Fortum reports decline in operating profit for first half of 2015
Low electricity prices in the Nordic market impacted Fortum's six-month results, with comparable operating profit falling 14% to 486 million euros.
Fortum recorded a comparable operating profit of 486 million euros for the first six months of 2015, representing a 14% decrease compared to the same period in 2014. During the second quarter alone, the comparable operating profit fell by 32% to 143 million euros as weak electricity prices continued to burden earnings.
Interim CEO Timo Karttinen attributed the results to a combination of market pricing pressures and unusual weather patterns. High precipitation levels and delayed snowmelt increased hydro production, which contributed to depressed spot prices in the Nordic region, at times falling below 10 euros per megawatt-hour.
While operating profit for continuing operations declined, the company's total earnings per share saw a significant boost due to the divestment of its Swedish electricity distribution business. This transaction generated a one-time sales gain of approximately 4.3 billion euros, significantly affecting the bottom line for the total group.
Looking ahead, Fortum anticipates a 0.5% annual growth in electricity demand in the Nordic countries. The company is set to undergo a leadership transition, with Pekka Lundmark scheduled to take over as President and CEO in September 2015.