Versorgungsunternehmen Finnland

High power forward prices at year-end 2010 cause mark-to-market valuation of electricity derivatives to decrease Fortum's Q4/2010 earnings per share - no impact on cash flow or comparable operating profit
18.1.2011 8:30


Fortum Corporation, Press Release, 2011-01-18 07:30 CET (GLOBE NEWSWIRE) -- According to preliminary information, Fortum's operating profit for the fourth quarter 2010 is affected more than usually by the IFRS accounting treatment (IAS 39) of derivatives used for hedging Fortum's power production. The effect on the October-December 2010 earnings per share is EUR -0.18. The decrease is based on IFRS requirements on mark-to-market accounting of Fortum’s hedging portfolio. The effect does not have an impact on Fortum's cash flow or comparable operating profit.

During the fourth quarter 2010, power forward price for the first quarter of 2011 in Nord Pool increased from EUR 51 per megawatt-hour (MWh) at the beginning of the quarter to EUR 84 per MWh at year-end. Most of the increase, EUR 22 per MWh, took place during December. Also the full-year 2011 forward price increased significantly during December.

The effect has reversed to a large extent during the first weeks of 2011, driven by a rapid decline of especially 2011 Nord Pool forward prices. During January, for example, the February 2011 forward price has decreased to EUR 63 per MWh.