Interim Report January-March 2016 - Fortum...Interim Report January-March 2016 Fortum Corporation 28...
Transcript of Interim Report January-March 2016 - Fortum...Interim Report January-March 2016 Fortum Corporation 28...
Interim Report January-March 2016 Fortum Corporation
28 April 2016
2
Disclaimer
This presentation does not constitute an invitation to underwrite, subscribe for,
or otherwise acquire or dispose of any Fortum shares
Past performance is no guide to future performance, and persons needing
advice should consult an independent financial adviser
Q1/2016: Satisfactory results, considering continuously weak power prices
3
Key figures (MEUR), continuing operations I/2016 I/2015 2015 LTM
Sales 989 1,040 3,459 3,408
Comparable EBITDA 357 396 1,102 1,063
Operating profit 369 350 -150 -131
Comparable operating profit 275 343 808 740
Profit before taxes 390 350 -305 -265
Earnings per share, EUR 0.37 0.33 -0.26 -0.22
Net cash from operating activities 375 516 1,228 1,087
Summary of the first quarter of 2016
– The key factor currently influencing Fortum’s business performance is the low wholesale price of
electricity
– Highest ever first quarter hydro volumes 6.6 TWh • Nordic hydrological conditions were close to normal at the end of the first quarter of 2016, as the snow level was
below historical average
– The availability in nuclear was very good; utilisation rates were high in all our nuclear power plants
both in Finland and Sweden, 99% in average
– The multi-year investment programme in Russia was completed
– Continuing optimisation of our current fleet we sold the 665-MW Tobolsk CHP plant in Russia
– Fortum acquired the Polish electricity and gas sales company Grupa DUON S.A.
– We launched our new vision, strategic cornerstones as well as updated our financial targets. In
addition, we reorganised our business structure; and our new Executive Management Team has
been in place as of 1 April
4
Acquisition of the electricity and gas sales company Duon
• One of the leading independent providers of electricity
and natural gas in Poland
• A leading distributor and transporter of LNG
• A high-growth company
• Revenues in 2015: EUR 206 million
• EBITDA in 2015: EUR 10 million
5
Market conditions in the first quarter of 2016
6
Nordic countries
− Power consumption in the Nordic countries was higher than in Q1/2015 and
totalled 117 (110) TWh
− The average system spot price was EUR 24.0 (28.1) per MWh
• Higher hydro power production and a lower marginal cost of coal condense
− The average area price in Finland was EUR 30.4 (32.1) per MWh and in
Sweden (SE3 ) EUR 24.1 (28.6) per MWh
• Finnish prices were somewhat higher during the beginning of the quarter, but
decreased as a result of the opening of the Sweden-Lithuania power cable and
mild weather during the latter part of the quarter
Russia
− Power consumption in Fortum’s operating area in Russia was marginally
higher than in Q1/2015 and totalled 212 (211) TWh
− Electricity spot price (in RUB) in the Urals hub decreased by 3% compared to
Q1/2015
Nordic water reservoirs
7
Source: Nord Pool
Q1 Q2 Q3 Q4
20
40
60
80
100
120
rese
rvo
ir c
on
ten
t (T
Wh)
0
2000 2003 2015 2014 reference level 2016
Wholesale price for electricity
8
Source: Nord Pool, Nasdaq Commodities
EUR/MWh Nord Pool System Price Forwards
25 April 2016
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 0
10
20
30
40
50
60
70
80
90
100
110
Price development in the Nordic region and Russia
9
Includes capacity income
-15%
-19% -5%
-3%
Comparable and reported operating profit
I/2016 I/2015 I/2016 I/2015
Power and Technology 153 203 209 203
Heat, Electricity Sales and Solutions 56 58 61 64
Russia 79 97 111 98
Other -13 -15 -12 -15
Total, continuing operations 275 343 369 350
Discontinued operations - 82 - 81
Total, Fortum 275 425 369 431
10
Comparable
operating profit
Reported
operating profit MEUR
Fortum’s first quarter 2016 operating profit was impacted by items affecting comparability EUR 94 (7) million
including sales gains EUR 44 (7) million as well as fair value changes in derivatives and nuclear fund
adjustments EUR 50 (0) million.
Q1: Lower Nordic power prices
11
Comparable operating profit, EUR million
• 7 EUR/MWh lower achieved price
• 0.9 TWh higher volumes
• 27 million higher CSA provision release in 2015
• Weakened russian rouble EUR -11 million
• Lower volumes mainly due to sale of Tobolsk
Income statement
MEUR I/2016 I/2015 2015 LTM
Sales 989 1,040 3,459 3,408
Other income and expenses -714 -697 -2,651 -2,668
Comparable operating profit 275 343 808 740
Items affecting comparability 94 7 -958 -871
Operating profit 369 350 -150 -131
Share of profit of associates and jv’s 67 58 20 29
Financial expenses, net -47 -57 -175 -165
Profit before taxes 390 350 -305 -265
Income tax expense -59 -55 78 74
Net profit, continuing operations 331 295 -228 -192
Net profit, discontinued operations - 63 4,369 4,306
Net profit, Fortum total 331 358 4,142 4,115
EPS, basic (EUR), continuing operations 0.37 0.33 -0.26 -0.22
EPS, basic (EUR), discontinued operations - 0.07 4.92 -
EPS, basic (EUR), Fortum Total 0.37 0.40 4.66 4.63
12
Cash flow statement
MEUR I/2016 I/2015 2015 LTM
Cash from operating activities:
Realised FX gains/losses 128 168 292 252
Other funds from operations 218 314 907 811
Change in working capital 29 34 29 24
Cash from operating activities, cont. operations 375 516 1,228 1,087
Cash from operating activities, discontinued operations 87 154 67
Cash from operating activities, total Fortum 375 603 1,381 1,153
Cash used in investing activities:
Paid capital expenditures -113 -101 -527 -539
Proceeds from divestments 44 36 55 63
Other investment activities -310 19 437 108
Total investing activities, continuing operations -379 -46 -35 -368
Total investing activities, discontinued operations
-43 6,303 6,346
Cash used in investing activities, total Fortum
-379 -89 6,268 5,978
Cash flow before financing activities, total Fortum -4 514 7,650 7,132
13
Debt portfolio and average interest rate at the balance sheet date March 31, 2016
1) In addition Fortum has received EUR 202 million based on Credit Support Annex agreements with several counterparties. This amount has been booked as a short term liability.
• Total interest-bearing debt
EUR 6,070 million
– Average interest 3.5%
(2015: 3.7%)
– Portfolio mainly in EUR and
SEK with average interest cost
2.4% (2015: 2.6%)
– EUR 677 million (2015: 641)
swapped to RUB, average
interest cost including cost for
hedging 12.7%
(2015: 12.8%)
0
250
500
750
1000
1250
1500
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026+
Bonds Financial institutions Other long-term debt Other short-term debt
Maturity profile
1)
Fortum has a strong financial position
MEUR LTM 2015
Comparable EBITDA, continuing operations 1,063 1,102
Comparable EBITDA, total Fortum 1,114 1,265
Interest-bearing net debt, total Fortum -2,158 -2,195
Comparable net debt/EBITDA, total Fortum -1.9 -1.7
ROCE % Return on capital employed, total Fortum 22.5 22.7
15
Liquid funds totalled EUR 8.2 billion
Committed credit lines total EUR 2.2 billion
Outlook
16
Nordic markets
• Fortum continues to expect that the annual electricity demand growth will be
approximately 0.5% on average in the coming years
• Electricity is expected to continue to gain share of total energy consumption
Russia
• The targeted operating profit (EBIT) level of RUB 18.2 billion in the Russia
segment is targeted to be reached during 2017-2018
Annual capex estimate, excluding potential acquisitions
• 2016 approximately EUR 650 million (maintenance capex approximately
EUR 300-350 million)
Hedging
• 2016 approx. 60% hedge ratio at approx. EUR 30/MWh
• 2017 approx. 30% hedge ratio at approx. EUR 28/MWh
Taxation
• Effective tax rate for 2016 for the Group 19-21%
For further information: www.fortum.com/investors