduction in scope 1 and 2 emissions by 2030. Our coal exit target by the end of 2027, as well as our targets for specific emissions and biodiversity, remain unchanged.
Regarding our strategic key performance indicators (KPIs) set in 2024, our optimisation premium reached 8.7 EUR/MWh in 2024, thus slightly exceeding our annual target of 6-8 EUR/MWh. We met our long-term hydro availability KPI but fell short of our long-term nuclear availability target due to unplanned and extended outages during the year. We are on track to reach our targets for the hedged share of our rolling 10-year outright generation volume and the ready-to-build pipeline for solar and onshore wind. Regarding the latter, we have an approximately 5-GW pipeline of onshore wind and solar projects in the permit process across the Nordic countries, with more in early development. The pipeline includes the development portfolio acquisition announced in December 2024.
On our strategic priority to deliver reliable and clean energy, in 2024 we focused on our core operations for power generation and advanced several significant projects to better meet the needs of the system, society and our customers. At the Loviisa nuclear power plant, the lifetime extension until 2050 progressed well with our decisions to modernise the low-pressure turbines and renew the main seawater pumps. We also reached an important milestone in securing a reliable Western alternative for our nuclear fuel supply as we loaded the first batch of Westinghouse fuel to Loviisa in August. The Espoo Clean Heat programme is making significant progress at the Espoo and Kirkkonummi sites with future waste heat offtake from the upcoming Microsoft data centres and at the electricity-based plant in Nuijala, Espoo. As part of the programme, we closed down our last coal-fired unit used for district heat production in Finland, one year ahead of schedule. In our renewables business, our Pjelax wind farm, the third largest in Finland, was fully commissioned in the second quarter and began its commercial operations through the power purchase agreement (PPA) with Finnish Helen at the beginning of July. In the fourth quarter, we made the decision to invest EUR 100 million in decarbonisation of our Czestochowa CHP plant in Poland.
On our strategic priority to drive decarbonisation in industries, we started to develop several potential sites across Finland that can be offered to our customers for data centre or industrial use. On one of these sites, in Rauma, we started to develop a site for a sustainable synthetic aviation fuel (eSAF) plant together with Norsk e-Fuel and Port of Rauma. In the fourth quarter, we took on the role as energy partner to support a feasibility study exploring low-carbon aluminium manufacturing opportunities in Kokkola and Kruunupyy, Finland. The facility, if realised, would consume approximately 7 TWh of electricity annually. Additionally, we began to build a 2-MW hydrogen pilot production plant in Loviisa.
Within the scope of our strategic priority to transform and develop, we continued our efficiency improvement programme with the target to gradually lower annual fixed costs by EUR 100 million (excluding inflation) by the end of 2025 with a full run-rate from the beginning of 2026. In 2024, we reduced our recurring fixed cost base by more than EUR 60 million. Simultaneously, we have taken actions with fixed cost effects to build our preparedness for future growth, such as the renewables development and site development. Also, the strategic review of the Circular Solutions' businesses progressed well during 2024. The recycling and waste business, the turbine and generator services and the biobased solutions business were divested. The total consideration for the sale of the recycling and waste business amounted to approximately EUR 800 million, and Fortum recorded a tax-exempt capital gain of EUR 176 million in the fourth quarter. In addition, Fortum successfully divested its stake in the 185-MW solar portfolio in India in the second quarter.
There have been public discussions about possible new nuclear projects both in Sweden and Finland. At Fortum, we see that the electrification of industry and transport, as well as new clean industrial investments, require a balance of different types of power and predictability in the coming decades. As the share of production with intermittent renewables increases, hydro power has a vital role in balancing the energy system in the Nordics. A flexible system, however, needs a stable foundation, which nuclear power provides. Fortum is concluding its two-year feasibility study to explore prerequisites for new nuclear power in the near term. Regarding the economic conditions for new nuclear, we have previously noted that the current energy prices in the Nordics do not facilitate profitable investments without societal participation. At Fortum, we consider it positive that the Swedish and Finnish governments are investigating financing and electricity market mechanisms for new nuclear power projects. However, we are still far from making any potential investment decisions. As announced today, we are starting a feasibility study to explore possibilities for flexible pumped-storage hydro power in Sweden to provide much needed flexible balancing power.
In conclusion, I would like to express my gratitude to all our employees for their dedication and hard work throughout the year. I also extend my thanks to our customers, partners, shareholders and other stakeholders for their continued trust in us as we strive to power a world where people, businesses and nature thrive together."
Dividend distribution proposal
The Board of Directors proposes that a dividend of EUR 1.40 per share be paid for the financial year 2024. The proposed dividend of EUR 1.40 per share comprises EUR 0.90 which corresponds to 90% payout of the Group's comparable earnings per share (EPS) of EUR 1.00 and EUR 0.50 as a special dividend.
In Fortum's dividend policy, the payout ratio is 60-90% of the Group's comparable EPS. In situations with strong balance sheet and low investments, Fortum applies the upper end of the range of the payout ratio. Through the proposed special dividend Fortum activates its balance sheet and rectifies its current very strong liquidity position.
Based on the number of shares registered as at 10 February 2025, the total amount of dividend would be EUR 1,256,170,251.
The dividend would be paid to shareholders who on the record date of the dividend payment 3 April 2025 are recorded in the Company's shareholders' register held by Euroclear Finland Oy. The Board of Directors proposes that the dividend be paid on 10 April 2025.
Espoo 10 February 2025
Fortum Corporation
Board of Directors
Webcast/teleconference
A combined live webcast/teleconference for investors, analysts and media will be arranged online on 11 February at 11:00 EET on Fortum's web site at https://fortum.videosync.fi/q4-2024.
To ask questions, please join the teleconference by registering using the following link: https://palvelu.flik.fi/teleconference/?id=50050243
After the registration you will be provided with phone numbers and a conference ID to access the conference. To ask a question, please press *5 on your telephone keypad to enter the queue.
A recording of the webcast, as well as the transcript will be published after the event at www.fortum.com/investors.
Further information:
Investor Relations and Financial Communications: Ingela Ulfves, tel. +358 40 515 1531, Rauno Tiihonen, tel. +358 10 453 6150, Siri Markula, tel. +358 40 743 2177, Pirjo Lifländer, tel. +358 40 643 3317, and investors@fortum.com
Media: Fortum News Desk, tel.?+358 40 198 2843
Financial calendar
The Financial Statements and Operating and Financial Review for 2024 will be published during week 8, starting on 17 February 2025, at the latest.
Fortum will publish three interim reports in 2025:
- January-March Interim Report on 29 April 2025 at approximately 9.00 EEST.
- January-June Half-year Financial Report on 15 August 2025 at approximately 9.00 EEST.
- January-September Interim Report on 29 October 2025 at approximately 9.00 EET.
The Annual General Meeting 2025 of Fortum Corporation is planned to be held on 1 April 2025. The Board of Directors will summon the Annual General Meeting at a later date.
Distribution:
Nasdaq Helsinki
Key media
www.fortum.com
Fortum
Fortum is a Nordic energy company. We generate and deliver reliable energy to our customers and the Nordic energy system while at the same time helping industries decarbonise their processes and grow. Our core operations comprise of efficient and best-in-class low-carbon power generation, customer services, and heating and cooling. Fortum's power generation is already 99% from renewable or nuclear sources with one the lowest specific CO2-emissions in Europe. We are guided by our ambitious SBTi-validated emission reduction targets on our way towards net-zero by 2040. For our ~4,500 employees, we commit to be a safe and inspiring workplace. Fortum's share is listed on Nasdaq Helsinki. fortum.com
