Financial results

January-March

In the first quarter of 2012, Group sales were EUR 1,901 (2,034) million. Group operating profit totalled EUR 736 (900) million. Fortum's operating profit for the period was affected by a EUR -16 (173) million IFRS accounting treatment (IAS 39) of derivatives mainly used for hedging Fortum's power production. The comparable operating profit, which was not impacted by the accounting treatment, totalled EUR 651 (649) million.

Non-recurring items, mark-to-market effects and nuclear fund adjustments amounted to EUR 85 (251) million, of which EUR -16 (173) million was attributed to changes in fair values of derivatives to hedge future cash flow. Non-recurring items totalled EUR 110 (82) million, which mainly relates to the divestment of shares in power and heat operations (Note 4).

 

Sales by division        
EUR million I/12 I/11 2011 LTM
Power 655 693 2,481 2,443
Heat 625 725 1,737 1,637
Russia 310 295 920 935
Distribution* 308 311 973 970
Electricity Sales* 247 373 900 774
Other 44 30 108 122
Netting of Nord Pool transactions -188 -366 -749 -571
Eliminations -100 -27 -209 -282
Total 1,901 2,034 6,161 6,028
* Part of the Electricity Solutions and Distribution Division        
         
Comparable operating profit by division        
EUR million I/12 I/11 2011 LTM
Power 341 325 1,201 1,217
Heat 161 171 278 268
Russia 48 34 74 88
Distribution* 110 124 295 281
Electricity Sales* 9 11 27 25
Other -18 -16 -73 -75
Total 651 649 1,802 1,804
* Part of the Electricity Solutions and Distribution Division        
         
Operating profit by division        
EUR million I/12 I/11 2011 LTM
Power 367 489 1,476 1,354
Heat 213 265 380 328
Russia 48 34 74 88
Distribution* 117 125 478 470
Electricity Sales* 11 -20 3 34
Other -20 7 -9 -36
Total 736 900 2,402 2,238
* Part of the Electricity Solutions and Distribution Division        

The share of profits of associates and joint ventures was EUR -7 (59) million. The Russian territorial generating company 1 (TGC-1) and Hafslund ASA contributed to the positive figure in the first quarter of 2011. TGC-1 is not included in the first-quarter results as TGC-1 has not published its 2011 IFRS Financial Statements.

The Group’s net financial expenses increased to EUR 76 (55) million. The increase is attributable to higher interest expenses, mainly due to higher SEK interest rates and to higher average net debt. Net financial expenses were negatively affected by changes in the fair value of financial instruments of EUR 7 (1) million.

Profit before taxes was EUR 653 (904) million.

Taxes for the period totalled EUR 119 (158) million. The tax rate according to the income statement was 18.3% (17.5). The tax rate excluding the impact of share of profits of associated companies and joint ventures as well as non-taxable capital gains was 21.0% (20.8). In Finland, the corporate tax rate was decreased to 24.5% from 26%, effective 1 January 2012.

The profit for the period was EUR 534 (746) million. Fortum's earnings per share were EUR 0.56 (0.76). The effect on earnings per share by the accounting treatment of derivatives was EUR -0.01 (0.14).

Non-controlling (minority) interests amounted to EUR 39 (68) million. These are mainly attributable to Fortum Värme Holding AB, in which the city of Stockholm has a 50% economic interest. The decrease compared to last year is mainly due to the minority's share, EUR 32 million, of the gain recognised in the first quarter 2011 from the divestment of Fortum Värme’s heat businesses outside the Stockholm area.