Fortum turns back to Nordic power generation after German foray

By Anne Kauranen

HELSINKI (Reuters) -Finnish utility Fortum on Thursday said it would focus on Nordic low-carbon energy again, after its five-year-long conquest of Germany's Uniper ended last year with a loss of nearly 6 billion euros ($6.38 billion) for it.

Fortum is recovering from a tumultuous year during which Russia's invasion of Ukraine sent gas prices soaring in Europe and forced Germany to nationalise its subsidiary Uniper.

It posted a bigger-than-expected rise in October to December profits on the back of high power prices after its first quarter as a stand-alone company since deconsolidating Uniper.

Fortum said its business is now fully stabilised and that its new strategy was to focus on Nordic hydro, wind and nuclear power generation which drove a strong financial performance for it in the fourth quarter.

"With our energy we help our customers to decarbonise their processes and societies to reach carbon neutrality in balance with nature," Fortum's Chief Executive Markus Rauramo said in a statement.

In the fourth quarter the company benefited from high power prices in the Nordics and its comparable operating profit rose to 744 million euros ($792 million) from 519 million a year ago, beating the 611.9 million euro mean estimate in a company-provided poll.

Yet it made an operating loss of 653 million euros when factoring in pre-tax impairments of 990 million euros announced in February from its Russian assets, which it is trying to divest, so far without success.

Fortum still has seven thermal power plants in Russia as well as joint ventures in wind and solar plants, which the company left out from its new strategy despite counting them to have a total value of 1.7 billion euros after the latest impairments.

"The divestment process has progressed and is still ongoing, but any major divestment in the Russian energy sector requires approval by the Russian Government Commission and the President", Rauramo said.

Fortum's board proposed a dividend of 0.91 euros per share, to be paid in two instalments.

($1 = 0.9398 euros)

(Reporting by Anne Kauranen; Editing by Essi Lehto, Terje Solsvik and Jan Harvey)