Financial outlook

From Half-year 2020 Financial Report


At the end of June 2020, approximately 85% of the Generation segment’s estimated Nordic power sales volume was hedged at EUR 34 per MWh for the remainder of 2020 and approximately 65% at EUR 33 per MWh for 2021 (at the end of the first quarter of 2020: 50% at EUR 34 per MWh).

At the end of June 2020, approximately 90% of the Uniper segment’s estimated Nordic power sales volume was hedged at EUR 29 per MWh for the remainder of 2020, approximately 80% at EUR 27 per MWh for 2021 (at the end of the first quarter of 2020: 70% at EUR 28 per MWh), and approximately 40% at EUR 24 per MWh for 2022 (at the end of the first quarter of 2020: 15% at EUR 23 per MWh).

The reported hedge ratios are based on the hedges and power generation forecasts of the Generation segment and of Uniper’s Nordic generation. The underlying generation assets and definition of hedges differ to some extent and thus are not fully comparable.

The reported hedge ratios may vary significantly, depending on Fortum’s and Uniper’s actions on the electricity derivatives markets. Hedges are mainly financial contracts, most of them electricity derivatives quoted on Nasdaq Commodities.

Capital expenditure

Fortum currently estimates its capital expenditure, including maintenance but excluding acquisitions, to be approximately EUR 700 million in 2020. This includes approximately EUR 200 million of solar and wind investments, which are subject to the capital recycling business model. The maintenance capital expenditure in 2020 is estimated to be approximately EUR 300 million, well below the level of depreciation. This guidance does not include capital expenditure for the Uniper segment.

Fortum and Uniper share the view of the importance of credit rating and take it into account when making new decisions on capital expenditures.


The Generation segment’s achieved Nordic power price typically depends on factors such as hedge ratios, hedge prices, spot prices, availability and utilisation of Fortum’s flexible generation portfolio, as well as currency fluctuations. Excluding the potential effects from changes in the power generation mix, a 1 EUR/MWh change in the Generation segment’s achieved Nordic power price will result in an approximately EUR 45 million change in Fortum’s annual comparable operating profit. The achieved power price also includes the results of optimisation of Fortum’s hydro and nuclear generation, as well as operations in the physical and financial commodity markets.

The Swedish hydropower real-estate tax decreased from 1.0% to 0.5% in January 2020. In 2019, the tax amounted to EUR 40 million and is expected to be approximately EUR 25 million in 2020.

City Solutions

The development of Fortum Oslo Varme’s business operations is estimated to require one-time integration-related costs and investments over the coming years. The cost synergies materialised gradually during 2019, with targeted annual synergies of EUR 5‑10 million expected to be achieved by the end of 2020.

Uniper guidance

With regard to Uniper, reference is made to the guidance that the company publishes quarterly.

Income taxation

In 2020, the comparable effective corporate income tax rate for Fortum is estimated to be in the range 20-25%, as Uniper is consolidated into Fortum’s results from the end of the first quarter. The wider range is mainly a consequence of volatility in the taxation of Uniper’s operations.

In June 2018, the Swedish Government decided to lower the Swedish corporate tax in two steps, from 22.0% to 21.4%, effective January 2019, and to 20.6%, effective January 2021.