Fortum Launches Efficiency Program, Cuts Costs by EUR 100 Million
Fortum Oyj is initiating an efficiency program targeting a EUR 100 million reduction in annual fixed costs by the end of 2025. The company also updated its capital expenditure guidance for 2023-2025.
Finnish energy company Fortum Oyj has launched a comprehensive efficiency program aimed at reducing annual fixed costs by EUR 100 million by the end of 2025. This reduction represents approximately 10% of the Group's fixed costs from 2022.
The program involves strategic prioritization, resource assessment, and turnaround actions for underperforming businesses. The company anticipates that personnel reductions will be part of the measures to achieve the cost savings. These actions are designed to improve profitability and ensure competitiveness amidst a challenging economic environment characterized by high inflation and interest rates.
Fortum has also revised its capital expenditure outlook for 2023-2025 as part of this initiative. Capital expenditure for 2023 is now expected to be approximately EUR 650 million (previously EUR 700 million), and for 2024, it is projected at EUR 550 million. Growth capital expenditure (excluding acquisitions) for the 2023-2025 period has been capped at EUR 1 billion, down from the previous guidance of EUR 1.5 billion.
President and CEO Markus Rauramo stated that the current operating environment is challenging and requires adaptation to the company's new, smaller structure. The focus is on efficiency, cost-cutting, and restructuring to prepare Fortum for increased demand in the future.