The ratings on Fortum Oyj reflect the group's position as one of the two largest Nordic electricity utilities, controlling competitive generation assets and utility monopoly operations, mainly in Finland and Sweden. Negative rating factors include exposure to volatile and competitive electricity operations, and increasing regulatory pressure in the monopoly distribution and heating operations. Fortum's Nordic utility strategy envisages further growth by acquisition, which could use up the headroom under the current ratings if it is debt-funded. Alternatively, increased shareholder pressure to increase leverage could temper Fortum's financial improvement. Fortum's business risk has reduced following the full disposal of the oil business in April 2005. Fortum has benefited from high power prices in its core markets in recent years, recently supported
