Fortum profit up on Uniper, power unit lags

By Essi Lehto and Tarmo Virki

HELSINKI (Reuters) - Fortum on Friday reported a jump in fourth-quarter profit helped by German subsidiary Uniper but its core power generation business missed forecasts, knocking shares in Finland's biggest utility.

Comparable operating profit rose to 928 million euros ($1.11 billion) from 398 million a year earlier, beating the 864 million expected by analysts, Refinitiv Eikon data showed.

"When taking into account that Uniper's result was better than expected, the operating result of 'the old Fortum' was a slight disappointment," said Inderes analyst Juha Kinnunen.

Its power generation unit reported a fall in operating profit to 177 million euros from 239 million a year earlier reflecting low power prices and low nuclear volumes and missing the 198 million expected by analysts in a poll provided by the company.

Revenue beat analysts expectations, growing almost 14-fold from a year earlier to 21.3 billion euros as Fortum incorporated Uniper's results after raising its shareholding to around 76% from 49.99% a year earlier.

"As a result of the strong hedging and optimisation in the power and gas business, the fourth-quarter 2020 results of the Uniper segment significantly contributed to Fortum's comparable operating profit," CEO Markus Rauramo said.

Separately, Fortum said it has agreed to sell its district heating business in the Baltics and serving 5 towns to Partners Group, valuing the business at 800 million euros, and booking a 240 million euro gain.

In 2020, Fortum's sales in the Baltics totalled 1.4 TWh of heat and 0.6 TWh of power with earnings before interest, tax, depreciation and amortisation (EBITDA) of 54 million euros, including substantial subsidies.

"For the year 2021, the focus will be on strategy execution, further deepening the cooperation with Uniper, and delivering on the collaboration benefits identified thus far with Uniper," Rauramo said in the statement.

($1 = 0.8370 euros)

(Reporting by Tarmo Virki and Essi Lehto; editing by Edmund Blair and Jason Neely)