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Fortum (FORTUM) Q3 underlying operating profit jumps

By Angela Barnes

14:50, 12 November 2021

Fortum Oslo Varme carbon capture project
Fortum Oslo Varme carbon capture project – Photo: Fortum

Fortum reported a larger-than-expected rise in underlying third-quarter operating profit Friday, boosted by higher energy prices and earnings from its German subsidiary.

The Finnish energy company said comparable operating profit went up to €260m ($298m) from a loss of €179m a year ago in the three months ended September, with a strong result in its global commodities business, Uniper.

The operating result beat the €203m forecast expected by analysts in a company-provided poll.

Sales rose 69% to €23.7bn and comparable EBITDA was €574m, up from €132m in the prior year quarter.

Commodity price drivers

The group said global commodity prices have been driving up power prices both on the continent and in the Nordics, with the price of natural gas the main driver, though high coal and carbon prices and low wind generation has also contributed.

Market tightness has been driven by the post-Covid-19 recovery, coupled with a cold winter and spring, along with increased global competition for liquid natural gas and an underinvestment of longer-term gas supplies, the company said.


243.74 Price
+0.430% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.22


147.43 Price
+8.350% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.54


15.56 Price
-4.230% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.16


475.08 Price
+2.100% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.14


Fortum is highly hedged against volatility of Nordic power prices. Generation Nordic is 75% hedged for the rest of 2021 at €34 per MWh and 65% hedged for 2022 at €32 per MWh.

Uniper is 85% hedged for the remainder of 2021 at €25 per MWh and 85% hedged for 2022 at €22 per MWh.

“The increased gas prices reflect a tight supply-demand balance for the winter, but forward prices indicate gradually normalising conditions thereafter,” the company’s chief executive, Markus Rauramo, said in a statement.

Shares in Fortum were down 2.28% on Friday afternoon.

Read more: Europe gas prices up as Belarus threatens to cut deliveries

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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