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Stock exchange release

Fortum Corporation: Financial Statements 2006

31 January 2007, 09:00 EET

Fortum Corporation Stock Exchange Release 31 January 2007

Fortum Corporation: Financial Statements 2006

Another good year for Fortum
- Fortum's Board proposes a dividend of EUR 1.26

The year in brief
- Comparable operating profit EUR 1,437 (1,334) million, + 8%
- Profit before taxes EUR 1,421 (1,267) million, + 12%
- Earnings per share EUR 1.22 (1.01), + 21%
- Progress in Russia and Poland
- Proposed total dividend EUR 1.26 per share

Key figures,                                IV/06    IV/05     2006      2005
continuing operations
Sales, EUR million                          1,254    1,112    4,491     3,877
Operating profit, EUR million                 455      474    1,455     1,347
Comparable operating profit, EUR              440      460    1,437     1,334
million
Profit before taxes, EUR million              448      466    1,421     1,267
Earnings per share, EUR                      0.39     0.36     1.22      1.01
Net cash from operating activities, EUR        92      424    1,151     1,271
million
Shareholders’ equity per share, EUR                            8.91      8.17
Interest-bearing net debt (at end of                          4,345     3,158
period),
EUR million
Average number of shares, 1,000s                            881,194   872,613


Key financial ratios,                        2006     2005
continuing operations
Return on capital employed, %                13.4     13.5
Return on shareholders’ equity, %            14.4     13.5
Net debt/EBITDA                               2.3      1.8

*) Return on equity for continuing operations is calculated based on profit for
the period from continuing operations divided by total equity at the end of the
period. Profit for the period from discontinued operations has been subtracted
from total equity as at 31 December 2005.

The year 2006 was characterised by improving results, progress in strategic
positions in Russia and Poland and acceleration of new power and heat generation
initiatives. In short, 2006 was a good year for Fortum. The company’s operating
results improved and its financial position remained strong. The key financial
targets, ROCE 12% and the new target for ROE, 14%, were exceeded. Fortum’s net
debt to EBITDA stood at 2.3 at the year end. Net cash from operating activities
decreased slightly to EUR 1,151 (1,271) million.

Fortum Power Generation segment's achieved Nordic power price was EUR 37.1 (31.2),
up by 19% from 2005. The average spot price of electricity in Nord Pool, the
Nordic power exchange, was EUR 48.6 (29.3) per megawatt-hour (MWh), which was
approximately 66% higher than in 2005.

During 2006, Fortum initiated several new capacity expansion projects. Ongoing or
planned investments in new generation capacity include the Olkiluoto 3 nuclear
reactor in Finland, capacity upgrades in Swedish nuclear reactors, two combined
heat and power plants (Suomenoja, Finland and Värtan, Sweden) as well as a new gas
turbine plant (Inkoo, Finland). The programme will increase the power generation
capacity by approximately 1,500 megawatts (MW) mainly by 2010. The total value of
Fortum's capacity investment programme, including investments through associated
companies, is approximately EUR 2.8 billion.

E.ON Finland (renamed Fortum Espoo) was acquired and subsequently de-listed.
Fortum Espoo has been fully consolidated from the end of the second quarter 2006,
and all Fortum Espoo's business functions have been integrated into Fortum's
business unit structure.

During 2006, Fortum strengthened its position in the Russian market and increased
its ownership to slightly over 25% in the regional power generating company of
north-west Russia, Territorial Generating Company No. 1 (TGC-1).

Fortum continued to expand its district heating business in Poland. In December
Fortum announced that it is building a new combined heat and power plant in
Czêstochowa, Poland.

Financial results, continuing operations

October-December

Group sales stood at EUR 1,254 (1,112) million.

Group operating profit totalled EUR 455 (474) million. Comparable operating profit
decreased by EUR 20 million to EUR 440 (460) million.

During the fourth quarter, the average price of electricity in Nord Pool was EUR
44.6 (32.3) per MWh, or 38% higher than during the corresponding period in 2005.
The Power Generation segment's achieved Nordic power price EUR 37.7 (33.0) per MWh
was 14% higher.

The comparable operating profit of the Power Generation segment was almost at the
same level as last year. The positive profit impact from higher achieved Nordic
power price was offset by increased taxes on nuclear capacity and hydro assets as
well as lower nuclear and hydro power generation volumes. Nuclear power generation
was lower due to unplanned shut-downs in Swedish nuclear power plants. The lost
volume due to these was approximately 0.6 TWh in the fourth quarter. The weaker
hydrological situation caused lower hydro power generation volumes. Thermal power
generation increased and thus the Power Generation segment was a net buyer of CO2
emission allowances.

The comparable operating profit of the Heat segment decreased slightly, being EUR
95 (97) million. This was mainly due to higher fuel prices and warm weather,
especially in December.

The Distribution segment's comparable operating profit of EUR 77 million in the
fourth quarter was EUR 1 million higher than last year.

The Markets segment recorded an operating loss during the last quarter.
Procurement costs continued to be high. Warm weather led to lower consumption and
sales volumes. At the same time, the intense retail competition, especially in
Finland, pressed sales margins.


Sales from continuing operations, by segment

EUR million                       IV/06      IV/05       2006        2005

Power Generation                    667        598      2,439       2,058
Heat                                381        325      1,268       1,063
Distribution                        210        196        753         707
Markets                             529        391      1,912       1,365
Other                                19         20         78          91
Eliminations                       -552       -418     -1,959      -1,407
Total                             1,254      1,112      4,491       3,877


Comparable operating profit/-loss from continuing operations, by segment

EUR million                       IV/06      IV/05       2006        2005

Power Generation                    289        297        985         854
Heat                                 95         97        253         253
Distribution                         77         76        250         244
Markets                              -8          8         -4          30
Other                               -13        -18        -47         -47
Total                               440        460      1,437       1,334


Operating profit/-loss from continuing operations, by segment

EUR million                       IV/06      IV/05       2006        2005

Power Generation                    290        296        980         825
Heat                                119         94        264         269
Distribution                         74         76        252         251
Markets                             -18         11         -6          32
Other                               -10         -3        -35         -30
Total                               455        474      1,455       1,347

January-December

Group sales stood at EUR 4,491 (3,877) million.

Group reported operating profit totalled EUR 1,455 (1,347) million. The comparable
operating profit stood at EUR 1,437 (1,334) million.

In January-December, the average Nord Pool spot price was EUR 48.6 (29.3) per MWh,
or 66% higher than in 2005. Fortum Power Generation's achieved Nordic power price
was EUR 37.1 (31.2), up by 19% from 2005.

The total power generation volume in the Power Generation segment was higher than
last year. Nuclear power generation was lower due to unplanned shut-downs in
Swedish nuclear power plants. The lost volume due to these was approximately 1.6
TWh. Hydro generation was 1.4 TWh lower than last year, driven by a weaker
hydrological situation.

The comparable operating profit of the Power Generation segment was EUR 131
million higher than last year despite the negative effect from increased taxes on
nuclear capacity and hydro property. Compared to the previous year, the effect of
increased taxes was approximately EUR -65 million in 2006.

The Heat segment's sales were EUR 205 million higher than last year, mainly due to
increased volumes from new businesses and higher power prices. The Heat segment's
comparable operating profit was at the same level as last year. The negative
impact of increased fuel prices was partly offset by the use of more waste fuel in
Sweden.

The Distribution segment's sales were EUR 753 million. This was EUR 46 million
higher than last year, mainly due to the Fortum Espoo integration. The segment's
comparable operating profit of EUR 250 million was EUR 6 million higher than last
year, mainly due to the Fortum Espoo integration.

The sales of the Markets segment in 2006 were higher than in 2005 mainly due to
the Fortum Espoo integration. Due to the challenging market situation, Markets
recorded an operating loss in 2006 while year 2005 was profitable. Procurement
costs continued to be high and the intense retail price competition, especially in
Finland, pressed sales margins.

The costs and provisions related to the implementation of a new customer and
billing system affected the operating results of the Markets and Distribution
segments in Sweden.

Profit before taxes was EUR 1,421 (1,267) million.

The Group's net financial expenses amounted to EUR 103 (135) million. The decrease
is mainly attributable to lower interest rates. Net financial expenses include
fair value gains on financial instruments of EUR 30 (40) million.

The share of profit of associates and joint ventures was EUR 69 (55) million. The
biggest contributor was Hafslund ASA in Norway. Hafslund ASA is showing the fair
value change in the Renewable Energy Corporation ASA (REC) shareholding through
the income statement, while Fortum is showing the fair value change in equity. The
fair value change during 2006 booked in Fortum's equity and based on the number of
shares reported by Hafslund, was approximately EUR 440 million at the end of
December 2006.

Minority interests accounted for EUR 49 (52) million. The minority interests are
mainly attributable to Fortum Värme Holding, in which the City of Stockholm has a
50% economic interest.

Taxes for the financial year totalled EUR 301 (331) million. The tax rate
according to the income statement was 21.2% (26.1%).

The profit for the financial year was EUR 1,120 (936) million. Fortum's earnings
per share were EUR 1.22 (1.01). Return on capital employed was 13.4% for 2006
(13.5%), and return on shareholders' equity was 14.4% for 2006 (13.5%).


Market conditions

According to preliminary statistics, the Nordic countries consumed 392 (392)
terawatt-hours (TWh) of electricity in 2006. The last half of 2006 was clearly
warmer than normal leading to lower consumption. The last quarter's consumption
was 102 (108) TWh, 6% less than the year before.

The year 2006 started with a 7-TWh surplus in the Nordic water reservoirs compared
to the long-term average. The hydrological situation weakened during the year
until the autumn. In August, the deficit was at its largest at 30 TWh. Warm
weather and low consumption combined with high precipitation helped to fill the
water reservoirs towards the end of the year. At the end of December, the Nordic
water reservoirs were only 2 TWh below the long-term average and 9 TWh below the
corresponding level in 2005.

During the fourth quarter, the average spot price for power in Nord Pool was EUR
44.6 (32.3) per MWh or 38% higher than in the corresponding period in 2005 and 25%
lower than in the previous quarter. During the fourth quarter, the hydrological
situation strengthened rapidly and the availability of the Swedish nuclear plants
improved. At the same time, power consumption was lower, driven by clearly warmer
than usual weather. Both the spot price and the financial market (forwards) turned
to a steep decline driven by this dramatic shift in market fundamentals.

During 2006, the average spot price for power in Nord Pool was EUR 48.6 (29.3) per
MWh, or 66% higher than in 2005. The spot price was higher during 2006 due to the
dry hydrological situation and the unplanned nuclear shut-downs in Sweden.

In Germany, the average spot price for 2006 was slightly higher than in the Nordic
area and resulted in a net export from the Nordic area to Germany.

During 2006, the average market price for CO2 emissions was EUR 18.5 (17.9)
per tonne, or 3% higher than during the previous year. During the fourth quarter,
the average market price for 2007 CO2 emissions was EUR 9.7 (22.1) per tonne CO2,
or 56% lower than during the corresponding period in 2005. During the fourth
quarter, the price declined from EUR 12-13 to EUR 6-7 per tonne CO2. However, at
the end of 2006 the prices of the Kyoto period CO2 emissions (years 2008-2012)
were significantly above the 2007 prices. For example, the 2008 price was about
EUR 17-18 EUR per tonne CO2.

Total power and heat generation figures

Fortum's total power generation during 2006 was 54.7 (52.3) TWh, of which 53.5
(51.2) TWh was in the Nordic countries. This corresponds to 14% (13%) of the total
Nordic electricity consumption.

At year end, Fortum's total power generating capacity was 10,913 (11,281) MW, of
which 10,768 (11,136) MW was in the Nordic countries. Changes are mainly due to
the divestment of thermal power plants in Finland and Sweden. The Fortum Espoo
integration increased Fortum's combined power and heat production capacity.

The share of CO2-free power generation was 84% (93%) of Fortum's power generation
in 2006. A preliminary estimate for CO2 emissions from Fortum’s own power plants
in 2006 totals 11.0 million tonnes, 4.5 million tonnes higher than in the previous
year. The emissions subject to EU's emissions trading scheme rose to about 10.4
million tonnes. The average volume of emission allowances allocated to Fortum's
installations in various countries totals approximately 9 million tonnes per year
during 2005-2007.

Fortum's total power and heat generation figures are presented below. In addition,
the segment reviews include the respective figures by segment.


Fortum's total power and heat         IV/06    IV/05    2006     2005
generation, TWh
Power generation                       15.4     14.3    54.7     52.3
Heat generation                         7.4      7.6    25.8     25.1

Fortum's own power generation by      IV/06    IV/05    2006     2005
source, TWh, total in the Nordic
countries
Hydropower                              5.6      5.8    19.8     21.2
Nuclear power                           6.4      7.0    24.4     25.8
Thermal power                           3.1      1.3     9.3      4.2
Total                                  15.1     14.1    53.5     51.2

Fortum's own power generation by      IV/06    IV/05    2006     2005
source, %, total in the Nordic
countries
Hydropower                               37       41      37       42
Nuclear power                            42       50      46       50
Thermal power                            21        9      17        8
Total                                   100      100     100      100

Total power and heat sales figures

Fortum’s total power sales were 61.6 (59.7) TWh, of which 60.2 (58.2) TWh were in
the Nordic countries. This represented approximately 15% (15%) of the region’s
total consumption. Heat sales in the Nordic countries amounted to 20.1 (19.4) TWh
and in other countries to 6.7 (4.4) TWh.

Fortum's total electricity *) and     IV/06    IV/05    2006     2005
heat sales, EUR million
Electricity sales                       667      575   2,437    2,002
Heat sales                              299      264   1,014      867

Fortum's total electricity sales*)    IV/06    IV/05    2006     2005
by area, TWh
Sweden                                  7.9      8.4    28.5     30.4
Finland                                 8.1      6.9    29.6     26.0
Other countries                         0.9      0.9     3.5      3.3
Total                                  16.9     16.2    61.6     59.7

Fortum's total heat sales by area,    IV/06    IV/05    2006     2005
TWh
Sweden                                  2.6      3.0     9.3      9.5
Finland                                 3.3      2.9    10.7      9.8
Other countries**)                      1.8      1.3     6.8      4.5
Total                                   7.7      7.2    26.8     23.8

*) Nord Pool transactions are calculated as a net amount of hourly sales and
purchases at the Group level.
**) Including the UK, which is reported in the Power Generation segment, other
sales.

SEGMENT REVIEWS

Power Generation

The business area comprises power generation and sales in the Nordic countries
and the provision of operation and maintenance services in the Nordic area and
selected international markets. The Power Generation segment sells its production
to Nord Pool. The segment includes the business units Generation, Portfolio
Management and Trading (PMT), and Service.

EUR million                            IV/06     IV/05     2006      2005

Sales                                    667       598    2,439     2,058
- power sales                            566       487    2,059     1,682
- other sales                            101       111      380       376
Operating profit                         290       296      980       825
Comparable operating profit              289       297      985       854
Net assets (at period-end)                                6,734     5,954
Return on net assets, %                                    16.1      14.0
Comparable return on net assets, %                         16.1      14.5

The segment's power generation during the fourth quarter amounted to 13.0 (12.8)
TWh in the Nordic countries.

In 2006, the segment's power generation in the Nordic countries was 48.3 (47.2)
TWh, of which about 19.8 (21.2) TWh or 41% (45%) was hydropower-based, 24.4 (25.8)
TWh or 51% (55%) nuclear power-based, and 4.1 (0.2) TWh or 8% (0%) thermal power-
based. The decrease in hydro power generation was due to a weakened hydrological
situation. The decrease in nuclear generation was caused by unplanned shut-downs
in the Swedish nuclear power plants. Thermal power generation increased due to low
hydro and nuclear volumes and high spot prices.

At year end, the segment’s power generation capacity totalled 9,540 (10,003) MW,
of which 9,400 (9,863) MW was in the Nordic countries and 140 (140) MW in other
countries. Changes are mainly due to thermal power plant divestments in Finland
and Sweden.

Power generation by area, TWh          IV/06     IV/05     2006      2005

Sweden                                   7.4       7.9     27.1      28.4
Finland                                  5.5       4.9     21.1      18.8
Other countries                          0.3       0.3      1.2       1.1
Total                                   13.2      13.1     49.4      48.3

Nordic sales volume, TWh                14.5      14.2     53.9      52.6
 of which pass-through sales             1.2       1.1      4.5       4.5


Sales price, EUR/MWh                   IV/06     IV/05     2006      2005
Generation's Nordic power price*        37.7      33.0     37.1      31.2

*) For the Power Generation segment in the Nordic area, excluding pass-through
sales.

Fortum Power Generation's achieved Nordic power price (excluding pass-through
items) in the fourth quarter was 14% higher than a year ago, mainly due to
improved hedging prices and higher spot prices. In the fourth quarter, the average
spot price of power in Nord Pool was 38% higher than a year ago. During 2006 Power
Generation's achieved Nordic power price was 19% higher, while the average spot
price in Nord Pool being 66% higher than in 2005. The related sales volume was
13.3 (13.1) TWh in the fourth quarter and 49.4 (48.1) TWh for the whole year.

Fortum has strengthened its position in Russia in the regional power generating
company of north-west Russia, Territorial Generating Company No. 1 (TGC-1).

In October, Fortum acquired a 12.5% share of St. Petersburg Generating Company.
This ownership combined with Fortum's previous stake in St. Petersburg Generating
Company entitled Fortum to a slightly over 25% share of TGC-1. In November 2006,
the merger of the regional generation companies was finalised and TGC-1 was
registered as a legal company. After converting the shares of the regional
generation companies into shares of TGC-1, the largest owners are RAO UES with
approximately 56%, Fortum with slightly over 25% and Interros with approximately
7%.

At the end of October, Fortum also participated in the IPO of the Russian
Wholesale Generating Company No. 5 (WGC-5), which has four production sites around
Russia. In the IPO, Fortum obtained less than 1% of WGC-5.

The unplanned shut-downs in the Swedish nuclear power plants Forsmark and
Oskarshamn caused a production loss in nuclear power generation of approximately
1.6 TWh to Fortum by the end of December.

Fortum is participating in the fifth Finnish nuclear power unit (Olkiluoto 3) with
a share of approximately 25%. The supplier (Consortium AREVA-Siemens) has reported
to TVO, the company that is building and owns the new unit, that the unit will be
completed at the turn of 2010 - 2011.

In October, Fortum completed the sale of its industrial maintenance business. Some
900 employees transferred in connection with the deal.

In November, Fortum signed a four-year contract on the operation and maintenance
of a waste-to-energy plant under construction in the UK, near London's Heathrow
Airport. The plant will be ready in summer 2008.

In November, Fortum applied for an additional 20-year operating licence for the
Loviisa nuclear power plant. In December, Fortum made a long-term agreement to
purchase nuclear fuel from Russian TVEL Corporation to Loviisa.

In November, Fortum sold its 154-MW peat-fired power plant in Haapavesi, Finland.
Fortum sold the equivalent of 1 TWh/a of constant generation capacity in the
Finnish area from November 2006 to the end of March 2011. Fortum leased its 308-MW
share of the Meri-Pori power plant from January 2007 to the end of June 2010.
These transactions were required by the Finnish competition authority for the
realisation of the Fortum Espoo acquisition.

In December, Fortum announced a plan to build a new gas turbine power plant in
Inkoo, Finland. According to the plan, the power plant will be in commercial use
in 2009. The fuel of the power plant will be light fuel oil, and the power
generation output will be about 250 to 300 MW.
Heat

The business area comprises heat generation and sales in the Nordic countries and
other parts of the Baltic Rim. Fortum is a leading heat producer in the Nordic
region. The segment also generates power in the combined heat and power plants
(CHP) and sells it to end-customers mainly by long-term contracts as well as to
Nord Pool. The segment includes the business units Värme, operating in Sweden, and
Heat, operating in other markets.


EUR million                            IV/06    IV/05      2006     2005

Sales                                    381      325     1,268    1,063
- heat sales                             288      254       976      834
- power sales                             68       48       198      145
- other sales                             25       23        94       84
Operating profit                         119       94       264      269
Comparable operating profit               95       97       253      253
Net assets (at period-end)                                3,407    2,551
Return on net assets, %                                     9.6     11.6
Comparable return on net assets, %                          9.2     11.0

The segment’s heat sales during the fourth quarter amounted to 7.2 (6.6) TWh and
to 24.7 (21.7) TWh during the whole year. The volume increase was mainly due to
the acquisitions in Poland and Fortum Espoo. Due to seasonality in district
heating demand, the first and last quarters of the year are most important to the
segment's results.

Power generation at combined heat and power plants (CHP) was 1.7 (1.3) TWh during
the fourth quarter and 5.0 (4.1) TWh during 2006. The increase was mainly due to
new volumes from the Fortum Espoo integration.

Heat sales by area, TWh                IV/06    IV/05      2006     2005

Sweden                                   2.5      3.0       9.3      9.5
Finland                                  3.3      2.9      10.7      9.8
Other countries                          1.4      0.7       4.7      2.4
Total                                    7.2      6.6      24.7     21.7

Power sales, TWh                       IV/06    IV/05      2006     2005

Total                                    1.7      1.3       5.0      4.1

In May, Fortum started a project to connect the southern and central parts of the
district heating systems in Stockholm. This will lead to more efficient use of
heat production capacity in Stockholm. The project will be ready by May 2007 and
the size of the investment is around EUR 20 million.

In May, Fortum Värme applied for an environmental permit for a new bio-fuel based
CHP plant in Värtan. The new plant is planned to be in operation at the earliest
by late 2009.

Fortum is planning to build a new CHP plant in connection with the current power
plant in Suomenoja, Espoo. The value of the investment is estimated to be
approximately EUR 200 million. The power plant is planned to be ready for
production by the end of 2009. The new power plant will be fuelled by natural gas.
The electricity production capacity will be approximately 260-300 MW and the
district heating capacity approximately 200-240 MW.

In September, Fortum signed an agreement to sell its CHP plant in Hämeenlinna,
Finland, to Vattenfall. The ownership was transferred to Vattenfall on 24 October.
The sale was required as one of the conditions set by the Finnish competition
authority for the realisation of the Fortum Espoo acquisition.

In December, Fortum announced an investment in a new CHP plant in Czêstochowa,
Poland. The value of the investment is around EUR 95 million. The power plant is
planned to be ready for production by the end of 2009.

Fortum signed an agreement to purchase the heat operations of Vattenfall in
Estonia and Latvia.

During the year, Fortum divested the shares of Sölvesborgs Fjärrvärme AB, Bromölla
Fjärrvärme AB and Karskär Energi AB in Sweden.

Net assets increased mainly due to the consolidation of Fortum Espoo.

Distribution

Fortum owns and operates distribution and regional networks and distributes
electricity to a total of 1.6 million customers in Sweden, Finland, Norway and
Estonia.
     
EUR million                           IV/06     IV/05      2006      2005

Sales                                   210       196       753       707
- distribution network                  179       164       636       592
transmission
- regional network transmission          20        22        80        82
- other sales                            11        10        37        33
Operating profit                         74        76       252       251
Comparable operating profit              77        76       250       244
Net assets (at period-end)                                3,412     3,021
Return on net assets, %                                     8.4       8.8
Comparable return on net assets,%                           8.3       8.6


During the fourth quarter, the volume of distribution and regional transmissions
totalled 7.0 (6.6) TWh and 4.6 (5.0) TWh, respectively.

For the whole year, the volume of distribution and regional network transmissions
totalled 24.6 (23.1) TWh and 18.1 (18.0) TWh, respectively. Electricity
transmissions via the regional distribution network totalled 15.0 (14.8) TWh in
Sweden and 3.1 (3.2) TWh in Finland.

Volume of distributed electricity     IV/06     IV/05      2006     2005
in distribution network, TWh
Sweden                                  3.8       4.1      14.4     14.4
Finland                                 2.5       1.8       7.7      6.3
Norway                                  0.6       0.6       2.3      2.2
Estonia                                 0.1       0.1       0.2      0.2
Total                                   7.0       6.6      24.6     23.1


Number of electricity                    31 Dec 2006         31 Dec 2005
distribution customers by area,
thousands
Sweden                                           865                 860
Finland                                          580                 410
Norway                                            97                  97
Estonia                                           23                  23
Total                                          1,565               1,390

The Swedish supervision model (NNM), used by the Energy Markets Inspectorate (EMI)
to calculate network prices, is contested by the industry. All decisions made by
EMI have been appealed.

The supervision of 2003 distribution tariffs for Fortum (two areas and a minor
subsidiary) is ongoing, and final decisions for Fortum are still pending.
Concerning the supervision of 2004 tariffs (four areas and a minor subsidiary),
there is no communication yet from the authority. In December, EMI informed that
its 2005 tariff supervision will include two of Fortum's distribution areas and a
minor subsidiary.

The development and implementation of a new customer and billing system in Sweden
continued to cause additional costs and quality deviations in customer service for
Distribution.

During 2006, the segment made investments to reduce average customer outage time.
This programme was initiated in 2005 and is expected to be finished by 2011. By
2011, Fortum will invest EUR 700 million in the Nordic networks. As part of this,
the EUR 200 million Reliability Investment Programme that was launched in 2005
continued according to plan during 2006

Another important ongoing project is automatic meter management (AMM). All
customers in Sweden will get automatic meters. The roll out of meters will start
in 2007 and the installation will be finalised by the end of 2008. The total value
of the AMM project in Sweden is estimated at EUR 240 million.


Markets

Markets is responsible for retail sales of electricity to a total of 1.3 million
private and business customers as well as to other electricity retailers in
Sweden, Finland and Norway. Markets buys its electricity through Nord Pool.


EUR million                           IV/06     IV/05      2006     2005

Sales                                   529       391     1,912    1,365
Operating profit/-loss                  -18        11        -6       32
Comparable operating profit/-loss        -8         8        -4       30
Net assets (at period-end)                                  176      228
Return on net assets, %                                    -1.6     17.4
Comparable return on net assets,                           -0.8     16.4
%

During the fourth quarter, Markets electricity sales totalled 11.5 (10.8) TWh with
sales for the whole year amounting to 42.1 (40.2) TWh. The sales in the fourth
quarter were higher than the year before despite the expiring of large sales
contracts in the third quarter of 2005. The increase in sales is mainly due to the
integration of Fortum Espoo and the higher number of both private and business
customers.

In the fourth quarter, Nordic retail electricity prices were higher than during
the second and third quarters. The retail prices in Sweden and Norway rapidly
follow the forward market prices in Nord Pool, whereas the retail prices in
Finland did not fully follow the forward market price fluctuation.

During the fourth quarter, the sales activities of Fortum Espoo were successfully
integrated to Fortum Markets.

Markets' customer flow continued to develop positively during 2006.

The development and implementation of the new customer and billing system in
Sweden continued to cause additional costs and quality deviations in customer
service for Markets.


Capital expenditures, investments and divestments of shares

Capital expenditures and investments in shares in 2006 totalled EUR 1,395 (479)
million. Investments excluding acquisitions were EUR 485 (346) million.

In January, Fortum's ownership of Polish MPEC Wroclaw's share capital reached
90.2% and 94.4% of the voting rights. Fortum de-listed Fortum Wroclaw S.A. from
the Warsaw Stock Exchange as of 29 April 2006. Fortum Wroclaw is a district heat
distribution company, whose net sales amounted to approximately EUR 71 million and
heat sales to approximately 2.1 TWh in 2005.

During 2006, Fortum concluded the acquisition of E.ON Finland (now Fortum Espoo),
amounting to EUR 766 million. Fortum Espoo was de-listed on 13 September. Fortum
Espoo has been fully consolidated from the end of the second quarter, and it is
included in the appropriate segment figures. The main effects of the consolidation
are on the Heat, Distribution and Markets segments. During the third quarter, all
Fortum Espoo business functions were integrated into Fortum's business unit
structure. Fortum expects the integration of Fortum Espoo to bring gradual annual
synergies of around EUR 15-20 million starting in 2007.

Fortum has fulfilled the conditions set by the Competition Authority for the
realisation of Fortum Espoo acquisition. In October, Fortum finalised the sale of
its combined heat and power plant in Hämeenlinna, Finland, to Vattenfall. In
November, Fortum sold its 154-MW peat-fired power plant in Haapavesi, Finland, to
Kanteleen Voima Oy, which is owned by a group of regional energy companies. Fortum
has also sold the equivalent of 1 TWh/a of constant generation capacity in the
Finnish area from November 2006 to the end of March 2011. Fortum has leased its
308-MW share of the Meri-Pori power plant from January 2007 to the end of June
2010.

Fortum sold its approximately 40% holding in Enprima Oy to the Swedish ÅF Group.
The deal was completed on 24 April 2006.

In September, Fortum announced its intention to sell its industrial maintenance
services business. Some 900 employees were transferred in connection with the
deal. The agreement was signed on 21 September 2006 and closed on 31 October 2006.

In October, Fortum finalised the purchase of approximately 12.5% of St. Petersburg
Generating Company. The purchase price was approximately EUR 120 million. With the
acquisition, Fortum's share in the Russian Territorial Generating Company No. 1
increased to slightly over 25%.

At the end of October, Fortum participated in the IPO of the Russian WGC-5,
Wholesale Generating Company number 5, which has four production branches around
Russia. In the IPO, Fortum obtained less than 1% of WGC-5.


Financing

During the fourth quarter, Fortum’s net debt increased by EUR 186 million. At year
end, the interest-bearing net debt stood at EUR 4,345 million (EUR 3,158 million),
resulting in a total increase in net debt of EUR 1,187 million for the year. The
increase in net debt is primarily linked to the dividend payment in March and the
Fortum Espoo acquisition in June. Net debt to EBITDA was 2.3 (1.8).

The Group’s net financial expenses for the fourth quarter were EUR 25 (35) million
and for the full year 2006 EUR 103 (135) million. The decrease is mainly
attributable to lower interest rates. Net financial expenses include fair value
gains on financial instruments of EUR 30 (40) million.

At year end, the average interest rate of Fortum’s interest-bearing loans was
approximately 4.5% per annum.

Group liquidity remained good. Year-end cash and marketable securities totalled
EUR 157 million. In addition, the Group had a total of EUR 1,312 million available
for drawings under committed credit facilities, such as the EUR 1,200 million
Syndicated Revolving Credit Facility and bilateral overdraft facilities.

In June, Fortum issued a EUR 750-million 10-year Eurobond under its EMTN (Euro
Medium Term Note) programme. The bonds are listed on the Luxembourg Stock
Exchange. The proceeds of the offering were used for general corporate and
refinancing purposes.

Fortum’s long-term credit rating from Moody’s and Standard and Poor's was A2
(stable) and A- (stable), respectively.


Shares and share capital

During 2006, a total of 830.8 (900.1) million Fortum shares for a total of EUR
16,936 million were traded. Fortum’s market capitalisation, calculated using the
closing quotation on the last trading day of the year, was EUR 19,132 million. The
highest quotation of Fortum Corporation’s shares on the Helsinki Stock Exchange in
2006 was EUR 23.48, the lowest EUR 15.71, and the average quotation EUR 20.39
(13.87). The closing quotation on the last trading day of the year was EUR 21.56
(15.84).

Relating to the 2001A share option scheme, a total of 1.6 million options for a
total of EUR 25.7 million were traded during 2006. Relating to the 2001B share
option scheme, a total of 5.5 million options for a total of EUR 85.3 million were
traded during 2006. Relating to the 2002A share option scheme, a total of 0.5
million options for a total of EUR 7.2 million were traded during 2006. Relating
to the 2002B share option scheme, a total of 5.3 million options for a total of
EUR 96.0 million were traded during 2006.

A total of 13,759,621 (8,210,120) shares subscribed on the basis of the above
share option schemes were entered into the trade register in 2006. The Board of
Directors of Fortum Corporation has cancelled a total of 1,660,000 repurchased
Fortum shares (EUR 30,390,150) according to the authorisation given to the Board
of Directors in the Annual General Meeting of Shareholders on 16 March 2006. The
average price for the repurchased own shares was EUR 18.31, the lowest price EUR
17.55 and the highest price EUR 19.15.  At the end of 2006, Fortum Corporation did
not own its own shares.

After registrations and the cancellation, Fortum Corporation’s share capital is
EUR 3,022,782,396 and the total number of registered shares is 887,393,646
(875,294,025) at the end of 2006. Share capital of Fortum Corporation increased by
a total of EUR 46,782,711 (27,914,408).

At year end the amount of shares that can still be registered for under the share
option schemes is a maximum of 0.8% (6.883.429 shares) of Fortum’s 2006 year-end
share capital and voting rights.

At year end, the Finnish State’s holding in Fortum was 50.8% (51.5%). The
proportion of foreign shareholders increased to 35.4% (33.2%).

Currently, the Board of Directors has no unused authorisations from the General
Meeting of Shareholders to issue convertible loans or bonds with warrants or to
issue new shares.  Currently, the Board of Directors has the authorisation from
the Annual General Meeting of Shareholders on 16 March 2006 to buy Fortum
Corporation’s own shares. The authorisation, amounting to EUR 500 million or 35
million shares, is valid one year from the last year AGM.


Group personnel

In 2006, the Fortum Group employed an average of 8,910 (8,939) people. At year
end, the number of employees totalled 8,134 (8,955), of which 7,681 (8,769) were
permanent employees. The integration of Fortum Espoo increased the total number of
employees by 336 persons and the acquisition of two Polish companies in late
December 2005 increased the total number of employees by 988 persons. The sale of
the industrial maintenance business decreased the total number of employees by
some 930 employees. The number of employees in the parent company, Fortum
Corporation, at year end totalled 566 (550).


Events after the period under review

Storms in January, especially in Sweden, have caused approximately EUR 10 million
additional costs for the Distribution segment.

In January, Fortum's subsidiary in Estonia, Fortum Tartu AS announced an
investment in a new CHP plant in the City of Tartu. The size of the investment is
around EUR 60 million. Fortum owns 60% of the company.


Outlook

The key market driver influencing Fortum's business performance is the Nordic
wholesale price of electricity. Key drivers behind the wholesale price development
are the Nordic hydrological situation, CO2 emissions allowance prices and fuel
prices. The Swedish krona exchange rate also affects Fortum's reported result, as
results generated by Fortum in Sweden are translated into euros.

According to general market information, electricity consumption in the Nordic
countries is predicted to increase by about 1% a year over the next few years.

At the end of January, the Nordic water reservoirs were about 4 TWh above the long-
term average and 1 TWh below the corresponding level of 2006. At the end of
January, the market price for emissions allowances for 2007 was between EUR 2-3
per tonne of CO2 and for 2008 between EUR 15-16 per tonne of CO2. At the same
time, the electricity forward price for the rest of 2007 was around EUR 28-29 per
MWh and around EUR 40-41 per MWh for 2008.

The first and last quarters of the year are usually the strongest quarters for the
power and heat businesses.

Fortum Power Generation's achieved Nordic power price typically depends on e.g.
the hedge ratio, hedge price, spot price, utilisation and optimisation of Fortum's
flexible production portfolio even on an hourly basis, and currency changes. If
Fortum would not hedge any of its production volumes, a 1 EUR/MWh change in the
spot price would result in approximately a EUR 50 million change in Fortum's
annual operating profit.

At the beginning of January, Fortum had hedged approximately 65% of the Power
Generation segment's estimated Nordic Power Generation sales volume for 2007 at
approximately EUR 42 per MWh. The hedge position for 2007 was lowered to a more
neutral level during the fourth quarter of 2006. This was based on Fortum's view
on future power prices at the time. At the beginning of January, Fortum had hedged
approximately 35% of the Power Generation segment's estimated Nordic sales volume
at approximately EUR 42 per MWh for the calendar year 2008. These hedge ratios may
vary significantly depending on Fortum's actions on the electricity derivatives
markets. Hedge prices are also influenced by changes in the SEK/EUR exchange
rates, as part of the hedges are conducted in SEK.

Despite lower hydro and nuclear generation volumes, Fortum's results in 2006 were
good and its financial position is strong. With its flexible and climate-benign
production portfolio, Fortum is well positioned also for 2007.


Dividend distribution proposal

Parent company's distributable equity as of 31 December 2006 amounted to EUR 2,065
million. After the end of the financial period there has been no material changes
in the financial position of the Company.

The Board of Directors proposes to the Annual General Meeting that Fortum
Corporation pay a cash dividend of EUR 1.26 per share for 2006, totalling EUR
1,119 million based on the number of registered shares as of 30 January 2007. Of
this total dividend, EUR 0.73 per share is in accordance with the Group's dividend
policy. An additional dividend of EUR 0.53 per share is proposed in order to steer
Fortum's capital structure towards the agreed target.

The Annual General Meeting will be held on 28 March 2007 at 3:00 pm at the
Kaapelitehdas in Helsinki.

Espoo, 30 January 2007
Fortum Corporation
Board of Directors

Further information:
Mikael Lilius, President and CEO, tel. +358 10 452 9100
Juha Laaksonen, CFO, tel. +358 10 452 4519

The Board of Directors has approved Fortum's 2006 Financial Statements and
Fortum's auditors have issued their audit report on 2006 on 30 January 2007.

Publication of results in 2007:
Interim Report January - March will be published on 24 April 2007
Interim Report January - June will be published on 18 July 2007
Interim Report January - September will be published on 18 October 2007

Distribution:
Helsinki Stock Exchange
Key media
www.fortum.com

Information on the financial statement release is available on Fortum’s website
at: www.fortum.com/investors


FORTUM GROUP
JANUARY-DECEMBER 2006
Financial Statements are audited

CONDENSED CONSOLIDATED  INCOME STATEMENT
MEUR                                               Q4 2006 Q4 2005  2006  2005

Continuing operations:
Sales                                                1 254  1 112  4 491 3 877
Other income                                            56     67     80   101
Materials and services                                -453   -355 -1 673-1 325
Employee benefit costs                                -133   -122   -508  -481
Depreciation, amortisation and impairment charges     -118   -102   -429  -407
Other expenses                                        -151   -126   -506  -418
Operating profit                                       455    474  1 455 1 347
Share of profit of associates and joint ventures        18     27     69    55
    Interest expense                                   -46    -46   -176  -203
    Interest income                                     12     15     50    46
    Fair value gains and losses on financial             6     14     30    40
    instruments
    Other financial expenses - net                       3    -18     -7   -18
Finance costs - net                                    -25    -35   -103  -135
Profit before income tax                               448    466  1 421 1 267
Income tax expense                                     -87   -125   -301  -331
Profit for the period from continuing operations       361    341  1 120   936
Discontinued operations:
Profit for the period from discontinued operations      -      -      -    474
Profit for the period                                  361    341  1 120 1 410

Attributable to:
Equity holders of the Company                          338    320  1 071 1 358
Minority interest                                       23     21     49    52
                                                       361    341  1 120 1 410


Earnings per share for profit from total Fortum Group attributable
to the equity holders of the company during the year (in € per share)

Basic                                                0.39   0.36   1.22  1.55
Diluted                                              0.38   0.36   1.21  1.53

Earnings per share for profit from continuing operations attributable
to the equity holders of the company during the year (in € per share)

Basic                                                0.39   0.36   1.22  1.01
Diluted                                              0.38   0.36   1.21  1.00

Earnings per share for profit from discontinued operations attributable
to the equity holders of the company during the year (in € per share)

Basic                                                   -      -      -  0.54
Diluted                                                 -      -      -  0.53


CONDENSED CONSOLIDATED BALANCE SHEET
MEUR                                                             Dec 31 Dec 31 
                                                                  2006    2005
ASSETS
Non-current assets
Intangible assets                                                     96    80
Property, plant and equipment                                     11 471 10176
Investments in associates and joint ventures                       2 197 1 610
Other long-term investments                                          556   502
Other long-term receivables                                          103    87
Long-term interest bearing receivables                               680   620
Total non-current assets                                          15 103 13075

Current assets
Inventories                                                          329   256
Trade and other receivables                                        1 250 1 011
Cash and cash equivalents                                            157   788
Total current assets                                               1 736 2 055

Total assets                                                      16 839 15130

EQUITY
Capital and reserves attributable to the
Company's equity holders
Share capital                                                      3 023 2 976
Other equity                                                       4 885 4 175
Total                                                              7 908 7 151
Minority interest                                                    253   260
Total equity                                                       8 161 7 411

LIABILITIES
Non-current liabilities
Interest-bearing liabilities                                       4 060 3 118
Deferred tax liabilities                                           1 795 1 512
Provisions                                                           636   606
Other liabilities                                                    619   435
Total non-current liabilities                                      7 110 5 671

Current liabilities
Interest-bearing liabilities                                         442   828
Trade and other payables                                           1 126 1 220
Total current liabilities                                          1 568 2 048

Total liabilities                                                  8 678 7 719

Total equity and liabilities                                      16 839 15130


CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY

MEUR                   Share Share   Other    Fair  Treasury Retain Minorit Total
                     capital premium restrict value shares   ed     ty
	                             ed funds and            earnings
	                                     other
		                             reserves

Total equity at          2 976     70      2   -117     -   4 220    260 7 411
31.12.2005
Translation and other       -      -      -      -      -      38      6    44
differences
Cash flow hedges            -      -      -     198     -      -      -1   197
Other fair value            -      -      -     442     -      -      -    442
adjustments 1)
Total gains and losses not  -      -      -     640     -      38      5   683
recognised in Income statement
Net profit for the          -      -      -      -      -   1 071     49 1 120
period
Total recognised income     -      -      -     640     -   1 109     54 1 803
for the period
Stock options excercised    47      3     -1     -      -      -      -     49
Cash dividend               -      -      -      -      -    -987     -   -987
Repurchase of own shares    -      -      -      -     -30     -      -    -30
Change in the recognition   -      -      -     -12     -     -12     -    -24
of shares preformance
arrangement 2)
Changes in minority         -      -      -      -      -      -     -61   -61
through business combinations
Total equity at          3 023     73      1    511    -30  4 330    253 8 161
31.12.2006

Total equity at          2 948     62     13    134     -   4 343    150 7 650
31.12.2004
Translation and other       -      -      -      -      -     -55     -7   -62
differences
Cash flow hedges            -      -      -    -257     -      -       3  -254
Other fair value            -      -      -       6     -      -      -      6
adjustments
Total gains and losses not  -      -      -    -251     -     -55     -4  -310
recognised in Income statement
Net profit for the period   -      -      -      -      -   1 358     52 1 410
Total recognised income     -      -      -    -251         1 303     48 1 100
for the period
Stock options excercised    28      8    -11     -      -      -      -     25
Cash dividend               -      -      -      -      -    -506     -   -506
Share dividend 3)           -      -      -      -      -    -920     -   -920
Changes in minority         -      -      -      -      -      -      62    62
through business combinations
Total equity at          2 976     70      2   -117     -   4 220    260 7 411
31.12.2005

1) Includes the fair value change of Renewable Energy Corporation (REC)
shareholding in Hafslund. See accounting policies.
2) Share performance arrangement has been formally decided to be cash-settled,
which has had an impact on the accounting treatment.
3) In 2005 the effect from the share dividend on Fortum Group equity was EUR
920 million. In the parent company the effect on retained earnings was
EUR 969 million in 2005.


CONSOLIDATED CASH FLOW STATEMENT
MEUR                                               Q4 2006 Q4 2005  2006  2005

Cash flow from operating activities
Operating profit before depreciations continuing       573    576  1 884 1 754
oprations
Non-cash flow items and divesting activities           -71     28    -92    15
Financial items and realised foreign exchange gains   -116    -45    -89  -107
and losses
Taxes                                                 -114    -72   -374  -298
Funds from operations continuing operations            272    487  1 329 1 364
Change in working capital                             -180    -63   -178   -93
Net cash from operating activities continuing           92    424  1 151 1 271
operations
Net cash from operating activities discontinued         -      -      -    133
operations
Total net cash from operating activities                92    424  1 151 1 404

Cash flow from investing activities
Capital expenditures                                  -188   -139   -485  -346
Acquisition of shares net of cash acquired            -144   -120   -899  -127
Proceeds from sales of fixed assets                     73     19     83    30
Proceeds from sales of shares                           11      0     42    26
Change in other investments                             -6     -1    -47    19
Net cash used in investing activities continuing      -254   -241 -1 306  -398
operations

Net cash used in investing activities discontinued      -      -      -  1 155
Total net cash used in investing activities           -254   -241 -1 306   757

Cash flow before financing activities                 -162    183   -155 2 161

Cash flow from financing activities
Net change in loans                                   -505   -186    492-1 063
Dividends paid to the Company´s equity holders           0      0   -987  -506
Repurchase of own shares                                 0     -     -30    -
Other financing items                                   21      9     49    22
Net cash used in financing activities continuing      -484   -177   -476-1 547
operations
Net cash used in financing activities discontinued      -      -      -     29
operations
Total net cash used in financing activities           -484   -177   -476-1 518

Total net increase (+)/decrease (-) in cash
and marketable securities, continuing operations      -646      6   -631   643


KEY RATIOS 1)
MEUR                    Dec    Sept    June   March  Dec   Sept    June   March
                        31     30      30     31     31    30      30     31
                        2006   2006    2006   2006   2005  2005    2005   2005

Continuing operations:
EBITDA, MEUR             1 884  1 311    979    570  1 754  1 178    837   509

Earnings per share        1.22   0.83   0.64   0.39   1.01   0.65   0.45  0.28
(basic), EUR

Capital employed, MEUR  12 663 12 216 12 121 10 605 11 357 11 154 10 987 10534

Interest-bearing net     4 345  4 159  4 308  3 900  3 158  3 333  3 595 4 878
debt, MEUR
Capital expenditure and  1 395  1 063    935    114    479    213    123    49
gross investments in 
shares, MEUR
Capital expenditure, MEUR  485    297    174     71    346    207    123    49

Return on capital         13.4   12.5   14.6   19.4   13.5   11.7   12.4  16.4
employed, % 3)
Return on shareholder's   14.4                        13.5
equity, % 2)
Net debt / EBITDA 3)       2.3    2.4    2.2    1.7    1.8    2.1    2.2   2.4

Gearing, %                  53     57     60     60     43     47     53    71
Equity per share, EUR     8.91   7.97   7.83   7.11   8.17   7.86   7.64  7.67
Equity-to-assets ratio, %   48     43     43     44     49     47     43    43

Total Fortum:

Earnings per share        1.22   0.83   0.64   0.39   1.55   1.19   0.99  0.38
(basic), EUR
Capital employed, MEUR  12 663 12 216 12 121 10 605 11 357 11 154 10 987 11891
Return on capital         13.4   12.5   14.6   19.4   16.6   15.3   16.7  18.2
employed, % 3)
Return on shareholder's   14.4   13.7   16.3   21.4   18.7   17.6   19.2  19.5
equity, % 3)
Net debt / EBITDA 3)       2.3    2.4    2.2    1.7    1.4    1.5    1.5   1.8
Interest coverage         11.5   10.9   13.7   16.9   11.6   10.6   11.3  11.6
Funds from operations/    30.6   33.9   36.5   49.6   43.2   42.9   44.2  39.3
interest-bearing net debt,
% 3)

Average number of        8 910  9 085  9 024  8 886 10 026 10 279 11 066 13135
employees
Average number of       881194 880695 880508 880725 872613 872438 872316 871710
shares, 1 000 shares
Diluted adjusted average886929 891217 891451 892406 887653 889157 883629 883774
number of shares,
1 000 shares
Number of registered    887394 883274 882708 881546 875294 872981 872793 871854
shares, 1 000 shares
Number of shares excluding N/A 881614  881048   N/A    N/A    N/A    N/A    N/A
treasury shares, 1 000 shares

1) Key ratios in 2005 are based on Fortum total numbers including continuing
and discontinued operations if otherwise not stated.
2) For year 2005 return on equity for continuing operations is calculated based
on Profit for the period from continuing operations divided by Total equity
at the end of the period. Profit for the period from discontinued operations
has been subtracted from Total equity as at 31 December 2005.
3) Quarterly figures are annualised.


SALES BY SEGMENTS
MEUR                                               Q4 2006 Q4 2005  2006  2005

Power Generation                                       667    598  2 439 2 058
- of which internal                                     36     23   -133    97
Heat                                                   381    325  1 268 1 063
- of which internal                                     -5      0    -32    12
Distribution                                           210    196    753   707
- of which internal                                      2      2      8     8
Markets                                                529    391  1 912 1 365
- of which internal                                     43     35    149   101
Other                                                   19     20     78    91
- of which internal                                     16     13     62    63
Eliminations 1)                                       -552   -418 -1 959-1 407
Sales from continuing operations                     1 254  1 112  4 491 3 877
Sales from discontinued operations                      -      -      -  2 061
Eliminations                                            -      -      -    -20
Total                                                1 254  1 112  4 491 5 918

1) Eliminations include sales and purchases with Nordpool that is netted on
Group level on an hourly basis and posted either as revenue or cost depending on
if Fortum is a net seller or net buyer during any particular hour.


OPERATING PROFIT BY SEGMENTS
MEUR                                               Q4 2006 Q4 2005  2006  2005

Power Generation                                       290    296    980   825
Heat                                                   119     94    264   269
Distribution                                            74     76    252   251
Markets                                                -18     11     -6    32
Other                                                  -10     -3    -35   -30
Operating profit from continuing operations            455    474  1 455 1 347
Operating profit from discontinued operations           -      -      -    517
Total                                                  455    474  1 455 1 864


COMPARABLE OPERATING PROFIT BY SEGMENTS, CONTINUING OPERATIONS

MEUR                                               Q4 2006 Q4 2005  2006  2005

Power Generation                                       289    297    985   854
Heat                                                    95     97    253   253
Distribution                                            77     76    250   244
Markets                                                 -8      8     -4    30
Other                                                  -13    -18    -47   -47
Comparable operating profit from continuing operations 440    460  1 437 1 334
Non-recurring items                                     38     10     61    30
Other items effecting comparability                    -23      4    -43   -17
Operating profit from continuing operations            455    474  1 455 1 347


NON-RECURRING ITEMS BY SEGMENTS
MEUR                                               Q4 2006 Q4 2005  2006  2005

Power Generation                                        22     -6     29    -3
Heat                                                    16      2     20    14
Distribution                                            -1      0      2     1
Markets                                                  0      0      0     0
Other                                                    1     14     10    18
Total                                                   38     10     61    30


OTHER ITEMS EFFECTING COMPARABILITY BY SEGMENTS
MEUR                                               Q4 2006 Q4 2005  2006  2005

Power Generation                                       -21      5    -34   -26
Heat                                                     8     -5     -9     2
Distribution                                            -2      0      0     6
Markets                                                -10      3     -2     2
Other                                                    2      1      2    -1
Total                                                  -23      4    -43   -17


DEPRECIATION, AMORTISATION AND IMPAIRMENT CHARGES BY SEGMENTS

MEUR                                               Q4 2006 Q4 2005  2006  2005

Power Generation                                        27     29    108   112
Heat                                                    43     31    144   123
Distribution                                            39     36    147   145
Markets                                                  5      4     19    15
Other                                                    4      2     11    12
Total depreciation, amortisation and impairment charges
from continuing operations                             118    102    429   407
Total depreciation, amortisation and impairment charges from
discontinued operations                                 -      -      -     36
Total                                                  118    102    429   443


SHARE OF PROFITS IN ASSOCIATES AND JOINT VENTURES BY SEGMENTS

MEUR                                               Q4 2006 Q4 2005  2006  2005

Power Generation 1)                                     12     17     30    23
Heat                                                     7      3     23    11
Distribution                                             0      6     15    20
Markets                                                  0      0      1     1
Other                                                   -1      1      0     0
Share of profits in associates and joint ventures       18     27     69    55
from operations
Share of profits in associates and joint ventures       -      -      -     -2
from discontinued operations
Total                                                   18     27     69    53

1) The main part of the associated companies in Power Generation are power
production companies from which Fortum purchases produced electricity at
production costs including interest costs and income taxes.


INVESTMENTS IN ASSOCIATES AND JOINT VENTURES BY SEGMENTS
MEUR                                                             Dec 31 Dec 31
								   2006   2005

Power Generation 2)                                                1 752 1 259
Heat                                                                 150   133
Distribution 2)                                                      287   210
Markets                                                                8     8
Other                                                                  0     0
Total                                                              2 197 1 610

2) Fortums ownership in Lenenergo shares was presented in Power Generation
segment in 2005 and 2006 in Distribution segment as a result of restructuring
of Lenenergo.

CAPITAL EXPENDITURE BY SEGMENTS
MEUR                                               Q4 2006 Q4 2005  2006  2005

Power Generation                                        33     25     95    83
Heat                                                    74     58    184   124
Distribution                                            76     50    183   115
Markets                                                  0      3      8    10
Other                                                    5      4     15    14
Capital expenditure from continuing operations         188    140    485   346
Capital expenditure from discontinuing operations       -      -      -     99
Total                                                  188    140    485   445


GROSS INVESTMENTS IN SHARES BY SEGMENTS
MEUR                                               Q4 2006 Q4 2005  2006  2005

Power Generation                                       141     45    145    47
Heat                                                     3     82    589    87
Distribution                                             0      0    130     0
Markets                                                  0      0      6     0
Other                                                    0      0     40     0
Gross investments in shares from continuing operations 144    127    910   134
Gross investments in shares from discontinuing           -      -      -     -
operations
Total                                                  144    127    910   134


NET ASSETS BY SEGMENTS
MEUR                                                             Dec 31 Dec 31
                                                                   2006   2005

Power Generation                                                   6 734 5 954
Heat                                                               3 407 2 551
Distribution                                                       3 412 3 021
Markets                                                              176   228
Other and Eliminations                                                85   139
Total                                                             13 814 11893


RETURN ON NET ASSETS  BY SEGMENTS
%                                                                Dec 31 Dec 31
                                                                   2006   2005

Power Generation                                                   16.1  14.0
Heat                                                                9.6  11.6
Distribution                                                        8.4   8.8
Markets                                                            -1.6  17.4

Power Generation                                                   7 131 6 522
Heat                                                               3 870 2 895
Distribution                                                       3 911 3 448
Markets                                                              618   515
Other and Eliminations                                               255   216
Assets included in Net assets                                     15 78513 596
Interest-bearing receivables                                         693   620
Deferred taxes                                                         5    18
Other assets                                                         199   108
Cash and cash equivalents                                            157   788

COMPARABLE RETURN ON NET ASSETS  BY SEGMENTS
%                                                                Dec 31 Dec 31
                                                                   2006   2005

Power Generation                                                   16.1  14.5
Heat                                                                9.2  11.0
Distribution                                                        8.3   8.6
Markets                                                            -0.8  16.4

Return on net assets is calculated by dividing the sum of operating profit and
share of profit of associated companies and joint ventures with average net
assets. Average net assets are calculated using the opening balance and end of
each quarter values.


ASSETS BY SEGMENTS
MEUR                                                             Dec 31 Dec 31
                                                                   2006   2005

Total assets                                                      16 83915 130


LIABILITIES BY SEGMENTS
MEUR                                                             Dec 31 Dec 31
                                                                   2006   2005

Power Generation                                                     397   568
Heat                                                                 463   344
Distribution                                                         499   427
Markets                                                              442   287
Other and Eliminations                                               170    77
Liabilities included in Net assets                                 1 971 1 703
Deferred tax liabilities                                           1 795 1 512
Other                                                                410   558
Total liabilities included in capital employed                     4 176 3 773
Interest-bearing liabilities                                       4 502 3 946
Total equity                                                       8 161 7 411
Total equity and liabilities                                      16 83915 130


CHANGES IN INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT
MEUR                                                             Dec 31 Dec 31
                                                                   2006   2005

Opening balance                                                   10 25612 041
De-consolidation of Neste Oil                                         - -1 540
Acquisition of subsidiary companies                                1 008   171
Capital expenditures                                                 485   346
Purchase of emission rights                                            9    -
Disposals                                                            -78   -31
Depreciation, amortisation and impairment                           -429  -407
Translation differences                                              316  -324
Closing balance                                                   11 56710 256

Acquisition of Fortum Espoo Oyj
Fortum acquired 99.8% of the shares of Fortum Espoo Oyj (former E.On Finland Oyj)
on 26. June 2006. On 13 September 2006 Fortum obtained the title to all minority
shares of Fortum Espoo in the redemption procedure according to the Finnish
Companies Act.
The quotation of Fortum Espoo's share on Helsinki Stock Exchange has ceased on
13 September 2006. Fortum Espoo is consolidated as 100% owned subsidiary
financial statements from the end of June.


Consideration                                                           Fortum
EUR million                                                        Espoo Group

Purchase consideration:
Cash paid                                                                  761
Direct costs relating to the acquisition                                     5
Total purchase consideration                                               766
Fair value of the acquired net assets                                      766
Translation difference                                                       0
Goodwill                                                                     0


                                                          Fortum Espoo Group
Specification of the acquired net identifiable assets:
                                                           Total Allocat Acquir
                                                           Value ed Fair ed Book
EUR million                                                      Values Value

Cash and cash equivalents                                      64           64
Intangible assets                                              13    -28    41
Property, plant and equipment                               1 008    696   312
Shares                                                          3      1     2
Inventories                                                    18           18
Receivables                                                   185     23   162
Deferred tax assets                                            19     18     1
Minorities                                                      0            0
Non-interest bearing liabilities                             -307    -17  -290
Interest-bearing liabilities                                  -11          -11
Deferred tax liabilities                                     -226   -190   -36
Net identifiable assets                                       766    503   263
Minority interests                                              0            0
Fair value of the acquired net identifiable assets            766    503   263

                                                                        Fortum
                                                                   Espoo Group

Purchase consideration settled in cash                                     766
Cash and cash equivalents in subsidiaries acquired                          64
Cash outflow on acquisition                                                702

Interest-bearing debt in subsidiaries acquired                              11
Gross investment in subsidiaries acquired                                  713

QUARTERLY SALES BY SEGMENTS

MEUR                        Q4     Q3     Q2     Q1     Q4     Q3     Q2    Q1
			  2006   2006   2006   2006   2005   2005   2005  2005

Power Generation           667    569    560    643    598    450    476   534
- of which internal         36   -102    -17    -50     23      6     13    55
Heat                       381    178    229    480    325    147    206   385
- of which internal         -5    -12     -7     -8      0      1     -1    12
Distribution               210    162    162    219    196    149    160   202
- of which internal          2      2      2      2      2      2      2     2
Markets                    529    436    400    547    391    284    298   392
- of which internal         43     30     35     41     35     19     22    25
Other                       19     19     20     20     20     26     22    23
- of which internal         16     16     15     15     13     13     15    22
Eliminations              -552   -418   -423   -566   -418   -282   -304  -403
Sales from continuing    1 254    946    948  1 343  1 112    774    858 1 133
Sales from discontinuing    -      -      -      -      -      -      -  2 061
Eliminations                -      -      -      -      -      -      -    -20
Total                    1 254    946    948  1 343  1 112    774    858 3 174

QUARTERLY OPERATING PROFIT BY SEGMENTS

MEUR                        Q4     Q3     Q2     Q1     Q4     Q3     Q2    Q1
			  2006   2006   2006   2006   2005   2005   2005  2005 
                                                                             1)

Power Generation           290    184    222    284    296    181    125   223
Heat                       119    -15     41    119     94     13     50   112
Distribution                74     42     55     81     76     48     56    71
Markets                    -18      6      3      3     11      7      8     6
Other                      -10     -1     -9    -15     -3     -9    -12    -6
Operating profit from      455    216    312    472    474    240    227   406
continuing operations
Operating profit from       -      -      -      -      -      -     390   127
discontinued operations
Total                      455    216    312    472    474    240    617   533

1) The accounting treatment of CO2 emission allowances was changed retroactively
in Q2/2005 according to the decision of IASB to withdraw the IFRIC 3 Emission
rights with immediate effect.

QUARTERLY COMPARABLE OPERATING PROFIT BY SEGMENTS, CONTINUING OPERATIONS

MEUR                        Q4     Q3     Q2     Q1     Q4     Q3     Q2    Q1
			  2006   2006   2006   2006   2005   2005   2005  2005 

Power Generation           289    195    208    293    297    161    172   224
Heat                        95     -3     35    126     97     12     37   107
Distribution                77     39     53     81     76     47     55    66
Markets                     -8      2      2      0      8      7      8     7
Other                      -13     -8    -12    -14    -18     -7    -11   -11
Comparable operating       440    225    286    486    460    220    261   393
profit from continuying
operations
Non-recurring items         38      8     15      0     10      2     12     6
Other items effecting      -23    -17     11    -14      4     18    -46     7
effecting comparability
Operating profit from      455    216    312    472    474    240    227   406
continuing operations

QUARTERLY NON-RECURRING ITEMS BY SEGMENTS

MEUR                        Q4     Q3     Q2     Q1     Q4     Q3     Q2    Q1
			  2006   2006   2006   2006   2005   2005   2005  2005 

Power Generation            22      1      6      0     -6      3      0     0
Heat                        16     -1      4      1      2      1     11     0
Distribution                -1      1      2      0      0      0      1     0
Markets                      0      0      0      0      0      0      0     0
Other                        1      7      3     -1     14     -2      0     6
Total                       38      8     15      0     10      2     12     6



QUARTERLY OTHER ITEMS EFFECTING COMPARABILITY

MEUR                        Q4     Q3     Q2     Q1     Q4     Q3     Q2    Q1
			  2006   2006   2006   2006   2005   2005   2005  2005 

Power Generation           -21    -12      8     -9      5     17    -47    -1
Heat                         8    -11      2     -8     -5      0      2     5
Distribution                -2      2      0      0      0      1      0     5
Markets                    -10      4      1      3      3      0      0    -1
Other                        2      0      0      0      1      0     -1    -1
Total                      -23    -17     11    -14      4     18    -46     7


DISCONTINUED OPERATIONS (including eliminations between Fortum and discontinued
operations)

Fortum does not have discontinued operations in the year 2006.

MEUR                                                          Q4   Q1-Q4 2005 2)
							    2005  2005 1)

Sales                                                          -   2 061 2 061
Other income                                                   -     395   395
Materials and services                                         -  -1 726-1 726
Employee benefit costs                                         -     -57   -57
Depreciation, amortisation and impairment charges              -     -36   -36
Other expenses                                                 -    -120  -120
Operating profit                                               -     517   517
Share of profit of associates and joint ventures               -      -2    -2
Finance costs-net                                              -      -6    -6
Profit before income tax                                       -     509   509
Income tax expense                                             -     -35   -35
Profit for the year from discontinued operations               -     474   474

1) The accounting treatment of CO2 emission allowances was changed retroactively
in Q2/2005 according to the decision of IASB to withdraw the IFRIC 3 Emission
rights with immediate effect.
2) Other income includes the capital gain, EUR 390 million, from the sale of
approximately 15% of the shares in Neste Oil Oyj in 2005.

PLEDGED ASSETS, CONTINGENT LIABILITIES AND COMMITMENTS

MEUR                                                              Dec 31 Dec 31 
								    2006   2005
Pledged assets
On own behalf
             For debt
              Pledges                                                176   144
              Real estate mortgages                                   49    49
             For other commitments
              Real estate mortgages                                   56    66
On behalf of associated companies and joint ventures
             Pledges and real estate mortgages                         3     3

Contingent liabilities
On own behalf
             Other contingent liabilities                            144    94
On behalf of associated companies and joint ventures
             Guarantees                                              213   208
             Other contingent liabilities                            125   125
On behalf of others
             Guarantees                                               12     2
             Other contingent liabilities                              1     3


Operating lease commitments
Due within a year                                                     20    17
Due after one year and within five years                              38    32
Due after five years                                                  78    76
Total                                                                136   125


Capital commitments                                                  266    81


NUCLEAR RELATED ASSETS AND LIABILITIES
MEUR                                                              Dec 31 Dec 31 
								    2006   2005

Liability for nuclear waste management according to the Nuclear E    685   618

Funding Target 2)                                                    649   618
Fortum´s share of reserves in the State Nuclear Waste Management    -636  -610
Difference covered by real estate mortgages 4)                        13     8

1) The legal liability calculated according to the Nuclear Energy Act in
Finland is EUR 685 (618) million as of 31 December 2006 (and 2005 respectively) 
Discounted liability in the balance sheet calculated according to IAS 37 is
EUR 450 (418) million as of 31 December 2006.
The main reason for the difference in liability is that the legal liability is
not discounted to net present value.
2) Funding Target is EUR 649 (618) million as of 31 December 2006 (and 2005
respectively). Funding target needs to be fully paid by the end of March 2007.
The difference between the liability and the funding target must be covered by
a security, which will be given by the end of June 2007.
3) Fortum contributes to the Nuclear Waste Fund according to the funding target.
Fortum´s share of the State Nuclear Waste Management Fund as of 31 December
2006 is EUR 636 (610) million.
The value of the fund asset in the balance sheet is EUR 450 (418) million as of
31 December 2006 due to IFRIC Interpretation 5, which states that it can not
exceed the carrying value of the related liabilities.
4) At year end there is a difference between the funding target and Fortum´s
share of the State Nuclear Waste Management Fund due to yearly revised
calculation of the legal liability and it will be paid during first quarter of
the following year. Fortum has given real estate mortgages as security which
also covers the liability in the balance sheet. The real estate mortgages are
included in pledged assets.


DERIVATIVES
MEUR                                                 Dec 31 2006    Dec 31 2005

						 Notional Net fair Notianal Net
                                                 value    value    value    fair
                                                                            value
Interest and currency derivatives                 

Interest rate swaps                                  3 021      3  2 636    11
Forward foreign exchange contracts                   5 256    -61  5 297    69
Interest rate and currency swaps                     2 575    -76  2 169     3

Electricity derivatives
						  Volume   Net fair Value   Net
                                                          value            fair
                                                                           value
                                                      TWh   MEUR     Wh     MEUR

Sales swaps                                            134    515     84  -463
Purchase swaps                                         101   -426     49   276
Purchased options                                        0      0      1    -1
Written options                                          3      3      3     2

Oil derivatives                                    
						 Volume   Net fair Value   Net
                                                         value            fair
                                                                          value
                                                  1000 bb  MEUR    1000 bb MEUR

Sales swaps and futures                                180      0     90     0
Purchase swaps and futures                             897      0    571     6

CO2 emission allowance derivatives 
						  Volume   Net fair Value   Net
                                                           value            fair
                                                                           value
                                                    ktCO2   MEUR   ktCO2    MEUR

Sold                                                   405      0     -     -
Bought                                                 418      0     -     -

Share derivatives 
						 Notional Net fair Notianal Net
                                                 value    value    value    fair
                                                                           value
Share forwards 1)                                       24     37     11    14

1) Cash-settled share forwards are used as a hedging instrument for Fortum Group's
performance share arrangement.


EXCHANGE RATES

The balance sheet date rate is based on exchange rate published by the European
Central Bank for the closing date. The average exchange rate is calculated as
an average of each months ending rate from the European Central Bank during the
year and ending rate previous year.

Key exchange rates for Fortum Group applied in the accounts:

                       Dec    Sept   June 30 March March  June   Sept   Dec
		       31     30     30      31    31     30     30     31
Average rate  Currency 2006   2006   2006    2006  2005   2005   2005   2005

Sweden           SEK   9.2637 9.3110 9.3329 9.3798 9.0817 9.1563 9.2166 9.2783
Norway           NOK   8.0376 7.9753 7.9396 8.0171 8.2306 8.1314 8.0550 8.0240
Poland           PLN   3.8965 3.9139 3.8991 3.8569 4.0381 4.1212 4.0600 4.0268

                       Dec    Sept   June 30 March March  June   Sept   Dec
		       31     30     30      31    31     30     30     31
Balance sheet date     2006   2006   2006    2006  2005   2005   2005   2005
rate

Sweden           SEK   9.0404 9.2797 9.2385 9.4315 9.1430 9.4259 9.3267 9.3885
Norway           NOK   8.2380 8.2350 7.9360 7.9675 8.2060 7.9155 7.8770 7.9850
Poland           PLN   3.8310 3.9713 4.0546 3.9425 4.0807 4.3088 3.9185 3.8600

ACCOUNTING POLICIES

The condensed financial statements have been prepared in accordance with
International Accounting Standard (IAS) 34, Interim Financial Reporting.

The accounting policies adopted are consistent with those followed in the
preparation of the Group's annual financial statements for the year
ended 31 December 2006.

Accounting for the share of profits from Hafslund ASA
According to Fortum Group accounting policies the share of profits from
Hafslund has been included in Fortum Group figures based on the previous quarter
information. Hafslund will publish January-December 2006 results on 7 February
2007. Fortum uses previous quarter information since Hafslund's interim reports 
are published later than Fortum's interim reports.

When calculating the share of profits in Hafslund, Fortum has in accordance with
Fortum's accounting policies reclassified Hafslund's accounting treatment
for the shareholding in Renewable Energy Corporation (REC). Hafslund has
classified the shareholding in REC as financial assets at fair value through 
profit and loss while Fortum has classified the REC shareholding as available for
sale financial assets with fair value changes recorded directly through equity,
only if Hafslund would divest shares in REC, the cumulative fair value change
would effect Fortum's income statement.

Since REC is listed on the Oslo stock exchange as of 9 May 2006, Fortum is
accounting for the fair value change in REC based on the closing price on the
Oslo stock exchange at each closing date. The amount of shares is based on the
amount published by Hafslund in the previous quarter if other information is not
available. At the end of December 2006 the fair value change during 2006 was
approximately EUR 440 million in Fortum.




Definitions of key figures

Comparable operating     =    Operating profit - non-recurring items - 
profit                        other items effecting comparability

Non-recurring items      =    Mainly capital gains and losses

Other items effecting    =    Includes effects from financial derivatives
comparability                 hedging future cash-flows where
                              hedge accounting is not applied according to
                              IAS 39 and effects from the accounting of Fortum´s
                              part of the Finnish Nuclear Waste Fund where the
                              asset in the balance sheet cannot exceed the related
                              liabilities according to IFRIC interpretation 5.

EBITDA (Earnings before  =    Operating profit continuing operations 
interest, taxes, depreciation  + Depreciation, amortisation
and amortisation) continuing  and impairment charges continuing operations
operations

Return on shareholder's  =    Profit for the year                       x 100
equity, %                     Total equity average

Return on capital        =    Profit before taxes + interest and other fx 100
employed, %                   Capital employed average

Return on capital employed    Profit before taxes continuing operations x 100
continuing operations, % =    financial expenses continuing operations
                              Capital employed continuing operations average

Return on net assets, %  =    Operating profit + Share of profit (loss) x 100
                              Net assets average

Comparable return on net =    Comparable operating profit + Share of prox 100
assets, %                     and joint ventures (adjusted for IAS 39 effects)
                              Comparable net assets average

Capital employed         =    Total assets - non-interest bearing liabilities
                              - deferred tax liabilities - provisions

Net assets               =    Non-interest bearing assets + interest-bearing
                              assets related to the Nuclear 
                              Waste Fund - non-interest bearing liabilities
                              - provisions
                              (non-interest bearing assets and liabilities do
                              not include finance related items, tax and deferred
                              tax and assets and liabilities from fair
                              valuations of derivatives where hedge
                              accounting is applied)

Comparable net assets    =    Net assets adjusted for non-interest bearing
                              assets and liabilities arising from financial
                              derivatives hedging future cash-flows where hedge
                              accounting is not applied according to IAS 39

Interest-bearing net debt=    Interest-bearing liabilities - cash and
                              cash equivalents

Gearing, %               =    Interest-bearing net debt                 x 100
                              Total equity

Equity per share, EUR    =    Shareholder's equity
                              Number of shares excluding treasury shares at
                              the end of the period

Equity-to-assets         =    Total equity including minority interest  x 100
ratio, %                      Total assets

Net debt / EBITDA        =    Interest-bearing net debt
                              Operating profit + Depreciation, amortisation
                              and impairment charges

Net debt / EBITDA        =    Interest-bearing net debt
continuing operations         Operating profit continuing operations + 
                              Depreciation, amortisation and
                              impairment charges continuing operations


Interest coverage        =    Operating profit
                              Net interest expenses

Earnings per share (EPS) =    Profit for the period - minority interest
                              Average number of shares during the period

Gross investments in     =    Investments in subsidiary shares, shares in
shares                        associated companies and other shares in available
                              for sale financial assets. Investments in
                              subsidiary shares are net of cash and grossed
                              with interest-bearing liabilities in the
                              acquired company.