BNPP Exane view: A miss in the core generation business on lower achieved pricing, but client incoming ahead of results suggests people were expecting a weak print, and bottom-line EPS is a high-single-dig beat on a combination of good results in the ''other'' and net financial costs lines. Latter two likely to get scrutiny on the conference call, but this looks not-as-bad-as feared overall and we think the shares could react moderately positively. Net debt has also improved, now below FY Bbg consensus although tracking with our own est, and hedging results look in line.
Fortum has released its 3Q24 results. The key highlights are:
. Comparable operating profit in line, EUR158m vs. Vara consensus EUR157m (+1%), see below for divisional breakdown
. Comparable EPS beat, EUR0.14 vs. Vara consensus EUR0.13 (+8%), looks driven by lower comparable finance costs (-EUR5m in 3Q24 vs. -EUR15m in 3Q23) and rounding effect
. Net debt at EUR655m has come in below FY consensus EUR776m (no Q3 consensus) but on trajectory of our own forecast to reach cEUR350m by y/e.
. Capex, tax and optimisation premium guidance is unchanged
Divisional highlights are:
. Generation comparable operating profit miss, EUR176m vs. Vara consensus EUR184m (-4%) due to lower spot and hedge prices
. Consumer solutions comparable operating profit miss, EUR6m vs. Vara consensus EUR13m (-54%) due to lower gas sales margins
. Other comparable operating profit beat, EUR(24)m vs. Vara consensus EUR(35)m (+31%), according to the PR ''mainly due to higher internal charges for services of enabling functions'' - likely to get some scrutiny on the conference call
Hedging:
. 2024 balance of year hedging: now 80% hedged at EUR44.0/MWh (vs. previously 75% at EUR43.0/MWh)
. 2025 hedging: now 65% hedged at EUR42.0/MWh (vs. previously 60% at EUR42.0/MWh), implying EUR42/MWh on incrementally hedged volumes
. 2026 hedging: newly disclosed: 40% hedged at EUR41/MWh
The conference call will begin at 09:00 UK time, dial in via webcast at...
