ISSN 2330-717X

Fortum To Set New Financial Targets By End Of Year, Current Targets Removed

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Fortum said Friday it aims to revise its long-term financial targets by the end of 2020 at the latest. Following the consolidation of Uniper, Fortum’s business profile has changed and Fortum has concluded that the current long-term financial targets do not appropriately reflect the Group’s current business profile.

As such, on Fortum’s Board of Directors decided on Friday to remove the following targets as of the first quarter 2020:Return on capital employed of at least 10%; and Comparable net debt-to-EBITDA of around 2.5x.

Fortum’s dividend policy, however, remains intact, the company said. Fortum’s dividend policy is to pay a stable, sustainable, and over time increasing dividend of 50-80% of earnings per share excluding one-time items.

Fortum said it targets to have a solid investment grade rating of at least BBB to maintain its financial strength, preserve financial flexibility, and good access to capital markets for the enlarged Group.

Fortum and Uniper will carefully manage their balance sheets going forward, focusing on profitability, optimizing of cash flow, and tight prioritizing of capital expenditure in the current market and business environment, the company said.

As one financial metric, Fortum said it will closely monitor that its comparable net debt-to-EBITDA ratio remains at a level that ensures a credit rating of at least BBB. For now, no specific target has been set for the comparable net debt-to-EBITDA ratio. Following the consolidation of Uniper, Fortum has new net debt definitions as described in Fortum’s first quarter interim report 2020.

Together with Uniper, the ambition is to develop a joint vision and achieve strategic alignment between the companies during 2020. By the end of the year at the latest, Fortum said it aims to set new long-term financial targets for the enlarged Group and ambitious decarbonization targets covering the combined operations of both companies.

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