Finland utility Fortum’s second-quarter core profit lags forecast

Finnish utility Fortum posted on Friday weaker-than-expected second-quarter core profits and said it would consider selling its recycling and waste businesses as it looks to focus on clean energy.

Comparable earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter fell 5% to 344 million euros ($377 million) from a year earlier, and came in below an average of 364 million euros expected by nine analysts in a poll provided by the company.

Fortum is recovering from a tumultuous year during which it had to give up its troubled German subsidiary Uniper to the German government, followed by Russia taking control of both groups’ Russian assets.

Fortum said profit at its power generation segment improved, while its consumer sales declined.

“Unfortunately the Consumer Solutions segment had a rather poor quarter mainly due to the continued churn with customer outflow from certain hedged power contracts,” Fortum CEO Markus Rauramo said in a statement.

Earnings for the quarter were also dented by lower profits of associates, Fortum said, mainly caused by the effects of Swedish nuclear waste-related provisions in co-owned nuclear companies.

In March, Fortum announced a new strategy focused on Nordic emissions-free energy, in an effort to put the crisis behind it.

“In the coming months, we look forward to continuing our strategy execution, focusing on reliable, clean energy production and industrial decarbonisation in the Nordics,” Rauramo said.

Fortum said its recycling and waste businesses called Circular Solutions were not core to its new strategy and would therefore be targeted for a review.

“Fortum has decided to assess strategic options, including potential divestments, of its Circular Solutions businesses, as a result of the continuous review of its business portfolio,” it said.

($1 = 0.9132 euros)