Finnish energy provider Fortum has reported a strong Q1 2007, with pretax profit up 34% over the same period in 2006 to E661 million, and comparable operating profit up 5% to E512 million. According to Forbes, however, this was below industry expectations.
Fortum said that Q1 2007 was characterized by warm weather, which lowered both power and heat demand. As a result, Fortum reported that its sales in Q1 2007 stood at E1.340 billion, as compared to E1.343 million in Q1 2006.
Nevertheless, Fortum stated that, despite the challenging power market conditions, its hedging positions had enabled it to improve its performance compared to 2006, and to reach its highest ever quarterly result.
Indeed, the company recorded a strong net cash flow from operating activities, which stood at E497 million in Q1 2007, up from E303 million in the previous comparable period. In addition, Fortum’s quarterly earnings per share were up 51% to E0.59.
Fortum said that the company booked a gain of E180 million from the sale of Renewable Energy Corporation shares by Hafslund, which is 34.09%-owned by Fortum. This corresponds to E0.20 per share in Fortum’s Q1 result.
Despite these strong results, according to Forbes, Fortum’s performance came in below industry expectations. The publication cited a poll by Kauppalehti/SME as putting analyst expectations regarding the company’s pretax profit at E683 million. Analysts also reportedly expected Q1 sales to reach E1.36 billion.
Nevertheless, in conclusion, Fortum said that, with its flexible and climate-benign production portfolio, the company continues to be well positioned for 2007 and 2008.