October 24, 2019 / 10:48 AM / a month ago

Finland's Fortum reports quarterly profit surge, still misses forecasts

HELSINKI (Reuters) - Finland’s Fortum (FORTUM.HE) missed analyst expectations despite reporting a 59% jump in its comparable operating profit for the third quarter on Thursday, saying electricity price hedging and higher hydro and nuclear volumes had helped it achieve the rise.

FILE PHOTO: Finnish energy company Fortum sign is seen at their headquarters in Espoo, Finland July 17, 2018. REUTERS/Ints Kalnins/File Photo

The firm’s shares fell almost 2% after third-quarter operating profit came in at 153 million euros ($170 million) compared to forecasts for 164 million euros, based on the company’s consensus of analysts.

Sales stood at 1.06 billion euros, up 9.2% on the same period a year ago and roughly in line with analysts’ expectations of 1.04 billion euros.

Fortum, which has been trying to gain control of its German rival Uniper (UN01.DE) for two years, said it expected to close the deal by the end of the first quarter in 2020.

The deal is subject to approval in Russia, where regulators have said they are reconsidering a cap on Fortum’s ownership of Uniper at 49.99% due to a water license operated by the German firm’s local subsidiary Unipro (UPRO.MM).

Russia’s RDIF sovereign wealth fund said this week that it planned to invest hundreds of millions of U.S. dollars in joint renewable energy projects with Fortum in Russia.

Fortum’s Chief Executive Pekka Lundmark said Fortum had signed a non-binding letter of intent as “a general declaration of willingness to cooperate in investment projects” with RDIF.

“There is absolutely no connection between (the announcement) and the federal antimonopoly service process. These are two completely separate processes,” he told a conference call with analysts and journalists.

Lundmark also said Fortum would seek to chair Uniper’s supervisory board once the deal closed.

“I continue to be hopeful that once we get clarity restored to the shareholding situation and when it is pretty clear who the main shareholder is, we would then quickly be able to proceed on the strategic alignment,” he said.

Reporting by Anne Kauranen, Editing by Sherry Jacob-Phillips

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