Financial position and cash flow

Cash flow

In the first quarter of 2012, total net cash from operating activities increased by 22% to EUR 553 (454) million. The major part of the increase was attributable to lower foreign exchange losses in cash flow, EUR 170 million, and the lower taxes paid, EUR 36 million, which was offset by the EUR -113 million increase in working capital. The foreign exchange gains and losses relate to the rollover of foreign exchange contracts hedging loans to Fortum’s Swedish subsidiaries. Capital expenditures in cash flow increased by EUR 66 million to EUR 272 (206) million. Acquisitions of shares totalled EUR 0 (19) million. Proceeds from divestments totalled EUR 276 (207) million in cash flow. Cash flow before financing activities, i.e. dividend distributions and financing, increased by EUR 97 million to EUR 536 (439) million.

After the reporting period, dividends amounting to EUR 888 million were paid on 23 April 2012 using the cash and cash equivalents Fortum had on 31 March and amounting to EUR 1 574 million.  

Assets and capital employed

Total assets increased by EUR 1,121 million to EUR 24,119 (22,998 at year-end 2011) million. Non-current assets increased by EUR 392 million from EUR 20,210 million to EUR 20,602 million. The majority, EUR 307 million, came from the increased value of property, plant and equipment, mainly due to the strengthening Russian rouble and other currencies. The increase in current assets was EUR 729 million, totalling EUR 3,517 million. The major part of the increase relates to the higher amount of cash and cash equivalents, EUR 843 million, offset by the EUR 183 million decrease in assets held for sale. The higher amount of cash was reserved for dividend payment amounting to EUR 888 million of 23 April 2012.

Capital employed was EUR 19,016 (17,931 at year-end 2011) million, an increase of EUR 1,085 million. The increase was due to the higher amount of total assets, totalling EUR 1,121 million and the minor decrease in interest-free liabilities totalling EUR 36 million. (These interim financial statements do not reflect the dividend paid in April).

Equity

Total equity was EUR 10,919 (10,161 at year-end 2011) million, of which equity attributable to owners of the parent company totalled EUR 10,346 (9,632 at year-end 2011) million and non-controlling interests EUR 573 (529 at year-end 2011) million. The increase in equity attributable to owners of the parent company totalled EUR 714 million and arose mainly from net profit for the period, amounting to EUR 495 million and from the translation differences mainly relating to Russian rouble totalling EUR 207 million.

Financing

Net debt decreased during the first quarter of 2012 by EUR 500 million to EUR 6,523 (7,023 at year-end 2011) million.

At the end of March 2012, the Group’s liquid funds totalled EUR 1,574 (747 at year-end 2011) million. Liquid funds include cash and bank deposits held by OAO Fortum amounting to EUR 249 (211 at year-end 2011) million. In addition to the liquid funds, Fortum had access to approximately EUR 2.7 billion of undrawn committed credit facilities.

The Group's net financial expenses in the first quarter of 2012 were EUR 76 (55) million. The increase in financial expenses is mainly attributable to higher market interest rates and higher average net debt during the quarter. Net financial expenses also include changes in the fair value of financial instruments of EUR -7 (-1) million.

Fortum Corporation's long-term credit rating from S&P and from Moody’s remained unchanged, A (negative) and A2 (stable), respectively.

Key figures

For the last twelve months net debt to EBITDA was 2.3 (2.3 at year-end 2011) and comparable net debt to EBITDA 2.7 (3.0 at year-end 2011). Gearing was 60% (69% at year-end 2011) and the equity-to-assets ratio 45% (44% at year-end 2011). For the last twelve months, return on capital employed was 12.8% (14.8% at year-end 2011) and return on equity 16.7% (19.7% at year-end 2011). Equity per share was EUR 11.65 (10.84 at year-end 2011).