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Fortum

Fortum is a Finnish utility, formed in 1998 from the merger of Finnish utility IVO and oil and chemical company Neste. Neste was spun-off in 2005 and Fortum now focuses exclusively on the electricity and heat sectors, providing customers with electricity, district heating and cooling, process steam, town gas and a range of related services. Fortum is 51.1% owned by the Finnish government. The company is mainly active in Finland and Sweden (before the Uniper acquisition). In the Nordic market it is the number one in heat generation and district heating, as well as serving a growing customer base of over 2.4 million customers, including the customers acquired with the recently completed reorganisation of its shareholding in Hafslund. It is number two in generation behind Vattenfall. Fortum owns 25% of the Fifth Finnish nuclear plant, which is currently under construction. Fortum is also active in Russia, where it owns TGC-10 and a 25% stake in TGC-1. In 2017 total group production was 73.4 TWh (73 TWh in 2017), of which 45.4 TWh (46.2 TWh in 2017) were in the Nordic countries and 26.3 TWh (25.5 TWh) in Russia. (12 Feb 2018)

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Oil & Gas: Slashing Oil Outlook, Downgrading E&Ps

Sector Analysis: 26 Nov 2018, 4:48 AM ET - We believe the recent 33% drop in oil prices is likely to be just the first leg of a deeper decline.  We are reducing our 2019 oil price view and recalibrating our IG and HY E&P investment recommendations to a more defensive position.

ESG and Utilities: CSights Sector View and Ratings

Sector Analysis: 30 Oct 2018, 3:25 PM ET - We are following up the formal launch of the CreditSights ESG investing framework with a in-depth look at ESG issues in the utility sector.
Focused

Iberdrola & Fortum: Euro Utes Results W/E 26/10

Earnings Note: 28 Oct 2018, 8:25 PM ET - Iberdrola and Fortum reported 9M18 results last week. But neither set of results gave us cause to change our view.

Euro IG Sector Snapshots: October 2018

Sector Analysis: 22 Oct 2018, 9:31 PM ET - Our updated one page snapshots of the Euro IG sectors.
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Nordic Utilities 1H18: No Surprises, No Changes

Earnings Note: 22 Jul 2018, 9:56 PM ET - There were no real surprises in the Fortum or Vattenfall 1H18 results. We maintain our Underperform view on Fortum and our Market perform view on Vattenfall. 

Euro HY Conference 2018: Insurers and Utilities

Transcript: 19 Jun 2018, 10:51 PM ET - Hybrid bonds issued by European Utilities and Insurers offer an interesting investment opportunity considering their relatively high yield levels while benefiting from strong ratings. We believe they offer an excellent risk/return.

Euro IG Strategy: Picks and Pans (May 2018)

Strategy Analysis: 21 May 2018, 10:34 PM ET - In this piece we summarise our sector recommendations, and provide a few names within each sector that our sector analysts like and dislike, their picks and pans. 
Focused

Nordic Utilities 1Q18: Good Start To The Year

Earnings Note: 29 Apr 2018, 9:53 PM ET - The three main Nordic utilities reported solid results for 1Q18. For Vattenfall and Ørsted it was business as usual but Fortum still has the uncertainty of the Uniper transaction. Maintain M/P on Vattenfal and Ørsted and U/P on Fortum.

Russia Sanctions: A Euro Credit Market Perspective

Strategy Analysis: 19 Apr 2018, 11:31 PM ET - We take a look at the impact of Russian sanction on euro credit markets and identify the companies with the most significant revenue exposure to the country.
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Euro Utilities: 2017 Results Roundup

Sector Analysis: 12 Apr 2018, 10:19 PM ET - We take a look at the trends and the highlights of the recent 2017 Euro utility results season 
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Fortum: Moody's Cuts To Baa2

Worth Watching: 15 Feb 2018, 4:50 AM ET - Fortum (Baa2/BBB/BBB+▼): Following Fortum's announcement that it has obtained a 47.12% shareholding in Uniper, Moody's has cut its unsolicited rating on Fortum to Baa2, from Baa1. The rating, which incorporates a one notch uplift for Finnish St ..
Focused

Fortum: Final Tender Result - 47.12%

Worth Watching: 07 Feb 2018, 10:48 AM ET - Fortum (Baa1▼/BBB/BBB+▼) announced that the final acceptance of its Uniper tender offer had reached 47.12%. This mean that apart from the shares bought from E.ON, only a further 0.47% of Uniper shareholders tendered their shares in the Fortum ..

Euro IG Strategy: Picks and Pans (February 2018)

Strategy Analysis: 04 Feb 2018, 10:28 PM ET - In this piece we summarise our sector recommendations, and provide a few names within each sector that our sector analysts like and dislike, their picks and pans. 
Focused

Fortum FY17: Good FY17 But What Now With Uniper?

Earnings Note: 04 Feb 2018, 9:50 PM ET - Fortum reported strong FY17 results bolstered by a good fourth quarter, but the real credit issue is the tender offer for Uniper. We look at the potential options for Fortum.
Focused

Fortum: Extends Tender Period For Uniper

Worth Watching: 21 Jan 2018, 7:28 PM ET - Fortum (Baa1▼/BBB+▼) announced on 19 January that the uptake of its tender offer for Uniper, at the end of the initial tender period, was 46.93% (including the 46.65% of E.ON and the additional shares owned by members of the E.ON board). It also ..
Focused

E.ON: Tenders Uniper Stake To Fortum

Worth Watching: 08 Jan 2018, 3:36 PM ET - E.ON (Baa2/BBB) announced on 8 January 2018 that it had tendered its Uniper (NR/BBB-) shares into Fortum's voluntary tender offer. E.ON will sell its 46.65% stake in Uniper to Fortum (Baa1▼/BBB+▼) for the price of €22/share which will give E.O ..

2018 Outlook: Euro Utilities, Brave New World

Sector Outlook: 12 Dec 2017, 4:04 PM ET - In 2018 we see operating results and credit quality being relatively stable for the utility sector, but longer term increasing competition and declining profitability will likely lead to anew wave of M&A.

Uniper: Updates Stand-Alone Strategy

Worth Watching: 07 Dec 2017, 5:39 AM ET - Uniper  (NR/BBB-):  In what was a thinly disguised appeal to shareholders not to sell to Fortum, on 7 December Uniper updated its strategy and gave 2018 guidance. It pledged to increase dividends at an average 25% per year to 2020 and that 2018 ..
Focused

Uniper: Management Rejects Fortum's Offer

Worth Watching: 21 Nov 2017, 9:10 PM ET - Uniper (NR/BBB-) has issued its formal response to the Fortum offer for the company in the form of a Joint Substantiated Statement of the Management Board and the Supervisory Board of Uniper. Both Boards are of the opinion that the offer is no ..

Uniper: 9M17 - Solid Numbers, Fortum Looming

Worth Watching: 07 Nov 2017, 9:51 AM ET - Uniper (NR/BBB-) has only one €500 mn bond outstanding, that bond trades tight and it has a short maturity (December 2018), all of which makes Uniper relatively uninteresting from a fixed income point of view. Except that Fortum (Baa1▼/BBB+▼/BB ..

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