Fortum said Wednesday it will have a one-time negative impact of approximately EUR 110 million on its fourth quarter 2015 net profit arising from impairments and provisions. The impact before taxes will mainly be included in the items affecting comparability of the Power and Technology segment.
The company said that one-time items mainly relate to Fortum’s two coal-fired power plants in Finland, Inkoo and Meri-Pori. The demand for coal condensing power in the Nordic power market has decreased as a result of the drop in the wholesale price for electricity. Fortum is booking a provision for the dismantling of the Inkoo power plant and starting preparations for permanent dismantling.
The Inkoo operations were ceased in February 2014 and assets written down in 2013. In addition Fortum is making an impairment loss for Fortum’s share of Meri-Pori assets, the company said.
According to Fortum, the negative impact to net profit also includes an additional write-down based on information received during the fourth quarter regarding the closure of the units 1 and 2 in Oskarshamn nuclear power plant in Sweden.
In addition, Fortum said its fourth quarter 2015 will include approximately EUR 75 million negative effect to net profit related to derivatives mainly hedging Fortum’s future power production, which do not get hedge accounting status according to IFRS (IAS 39).