Finnish energy company Fortum’s (OMXH: FUM1V) comparable operating profit plunged 19% to 281 million Euros on sales of 1284 million on Q2 2012. Earnings per share of 0.21 EUR is historically very weak. Worryingly the utility itself called the result satisfactory and attributed the decline to very difficult business environment. Nordic power prices have been low on high water levels in Norway with average Nord Pool system price 24 Euros per MWh lower than in comparison period. Nuclear volumes were also down due to extended repairs in Sweden and Fortum also blamed economic uncertainty in Europe.
The company expects annual electricity demand growth of 0.5% in Nordic countries in the coming years. In the short term, the hydrological situation and economic uncertainty might make downward pressure on prices to continue. In Russia demand and prices were both down and the”demanding” construction project of the new units in Nyagan will be delayed”slightly further”. Industry regulation and completion of the investment programme are main areas of concern there.
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