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UPDATE 1-Fortum to restructure after profit falls
October 19, 2012 / 7:01 AM / 5 years ago

UPDATE 1-Fortum to restructure after profit falls

* Q3 operating profit 220 mln euros, vs 251 mln poll

* Power unit Q3 price 39.7 euros/MWh, down 4.6 euros y/y

* Starts cost cuts, to sell non-core assets (Adds CEO comments, details on restructuring plan)

HELSINKI, Oct 19 (Reuters) - Finnish utility Fortum is to cut costs and sell assets to improve its financial health after quarterly operating profit fell 26 percent.

Fortum said on Friday a restructuring programme should improve its cash flow by more than 1 billion euros ($1.3 billion) in 2013-14, adding it may have to cut jobs.

It plans to sell around 500 million euros in assets and cut capital spending by around 250-350 million.

The move came with Fortum struggling to lift profit during a global downturn and prolonged outages at its the Oskarshamn nuclear power plant in Sweden, which it partly owns.

Nordic electricity prices have also been under pressure from high water reservoir levels that make hydro power cheaper.

Fortum’s July-September comparable operating profit fell to 220 million euros, compared with a forecast for 251 million in a Reuters poll.

“The third quarter was weak as we expected, but still unacceptable,” chief executive Tapio Kuula said. “External pressures combined with cost increases are making it necessary for us to improve efficiency and to find cost reductions in time.”

Fortum said it had hedged 30 percent of electricity volumes in 2014 at 43 euros per megawatt hour. ($1 = 0.7638 euro) (Reporting by Terhi Kinnunen; Editing by Dan Lalor) (; +358 9 680 50 243; Reuters Messaging:

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