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Fortum to have a one-time negative impact on 4Q15 net profit

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World Coal,

Fortum has reported it will have a one-time negative impact of approximately €110 million on its 4Q15 net profit as a result of impairments and provisions.

The impact before taxes will mainly be included in the items affecting comparability of the power and technology segment.

The one-time items largely due to Fortum’s two coal-fired power plants in Finland: Inkoo power plant and Meri-Pori power plant. The demand for coal condensing power in the Nordic power market has decreased as a result of the drop in the wholesale price for electricity.

Fortum is booking a provision for the dismantling of the Inkoo coal-fired power plant and starting preparations for permanent dismantling. The Inkoo operations were ceased in February 2014 and assets written down in 2013.

The company is also making an impairment loss for Fortum’s share of Meri-Pori assets.

The negative impact to net profit also includes an additional write-down based on information received during the fourth quarter regarding the closure of the units 1 and 2 in Oskarshamn nuclear power plant in Sweden.

In addition, Fortum’s 4Q15 will include approximately €75 million negative effect to net profit related to derivatives mainly hedging Fortum’s future power production, which do not get hedge accounting status according to IFRS (IAS 39).

Edited from press release by Harleigh Hobbs

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