Fortum takes a first year hit

Nordic energy group Fortum last month reported lower-than-expected first year profits for 1998 of FM2.21bn ($40m). The company cited the sharp decline in electricity and oil prices as the main reason for the drop, and warned that the company`s results would see little improvement if prices remained at current levels.

The Finnish company, formed last year by the merger of Imatran Voima Oy and Neste, saw its maiden 12 month profits fall by 24 per cent on the previous year, and also reported reduced sales of FM50.5bn. The proforma turnover of the group for the 1997 fiscal year was FM60bn.

Chief Executive Heikki Marttinen stated that the company had performed well given the market conditions. Crude oil prices fell from a peak of $20 per barrel in 1997 to $10 per barrel by the end of 1998. Fortum`s Operating profit fell 20 per cent to FM3.5bn, with the greatest reduction seen in the group`s oil exploration and production unit.

• Following the merger of IVO and Neste Oy last year, Fortum`s IVO Generation Services (UK) Ltd. unit will be known as Fortum O&M (UK) Ltd. as of 10 March 1999.