Fortum reports Q1 gains with Uniper
Finnish state utility Fortum reported May 12 a strong Q1 2021 financial result relative to Q1 2020, reflecting the consolidation of Uniper as a subsidiary at the end of March 2020. In the last 12 months it has contributed €1bn to Fortum's operating profit. But all its segments recorded higher comparable operating profits than a year ago, said CEO Markus Rauramo.
Its operating profit of €1.35 ($1.63)bn was more than twice the €603mn in the same period of 2020. Net income of €1.31bn was up from €938mn.
|
Advertisement: The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business. |
Nordic power prices were much higher despite the persistently high hydro reservoir levels, and these drove the 14% increase in the comparable operating profit of the generation segment. The Russia segment improved slightly, thanks to the profitable sale of Fortum’s 116-MW solar power project to a partly-owned joint venture for renewable power. This profit offset most of the negative effects from the weaker Russian rouble.
As well as incorporating Uniper and installing its own people in key positions this spring, Fortum also reported favourable developments in the regulatory environment this year. European Union institutions agreed to tighten the 2030 climate target to a 55% reduction of greenhouse gas emissions and a goal of climate neutrality by 2050.
The bulk of its Nordic CO2-free hydropower is eligible for funding under the taxonomy, and although the eligibility of nuclear power and gas will be addressed separately in the summer, the European Commission's Joint Research Centre has concluded that nuclear power generation causes no more harm than other forms of power generation. This is a positive outcome for Fortum and it "expects the EC will respect the view of its own scientific body."
Regarding gas, Fortum said that it was glad the EC has "highlighted a clear transitional role for natural gas in reducing greenhouse gas emissions in the path towards climate neutrality and expect this role to be reflected in the upcoming legislation."
One possible risk hanging over Uniper is the financing it provided Gazprom for Nord Stream 2. There is a chance that the pipeline will not be allowed to operate at full capacity, even when it is completed, depending on the stance taken by European regulators.