Tear Sheet: Fortum Oyj

While the company?s EBITDA declined to about €950 million in first-half 2024, from €1.125 billion for same period in 2023, its rating headroom remains ample. We maintain our forecast of EBITDA at €1.6 billion-€1.9 billion for 2024. Fortum?s softer power production, together with the spot power price declining to €48.5 per megawatt hour (MWh) from €58.6/MWh between January and June 2023, resulted in lower cash flow generation. Despite this, Fortum managed to achieve actual power price realization of €56.7/MWh in first-half 2024, about 17% higher than spot prices during the same period due to hedged volumes and flexible production. Approximately 75% of Fortum?s production is hedged at €43/MWh for the remainder of 2024, and approximately 60% at €42/MWh for 2025,

...Rating Component Scores Foreign currency issuer credit rating ###+/Stable/A-2 Local currency issuer credit rating ###+/Stable/A-2 Business risk Satisfactory Country risk Very Low Industry risk Moderately High Competitive position Satisfactory Financial risk Intermediate Cash flow/leverage Intermediate Anchor ###- Diversification/portfolio effect Neutral (no impact) Capital structure Neutral (no impact) Financial policy Neutral (no impact) Liquidity Strong (no impact) Management and governance Neutral (no impact) Comparable rating analysis Positive (+1 notch) Stand-alone credit profile ###...

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