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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7131": {
"value": "2809000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ProceedsFromNoncurrentBorrowings",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7134": {
"value": "5888000000",
"decimals": -6,
"dimensions": {
"concept": "fort:RepaymentsOfNonCurrentBorrowingsAndRepaymentsOfLeaseLiabilities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7136": {
"value": "2153000000",
"decimals": -6,
"dimensions": {
"concept": "fort:RepaymentsOfNonCurrentBorrowingsAndRepaymentsOfLeaseLiabilities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7139": {
"value": "-170000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInIncreaseDecreaseInCurrentBorrowings",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7141": {
"value": "1844000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInIncreaseDecreaseInCurrentBorrowings",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7145": {
"value": "1013000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:DividendsPaidToEquityHoldersOfParentClassifiedAsFinancingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7147": {
"value": "995000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:DividendsPaidToEquityHoldersOfParentClassifiedAsFinancingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7150": {
"value": "19000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:DividendsPaidToNoncontrollingInterestsClassifiedAsFinancingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7152": {
"value": "14000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:DividendsPaidToNoncontrollingInterestsClassifiedAsFinancingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7155": {
"value": "150000000",
"decimals": -6,
"dimensions": {
"concept": "fort:IncreaseDecreaseInMarginLiabilitiesClassifiedAsFinancingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7157": {
"value": "63000000",
"decimals": -6,
"dimensions": {
"concept": "fort:IncreaseDecreaseInMarginLiabilitiesClassifiedAsFinancingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7160": {
"value": "-168000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:OtherInflowsOutflowsOfCashClassifiedAsFinancingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7162": {
"value": "50000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:OtherInflowsOutflowsOfCashClassifiedAsFinancingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7165": {
"value": "-4686000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInFinancingActivitiesContinuingOperations",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7167": {
"value": "1603000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInFinancingActivitiesContinuingOperations",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7170": {
"value": "-1119000000",
"decimals": -6,
"dimensions": {
"concept": "fort:IncreaseDecreaseInCashAndCashEquivalentsFromContinuingOperationsBeforeEffectOfExchangeRateChanges",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7172": {
"value": "2211000000",
"decimals": -6,
"dimensions": {
"concept": "fort:IncreaseDecreaseInCashAndCashEquivalentsFromContinuingOperationsBeforeEffectOfExchangeRateChanges",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7176": {
"value": "-10870000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInOperatingActivitiesDiscontinuedOperations",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7178": {
"value": "3851000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInOperatingActivitiesDiscontinuedOperations",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7182": {
"value": "-2450000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInInvestingActivitiesDiscontinuedOperations",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7184": {
"value": "-5215000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInInvestingActivitiesDiscontinuedOperations",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7187": {
"value": "10757000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInFinancingActivitiesDiscontinuedOperations",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7189": {
"value": "4409000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInFinancingActivitiesDiscontinuedOperations",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7192": {
"value": "-2563000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsDiscontinuedOperations",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7194": {
"value": "3045000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsDiscontinuedOperations",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7198": {
"value": "-8767000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInOperatingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7200": {
"value": "4970000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInOperatingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7203": {
"value": "-985000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInInvestingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7205": {
"value": "-5727000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInInvestingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7208": {
"value": "6070000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7210": {
"value": "6013000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashFlowsFromUsedInFinancingActivities",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7213": {
"value": "-3682000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsBeforeEffectOfExchangeRateChanges",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7215": {
"value": "5256000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:IncreaseDecreaseInCashAndCashEquivalentsBeforeEffectOfExchangeRateChanges",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7218": {
"value": "7592000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashAndCashEquivalents",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7220": {
"value": "2308000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashAndCashEquivalents",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7223": {
"value": "7000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7225": {
"value": "29000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7229": {
"value": "3919000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashAndCashEquivalents",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7231": {
"value": "7592000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:CashAndCashEquivalents",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f7327": {
"value": "Additional cash flow information Change in working capital
\nEUR million
2022
2021
\nChange in interest-free receivables, decrease(+)/increase(-)
-352
-633
\nChange in inventories, decrease(+)/increase(-)
-201
2
\nChange in interest-free liabilities, decrease(-)/increase(+)
335
137
\nCF
Total
-219
-494
\nCapital expenditure in cash flow
\nEUR million
Note
2022
2021
\nCapital expenditure
16, 17
525
443
\nChange in not yet paid investments, decrease(+)/increase(-)
14
30
\nCapitalised borrowing costs
-5
-3
\nCF
Total
534
470
\nAcquisition of shares in cash flow
\nAcquisition of shares, net of cash acquired, amounted to EUR 35 million during 2022 (2021: 282). For
\nfurther information see
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nFrom 2022, acquisition of additional shares in Uniper are presented in cash flow from financing activities
\nto better reflect the requirements of IAS 7 Statement of cash flows. In 2021 acquisition of additional
\nshares in Uniper were presented in cash flow from investing activities. Comparatives have not been
\nrestated.
\nDivestment of shares in cash flow
\nEUR million
Note
2022
2021
\nProceeds from sales of subsidiaries, net of cash disposed
3
1,070
915
\nProceeds from sales and capital returns of associates and joint ventures
3, 18
86
2,901
\nCF
Total
1,156
3,816
\nDuring 2022 Fortum completed the divestment of the e-mobility business Plugsurfing, the 30% stake in
\nthe public charging operator Recharge AS and the 50% ownership in the district heating company Fortum
\nOslo Varme AS in Norway. During 2021, Fortum completed the divestment of the 50% stake in the
\nSwedish district heating and cooling company Stockholm Exergi, the district heating business in the
\nBaltics, the Pavagada II and the Rajasthan solar power plants in India, the 80% stake in the S\u00f8rfjord wind
\npark in Norway and eight small hydropower plants in Sweden. For further information, see
\ue001
Note 3
\nAcquisitions and disposals, assets held for sale and discontinued operations.
\nOn 21 December 2022 Fortum completed the divestment of Uniper. The consideration of the share
\ntransaction of EUR 498 million is presented in the cash flow from discontinued operations.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7416": {
"value": "1 Significant accounting policies
\n1.1 Basic information
\nFortum Corporation (the company) is a Finnish public limited liability company domiciled in Espoo,
\nFinland. For
tum\u2019s shares are traded on Nasdaq Helsinki. Fortum
is an energy company driving the
\nchange for a cleaner world. Our role is to ensure the security of supply and a fast and reliable transition to
\na carbon-neutral economy by providing customers and societies with clean energy and sustainable
\nsolutions. Fortum\u2019s core operation are located in the Nordics and consist of CO
2
-free power generation,
\nelectricity sales, district heating as well as recycling and waste solutions.
\nThese financial statements were approved by the Board of Directors on 1 March 2023. The Financial
\nStatements are also published in accordance with the European Single Electronic Format (ESEF)
\nreporting requirement. The audit firm, Deloitte Oy, has provided
an independent auditor\u2019s reasonable
\nassurance report on Fortum\u2019s ESEF Financial Statements in accordance with ISAE 3000 (Revised). The
\nESEF report is available at https://www.fortum.com/about-us/investors/reports-and-presentations.
\n1.2 Basis of preparation
\nThe consolidated financial statements of Fortum Group for the year ended 31 December 2022 have been
\nprepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC Interpretations
\nas adopted by the European Union. The notes to the consolidated financial statements also comply with
\nthe supplementing requirements of the Finnish accounting and company legislation.
\nThe consolidated financial statements have been prepared under the historical cost convention, except
\nfor financial assets and financial liabilities (including derivative instruments) that are valued at fair value
\nthrough profit and loss or other comprehensive income.
\nThe figures in the consolidated financial statements have been rounded and consequently the sum of
\nindividual figures may deviate from the sum presented. Key figures have been calculated using exact
\nfigures. Unless otherwise indicated, all amounts are presented in millions of euro (EUR million).
\nThe following symbols show which amounts in the notes reconcile to the items in the income statement,
\nbalance sheet and cash flow statement:
\nIS
= Income statement
\nBS
= Balance sheet
\nCF
= Cash flow
\nFortum\u2019s consolidated income statement was modified in 2022 to include discontinued operations
\ndisclosure as required by IFRS 5 Non-current assets held for sale and discontinued operations. See
\n\ue001
Note 1.7
Impact of Uniper deconsolidation on consolidated financial statements.
\n1.3 Principles for consolidation
\nThese consolidated financial statements comprise of the parent company, subsidiaries, joint ventures and
\nassociated companies.
\nFortum Group was formed in 1998 by using the pooling-of-interests method for consolidating Fortum
\nPower and Heat Oy and Fortum Oil and Gas Oy (the latter demerged to Fortum Oil Oy and Fortum Heat
\nand Gas Oy 1 May 2004). In 2005 Fortum Oil Oy (current Neste Oyj) was separated from Fortum by
\ndistributing 85% of its shares to Fortum\u2019
s shareholders and by selling the remaining 15%. This means that
\nthe acquisition cost of Fortum Power and Heat Oy and Fortum Heat and Gas Oy has been eliminated
\nagainst the share capital of the companies. The difference has been entered as a decrease in
\nsh
areholders\u2019 equity.
\n1.3.1 Subsidiaries
\nSubsidiaries are defined as companies over which Fortum has control. Control exists when Fortum is
\nexposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
\naffect those returns through its power over the entity. See
\ue001
Note 3
Acquisitions, disposals, assets held for
\nsale and discontinued operations.
\nIntercompany transactions, balances and unrealised gains on transactions between Group companies
\nare eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
\nimpairment of the asset transferred.
\nWhere necessary, subsidiaries\u2019 accounting policies have been changed to ensure consistency with the
\npolicies the Group has adopted.
\nCertain subsidiaries and associated companies are not included in the consolidated financial
\nstatements on materiality grounds. These companies are accounted for outside the scope of IFRS 9 and
\nmeasured at cost, with adjustments for any loss allowance.
\nFortum Group subsidiaries are disclosed in
\ue001
Note 40
Group companies by segment. Group holding %
\nfor companies owned via subsidiaries is based on the Fortum Corporation ownership % in the direct
\nsubsidiary times the ownership % of the direct subsidiary in the indirect subsidiary / associate / joint
\nventure.
\n1.3.2 Associates
\nAssociated companies are entities over which the Group has significant influence but not control,
\ngenerally accompanying a shareholding of between 20% and 50% of the voting rights. The Group\u2019s
\ninterests in associated companies are accounted for using the equity method of accounting. See
\n\ue001
Note 18
Participations in associated companies and joint ventures.
\n1.3.3 Joint ventures
\nJoint ventures are arrangements in which the Group has joint control. Joint ventures are accounted for
\nusing the equity method of accounting. See
\ue001
Note 18
Participations in associated companies and joint
\nventures.
\n1.3.4 Non-controlling interests
\nNon-controlling interests in subsidiaries are identified separately from the equity of the owners of the
\nparent company. Non-controlling interests are generally initially measured at the non-
controlling interests\u2019
\nproportionate share of the fair value of the acquiree\u2019s identifiable net assets. Changes in non
-controlling
\ninterest due to changes in ownership interest of a subsidiary are accounted for as equity transactions.
\nSubsequent to acquisition, the carrying amount of non-controlling interests is the amount of those
\ninterests at initial recognition plus the non-
controlling interests\u2019 share
of subsequent changes in equity.
\nSee
\ue001
Note 26
Non-controlling interests.
\n1.4 Measures for performance
\nAccording to the ESMA Guidelines on Alternative Performance Measures, an Alternative Performance
\nMeasure (APM) is understood as a financial measure of historical or future financial performance,
\nfinancial position, or cash flows, other than a financial measure defined or specified in the applicable
\nfinancial reporting framework.
Fortum uses APMs, such as Comparable operating profit and Comparable EBITDA in the financial
\ntarget setting and forecasting, management's follow-up of financial performance of segments and the
\nGroup, as well as for the allocation of resources in the Group's performance management process. Items
\naffecting comparability are excluded from Comparable operating profit and Comparable EBITDA and
\ndisclosed separately in Fortum's consolidated income statement to support the transparency of underlying
\nbusiness performance when comparing results between periods.
\nItems classified as Items affecting comparability include accounting effects from valuation according to
\nIFRS not arising from the performance of business operations. Such items include fair value changes of
\nfinancial derivatives hedging future cash flows where hedge accounting is not applied and fair value
\nchanges of physical contracts accounted for as derivatives according to IFRS 9, Financial Instruments.
\nFurther, business performance of operations cannot be compared from one period to another without
\nadjusting for one-time items relating to capital gains and other related items, such as transaction costs
\narising from acquisitions; impacts from acquisition accounting; significant impairments and reversals of
\nimpairments as well as other miscellaneous non-operating items, such as restructuring and cost
\nmanagement expenses. Such items are also treated as Items affecting comparability.
\nAccording to IFRS 3, Business Combinations, transaction costs related to the acquisitions of subsidiary
\nshares are recognised in the consolidated income statement. Such costs are presented in Capital gains
\nand other within Items affecting comparability.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, and in 2022 Fortum introduced the following new APMs: \u2018Comparable
\nEBITDA from continuing operations excl. Russia\u2019, \u2018Comparable operating profit from continuing operations
\nexcl. Russia\u2019, \u2018Comparable net profit from continuing operations excl. Russia\u2019, \u2018Comparable earnings per
\nshare from continuing operations excl. Russia\u2019, and \u2018Financial net debt/comparable EBITDA excl. Russia\u2019
\nto provide additional financial performance indicators to support meaningful comparison of financials for
\nFortum's strategic businesses.
\nSee
\ue001
Note 7
Comparable operating profit and comparable net profit. Definitions are presented in the
\nsection
\ue001
Definitions and reconciliations of key figures.
\nFortum\u2019s long
-term financial target for capital structure until 31 December 2022 was Financial net debt /
\ncomparable EBITDA below 2x. See
\ue001
Note 5
Capital risk management.
\n1.5 Foreign currency transactions and translation
\n1.5.1 Functional and presentation currency
\nItems inc
luded in the financial statements of each of the Group\u2019s entities are measured using the currency
\nof the primary economic environment in which the entity operates (the functional currency). The
\nconsolidated financial statements are presented in euros, whic
h is the company\u2019s functional and
\npresentation currency.
\n1.5.2 Transactions and balances
\nTransactions denominated in foreign currencies are translated using the exchange rate at the date of
\ntransaction. Receivables and liabilities denominated in foreign currencies outstanding on the balance
\nsheet date are translated using the balance sheet date exchange rate. Exchange rate differences are
\nrecognised in the consolidated income statement. Net exchange differences relating to financing
\ncomponents are recognised in the income consolidated statement, except when deferred to equity as
\nqualifying cash flow hedges. Translation differences on financial assets through other comprehensive
\nincome are included in Other equity components in equity.
\n1.5.3 Group companies
\nIncome statement and cash flow statement of subsidiaries, whose functional currencies are not euro, are
\ntranslated into euro using the average exchange rates; whereas the balance sheets of such subsidiaries
\nare translated into euro using the closing exchange rates on the balance sheet date. On consolidation,
\nexchange rate differences arising from the translation of net investment in foreign entities, as well as
\nborrowings and other currency instruments designated as hedges for such investments, are taken to
\nequity. When a foreign operation is sold, such exchange differences are recognised in the consolidated
\nincome statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the
\nacquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at
\nclosing rate.
\nThe balance sheet date rate is based on the exchange rate published by the European Central Bank for
\nthe closing date. The average exchange rate is calculated as an average of daily closing rates from the
\nEuropean Central Bank. The European Central Bank stopped publishing rouble (RUB) rates from 2 March
\n2022. From 2 March 2022, the daily spot rate at 17:15 EET from the market has been used.
\nKey exchange rates used in consolidated financial statements
\nAverage rate
Balance sheet date rate
\n2022
2021
31 Dec 2022
31 Dec 2021
\nUnited Kingdom (GBP)
0.8528
0.8596
0.8869
0.8403
\nNorway (NOK)
10.1026
10.1633
10.5138
9.9888
\nPoland (PLN)
4.6861
4.5652
4.6808
4.5969
\nRussia (RUB)
73.6173
87.1527
77.8998
85.3004
\nSweden (SEK)
10.6296
10.1465
11.1218
10.2503
\nUnited States (USD)
1.0530
1.1827
1.0666
1.1326
\n1.5.4 Associates and joint ventures
\nAssociates and joint ventures, whose measurement and reporting currencies are not euro, are translated
\ninto the Group reporting currency using the same principles as for subsidiaries.
1.6 Other significant accounting policies
\nFortum describes other significant accounting policies in conjunction with the relevant disclosure
\ninformation. The table below lists significant accounting policies and the financial statement note where
\nthey are presented, as well as the relevant IFRS standard.
\nAccounting policy
Note
IFRS standard
\nSubsidiaries
\n3. Acquisitions, disposals, assets held for
\nsale and discontinued operations
\nIFRS 3, IFRS 10
\nAssets held for sale
3. Acquisitions, disposals, assets held for
\nsale and discontinued operations
\nIFRS 5
\nDiscontinued operations
3. Acquisitions, disposals, assets held for
\nsale and discontinued operations
\nIFRS 5
\nFinancial instruments
4. Financial risk management
\n14. Financial assets and liabilities by
\ncategories
\n15. Financial assets and liabilities by fair
\nvalue hierarchy
\nIAS 32, IFRS 7, IFRS 9, IFRS 13
\nSegment reporting
6. Segment reporting
IFRS 8, IFRS 15
\nRevenue recognition
6. Segment reporting
\n23. Trade and other receivables
\nIFRS 15
\nOther income
8. Other income and other expenses
IFRS 15
\nResearch and development costs
8. Other income and other expenses
IAS 38
\nGovernment grants
8. Other income and other expenses
IAS 20
\nShare-based payments
10. Employee benefits and Board
\nremuneration
\nIFRS 2
\nEarnings per share
13. Earnings and dividend per share
IAS 33
\nOther shares and participations
14. Financial assets and liabilities by
\ncategories
\n20. Other non-current assets
\nIAS 32, IAS 36, IFRS 9
\nFair value measurement
15. Financial assets and liabilities by fair
\nvalue hierarchy
\nIFRS 13
\nIntangible assets
16. Intangible assets
IAS 38
\nTangible assets
17. Property, plant and equipment and
\nRight-of-use Assets
\nIAS 16
\nJoint arrangements
18. Participations in associated companies
\nand joint ventures
\nIFRS 11, IAS 28, IFRS 12
\nInvestments in associates
18. Participations in associated companies
\nand joint ventures
\nIAS 28, IFRS 12
\nImpairment testing
19. Impairment testing
IAS 36
\nInventories
22. Inventories
IAS 2
\nTrade receivables
23. Trade and other receivables
IFRS 9
\nLiquid funds
24. Liquid funds
IAS 7
\nBorrowings
27. Interest-bearing liabilities
IFRS 9
\nIncome taxes
28. Income taxes on the balance sheet
IAS 12
\nDecommissioning obligation
29. Nuclear related assets and liabilities
IFRIC 5
\nProvisions
30. Other provisions
IAS 37
\nPensions and similar obligations
31. Pension obligations
IAS 19
\nLeases
34. Leases
IFRS 16
\nContingent liabilities
36. Pledged assets and contingent liabilities
IAS 37
\nEvents after the balance sheet date
39. Events after the balance sheet date
IAS 1
\n1.7 Impact of Uniper deconsolidation on consolidated financial
\nstatements
\nUniper SE, a German listed company, was acquired in March 2020. Uniper is an international energy
\ncompany with activities in more than 40 countries. Its business is the secure provision of energy and
\nrelated services. Its main activities include power generation in Europe and Russia as well as global
\nenergy trading and optimisation.
\n1.7.1 Discontinued operations
\nFortum lost control of Uniper on the signing of the agreement in principle to sell the shares in Uniper SE to
\nthe German State on 21 September 2022. Thus, Uniper was deconsolidated at 30 September 2022.
\nUniper has been a s
eparate reportable segment in Fortum\u2019s consolidated financial statements, which
\nresults in Uniper being classified as discontinued operations. The transaction was completed on 21
\nDecember 2022. See also
\ue001
Note 2
Critical accounting estimates and judgements.
\nFortum\u2019s consolidated income statement consolidated cash flow statement were modified in 2022 to
\ninclude discontinued operations disclosure as required by IFRS 5 Non-current assets held for sale and
\ndiscontinued operations. Comparatives for 2021 were restated and a separate stock exchange release
\nwith restated comparatives was issued on 6 October 2022. Discontinued operations include Fortum\u2019s
\nformer subsidiary Uniper SE and its consolidated group companies.
\nIncome statement information in the following notes to the financial statements include only continuing
\noperations, unless otherwise specified. Uniper was deconsolidated at 30 September 2022, and thus
\nUniper\u2019s balance sheet items are not included on Fortum\u2019s 31 December 2022 consolidated balance
\nsheet. Consolidated balance sheet at 31 December 2021 included Uniper.
\n1.7.2 Joint ownership in the Swedish nuclear company OKG AB
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG Aktiebolag (OKG AB), with
\nFortum owning 45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March
\n2020 to 30 September 2022, with the results of the company being split between the Uniper segment and
\nthe Generation segment according to ownership. On deconsolidation of Uniper at 30 September 2022,
\nOKG AB was reclassified as an associated company. The reclassification resulted in the restatement of
\nthe Generation segment\u2019s 2021 financials.
\n1.7.3 Group impact from Uniper deconsolidation
\nOn deconsolidation of Uniper at 30 September 2022, Fortum recorded EUR 28.0 billion one-time, mainly
\nnon-
cash positive effect. The amount consists of the net effect from the deconsolidation of Uniper\u2019s
\nassets, liabilities and non-controlling interest, and the book value of Uniper-related goodwill and other fair
\nvalue adjustments made on acquisition; as well as certain items previously recognised in other
\ncomprehensive income, mainly foreign exchange differences, that are reclassified to profit and loss on
\ndisposal. See also
\ue001
Note 3.4
Discontinued operations.
\n1.8 New accounting standards, amendments and interpretations
\nNew accounting standards, amendments and interpretations effective from 1 January 2022 did not have a
\nmaterial impact on Fortum's consolidated financial statements.
\nNew accounting standards, amendments and interpretations issued by the balance sheet date and
\neffective from 1 January 2023, or later, are not expected to have a material impact on Fortum\u2019s
\nconsolidated financial statements.
ACCOUNTING POLICIES
\nSUBSIDIARIES
\nAcquisition of subsidiaries are accounted for using the acquisition method. The consideration transferred
\nis measured as the aggregate of acquisition date fair values of assets transferred and liabilities
\nassumed. Identifiable assets acquired and liabilities assumed are measured initially at acquisition date
\nfair values, irrespective of the extent of any minority interest. The excess of the cost of acquisition over
\nthe fair value of the identifiable net assets acquired is recorded as goodwill.
\nSubsidiaries are fully consolidated from the date on which control is transferred to the Group and are
\nno longer consolidated from the date that control ceases. See
\ue001
Note 1.3
Principles for consolidation.
\nASSETS HELD FOR SALE
\nAssets or disposal groups are classified as assets held for sale if their carrying amounts will be
\nrecovered principally through a sale transaction rather than through continuing use. For this to be the
\ncase, the asset, or the disposal group, must be available for immediate sale in its present condition
\nsubject only to terms that are usual and customary for sales of such assets or disposal groups, and the
\nsale must be highly probable. These assets, or in the case of disposal groups, assets and liabilities, are
\npresented separately on the consolidated balance sheet and measured at the lower of the carrying
\namount and fair value less costs to sell. Assets classified as held for sale, or included in a disposal
\ngroup classified as held for sale, are not depreciated.
\nDISCONTINUED OPERATIONS
\nA discontinued operation is a component of the Group that has been disposed of or is classified as held
\nfor sale, and that represents a separate major line of business or geographical area of operations or is
\npart of a single co-ordinated plan to dispose of such a line of business or area of operations. The results
\nof discontinued operations are presented separately in the consolidated income statement.
SIGNIFICANT ACCOUNTING POLICIES
\nREVENUE RECOGNITION
\nFortum's operations comprise the provision of electricity, heating and cooling, gas and waste
\nmanagement services. Revenue streams can be divided into five groups: power sales to wholesale
\nmarkets, power sales to retail customers, heating sales, gas sales and waste treatment sales.
\nRevenue is recognised when goods are transferred or services are performed, i.e. when a
\nperformance obligation is satisfied and control of the good or service underlying the particular
\nperformance obligations is transferred to the customer. Revenue is shown at the price that Fortum
\nexpects to be entitled to and it is presented net of rebates, discounts, value-added tax and selective
\ntaxes, such as electricity tax. Revenues include effects from physically settled contracts for which own
\nuse exemption cannot be used according to IFRS 9, see
\ue001
Note 7
Comparable operating profit and
\ncomparable net profit. Accounting policies for the different revenue streams are described below.
\nPOWER SALES TO WHOLESALE MARKETS AND THROUGH BILATERAL CONTRACTS
\nPhysical electricity trades to wholesale markets are made at a spot price and thus there are no variable
\nelements. Electricity sales are recognised on delivery at the price defined in wholesale market. Fortum is
\nalso selling power to industrial customers and municipalities through bilateral contracts. These contracts
\ncan include fixed price components that are recognised in line with the customer\u2019s actual consumption
\nprofile, when the nature of the performance obligation is to deliver power instead of standing-ready to
\ndeliver power. When Fortum is acting as an agent in electricity trade by granting access to Nord Pool
\npower trading system, Fortum presents the bilateral trades between Fortum and the customer on a net
\nbasis and only the service fee is recorded as revenue.
\nPOWER SALES TO RETAIL CUSTOMERS
\nFortum\u2019s contracts with consumer and business customers cover electricity sales, while the distribution
\nservice is delivered by the transmission company operating the local network. There is only one
\nperformance obligation, which is to stand-ready to supply electricity to the customer. The transaction
\nprice generally includes both a fixed monthly charge and a variable fee based on the volume of
\nelectr
icity supplied. As Fortum\u2019s promise is to stand ready to deliver electricity, the fixed and variable
\ncomponents are recognised based on the fees chargeable from the customer. If automated meter
\nreading is not available, electricity consumption between the last meter reading and the end of
\nthe month is estimated.
\nHEAT SALES
\nIn many areas the district heating service covers both the distribution and sale of heat. Fortum is usually
\nresponsible for delivering the whole service, even when heat is being produced by a third party, and is
\nacting as a principal for heat sales as well. There is only one performance obligation, which is to stand-
\nready to supply heat to the customer. The fees charged from the customer generally comprise a
\nfixed monthly charge a
nd a variable fee based on the volume of heat supplied. As Fortum\u2019s promise is to
\nstand ready to deliver heat, the fixed and variable components are recognised based on the fees
\nchargeable from the customer. In Russia and Poland there are also areas where Fortum operates only
\nthe heat production facilities while some third party is responsible for the distribution of heat. In these
\nareas the performance obligation is to supply heat and revenue is recognised based on the volume of
\nheat that Fortum is entitled to charge from the customer.
\nGAS SALES
\nRevenues are generated from sales of gas via traded markets, as well as to retail and industrial
\ncustomers, and include hedges settled through physical delivery, which are recognised when delivery
\ntakes place and control is transferred to the customer. Gas sales include also revenues earned from the
\ntransportation of gas. Contracts generally contain one performance obligation for which the entire
\ntransaction price is recognised.
\nFor physically settled transactions that are in the scope of IFRS 15 (own-use transactions), revenue is
\nrecognised based on contract prices, as these reflect the economic character of the transactions and the
\ncontractually agreed consideration amounts. If IFRS 15 provides for a different method, for example
\nwhen constraint on variable considerations is applicable, contract prices are adjusted accordingly.
\nGas contracts can also include fixed price components that are recognised in line with the customer\u2019s
\nactual consumption profile, when the nature of the performance obligation is to deliver gas instead of
\nstanding-ready to deliver gas.
\nWASTE TREATMENT SALES
\nMajority of revenue from waste management services arises from fees charged for receiving waste from
\ncustomers (i.e. gate fees). The fee is usually determined based on the volume of waste received, there
\nare no variable elements in pricing. Fortum is required to treat the waste and this performance obligation
\nis satisfied when treatment has been performed. Transportation of the waste forms another performance
\nobligation. Fees for waste treatment and transportation services are separately agreed in the contract
\nand correspond to the price that would be charged for these services separately. Revenue for
\ntransportation service is recognised when the service has been provided.
\nWaste treatment sales include also various types of soil and landfill site projects, which mostly take
\nplace at customer sites. Fees charged are invoiced based on payment schedules agreed with the
\ncustomer. The customer obtains the benefit of the construction work simultaneously when the
\nconstruction work proceeds, and therefore project revenues are recognised over time. Progress of the
\nconstruction is best measured either through costs incurred, or the completed area of the construction
\nsite.
\nNETTING AND INTER-SEGMENT TRANSACTIONS
\nGeneration and City Solution segments sell their electricity production to Nord Pool and Consumer
\nSolutions segment buys its electricity from Nord Pool. For these segments eliminations of sales include
\neliminations of sales and purchases with Nord Pool that are netted at Group level on an hourly basis and
\nposted either as revenue or cost depending on if Fortum is a net seller or net buyer during any particular
\nhour. Intersegment sales, expenses and results for the different business segments are affected by
\nintragroup deliveries, which are eliminated on consolidation. Inter-segment transactions are based on
\ncommercial terms.
ACCOUNTING POLICIES
\nGOVERNMENT GRANTS
\nGovernment grants are recognised at their fair value when there is a reasonable assurance that the
\ngrant will be received and the Group will comply with all attached conditions. Government grants are
\ndeferred and recognised in the income statement to match with the related costs.
ACCOUNTING POLICIES
\nEARNINGS PER SHARE
\nBasic earnings per share is calculated by dividing the net profit attributable to the owners of the parent
\ncompany by the weighted average number of ordinary shares in issue during the year, excluding
\nordinary shares purchased by the Group and held as treasury shares.
\nDIVIDENDS
\nDividends proposed by the Board of Directors are not recognised in the financial statements until they
\nhave been approved by the company's shareholders at the Annual General Meeting.
ACCOUNTING POLICIES
\nFINANCIAL ASSETS
\nFortum classifies its financial assets in the following categories according to IFRS 9: financial assets at
\namortised cost, financial assets at fair value through profit or loss and financial assets at fair value
\nthrough other comprehensive income. The classification is made at initial recognition and depends on
\nthe financial asset's contractual cash flow characteristics and the Group's business model for managing
\nthem.
\nIn order for the financial asset to be classified and measured at amortised cost or fair value through
\nother comprehensive income, it needs to give rise to cash flows that are solely payments of the principal
\nand interest on the principal amount outstanding (SPPI). This assessment is referred to as the SPPI test
\nand is performed at an instrument level. When the SPPI criteria is not met, financial assets are classified
\nto fair value through profit or loss category.
\nFinancial assets are presented as non-current assets unless they are held for trading, expected to be
\nrealised within 12 months at the closing date or they have a maturity of under 12 months at closing date.
\nThese are classified as current assets.
\nFINANCIAL ASSETS AT AMORTISED COST
\nFortum measures financial assets at amortised cost when the financial asset is included in the held-to-
\ncollect business model with fixed or determinable payments that are payments of amount outstanding or
\ninterest on it. They arise when the Group provides money, goods or services directly to a debtor.
\nFinancial assets at amortised cost include non-derivative financial assets with fixed or determinable
\npayments that are not quoted in an active market.
\nFinancial assets at amortised cost are subject to impairment using expected credit loss (ECL) model.
\nGains and losses from derecognition of the asset are recognised in profit and loss.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
\nFinancial assets at fair value through profit or loss include financial assets held for trading in the short
\nterm, financial assets designated upon initial recognition irrevocably as fair value through profit or loss
\nand financial assets mandatorily recognised at fair value through profit or loss according to IFRS 9.
\nDerivatives are classified as held for trading unless they are designated as effective hedging
\ninstruments.
\nGains and losses arising from changes in the fair value are included in the income statement in the
\nperiod in which they arise.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
\nOther equity investments designated at fair value through other comprehensive income are not subject
\nto impairment assessment and accumulated reserves are not recycled to profit or loss upon
\nderecognition. Dividends received are recognised in profit and loss.
\nDERECOGNITION
\nFortum derecognises financial assets when the rights to receive cash flows from the assets have expired
\nor when it has substantially transferred the risks and rewards of the assets outside of the Group.
\nIMPAIRMENT
\nFortum recognises an allowance for expected credit losses (ECL) according to IFRS 9 for financial
\nassets measured at amortised cost. See further information on ECL in
\ue001
Note 4.4.1
Credit quality of
\nmajor financial assets and in
\ue001
Note 23
Trade and other receivables.
\nFinancial assets measured at fair value through profit or loss are not included in ECL assessment as
\nthey are already measured at fair value. A financial asset is written-off when there is no reasonable
\nexpectation of recovering the contractual cash flows.
\nFINANCIAL LIABILITIES
\nAll financial liabilities are recognised initially at fair value. In the case of loans and borrowings and
\npayables, incurred transaction costs are deducted. In subsequent periods, all financial liabilities, except
\nderivatives and financial liabilities which the Group has at initial recognition irrevocably designated at fair
\nvalue through profit or loss, are stated at amortised cost; any difference between proceeds (net of
\ntransaction costs) and the redemption value is recognised as interest cost over the period of the
\nborrowing using the effective interest rate method.
\nDerivative financial instruments entered into by the Group, that are not designated as hedging
\ninstruments are classified as liabilities at fair value through profit and loss. Amortisation of the effective
\ninterest rate and gains and losses of liabilities are recognised in the income statement.
\nGroup\u2019s financial liabilities include trade and other payables, loans and borrowings and derivative
\nfinancial instruments. Borrowings or portion of borrowings being hedged with a fair value hedge are
\nrecognised at fair value through profit or loss. Derecognition of financial liabilities takes place when the
\nGroup has fulfilled the contractual obligations.
\nACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
\nWithin the ordinary course of business, the Group routinely enters into sale and purchase transactions
\nfor commodities. Contracts that were entered into and continue to be held for the purpose of receipt or
\ndelivery of the commodity in accordance with the Group's expected sale, purchase or usage
\nrequirements are not within the scope of IFRS 9 (\"own use exemption\"). Physical contracts to buy or sell
\na non-financial item, which are fair valued using the fair value option to off-set accounting mismatch, or
\nwhere own use exemption or hedge accounting cannot be applied are fair valued through the income
\nstatement.
\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and
\nare subsequently remeasured at their fair value. Gains and losses resulting from the initial fair value
\nmeasurement of a
derivative (\u201cday one\u201d gains and losses) are eliminated against the corresponding
\nderivative asset or liability, if the initial fair value is determined based on valuation model with input
\nparameters that are unobservable from active markets. For derivatives whose initial fair value is
\nevidenced by a quoted price in an active market for an identical contract or based on a valuation
\ntechnique that uses only data from observable markets, gains and losses from the initial measurement
\nare accounted for similarly to gains or losses on the subsequent measurement.
\nThe method of recognising the resulting gain or loss on the subsequent measurement depends on
\nwhether the derivative is designated as a hedging instrument eligible for hedge accounting, and if so, the
\nnature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of
\nhighly probable forecast transactions (cash flow hedges); (2) hedges of the fair value of recognised
\nassets or liabilities, or unrecognised firm commitments (fair value hedge); or (3) hedges of net
\ninvestments in foreign operations.
\nThe Group documents at the inception of the transaction the relationship between hedging
\ninstruments and hedged items, whether the hedged item is one or several risk components separately or
\nin aggregation, as well as its risk management objective and strategy for undertaking various hedge
\ntransactions. When applying hedge accounting the Group also documents its assessment, of whether
\nthe derivatives that are used in hedging transactions are meeting the hedge accounting effectiveness
\ncriteria: (1) there is an economic relationship between the hedged item and the hedging instrument, (2)
\nthe effect of credit risk does not dominate the value changes that result from that economic relationship;
\nand (3) the hedge ratio of the hedging relationship is the same as applied in the risk management. The
\nGroup also documents its assessment, both at hedge inception and on an ongoing basis, of whether the
\nderivatives that are used in hedging transactions are highly effective by assessing the prospective
\ncapacity of the derivatives in offsetting changes in fair values or cash flows of hedged items. Hedge
\naccounting is discontinued only when the hedging relationship ceases to meet the hedge effectiveness
\ncriteria.
CASH FLOW HEDGE
\nThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash
\nflow hedges are recognised in equity. Gain or loss relating to the ineffective portion is recognised
\nimmediately in the income statement. Amounts accumulated in equity are recycled in the income
\nstatement in the periods when the hedged item will affect profit and loss (e.g. when the forecasted sale
\nthat is hedged takes place). However, when the forecast transaction that is hedged results in the
\nrecognition of a non-financial asset (e.g. inventory) or a liability, the gains and losses previously deferred
\nin equity are transferred from equity and included in the initial measurement of the cost of the asset or
\nliability. When a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
\nexisting in equity is recognised in the income statement when the forecast transaction is ultimately also
\nrecognised in the income statement. When a forecasted transaction is no longer expected to occur, the
\ncumulative gain or loss that was reported in equity is immediately recognised in the income statement.
\nFortum hedges its exposure to commodity market risks and applies hedge accounting by risk
\ncomponents. Hedge accounting is applied to Nordic electricity price risk, where the Nordic area priced
\nphysical electricity delivery is commonly divided into three risk components: (1) system price risk, (2)
\nelectricity price area difference risk (EPAD) and (3) currency risk. For each of these separate risk
\ncomponents there are specific derivative contracts available, which each are being effective hedges for
\nthe associated risk components.
\nIn addition, hedge accounting is applied to certain derivative contracts hedging gas price risk. These
\nare physically settled fixed-price forward and futures contracts, for which the own-use exemption cannot
\nbe applied (failed own-use contracts), where the contract constitutes an effective hedge of cash flows of
\nthe gas volumes to be delivered (\u201call
-
in one\u201d hedge).
\nFAIR VALUE HEDGE
\nChanges in the fair value of derivatives that are designated and qualify as fair value hedges are
\nrecorded in the income statement, together with any changes in the fair value of the hedged asset or
\nliability that are attributable to the hedged risk.
\nIf the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount
\nof a hedged item for which the effective interest method is used is amortised to profit or loss for the
\nperiods until maturity of the hedged item.
\nNET INVESTMENT HEDGING IN FOREIGN OPERATIONS
\nHedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any
\ngain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in
\nequity; the gain or loss relating to the ineffective portion is recognised immediately in the income
\nstatement. Gains and losses accumulated in equity are included in the income statement when the
\nforeign operation is disposed of.
\nDERIVATIVES THAT DO NOT QUALIFY FOR HEDGE ACCOUNTING
\nCertain derivative instruments representing economic hedging relationship do not qualify for hedge
\naccounting. Unrealised fair value changes of non-hedge accounted commodity derivatives hedging
\nfuture cash flow and physical contracts that are accounted for as derivatives within the scope of IFRS 9
\nare recognised in items affecting comparability in the income statement. Gains and losses on interest
\nrate and currency derivative instruments are recognised in finance costs
\u2013
net with corresponding hedge
\nitems.
\nFinancial assets and liabilities in the tables below are split into categories in accordance with IFRS 9.
\nThe categories are further divided into classes which are the basis for valuing a respective asset or
\nliability. Further information can be found in the Notes mentioned in the table.
ACCOUNTING POLICIES
\nFair value measurements are classified using a fair value hierarchy i.e. Level 1, Level 2 and Level 3 that
\nreflects the significance of the inputs used in making the measurements.
\nFAIR VALUES UNDER LEVEL 1 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 1 is based on unadjusted quoted
\nprices in active markets at the closing date. Level 1 consist e.g. commodity derivatives traded in active
\nmarkets.
\nFAIR VALUES UNDER LEVEL 2 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 2 is based on observable input
\nparameters, which are other than quoted prices.
\nThe fair value of financial instruments traded in active markets in Level 2 is calculated using prices
\nderived from quoted market prices at the closing date. Known calculation techniques, such as estimated
\ndiscounted cash flows, are used to determine fair value of interest rate and currency financial
\ninstruments. The fair value of interest-rate swaps is calculated as the present value of the estimated
\nfuture cash flows. The fair value of forward foreign exchange contracts is determined using forward
\nexchange market rates at the closing date. Fair values of options are determined by using option
\nvaluation models. The fair value of financial liabilities is estimated by discounting the future contractual
\ncash flows at the current market interest rate that is available to the Group for similar financial
\ninstruments. The counterparty credit risk has been taken into account when determining fair value. The
\ncredit risk is determined based on a portfolio valuation in a bilateral approach.
\nThe Group bases the calculation on existing market conditions at each closing date. Financial
\ninstruments used in Fortum are standardised products that are either cleared via exchanges or widely
\ntraded in the market. Credit risk from trading commodity derivatives is mitigated by clearing trades
\nthrough exchanges or by limiting trades to OTC counterparties considered to be creditworthy, or secured
\nby credit worthy guarantees. Financial derivatives are traded with credit worthy financial institutions with
\ninvestment grade ratings.
\nFAIR VALUES UNDER LEVEL 3 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 3 is based on unobservable input
\nparameters.
\nLevel 3 consist mainly investments in unlisted shares classified as other investments for which the fair
\nvalue can't be reliably measured and derivative financial instrument for which the fair value has been
\ndetermined using valuation techniques with unobservable inputs. The input parameters of Level 3 of the
\nfair value hierarchy for equity investments are specified taking into account economic developments and
\navailable industry and corporate data. The counterparty credit risk has been adjusted when determining
\nthe fair value.
ACCOUNTING POLICIES
\nIntangible assets, except goodwill, are stated at historical cost less accumulated amortisation and
\nimpairment losses; and amortised on a straight-line basis over their expected useful lives.
\nThe assets\u2019 residual values and useful lives
are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
\nGOODWILL
\nGoodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of
\nnet identifiable assets of the acquired subsidiary, associate or joint venture at the date of acquisition.
\nGoodwill on acquisitions of subsidiaries is included in intangible assets and tested annually for
\nimpairment. Goodwill on acquisition of associates and joint ventures is included in investments in
\nassociates and joint ventures and is tested for impairment as part of the overall balance. Goodwill is
\ncarried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed.
\nGains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity
\nsold.
\nCONTRACT-BASED INTANGIBLE ASSETS
\nMajority of contract-based intangible assets are concession rights in Germany, which are valued at
\namortised costs. Contract-based intangible assets in 2021 related to Uniper.
\nRESEARCH AND DEVELOPMENT COSTS
\nResearch and development costs are recognised as expense as incurred and included in other
\nexpenses in the consolidated income statement. If development costs are expected to generate future
\nincome, they are capitalised as intangible assets and depreciated over the period of the income streams.
ACCOUNTING POLICIES
\nProperty, plant and equipment mainly include power and heat production-related buildings, structures
\nand machinery, waterfall rights, and other buildings and machinery.
\nProperty, plant and equipment are stated at historical cost less accumulated depreciation and
\nimpairment losses on the consolidated balance sheet. Historical cost includes expenditure that is directly
\nattributable to the acquisition of an item. Borrowing costs are included in the cost of qualified assets.
\nAdditionally, the cost of an item of property, plant and equipment includes the estimated cost of its
\ndismantlement, removal or restoration when there is a contractual obligation towards a third party, or a
\nlegal obligation.
\nAcquired assets on the acquisition of a new subsidiary are stated at their fair values at the date of
\nacquisition.
\nSee
\ue001
Note 30
Other provisions for information about asset retirement obligations,
\ue001
Note 29
Nuclear-
\nrelated assets and liabilities, for information about provisions for decommissioning nuclear power plants
\nand
\ue001
Note 34
Leases, for information about right-of-use assets.
\nLand, water areas and waterfall rights are not depreciated since they have indefinite useful lives.
\nDepreciation on other assets is calculated using the straight-line method to allocate their cost to their
\nresidual values over their estimated useful lives, as follows:
\n\u2022
Buildings and structures: 10-50 years
\n\u2022
Machinery and equipment: 3-65 years
\nSubsequent costs are included in the asset\u2019s carrying amount or recognised as a separate asset, as
\nappropriate, only when it is probable that future economic benefits associated with the item will flow to
\nthe Group and the cost of the item can be measured reliably. All other repairs and maintenance
\nexpenses are charged to the income statement during the financial period in which they are incurred.
\nThe assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
\nEconomic lives and book values of property, plant and equipment reflect approved actions towards
\nFortum\u2019s climate
-related targets.
\nBORROWING COSTS
\nBorrowing costs directly attributable to the construction of qualifying assets are added to the cost of
\nthose assets. Qualifying assets are assets that take a substantial time to get ready for their intended use
\nor sale.
ACCOUNTING POLICIES
\nThe Group\u2019s i
nterests in associated companies and jointly controlled entities are accounted for using the
\nequity method of accounting. Assets acquired and liabilities assumed in the investment in associates or
\njoint ventures are measured initially at their fair values at the acquisition date. The excess of the cost of
\nacquisition over the fair value of the Group\u2019s share of the identifiable net assets acquired is recorded as
\ngoodwill.
\nThe Group\u2019s share of its associates or joint ventures post
-acquisition profits or losses after tax, and
\nthe expenses related to the adjustments to the fair values of the assets and liabilities assumed are
\nrecognised in the income statement. The cumulative post-acquisition movements are adjusted against
\nthe carrying amount of the investment.
The Group\u2019s share of post
-acquisition adjustments to associates
\nor joint ventures equity that has not been recognised in the associate\u2019s or joint venture\u2019s income
\nstatement, is recognised directly in Group\u2019s shareholder\u2019s equity, and against the carrying a
mount of the
\ninvestment.
\nWhen the Group\u2019s share of losses in an associate or a joint venture equals or exceeds its interest in
\nthe associate or joint venture, including any other unsecured receivables, the Group does not recognise
\nfurther losses, unless it has incurred obligations or made payments on behalf of the associate or joint
\nventure.
\nMaterial unrealised gains on transactions between the Group and its associates or joint ventures are
\neliminated to the extent of the Group\u2019s interest in the associate o
r joint venture. Material unrealised
\nlosses are also eliminated, unless the transaction provides evidence of an impairment of the asset
\ntransferred. Accounting policies of associates or joint ventures have been changed where necessary to
\nensure consistency with the policies adopted by the Group.
\nIf more recent information is not available, the share of the profit of certain associated or joint venture
\ncompanies is included in the consolidated accounts based on the latest available information.
ACCOUNTING POLICIES
\nThe carrying values of goodwill, other intangible assets, property, plant and equipment, right-of-use
\nassets, and non-financial investments are reviewed regularly for indication of impairment.
\nIndications of impairment are business-specific and are thus analysed separately by each segment;
\nand include risks, such as changes in electricity and fuel prices, regulatory/political risks relating to
\nenergy taxes, price regulations, and limitations to the lifetime of assets.
\nImpairment testing is performed if there is an indication of impairment; and the asset is written down to its
\nrecoverable amount if its carrying amount is greater than the estimated
re
coverable amount.
\nIn addition, goodwill and other intangible assets that have an
indefinite useful life, and as such are not
\nsubject to amortisation, are tested annually for impairment, even if there is no indication of impairment.
\nImpairment testing is performed and documented annually in connection with the long-term forecasting
\nprocess.
\nAnnual impairment testing is performed on a cash-generating unit level. Fortum defines cash-
\ngenerating unit as the smallest group of assets that generate cash flows that are independent of the cash
\nflows generated by other assets.
\nGoodwill is allocated to groups of cash-generating units that benefit from the synergies of the acquired
\ngoodwill.
\nFortum uses value in use to establish the recoverable amount of cash-generating units. Value in use
\nis determined by discounting future cash flows expected to be derived from group of assets. The
\ncarrying amount of group of cash generating units comprises net operating assets, including goodwill
\nand fair value adjustments arising from
acquisitions.
\nNon-financial assets, other than goodwill, that have been impaired in the past are reviewed for possible
\nreversal of
impairment at each reporting date.
ACCOUNTING POLICIES
\nInventories are stated at the lower of cost and net realisable value being the estimated selling price for
\nthe end product, less applicable variable selling expenses and other production costs. Cost is generally
\ndetermined using the weighted average cost method.
\nInventories which are acquired for the purpose of buying and selling commodities in the near future,
\ngenerating profit from the fluctuation in market price, are stated at fair value less cost to sell.
\nEMISSION ALLOWANCES
\nInventories include CO
2
emission allowances for covering emissions caused by power and heat
\nproduction. CO
2
emission allowances received free of charge are accounted at nominal value.
\nPurchases of CO
2
emissions allowances meeting the IFRS 9 \u201cown
use\u201d
-criteria, are accounted for at
\ncontracted purchase price. Purchases of CO
2
emission allowances, which have failed to meet the \u201cown
\nuse\u201d \u2013
criteria, and are thus accounted for as derivatives, are recognised at market price applicable at the
\ntime of delivery.
\nCO
2
emission costs are settled by returning the emission allowances. The obligation for CO
2
emission
\ncosts is presented in Other payables, see
\ue001
Note 33
Trade and other payables. To the extent that the
\nGroup already holds allowances to cover the emission costs, the obligation is measured at the carrying
\namount of those allowances. Any shortfall of allowances needed to cover the settlement obligation is
\nvalued at the current market value of allowances.
\nThe emission cost is recognised in the consolidated income statement within materials and services.
ACCOUNTING POLICIES
\nTrade receivables include revenue based on an estimate of electricity, gas, heat and cooling already
\ndelivered but not yet measured and not yet invoiced.
\nImpairment losses for trade receivables are calculated according to the expected credit loss (ECL)
\nmodel. Loss allowances on trade receivables are measured at an amount equal to lifetime expected
\ncredit losses.
\nAn allowance is made on the balance sheet for the expected future credit losses and remains on the
\nbalance sheet until it is written off as a credit loss or reversed. Allowances may remain on the balance
\nsheet for several years pending the outcome of collection processes and court proceedings. Write-off
\npolicies differ by country depending on local legislation and assessment of recovery possibilities. For
\nlarge trade receivables, ECL is calculated for the individual customer based on the estimated probability
\nof default and expected recovery rate for the customer. These estimates are derived from available
\nmarket data when possible, or based on the customer\u2019s rating. Adjustments are made if there are
\nindications of decreased creditworthiness, e.g. based on payment behaviour. ECL for trade receivables
\nfrom small customers are calculated on portfolio basis by country and business segment. The credit loss
\nallowances are based on historical analysis of losses when possible, or on average default rates for
\ncustomers based on externally available information. These rates are adjusted if there are any forward-
\nlooking indicators showing changes in expected credit losses. Trade receivables overdue more than
\n180 days are generally considered to be credit-impaired and allowances are made for the full amount,
\nadjusted for expected recovery rates.
ACCOUNTING POLICIES
\nCash and cash equivalents in Liquid funds include cash in hand, deposits held at call with banks and
\nother short-term, highly liquid investments with original maturities of three months or less. Cash and
\ncash equivalents, deposits and commercial papers are measured at amortised cost. Fixed-term
\nsecurities are measured at fair value through profit or loss.
\nDrawn amount of bank overdrafts are shown within borrowings in current liabilities on the balance
\nsheet. Trading-related cash collaterals are included in margin receivables and otherwise restricted cash
\nis treated as short-term interest-bearing receivables.
ACCOUNTING POLICIES
\nThe tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as
\nreported in the consolidated income statement, because of items of income or expense that are taxable
\nor deductible in other years and items that are never tax
able or deductible. The Group\u2019s liability for
\ncurrent tax is calculated using tax rates that have been enacted or substantively enacted by the end of
\nthe reporting period.
\nDeferred tax is provided in full, using the balance sheet approach on temporary differences arising
\nbetween the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
\nstatements. However, if the deferred tax arises from initial recognition of an asset or liability in a
\ntransaction other than a business combination that at the time of the transaction affects neither
\naccounting nor taxable profit or loss, it is not accounted for. Deferred tax is determined using tax rates
\n(and laws) that have been enacted or substantially enacted by the closing date and are expected to
\napply when the related deferred tax asset is realised or the deferred tax liability is settled.
\nDeferred tax assets are recognised to the extent that it is probable that future taxable profit will be
\navailable against which the temporary differences can be utilised. Deferred tax assets are set off against
\ndeferred tax liabilities if they relate to income taxes levied by the same taxation authority.
\nDeferred tax is provided on temporary differences arising from investments in subsidiaries, associates
\nand joint ventures, except where the timing of the reversal of the temporary difference is controlled by
\nthe Group, and it is probable that the temporary difference will not be reversed in the foreseeable future.
\nThe Group recognises liabilities for anticipated tax dispute issues based on estimates of whether
\nadditional taxes will be due. No provision will be recognised in the financial statements if Fortum
\nconsiders the claims unjustifiable. Therefore, if taxes regarding ongoing tax disputes have to be paid
\nbefore final court decisions, they are booked as a receivable. Where the final outcome of these matters
\nis different from the amounts that were initially recorded, such differences will impact the income tax and
\ndeferred tax provisions in the period in which such determination is made.
ACCOUNTING POLICIES
\nFortum owns Loviisa nuclear power plant in Finland. In Fortum's consolidated balance sheet, Share in
\nthe Nuclear Waste Funds and the Nuclear provisions relate to Loviisa nuclear power plant.
\nComparatives include also Barseb\u00e4ck Kraftbolag AB and OKG Aktiebolag AB.
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG AB, with Fortum owning
\n45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March 2020 to 30
\nSeptember 2022. On deconsolidation of Uniper on 30 September 2022, OKG AB was reclassified as an
\nassociated company. Uniper\u2019s 100% owners
hip in Barseb\u00e4ck Kraftbolag AB was also deconsolidated.
\nFortum\u2019s shares in the Nuclear Waste Funds are accounted for according to IFRIC 5, Rights to
\ninterests arising from decommissioning, restoration and environmental rehabilitation funds which states
\nthat the fund assets are measured at the lower of fair value or the value of the related liabilities since
\nFortum does not have control or joint control over the Nuclear Waste Funds. The Nuclear Waste Funds
\nare managed by governmental authorities. The related provisions are the provision for decommissioning
\nand the provision for disposal of spent fuel.
\nThe fair values of the provisions are calculated according to IAS 37 by discounting the separate future
\ncash flows, which are based on estimated future costs and actions already taken. The initial net present
\nvalue of the provision for decommissioning (at the time of commissioning the nuclear power plant) has
\nbeen included in the investment cost and is depreciated over the estimated operating time of the nuclear
\npower plant. Changes in the technical plans etc., which have an impact on the future cash flow of the
\nestimated costs for decommissioning, are accounted for by discounting the additional costs to the
\ncurrent point in time. The increased asset retirement cost due to the increased provision for
\ndecommissioning is added to property, plant and equipment and depreciated over the remaining
\nestimated operating time of the nuclear power plant. For power plant units taken from use the increase is
\nrecognised immediately in the income statement.
\nThe provision for spent fuel covers the future disposal costs for fuel used until the end of the
\naccounting period. Costs for disposal of spent fuel are expensed during the operating time based on fuel
\nusage. The impact of the possible changes in the estimated future cash flow for related costs is
\nrecognised immediately in the income statement based on the accumulated amount of fuel used until the
\nend of the accounting period. The related interest costs due to unwinding of the provision is recognised
\nin other financial items - net.
\nThe interest income and possible fair valuation effects on the Nuclear Waste Funds assets are
\npresented in other financial items - net.
\nFortum's actual share of the Nuclear Waste Funds can be higher than the carrying value of the Fund
\nin the balance sheet. The legal nuclear liability should be fully covered by payments and guarantees to
\nthe Nuclear Waste Fund in Finland. The same applies in Sweden for the nuclear power plants that are
\ntaken out of operation. For Swedish nuclear power plants in operation the nuclear liability should be fully
\ncovered at the end of the plants operating lifetimes. The difference between the legal liability and
\nprovisions can be material per power plant, as the legal liability in Finland is not discounted while the
\nprovisions are and in Sweden the legal liability is based on different assumptions than the provisions.
\nThe annual fees to the Fund are based on changes in the legal liability, the return generated in the
\nNuclear Waste Fund and incurred costs of taken actions.
\nFortum also has minority interests in other nuclear power companies, i.e. Teollisuuden Voima Oyj
\n(TVO) in Finland and Forsmarks Kraftgrupp AB (Forsmark) in Sweden. The minority shareholdings are
\nclassified as associated companies and joint ventures and are consolidated with equity method. Both the
\nFinnish and the Swedish companies are non-profit making, i.e. electricity production is invoiced to the
\nowners at cost according to local GAAP. Accounting policies of the associates regarding nuclear-related
\nassets and liabilities have been changed where necessary to ensure consistency with the policies
\nadopted by the Group.
ACCOUNTING POLICIES
\nProvisions are recognised when the Group has a present legal or constructive obligation to a third party
\nas a result of past events, it is probable that an outflow of resources will be required to settle the
\nobligation and the amount can be reliably estimated.
\nProvisions are measured at the present value of the expenditures expected to be required to settle the
\nobligation at the reporting date using a discount rate that reflects current market assessment of the time
\nvalue of money. When risk is not covered in the estimated cash flows, the discount rate also includes the
\nrisks specific to the obligation.
\nIncrease in the provision due to the passage of time and changes in provisions due to changes in
\ndiscount rates are recognised as interest expense in the consolidated income statement. Changes in
\nprovisions, except for changes in asset retirement obligations, are recognised in the consolidated
\nincome statement.
\nASSET RETIREMENT OBLIGATIONS
\nAsset retirement obligations for the decommissioning or dismantling of property, plant and equipment
\nare recognised either when there is a contractual obligation towards a third party or a legal obligation.
\nThe obligation is generally based on detailed cost estimates validated by external experts.
\nThe asset retirement obligation is recognised as part of the cost of an item of property, plant and
\nequipment when the asset is put in service. Costs are depreciated over the remainder of the asset's
\nuseful life. Changes in asset retirement obligations are recognised in property, plant and equipment on
\nthe consolidated balance sheet; unless the item of property, plant and equipment has already been fully
\ndepreciated when changes are recognised in the consolidated income statement.
\nONEROUS CONTRACT PROVISIONS
\nAn onerous contract provision is recognised for a contract under which the unavoidable costs of meeting
\nthe obligations under the contract exceed the economic benefits expected to be received under it.
\nUnavoidable costs is the lower of the excess obligation from the performance under the contract, and
\nany potential penalties or compensation arising in the event of non-performance.
\nENVIRONMENTAL PROVISIONS
\nEnvironmental provisions are recognised based on the current interpretation of environmental laws and
\nregulations when it is probable that a present obligation has arisen, and the amount of such liability can
\nbe reliably estimated. The obligation is generally based on detailed cost estimates validated by external
\nexperts.
ACCOUNTING POLICIES
\nThe Group companies have various pension schemes in accordance with the local conditions and
\npractices in the countries in which they operate. The schemes are generally funded through various
\npension vehicles including payments to insurance companies, Group\u2019s pension funds and other
\nseparate arrangements. The Group has both defined benefit and defined contribution plans.
\nFor defined benefit plans, pension costs are assessed using the projected unit credit method. The
\ncost of providing pensions is charged to the income statement as to spread the service cost over the
\nservice lives of employees. Current and past service cost, as well as gains or losses from settlements
\nare reported under personnel costs. The net interest is reported in financial items.
\nThe defined benefit obligation is calculated annually on the balance sheet date and is measured as
\nthe present value of the estimated future cash flows using interest rates of high-quality corporate bonds,
\nor similar, that have terms to maturity approximating to the terms of the related pension liability. The plan
\nassets for pensions are valued at market value. The net liability recognised on the balance sheet is the
\ndefined benefit obligation at the closing date less the fair value of plan assets.
\nAny net asset position that might arise from offsetting the present value of the defined benefit obliga-
\ntions against the corresponding fair value of plan assets is recognised taking into account the applicable
\nasset restrictions. Such an asset position is reported in Other non-current assets on the balance sheet.
\nIn the case of a plan amendment, curtailment or settlement (each a \"plan event\") occurring in a
\ndefined benefit plan during an annual reporting period, the current service cost and the net interest on
\nthe net liability or asset are remeasured for the remainder of the reporting period after the plan event.
\nThe actuarial assumptions applicable as of the date of the plan event are to be used as the basis for
\nsuch remeasurement. When the benefits of a plan are changed, or when a plan is curtailed, the resulting
\nchange in the present value of the defined benefit obligation that relates to past service, or the gain or
\nloss related to a curtailment is recognised immediately in profit or loss. Gains or losses on settlements of
\ndefined benefit plans are recognised when the settlement occurs.
\nRemeasurements of the net defined benefit liability or asset include actuarial gains and losses that
\nmay arise especially from differences between estimated and actual variations in underlying
\nassumptions about demographic and financial variables; and, additionally, from developments in these
\nassumptions as of each reporting date. Additionally included is the difference between the actual return
\non plan assets and the interest income on plan assets contained in the net interest result, as well as any
\nchange in the effect of the asset ceiling, excluding amounts already included in net interest.
\nRemeasurement results and related deferred taxes are recognised in full in the period in which they
\noccur and are reported in other comprehensive income.
\nThe Group's contributions to defined contribution plans are charged to the income statement in the
\nperiod to which the contributions relate.
ACCOUNTING POLICIES
\nLESSEE ACCOUNTING
\nThe Group leases mainly office buildings and land areas. The 2021 comparative also included gas
\nstorage facilities related to Uniper. The Group recognises all leases, with the exception of short-term (i.e.
\nlease term less than 12 months) and low value leases as right-of-use assets with a corresponding lease
\nliability at the date at which the leased asset is available for use by the Group.
\nRight-of-use assets and lease liabilities are initially recognised on the consolidated balance sheet at
\nfuture fixed lease payments over the lease term. Lease payments are discounted to present value.
\nRight-of-use assets are depreciated on a straight-line basis over the lease term, or the useful life of the
\nleased asset if shorter; and reviewed periodically for indication of impairment.
\nWhen the future lease payments are revised due to changes in index-linked considerations or the
\nlease term changes, the right-of-use asset and the corresponding lease liability is remeasured. Any
\ndifferences arising on reassessments are recognised in the consolidated income statement.
\nInterest expense on lease liabilities is presented within Interest expense in the consolidated income
\nstatement. In the consolidated cash flow statement, the principal portion of the lease payment is
\npresented under Payments of long-term liabilities, and the interest portion as Interest paid under Funds
\nfrom operations. Variable lease payments, as well as costs for leases not capitalised due to exemptions
\nin the standard, are expensed to consolidated income statement.
ACCOUNTING POLICIES
\nPLEDGED ASSETS
\nPledged assets are given to a lender as security for a loan, trading or other commitment. If the borrower
\nor trading party is unable to make the agreed payments, the lender can use the pledged assets to
\nmitigate its losses. Pledged assets at Fortum mostly consist of securities and real estate mortgages.
\nCONTINGENT LIABILITIES
\nA contingent liability is disclosed when there is a possible obligation that arises from past events and
\nwhose existence is only confirmed by one or more doubtful future events; or when there is an obligation
\nthat is not recognised as a liability or provision because it is not probable that an outflow of resources
\nwill be required, or the amount of the obligation cannot be reliably estimated.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7418": {
"value": "1 Significant accounting policies 1.1 Basic information
\nFortum Corporation (the company) is a Finnish public limited liability company domiciled in Espoo,
\nFinland. For
tum\u2019s shares are traded on Nasdaq Helsinki. Fortum
is an energy company driving the
\nchange for a cleaner world. Our role is to ensure the security of supply and a fast and reliable transition to
\na carbon-neutral economy by providing customers and societies with clean energy and sustainable
\nsolutions. Fortum\u2019s core operation are located in the Nordics and consist of CO
2
-free power generation,
\nelectricity sales, district heating as well as recycling and waste solutions.
\nThese financial statements were approved by the Board of Directors on 1 March 2023. The Financial
\nStatements are also published in accordance with the European Single Electronic Format (ESEF)
\nreporting requirement. The audit firm, Deloitte Oy, has provided
an independent auditor\u2019s reasonable
\nassurance report on Fortum\u2019s ESEF Financial Statements in accordance with ISAE 3000 (Revised). The
\nESEF report is available at https://www.fortum.com/about-us/investors/reports-and-presentations.
\n1.2 Basis of preparation
\nThe consolidated financial statements of Fortum Group for the year ended 31 December 2022 have been
\nprepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC Interpretations
\nas adopted by the European Union. The notes to the consolidated financial statements also comply with
\nthe supplementing requirements of the Finnish accounting and company legislation.
\nThe consolidated financial statements have been prepared under the historical cost convention, except
\nfor financial assets and financial liabilities (including derivative instruments) that are valued at fair value
\nthrough profit and loss or other comprehensive income.
\nThe figures in the consolidated financial statements have been rounded and consequently the sum of
\nindividual figures may deviate from the sum presented. Key figures have been calculated using exact
\nfigures. Unless otherwise indicated, all amounts are presented in millions of euro (EUR million).
\nThe following symbols show which amounts in the notes reconcile to the items in the income statement,
\nbalance sheet and cash flow statement:
\nIS
= Income statement
\nBS
= Balance sheet
\nCF
= Cash flow
\nFortum\u2019s consolidated income statement was modified in 2022 to include discontinued operations
\ndisclosure as required by IFRS 5 Non-current assets held for sale and discontinued operations. See
\n\ue001
Note 1.7
Impact of Uniper deconsolidation on consolidated financial statements.
\n1.3 Principles for consolidation
\nThese consolidated financial statements comprise of the parent company, subsidiaries, joint ventures and
\nassociated companies.
\nFortum Group was formed in 1998 by using the pooling-of-interests method for consolidating Fortum
\nPower and Heat Oy and Fortum Oil and Gas Oy (the latter demerged to Fortum Oil Oy and Fortum Heat
\nand Gas Oy 1 May 2004). In 2005 Fortum Oil Oy (current Neste Oyj) was separated from Fortum by
\ndistributing 85% of its shares to Fortum\u2019
s shareholders and by selling the remaining 15%. This means that
\nthe acquisition cost of Fortum Power and Heat Oy and Fortum Heat and Gas Oy has been eliminated
\nagainst the share capital of the companies. The difference has been entered as a decrease in
\nsh
areholders\u2019 equity.
\n1.3.1 Subsidiaries
\nSubsidiaries are defined as companies over which Fortum has control. Control exists when Fortum is
\nexposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
\naffect those returns through its power over the entity. See
\ue001
Note 3
Acquisitions, disposals, assets held for
\nsale and discontinued operations.
\nIntercompany transactions, balances and unrealised gains on transactions between Group companies
\nare eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
\nimpairment of the asset transferred.
\nWhere necessary, subsidiaries\u2019 accounting policies have been changed to ensure consistency with the
\npolicies the Group has adopted.
\nCertain subsidiaries and associated companies are not included in the consolidated financial
\nstatements on materiality grounds. These companies are accounted for outside the scope of IFRS 9 and
\nmeasured at cost, with adjustments for any loss allowance.
\nFortum Group subsidiaries are disclosed in
\ue001
Note 40
Group companies by segment. Group holding %
\nfor companies owned via subsidiaries is based on the Fortum Corporation ownership % in the direct
\nsubsidiary times the ownership % of the direct subsidiary in the indirect subsidiary / associate / joint
\nventure.
\n1.3.2 Associates
\nAssociated companies are entities over which the Group has significant influence but not control,
\ngenerally accompanying a shareholding of between 20% and 50% of the voting rights. The Group\u2019s
\ninterests in associated companies are accounted for using the equity method of accounting. See
\n\ue001
Note 18
Participations in associated companies and joint ventures.
\n1.3.3 Joint ventures
\nJoint ventures are arrangements in which the Group has joint control. Joint ventures are accounted for
\nusing the equity method of accounting. See
\ue001
Note 18
Participations in associated companies and joint
\nventures.
\n1.3.4 Non-controlling interests
\nNon-controlling interests in subsidiaries are identified separately from the equity of the owners of the
\nparent company. Non-controlling interests are generally initially measured at the non-
controlling interests\u2019
\nproportionate share of the fair value of the acquiree\u2019s identifiable net assets. Changes in non
-controlling
\ninterest due to changes in ownership interest of a subsidiary are accounted for as equity transactions.
\nSubsequent to acquisition, the carrying amount of non-controlling interests is the amount of those
\ninterests at initial recognition plus the non-
controlling interests\u2019 share
of subsequent changes in equity.
\nSee
\ue001
Note 26
Non-controlling interests.
\n1.4 Measures for performance
\nAccording to the ESMA Guidelines on Alternative Performance Measures, an Alternative Performance
\nMeasure (APM) is understood as a financial measure of historical or future financial performance,
\nfinancial position, or cash flows, other than a financial measure defined or specified in the applicable
\nfinancial reporting framework.
47
\nFortum uses APMs, such as Comparable operating profit and Comparable EBITDA in the financial
\ntarget setting and forecasting, management's follow-up of financial performance of segments and the
\nGroup, as well as for the allocation of resources in the Group's performance management process. Items
\naffecting comparability are excluded from Comparable operating profit and Comparable EBITDA and
\ndisclosed separately in Fortum's consolidated income statement to support the transparency of underlying
\nbusiness performance when comparing results between periods.
\nItems classified as Items affecting comparability include accounting effects from valuation according to
\nIFRS not arising from the performance of business operations. Such items include fair value changes of
\nfinancial derivatives hedging future cash flows where hedge accounting is not applied and fair value
\nchanges of physical contracts accounted for as derivatives according to IFRS 9, Financial Instruments.
\nFurther, business performance of operations cannot be compared from one period to another without
\nadjusting for one-time items relating to capital gains and other related items, such as transaction costs
\narising from acquisitions; impacts from acquisition accounting; significant impairments and reversals of
\nimpairments as well as other miscellaneous non-operating items, such as restructuring and cost
\nmanagement expenses. Such items are also treated as Items affecting comparability.
\nAccording to IFRS 3, Business Combinations, transaction costs related to the acquisitions of subsidiary
\nshares are recognised in the consolidated income statement. Such costs are presented in Capital gains
\nand other within Items affecting comparability.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, and in 2022 Fortum introduced the following new APMs: \u2018Comparable
\nEBITDA from continuing operations excl. Russia\u2019, \u2018Comparable operating profit from continuing operations
\nexcl. Russia\u2019, \u2018Comparable net profit from continuing operations excl. Russia\u2019, \u2018Comparable earnings per
\nshare from continuing operations excl. Russia\u2019, and \u2018Financial net debt/comparable EBITDA excl. Russia\u2019
\nto provide additional financial performance indicators to support meaningful comparison of financials for
\nFortum's strategic businesses.
\nSee
\ue001
Note 7
Comparable operating profit and comparable net profit. Definitions are presented in the
\nsection
\ue001
Definitions and reconciliations of key figures.
\nFortum\u2019s long
-term financial target for capital structure until 31 December 2022 was Financial net debt /
\ncomparable EBITDA below 2x. See
\ue001
Note 5
Capital risk management.
\n1.5 Foreign currency transactions and translation
\n1.5.1 Functional and presentation currency
\nItems inc
luded in the financial statements of each of the Group\u2019s entities are measured using the currency
\nof the primary economic environment in which the entity operates (the functional currency). The
\nconsolidated financial statements are presented in euros, whic
h is the company\u2019s functional and
\npresentation currency.
\n1.5.2 Transactions and balances
\nTransactions denominated in foreign currencies are translated using the exchange rate at the date of
\ntransaction. Receivables and liabilities denominated in foreign currencies outstanding on the balance
\nsheet date are translated using the balance sheet date exchange rate. Exchange rate differences are
\nrecognised in the consolidated income statement. Net exchange differences relating to financing
\ncomponents are recognised in the income consolidated statement, except when deferred to equity as
\nqualifying cash flow hedges. Translation differences on financial assets through other comprehensive
\nincome are included in Other equity components in equity.
\n1.5.3 Group companies
\nIncome statement and cash flow statement of subsidiaries, whose functional currencies are not euro, are
\ntranslated into euro using the average exchange rates; whereas the balance sheets of such subsidiaries
\nare translated into euro using the closing exchange rates on the balance sheet date. On consolidation,
\nexchange rate differences arising from the translation of net investment in foreign entities, as well as
\nborrowings and other currency instruments designated as hedges for such investments, are taken to
\nequity. When a foreign operation is sold, such exchange differences are recognised in the consolidated
\nincome statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the
\nacquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at
\nclosing rate.
\nThe balance sheet date rate is based on the exchange rate published by the European Central Bank for
\nthe closing date. The average exchange rate is calculated as an average of daily closing rates from the
\nEuropean Central Bank. The European Central Bank stopped publishing rouble (RUB) rates from 2 March
\n2022. From 2 March 2022, the daily spot rate at 17:15 EET from the market has been used.
\nKey exchange rates used in consolidated financial statements
\nAverage rate
Balance sheet date rate
\n2022
2021
31 Dec 2022
31 Dec 2021
\nUnited Kingdom (GBP)
0.8528
0.8596
0.8869
0.8403
\nNorway (NOK)
10.1026
10.1633
10.5138
9.9888
\nPoland (PLN)
4.6861
4.5652
4.6808
4.5969
\nRussia (RUB)
73.6173
87.1527
77.8998
85.3004
\nSweden (SEK)
10.6296
10.1465
11.1218
10.2503
\nUnited States (USD)
1.0530
1.1827
1.0666
1.1326
\n1.5.4 Associates and joint ventures
\nAssociates and joint ventures, whose measurement and reporting currencies are not euro, are translated
\ninto the Group reporting currency using the same principles as for subsidiaries.
48
\n1.6 Other significant accounting policies
\nFortum describes other significant accounting policies in conjunction with the relevant disclosure
\ninformation. The table below lists significant accounting policies and the financial statement note where
\nthey are presented, as well as the relevant IFRS standard.
\nAccounting policy
Note
IFRS standard
\nSubsidiaries
\n3. Acquisitions, disposals, assets held for
\nsale and discontinued operations
\nIFRS 3, IFRS 10
\nAssets held for sale
3. Acquisitions, disposals, assets held for
\nsale and discontinued operations
\nIFRS 5
\nDiscontinued operations
3. Acquisitions, disposals, assets held for
\nsale and discontinued operations
\nIFRS 5
\nFinancial instruments
4. Financial risk management
\n14. Financial assets and liabilities by
\ncategories
\n15. Financial assets and liabilities by fair
\nvalue hierarchy
\nIAS 32, IFRS 7, IFRS 9, IFRS 13
\nSegment reporting
6. Segment reporting
IFRS 8, IFRS 15
\nRevenue recognition
6. Segment reporting
\n23. Trade and other receivables
\nIFRS 15
\nOther income
8. Other income and other expenses
IFRS 15
\nResearch and development costs
8. Other income and other expenses
IAS 38
\nGovernment grants
8. Other income and other expenses
IAS 20
\nShare-based payments
10. Employee benefits and Board
\nremuneration
\nIFRS 2
\nEarnings per share
13. Earnings and dividend per share
IAS 33
\nOther shares and participations
14. Financial assets and liabilities by
\ncategories
\n20. Other non-current assets
\nIAS 32, IAS 36, IFRS 9
\nFair value measurement
15. Financial assets and liabilities by fair
\nvalue hierarchy
\nIFRS 13
\nIntangible assets
16. Intangible assets
IAS 38
\nTangible assets
17. Property, plant and equipment and
\nRight-of-use Assets
\nIAS 16
\nJoint arrangements
18. Participations in associated companies
\nand joint ventures
\nIFRS 11, IAS 28, IFRS 12
\nInvestments in associates
18. Participations in associated companies
\nand joint ventures
\nIAS 28, IFRS 12
\nImpairment testing
19. Impairment testing
IAS 36
\nInventories
22. Inventories
IAS 2
\nTrade receivables
23. Trade and other receivables
IFRS 9
\nLiquid funds
24. Liquid funds
IAS 7
\nBorrowings
27. Interest-bearing liabilities
IFRS 9
\nIncome taxes
28. Income taxes on the balance sheet
IAS 12
\nDecommissioning obligation
29. Nuclear related assets and liabilities
IFRIC 5
\nProvisions
30. Other provisions
IAS 37
\nPensions and similar obligations
31. Pension obligations
IAS 19
\nLeases
34. Leases
IFRS 16
\nContingent liabilities
36. Pledged assets and contingent liabilities
IAS 37
\nEvents after the balance sheet date
39. Events after the balance sheet date
IAS 1
\n1.7 Impact of Uniper deconsolidation on consolidated financial
\nstatements
\nUniper SE, a German listed company, was acquired in March 2020. Uniper is an international energy
\ncompany with activities in more than 40 countries. Its business is the secure provision of energy and
\nrelated services. Its main activities include power generation in Europe and Russia as well as global
\nenergy trading and optimisation.
\n1.7.1 Discontinued operations
\nFortum lost control of Uniper on the signing of the agreement in principle to sell the shares in Uniper SE to
\nthe German State on 21 September 2022. Thus, Uniper was deconsolidated at 30 September 2022.
\nUniper has been a s
eparate reportable segment in Fortum\u2019s consolidated financial statements, which
\nresults in Uniper being classified as discontinued operations. The transaction was completed on 21
\nDecember 2022. See also
\ue001
Note 2
Critical accounting estimates and judgements.
\nFortum\u2019s consolidated income statement consolidated cash flow statement were modified in 2022 to
\ninclude discontinued operations disclosure as required by IFRS 5 Non-current assets held for sale and
\ndiscontinued operations. Comparatives for 2021 were restated and a separate stock exchange release
\nwith restated comparatives was issued on 6 October 2022. Discontinued operations include Fortum\u2019s
\nformer subsidiary Uniper SE and its consolidated group companies.
\nIncome statement information in the following notes to the financial statements include only continuing
\noperations, unless otherwise specified. Uniper was deconsolidated at 30 September 2022, and thus
\nUniper\u2019s balance sheet items are not included on Fortum\u2019s 31 December 2022 consolidated balance
\nsheet. Consolidated balance sheet at 31 December 2021 included Uniper.
\n1.7.2 Joint ownership in the Swedish nuclear company OKG AB
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG Aktiebolag (OKG AB), with
\nFortum owning 45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March
\n2020 to 30 September 2022, with the results of the company being split between the Uniper segment and
\nthe Generation segment according to ownership. On deconsolidation of Uniper at 30 September 2022,
\nOKG AB was reclassified as an associated company. The reclassification resulted in the restatement of
\nthe Generation segment\u2019s 2021 financials.
\n1.7.3 Group impact from Uniper deconsolidation
\nOn deconsolidation of Uniper at 30 September 2022, Fortum recorded EUR 28.0 billion one-time, mainly
\nnon-
cash positive effect. The amount consists of the net effect from the deconsolidation of Uniper\u2019s
\nassets, liabilities and non-controlling interest, and the book value of Uniper-related goodwill and other fair
\nvalue adjustments made on acquisition; as well as certain items previously recognised in other
\ncomprehensive income, mainly foreign exchange differences, that are reclassified to profit and loss on
\ndisposal. See also
\ue001
Note 3.4
Discontinued operations.
\n1.8 New accounting standards, amendments and interpretations
\nNew accounting standards, amendments and interpretations effective from 1 January 2022 did not have a
\nmaterial impact on Fortum's consolidated financial statements.
\nNew accounting standards, amendments and interpretations issued by the balance sheet date and
\neffective from 1 January 2023, or later, are not expected to have a material impact on Fortum\u2019s
\nconsolidated financial statements.
49
\n2 Critical accounting estimates and judgements
\nThe preparation of IFRS consolidated financial statements requires management to make estimates and
\nassumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
\nliabilities existing at the balance sheet date, as well as the reported amounts of revenues and expenses during
\nthe reporting period.
\nEstimates and judgements are continually evaluated and are based on historical experience and other
\nfactors, including expectations of future events that are believed to be reasonable under the circumstances
\nbased on, for instance, the analysis of energy policy and the regulatory environment. The Russia-Ukraine war
\nhas fundamentally changed the geopolitical situation; and given the uncertainty and risks arising from the
\ngeopolitical situation, there may be future effects on the consolidated financial statements arising from more
\nvolatile global economy and especially commodity markets. These factors can affect the carrying amounts of
\nassets and liabilities, the amount and timing of earnings recognition, as well as cash flows.
\nThe table below lists the areas where management\u2019s accounting estimates and judgements are most critical
\nto reported results and financial position; as well as where to find more information on the areas of critical
\naccounting estimate and judgement.
\nCritical accounting estimates and judgements
Note
\nJudgement used in determining the valuation of certain financial
\ninstruments
\n14. Financial assets and liabilities by categories
\n15. Financial assets and liabilities by fair value
\nhierarchy
\nAssumptions used when determining loss of control on disposal of
\nsubsidiaries
\n2. Critical accounting estimates and judgments
\n3. Acquisitions, disposals, assets held for sale and
\ndiscontinued operations
\nAssigned values and useful lives determined for intangible assets
\nand property, plant and equipment acquired in a business
\ncombination
\n16. Intangible assets
\n17. Property, plant and equipment and right-of-use
\nassets
\nAssumptions related to impairment testing of property, plant and
\nequipment and intangible assets as well as associated companies
\nand joint ventures
\n16. Intangible assets
\n17. Property, plant and equipment and right-of-use
\nassets
\n18. Participations in associated companies and joint
\nventures
\n19. Impairment testing
\nJudgement used when assessing the nature of Fortum's interest in
\nits investees, when considering the classification of Fortum's joint
\narrangements, as well as commitments arising from these
\narrangements
\n18. Participations in associated companies and joint
\nventures
\nEstimates used for the recognition and measurement of deferred tax
\nassets
\n28. Income taxes on the balance sheet
\n37. Legal actions and official proceedings
\nAssumptions made to determine long-term cash flow forecasts of
\nestimated costs for provision related to nuclear production
\n29. Nuclear related assets and liabilities
\nAssumptions made when estimating provisions
30. Other provisions
\nAssumptions used to determine future pension obligations
31. Pension obligations
\nAssumptions used to determine the lease liability
34. Leases
\n2.1 Russia\u2019s invasion of Ukraine and macroeconomic environment
\nRussia\u2019s attack on Ukraine in February 2022 has severely impacted Fortum\u2019s current and future businesses.
\nThe main imp
acts on Fortum\u2019s 2022 financials include the events that led to the divestment of Uniper to the
\nGerman State for EUR 0.5 billion; the severe liquidity constraints caused by significantly higher collaterals
\nrelated to power and gas on the commodities exchanges, which required additional financing measures; as well
\nas the overall impact of the war on Fortum\u2019s Russian operations.
\n2.1.1 Uniper divestment to the German State
\nFollowing the war in Ukraine, particularly the Uniper segment\u2019s business and financial risk profiles significantly
\ndeteriorated in 2022, mainly due to Russian gas curtailments and commodity price volatility, which significantly
\nincreased margining requirements and liquidity needs. In July 2022, Fortum and Uniper reached out to the
\nGerman Government to agree on a long-term solution for Uniper.
\nOn 21 September 2022, Fortum, the German Government and Uniper signed an agreement in principle
\nallowing the German State to take full control of Uniper. This final Uniper agreement in principle replaced the
\ninitial agreement between the same parties, signed in July 2022. After July, the European energy crisis
\nescalated further and the severity of the situation made it apparent that the previously agreed stabilisation
\nmeasures were insufficient and difficult to implement. By 21 September 2022, Uniper had accumulated
\nsignificant negative earnings amounting to billions of euros in gas-related losses, and it had become evident that
\nthe company, as privately-owned, was not able to fulfil its role as a critical energy provider of security of supply in
\nGermany.
\nThe transaction was completed on 21 December 2022.
Under the agreement, Uniper issued new ordinary
\nregistered shares, which the German State subscribed at a nominal value of EUR 1.70 per share. At completion
\nof the equity capital increase, the German State bought all of Fortum\u2018s approximately 293 million shares in
\nUniper SE for EUR 1.70 per share, i.e. for a total of EUR 0.5 billion; and Uniper repaid the EUR 4 billion
\nshareholder loan. Out of the EUR 4.0 billion parent company guarantee facility that Fortum had granted to
\nUniper, a total of EUR 3.0 billion was released by year-end 2022. The remaining, approximately EUR 1.0 billion,
\nwith a full German State back-to-back guarantee (indemnity), will be released latest at the end of June 2023.
\nThe signing of the agreement in principle with the German Government on 21 September 2022 triggered a
\ncontrol assessment as required by IFRS 10 Consolidated financial statements. Management concluded that
\nFortum\u2019s rights are no longer substantive as it does not have practical ability to use control over Uniper. The loss
\nof control was impacted by the signing of the agreement in principle and the significant financial support to
\nUniper through the KfW Bank\u2019s bridge financing.
In the judgement of the management, the overall effect of that
\nfinancing, combined with the agreement in principle, was such that the German Government was in practice
\nsubsequently able to approve or reject the most important decisions in relation to the business of Uniper.
\nConsequently, control was assessed to have been lost and Uniper was deconsolidated at 30 September 2022.
\nIn addition, Uniper was presented as discontinued operations in accordance with IFRS 5 Non-current assets
\nheld for sale and discontinued operations as management was committed to fully disposing of Uniper SE\u2019s
\nshares, and Uniper had been a separate reportable segment and a significant component of Fortum Group. See
\nalso
\ue001
Note 1
Significant accounting policies.
\nDeferred tax assets at 31 December 2022 include EUR 706 million recognised in 2022 relating to a one-time
\ntax impact realised in Ireland, which resulted in increased deferred tax assets on tax loss carry forward. The
\ndeferred tax asset mainly relates to impacts caused by the Uniper divestment, and the utilisation is subject to
\nfuture taxable income in Ireland. See
\ue001
Note 28
Income taxes on the balance sheet.
\n2.1.2 Liquidity
\nThe energy crisis in Europe has resulted in the very volatile commodity markets with unprecedentedly high
\nprices that have required significantly higher collaterals related to power and gas on the commodities
\nexchanges. In the latter part of 2022, the Nordic power prices declined from the record levels at the end of
\nAugust and the market was less volatile. However, Fortum remained prepared for continued market turbulence,
\nand has taken precautionary financing measures to secure its liquidity position and financial flexibility. On 6
\nSeptember 2022 Fortum signed a EUR 2,350 million bridge financing with Finnish State-owned company,
\nSolidium. According to loan terms, in order to keep the facility effective for the one year period, on 26 September
\n2022, Fortum announced to draw EUR 350 million under this facility. On 21 December 2022, Uniper repaid its
\nEUR 4 billion shareholder loan and Fortum received the sales proceeds of EUR 0.5 billion from the divestment
\nof Uniper shares. At the end of the year, Fortum\u2019s financial situation was solid,
Fortum Group had undrawn
\ncommitted credit facilities amounting to EUR 7,200 million, as well as EUR 100 million committed overdraft limits
\nthat are valid until further notice. See also
\ue001
Note 27
Interest-bearing liabilities.
50
\n2.1.3 Geopolitical uncertainties and impacts on Russian operations
\nDue to the sanctions imposed by the Russi
an Federation, Fortum\u2019s Russian subsidiaries are subject to foreign
\nexchange transfer restrictions, which currently limit the transfer of funds, such as potential dividend distributions,
\ninto the EU. The sanctions currently do not, however, restrict Fortum from exercising its voting rights at the
\ngeneral meetings of the Russian subsidiaries. Hence, Fortum\u2019s Russian subsidiaries continue to be consolidated
\nas subsidiaries at 31 December 2022. However, the cash and cash equivalents held by Fortum\u2019s Russia
\nsegment in Russia, a total of EUR 247 million, are not available to the other group companies.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, however there are no decisions and these processes might take some time
\nand are subject to regulatory approvals. See also Risk management section in the Operating and financial
\nreview.
\nTotal impairment charges in 2022 for the Russia cash-generating unit (CGU) amount to EUR 1,697 million
\n(pre-tax), including EUR 905 million impairment of intangible assets and property, plant and equipment, EUR
\n475 million impairment of participations in associates and joint ventures, EUR 145 million expected credit losses
\non Russian deposits and receivables, as well as EUR 171 million write down of other shares. The remaining
\nbook value of Russia segment\u2019s net assets is approximately EUR 1.7 billion at 31 December 2022 (31 Dec
\n2021: 2.5). The book value is based on the assumption that the controlled exit can be executed, and that other
\nassumptions made by management realise as expected. The carrying amount of the Russia CGU is equal to its
\nrecoverable amount, meaning that any detrimental future changes may cause further impairment. See
\n\ue001
Note 19
Impairment testing.
\n2.2 Climate-related matters
\nFortum\u2019s power generation in the Nordic countries is mainly based on CO
2
-free hydro and nuclear power. A
\nminor share of Fortum\u2019s power generation is currently based on solar and wind. Fortum has also generation of
\ndistrict heating and cooling in Finland and Poland. In Europe, heat is mainly produced at energy-efficient
\ncombined heat and power (CHP) plants. In addition, Fortum offers industrial and infrastructure solutions, e.g.,
\nwaste-to-energy, as well as energy sales. In Russia, Fortum has mainly natural gas-fired generation.
\nMain climate-related risks facing Fortum include transition risks, such as changes in legislation, changes in
\ntechnology, impact on supply or demand, and reputation; as well as physical risks, such as those arising from
\nextreme weather conditions or changes in long-term weather patterns. For instance, floods will impact the
\noptimal operation of hydro power plants. Fortum is systematically reducing risks related to dam safety through
\nlong-term investments to secure the discharge capacity in extreme flood situations.
\nThe impacts of climate change are reflected in the consolidated financial statements generally when specific
\nactions, such as new investments, to transition to CO
2
-free production or to tackle climate change have been
\napproved; or when climate-related risks have materialised. The impact from climate-related risks to 2022
\nfinancial statements has not been material.
\nThe following financial statement items are most relevant when considering the impact of climate-related
\nmatters:
\n\u2022
Impairment testing: approved actions towards Fortum\u2019s climate risks an
d targets are reflected in the
\nassumptions used in the impairment testing, as appropriate. See
\ue001
Note 19
Impairment testing.
\n\u2022
Property, plant and equipment: economic lives and book values of property, plant and equipment reflect
\napproved actions towards Fo
rtum\u2019s climate
-related risks and targets. See
\ue001
Note 17
Property, plant and
\nequipment.
\n\u2022
Nuclear provisions include future costs for decommissioning nuclear power plants, and the appropriate
\ntreatment of spent fuel. See
\ue001
Note 29
Nuclear-related assets and liabilities.
\nFor accounting treatment applied to emission allowances, see
\ue001
Note 22
Inventories.
\nFortum\u2019s new climate
-related targets are disclosed in
\ue001
Note 39
Events after the balance sheet date.
\n3 Acquisitions, disposals, assets held for sale and
\ndiscontinued operations
\nACCOUNTING POLICIES
\nSUBSIDIARIES
\nAcquisition of subsidiaries are accounted for using the acquisition method. The consideration transferred
\nis measured as the aggregate of acquisition date fair values of assets transferred and liabilities
\nassumed. Identifiable assets acquired and liabilities assumed are measured initially at acquisition date
\nfair values, irrespective of the extent of any minority interest. The excess of the cost of acquisition over
\nthe fair value of the identifiable net assets acquired is recorded as goodwill.
\nSubsidiaries are fully consolidated from the date on which control is transferred to the Group and are
\nno longer consolidated from the date that control ceases. See
\ue001
Note 1.3
Principles for consolidation.
\nASSETS HELD FOR SALE
\nAssets or disposal groups are classified as assets held for sale if their carrying amounts will be
\nrecovered principally through a sale transaction rather than through continuing use. For this to be the
\ncase, the asset, or the disposal group, must be available for immediate sale in its present condition
\nsubject only to terms that are usual and customary for sales of such assets or disposal groups, and the
\nsale must be highly probable. These assets, or in the case of disposal groups, assets and liabilities, are
\npresented separately on the consolidated balance sheet and measured at the lower of the carrying
\namount and fair value less costs to sell. Assets classified as held for sale, or included in a disposal
\ngroup classified as held for sale, are not depreciated.
\nDISCONTINUED OPERATIONS
\nA discontinued operation is a component of the Group that has been disposed of or is classified as held
\nfor sale, and that represents a separate major line of business or geographical area of operations or is
\npart of a single co-ordinated plan to dispose of such a line of business or area of operations. The results
\nof discontinued operations are presented separately in the consolidated income statement.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS
\nREGARDING LOSS OF CONTROL
\nFortum reassesses if it controls its subsidiaries if facts and circumstances indicate that there are
\nchanges to the three elements of control: power over the investee, exposure or rights to variable returns,
\nor the ability to use power over to affect the amount of returns. Therefore, the date on which control over
\na subsidiary is lost may require management judgment. With regards to Uniper deconsolidation,
\nmanagement has used judgment in concluding that the signing of the agreement with the German
\nGovernment on 21 September 2022 resulted in loss of control. See also
\ue001
Note 2
Critical accounting
\nestimates and judgements.
51
\n3.1 Acquisitions
\nEUR million
2022
2021
\nGross investments in shares in subsidiary companies
0
210
\nGross investments in shares in associated companies and joint ventures
14
39
\nGross investments in other shares
19
31
\nTotal
33
281
\nGross investments in shares during 2022 were EUR 33 million (2021: 281). Acquisition of subsidiary
\nshares in 2021 mainly relate to the acquisition of Uniper shares. From 2022, acquisition of additional
\nshares in Uniper are not included in gross investments in shares. This reflects the change in presentation
\nin the cash flow where the acquisition of additional shares in 2022 are presented in cash flow from
\nfinancing activities to better reflect the requirements of IAS 7 Statement of cash flows. Until 2021
\nacquisition of additional shares in Uniper were presented in cash flow from investing activities.
\nComparatives have not been restated.
\n3.2 Disposals
\nEUR million
2022
2021
\nGross divestments of shares in subsidiary companies
1,279
1,136
\nGross divestments of shares in associated companies and joint ventures
86
2,898
\nTotal
1,365
4,034
\n3.2.1 Disposals of subsidiary companies
\nDisposals during 2022
\nOn 21 September 2022, Fortum, the German Government and Uniper signed an agreement in principle
\nallowing the German State to take full control of Uniper and Uniper was deconsolidated. On 21 December
\n2022, the transaction was completed and Fortum received the total consideration of the share transaction
\nof EUR 498 million and Uniper repaid the EUR 4 billion shareholder loan. The consideration received for
\nthe shares is presented in the cash flow from discontinued operations. See also
\ue001
Note 1
Significant
\naccounting policies,
\ue001
Note 2
Critical accounting estimates and judgements and
\ue001
Note 3.4
Discontinued
\noperations.
\nOn 1 September 2022, Fortum announced that it had concluded the sale of its e-mobility business
\nPlugsurfing to Fleetcor Technologies, Inc., a leading global business payments company. The transaction
\nprice was approximately EUR 75 million on a cash and debt free basis and Fortum recorded a tax-exempt
\ncapital gain of EUR 61 million in t
he Other Operations\u2019 2022 results.
\nOn 19 May 2022, Fortum announced that it had concluded the sale of its 50% ownership in the district
\nheating company Fortum Oslo Varme AS in Norway to a consortium of institutional investors of Hafslund
\nEco, Infranode and HitecVision. The total consideration of the sale amounted to approximately EUR 1
\nbillion on a cash- and debt-free basis; and as part of the transaction, Fortum deconsolidated a related
\nEUR 210 million shareholder loan from the City of Oslo. Fortum recorded a tax-exempt capital gain of
\nEUR 638 million in the City Solutions segment\u2019s 2022 results.
\nIn May 2022, the second phase of the Rajasthan divestment was concluded and a tax-exempt sales
\ngain of EUR 5 million was recorded in comparable operating profit in
City Solutions segment\u2019s
2022
\nresults.
\nDisposals during 2021
\nOn 22 June 2021, Fortum announced that it had signed an agreement to divest the 250-MW Pavagada II
\nand the 250-MW Rajasthan solar power plants in India to Actis. The total consideration from the
\ndivestment on a debt and cash-free basis, including the effect of deconsolidating of the net debt amounted
\nto approximately EUR 280 million. The sale of Pavagada II was concluded in October 2021 and the first
\nphase of Rajasthan divestment in November 2021. Fortum recorded a tax-exempt sales gain of EUR 11
\nmillion in the 2021 comparable operating profit of the City Solutions segment.
\nOn 12 March 2021, Fortum announced that it had signed an agreement to sell its district heating
\nbusiness in the Baltics to Partners Group. On 2 July 2021, Fortum concluded the sale. The total
\nconsideration of the sale amounted to approximately EUR 710 million. Fortum recorded a tax-exempt
\ncapital gain of EUR 254 million in the City Solutions segment\u2019s 2021 results.
\nOn 2 March 2021, Fortum announced it had decided to construct the largest solar power plant in Russia
\nthrough a joint venture established with RDIF. The power plant is based on capacities won by Fortum in
\nCSA auctions in 2018 and 2019. In March 2021, Fortum sold the CSA-backed solar power project to the
\njoint venture with RDIF, which had a positive effect of EUR 17 million in the 2021 comparable operating
\nprofit of the Russia segment.
\nIn December 2020, Fortum decided to sell eight small hydropower plants in Sweden with an average
\nannual power generation of 0.1 TWh to Downing Renewables & Infrastructure Trust plc. The total
\npurchase price on a debt and cash free basis is EUR 64.5 million. The transaction closed on 2 February
\n2021.
\nIn December 2019, Fortum and Credit Suisse Energy Infrastructure Partners (CSEIP) signed an
\nagreement whereby funds advised by CSEIP acquired an 80% stake in Fortum\u2019s Nordic wind portfolio.
\nThe transaction, excluding the S\u00f8rfjord wind park, which was still under construction, was closed on 14
\nMay 2020. The transaction on S\u00f8rfjord wind park was closed on 20 January 2021.
\nDivestments of shares in subsidiaries - Impact on financial position
\nThe table below does not include the impact of deconsolidation of Uniper, which is presented separately
\nin
\ue001
Note 3.4.3
Deconsolidation effect.
\nEUR million
2022
2021
\nGross divestments of shares in subsidiary companies
1,279
1,136
\nIntangible assets and property, plant and equipment
797
786
\nOther non-current and current assets
592
75
\nLiquid funds
44
42
\nInterest-bearing loans
-206
-211
\nOther liabilities and provisions
-816
-29
\nNet assets divested
411
662
\nReclassified to participations in associates and joint ventures
-
37
\nResult from transaction
702
350
\n3.2.2 Other disposals
\nOn 18 August 2022, Fortum concluded the sale of its 30% ownership in Recharge AS, a public charging
\npoint operator for electric vehicles, to Infracapital, the infrastructure equity investment arm of M&G Plc.
\nThe transaction price was approximately EUR 85 million. Fortum recorded a tax-exempt capital gain of
\nEUR 77 million in Other Operations\u2019 2022 results.
\nOn 20 September 2021, Fortum concluded the sale of its 50% ownership in the Swedish district heating
\nand cooling company Stockholm Exergi Holding AB (publ) to a consortium of European institutional
\ninvestors of APG, Alecta, PGGM, Keva, and AXA. The signing of the transaction was announced on 30
\nJune 2021. The total consideration of the sale amounted to SEK 29.5 billion (approximately EUR 2.9
52
\nbillion). Fortum recorded a tax-
exempt capital gain of EUR 2,350 million in the City Solutions segment\u2019s
\n2021 results.
\n3.3 Assets held for sale
\nAssets held
for sale at 31 December 2021 included EUR 108 million of Uniper SE\u2019s assets held for sale
\nrelating to an equity investment in Javelin, UK and the \u00d6resundverket power plant in Malm\u00f6, Sweden.
\n3.4 Discontinued operations
\nUniper segment has been classified as discontinued operations in 2022. See also
\ue001
Note 1
Significant
\naccounting policies and
\ue001
Note 2
Critical accounting estimates and judgments. Financial performance and
\ncash flow information for the discontinued operations is presented until 30 September 2022. The
\ntransaction was completed on 21 December 2022, and the consideration received for the shares of EUR
\n498 million is presented in cash flow from discontinued operations in 2022.
\n3.4.1 Financial performance
\nThe result from discontinued operations is disclosed on one line on the face of the consolidated income
\nstatement. The following table presents breakdown of income statement information for discontinued
\noperations. The effects of eliminations from internal sales and purchases have been included in the
\ndiscontinued operations. The net financial costs are based on the historical financial costs in the separate
\ncompanies.
\nEUR million
2022
2021
\nSales
128,102
106,127
\nOther income
22,508
12,289
\nMaterials and services
-132,287
-101,889
\nEmployee benefits
-709
-1,065
\nDepreciation and amortisation
-573
-694
\nOther expenses
-21,788
-13,661
\nComparable operating profit
-4,747
1,107
\nDeconsolidation effect
27,966
-
\nItems affecting comparability
-39,621
-6,021
\nOperating profit
-16,402
-4,913
\nShare of profit/loss of associates and joint ventures
71
23
\nFinance costs - net
-1,052
269
\nProfit before income tax
-17,383
-4,621
\nIncome tax expense
6,081
500
\nNet profit from discontinued operations
-11,302
-4,121
\nAttributable to:
\nOwners of the parent
-3,428
-3,246
\nNon-controlling interests
\n1)
\n-7,874
-875
\nEarnings per share, discontinued operations, EUR
-3.86
-3.65
\nComparable net profit from discontinued operations
-2,538
687
\nComparable earnings per share, discontinued operations, EUR
-2.86
0.77
\n1) Non-controlling interest is not calculated on the Deconsolidation effect
as the deconsolidation effect is calculated based on Fortum\u2019s share
\nof Uniper\u2019s net assets
.
\n3.4.2 Cash flow information
\nIn the cash flow statement, the net cash flows attributable to the operating, investing and financing activities
\nof the discontinued operations are disclosed separately. The consideration received for the shares of Uniper,
\nEUR 498 million, is presented in net cash from/used in investing activities of the discontinued operations. Net
\ncash from/used in investing activities in 2022 is presented net of liquid funds due to the deconsolidation of
\nUniper. Liquid funds of Uniper were EUR 2,248 million at 30 September 2022.
\nEUR million
2022
2021
\nNet cash from/used in operating activities
-10,870
3,851
\nNet cash from/used in investing activities
-2,450
-5,215
\nNet cash from/used in financing activities
10,757
4,409
\nTotal net decrease/increase in liquid funds
-2,563
3,045
\n3.4.3 Deconsolidation effect
\nOn deconsolidation of Uniper at 30 September 2022, Fortum recorded EUR 28.0 billion one-time, mainly
\nnon-cash positive effect that is included in 2022 in net profit from discontinued operations in the
\nconsolidated income statement. The amount consists of the net effect from the consideration received for
\nthe shares, EUR 498 million; Uniper\u2019s negative net assets divested resultin
g in a positive impact to the
\ndeconsolidation effect of EUR 26 658 million; as well as certain items previously recognised in other
\ncomprehensive income, EUR 810 million, mainly foreign exchange differences, that are reclassified to
\nIncome statement on disposal.
\nEUR million
30 Sep 2022
\nIntangible assets
1,224
\nProperty, plant and equipment and right-of-use assets
9,638
\nParticipations in associates and joint ventures
671
\nDerivative financial instruments, net
-18,017
\nDeferred taxes, net
7,595
\nMargin receivables, net
8,763
\nInterest-bearing receivables
860
\nOther non-current and current assets
21,070
\nLiquid funds
2,248
\nNon-controlling interests
6,237
\nInterest-bearing liabilities
-20,391
\nProvisions
-30,281
\nPension obligations, net
-516
\nNuclear provisions
-2,696
\nOther liabilities
-13,063
\nNet assets divested
-26,658
\nConsideration received for the shares
498
\nItems recycled to Income statement
810
\nDeconsolidation effect
27,966
\nFortum\u2019s total
pre-tax loss from the Uniper investment was slightly below EUR 6 billion which is the net
\neffect from the investments in Uniper shares during 2018-2022 of approximately EUR 7.2 billion, the sales
\nproceeds of EUR 0.5 billion received and dividends of approximately EUR 0.9 billion received during the
\nUniper ownership.
53
\n4 Financial risk management
\nFortum's risk management framework, objectives, organisation and processes as well as a description of
\nstrategic, sustainability, financial and operational risks can be found in the Risk management section of
\nthe Operating and financial review (OFR).
\n4.1 Commodity market and fuel risks
\nFortum\u2019s business is exposed to fluctuations in prices and availability of commodities used in the
\nproduction, transmission and sales of energy products. The main exposure is toward electricity prices and
\nvolumes, prices of emissions, and price and availability of fuels. Fortum hedges its exposure to
\ncommodity market risks in order to improve the predictability of the future result by reducing volatility in
\nearnings while ensuring cash flow risk is at an acceptable level.
\nRisk management for commodity hedging activities is based on general standards in the industry and
\ninvolves the segregation of duties, as well as daily calculation, monitoring and reporting of results,
\npositions and risks. Controls are in place to ensure exposures are kept within approved limits and
\nmandates. Hedging involves the use of derivative financial instruments, as well as fixed-price physical
\ndelivery contracts.
\n4.1.1. Sensitivity arising from commodity derivatives according to IFRS 7
\nSensitivity analysis shows the sensitivity arising from financial commodity derivatives as defined in
\nIFRS 7.
\nThese derivatives are used for hedging purposes with hedge accounting applied to most hedging
\nstrategies. Sensitivities in the table below are calculated based on the electricity position as of 31
\nDecember. Positions are actively managed in the day-to-day business operations and therefore the
\nsensitivities vary from time to time. Sensitivity analysis includes only the market risks arising from
\nderivatives i.e. the underlying physical electricity sales and purchases are not included. Sensitivity is
\ncalculated with the assumption that electricity forward and futures quotations would change 1 EUR/MWh
\nfor the period Fortum has derivatives.
\nSensitivity according to IFRS 7
\n+/- 1 EUR/MWh change in electricity forward and futures quotations, EUR million
Effect
2022
2021
\nEffect on profit before income tax
-/+
2
1
\nEffect on equity
-/+
47
57
\n4.1.2. Electricity price and volume risk
\nThe exposure to Nordic electricity prices and normal volume fluctuations (e.g. due to weather-driven demand
\nand supply changes) is the largest commodity market risk exposure for Fortum in terms of impact to
\nearnings. The exposure arising from outright power production (hydro and nuclear production assets) is
\nmainly hedged by entering into electricity derivatives contracts on exchanges such as Nasdaq Commodities
\nor the European Energy Exchange, as well as directly with counterparties active in the energy and financial
\nmarkets. The main objective of hedging is to reduce the effect of electricity price volatility in earnings while
\nensuring the cash flow risk is at an acceptable level, and to increase the predictability of future results. The
\nGeneration segment\u2019
s hedging strategies cover several years in the short- to medium-term. These hedging
\nstrategies are executed within approved mandates and are continuously evaluated as electricity and other
\ncommodity market prices, the hydrological balance and other relevant parameters change.
\nThe Generation segment\u2019s hedging for power sales is performed in EUR on a Nordic level covering both
\nFinland and Sweden. The currency component of these hedges in the Swedish entity is currently not hedged.
\nGeneration segment\u2019s sens
itivity to the Nordic electricity market price is dependent on the hedge level for a
\ngiven time period. As per 31 December 2022, approximately 75% of the Generation segment's estimated
\nNordic power sales volume was hedged for the calendar year 2023 with a price of 58 EUR/MWh and
\napproximately 45% for the calendar year 2024 with a price of 42 EUR/MWh.
\nIn the Russia segment, electricity prices are the main sources of market risk. The electricity price is
\nhighly correlated with the gas price. Exposure is partly mitigated through regulated fixed-price bilateral
\nagreements, but the majority of electricity sales is exposed to spot price risk. There are no derivative
\ncontracts in the Russia segment.
\n4.1.3 Commodity derivatives
\nThe table below discloses Fortum Group's commodity derivatives for which hedge accounting according
\nto IFRS 9 is applied. The fair values represent the values disclosed on the balance sheet. See also
\n\ue001
Note 14
Financial assets and liabilities by categories for accounting principles and
\ue001
Note 15
Financial
\nassets and liabilities by fair value hierarchy for basis of fair value estimations.
\nCommodity derivatives subject to hedge accounting 2022
\nVolume, TWh
Fair value, EUR million
\nUnder
\n1 year
\n1
\u2013
5
\nyears
\nOver
\n5 years
Total
Positive
Negative
Net
\nElectricity derivatives
18
27
1
47
1,376
4,302
-2,926
\nNetting against commodity
\nexchanges
\n1)
\n-546
-546
-
\nTotal
18
27
1
47
830
3,756
-2,926
\n1) Receivables and liabilities against commodity exchanges arising from standard derivative contracts with same delivery period are netted.
\nCommodity derivatives subject to hedge accounting 2021
\nVolume, TWh
Fair value, EUR million
\nUnder
\n1 year
\n1
\u2013
5
\nyears
\nOver 5
\nyears
Total
Positive
Negative
Net
\nElectricity derivatives
25
31
1
57
349
1,648
-1,298
\nGas derivatives
30
-
-
30
335
1,750
-1,415
\nNetting against commodity
\nexchanges
\n1)
\n-215
-215
-
\nTotal
55
31
1
87
469
3,183
-2,713
\n1) Receivables and liabilities against commodity exchanges arising from standard derivative contracts with same delivery period are netted.
54
\nMaturity analysis of commodity derivatives
\nAmounts in the table are fair values.
\n2022
2021
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nCommodity derivatives, assets
1,370
194
30
1,594
65,165
16,965
44
82,174
\nCommodity derivatives, liabilities
3,919
601
35
4,554
71,839
16,495
126
88,460
\nChange in maturity analysis of commodity
derivatives\u2019 total assets and total liabilities from 31 December
\n2021 is mainly due to the deconsolidation of Uniper at 30 September 2022.
\n4.2 Liquidity and refinancing risk
\nFortum's business is exposed to liquidity and refinancing risks primarily through the need to finance the
\nGroup\u2019s business operations including margining and collaterals issued for hedging activities. Trading
\nderivative financial instruments exposes the Group to a liquidity risk associated with having to provide
\nfinancial collaterals li
ke cash or bank guarantees. A downgrade in rating could trigger counterparties\u2019 right
\nto demand additional collateral, which would need to be provided via cash or bank guarantees.
\nThe derivative instruments used by the Group are traded via exchanges and over-the-counter with
\nselected counterparties based on bilateral agreements. Trading through exchanges requires the
\nexchange of cash to cover credit risks (margining payments). Since the second half of 2021, the very
\nvolatile commodity markets with unprecedently high prices have required significantly high net margining
\npayments. During the third quarter 2022, as Nordic power prices followed the very high Continental
\nEuropean power and gas prices, Fortum\u2019s standalone (excl. Uniper) collateral requirements inc
reased to a
\nrecord-high level peaking at around EUR 5 billion. Fortum has arranged new financing to meet the
\ndemands, for further information see
\ue001
Note 24
Liquid funds and
\ue001
Note 27
Interest-bearing liabilities.
\nMargin receivables from commodity hedging activities at balance sheet date were EUR 2,607 million
\n(2021: 9,163) and margin liabilities EUR 352 million (2021: 985).
\nThe exposure to margining requirements is continuously assessed and monitored so that adequate
\nliquidity is available to cover expected future cash collateral required for margining.
\nLiquidity and refinancing risks are managed through a combination of cash positions and committed
\ncredit and other guarantee facility agreements with the core banks. The maturity profile of loans is
\nmonitored to ensure that there is at all times access to adequate liquidity for investments, loan maturities
\nand margining required for commodity trading and hedging activities.
\nFortum\u2019s business is capital intensive and it has a diversified loan portfolio. Long
-term financing is
\nprimarily raised by issuing bonds under Fortum Corporation\u2019s Euro Medium Term Note programme
\n(EMTN), as well as through bilateral and syndicated loan facilities from a variety of different financial
\ninstitutions.
\nIn Fortum, financing is primarily raised on parent company level and funds are distributed internally
\nthrough various internal financing arrangements.
\nOn 31 December 2022, 89% (2021: 66%) of th
e Group\u2019s total external loans was raised by the parent
\ncompany Fortum Corporation, and remaining 11% by other subsidiaries (2021: 29% by the Uniper
\nsegment and 5% by other subsidiaries).
\nAt the end of 2022, financial net debt was EUR 1,084 million (2021: 789) and adjusted net debt EUR
\n1,117 million (2021: 3,227).
\nOn 31 December 2022, loan maturities for the coming twelve-month period amounted to EUR 4,108
\nmillion (2021: 8,389) which include EUR 1,090 million maturing bonds, EUR 475 million commercial
\npapers, EUR 1,100 million revolving credit facility (6+6 months extension options by Fortum), EUR 350
\nmillion Solidium bridge financing and EUR 500 million bilateral loan (8 months extension option by
\nFortum). Maturities in 2023 also include EUR 592 million loans with no contractual due date.
\nAt the end of the reporting period, the Group\u2019s liquid funds totalled EUR 3,919 million (2021: 7,592).
\nLiquid funds include EUR 247 million (2021: 300) relating to Fortum\u2019s Russian operations.
\nMaturity of loans
\nEUR million
2022
\n2023
4,108
\n2024
717
\n2025
7
\n2026
730
\n2027
17
\n2028 and later
2,087
\nTotal
7,666
\nFor more information on loans, see
\ue001
Note 27
Interest-bearing liabilities.
\nLiquid funds, major credit lines and debt programmes 2022
\nEUR million
2022
\nLiquid funds
3,919
\nof which in Russia
247
\nCommitted credit lines
Total facility
\nAvailable
\namount
\nDrawn
\namount
\nFortum Corporation, EUR 5,500 million syndicated credit facility
5,500
4,400
1,100
\nFortum Corporation, EUR 800 million bilateral credit facility
800
800
-
\nFortum Corporation, EUR 2,350 million Finnish State bridge financing
2,350
2,000
350
\nFortum Corporation, bilateral overdraft facilities
100
100
-
\nTotal
\n1)
\n8,750
7,300
1,450
\n1) Additionally, Fortum has uncommitted commercial paper programmes in Finland and Sweden and uncommitted EMTN programme. From
\nthe commercial paper programmes, EUR 475 million (2021: 3,129) was drawn, and from the EMTN programme EUR 2,690 million (2021:
\n3,698) bonds were outstanding at the end of the reporting period.
\nLiquid funds, major credit lines and debt programmes 2021
\nEUR million
2021
\nLiquid funds
\nFortum
4,626
\nUniper segment
2,966
\nTotal
7,592
\nof which in Russia
300
\nCommitted credit lines
Total facility
\nAvailable
\namount
\nDrawn
\namount
\nFortum Corporation, EUR 1,750 million syndicated credit facility
1,750
-
1,750
\nFortum Corporation, EUR 800 million bilateral credit facility
800
300
500
\nUniper, EUR 1,800 million syndicated credit facility
1,800
-
1,800
\nFortum Corporation, bilateral overdraft facilities
100
100
-
\nTotal
4,450
400
4,050
55
\nMaturity analysis of interest-bearing loans and derivatives
\nInterest-bearing loans are non-discounted expected cash flows including future interest payments and
\namortisations. Interest rate and currency derivatives represent the fair value of the derivatives on the
\nbalance sheet. Maturity analysis of commodity derivatives is disclosed separately in the
\ue001
Note 4.1.3
\nCommodity derivatives.
\n2022
2021
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nInterest-bearing loans
4,290
1,831
2,254
8,374
8,490
5,728
2,450
16,669
\nInterest rate and currency derivative liabilities
54
46
75
175
107
17
19
143
\nInterest rate and currency derivative receivables
-116
-28
-92
-235
-227
-87
-1
-315
\nTotal
4,228
1,849
2,237
8,314
8,371
5,659
2,468
16,498
\n4.3 Interest rate risk and currency risk
\n4.3.1 Interest rate risk
\nFortum is exposed to cash flow risk from changes in interest rates mainly from interest-bearing liabilities
\nand derivatives on a fixed- and floating rate basis.
\nFortum manages the interest rate exposure through a duration target of the loan portfolio (excluding
\nlease liabilities and provisions), and cash flow at risk limit. Fortum uses different types of financing
\ncontracts and interest rate derivative contracts to manage the interest rate exposure, and evaluates and
\ndevelops the strategies in order to find an optimal balance between risk and financing cost.
\nOn 31 December 2022, the duration of Fortum\u2019s loan portfolio (including derivatives) was 1.2 years
\n(2021: 1.7). Approximately 77% (2021: 82%) of the loan portfolio was on a floating rate basis, or fixed rate
\nloans maturing within the next 12-month period. The flow risk, measured as the difference between the
\nbase case interest cost estimate and the worst-case s
cenario estimate for Fortum\u2019s loan portfolio for the
\ncoming 12 months, was EUR 93 million (2021: 63). The increase of flow risk is mainly driven by increase
\nof new loans, especially floating loans as a response to high collateral demand, and a significant increase
\nin interest rate volatilities at the end of 2022 in several currencies.
\nThe average interest rate for the total loan portfolio, including derivatives in finance costs, was 3.9% at
\nthe balance sheet date (2021: 1.3%). The average interest rate of EUR loans was 3.1% (2021: 0.6%).
\nFortum uses interest rate derivatives and to large extend applies hedge accounting when hedging the
\nloan portfolio of the Group. There is an ongoing reform of certain floating interest benchmark rates to
\nalternative risk free rates (ARR) due to the IBOR (Interbank Offered Rates) transition. Since EURIBOR
\n(Euro Interbank Offered Rate) is expected to continue as the benchmark rate, as it has been already fully
\nreformed, all hedges are expected to continue to be 100% effective with no impact on finance costs
\u2013
net.
\nIn addition to significant EURIBOR exposure, the Group has interest rate derivatives in SEK and sees that
\nthe IBOR transition will not have significant impact on the value and effectiveness of these derivatives.
\nFortum Group will continue to monitor the development of the IBOR transition.
\n4.3.2 Currency risk
\nFortum\u2019s policy is to hedge major transaction exposures on a local level in the reporting currency of each
\nlegal entity in order to avoid exchange differences in the income statement. An exception is Generation
\nsegment\u2019s hedging of power sales in Sweden where the currency component is not hedged. Derivatives
\nare used to hedge existing foreign exchange risks, not for proprietary trading. As a result of sanctions
\nagainst the Russian Federation followed by low liquidity in RUB and crossborder payment restrictions,
\nhedging of RUB position was stopped during first part of 2022 and existing hedges were unwinded.
\nFortum\u2019s transaction exposure
\n2022
2021
\nEUR million
\nNet
\nPosition
Hedge
Open
\nNet
\nPosition
Hedge
Open
\nRUB
869
-
869
744
-744
0
\nSEK
-669
679
10
-898
901
3
\nPLN
531
-529
2
499
-498
1
\nNOK
751
-745
5
748
-746
2
\nUSD
-993
993
0
-36
37
1
\nOther
4
-
4
5
-2
3
\nTotal
492
398
890
1,062
-1,052
11
\nFortum has cash flows, assets and liabilities in currencies other than EUR and is therefore exposed to
\nfluctuations in exchange rates. Currency exposures are divided into transaction exposures (foreign
\nexchange exposures relating to contracted or estimated cash flows and balance sheet items where
\nchanges in exchange rates will have an impact on earnings and cash flows) and translation exposure
\n(foreign exchange exposure that arises when profits and balance sheets in foreign entities are
\nconsolidated).
\nTransaction exposures arise mainly from physical and financial trading of commodities, existing and
\nnew investments, external and internal financing and shareholder loans. Contracted cash flow exposures
\nare hedged to reduce volatility in future cash flows. These hedges normally consist of currency derivative
\ncontracts, which are matched against the underlying future cash flow according to maturity. Fortum has
\ncurrency cash flow hedges both with and without hedge accounting treatment under IFRS. Those
\ncurrency cash flow hedges for which hedge accounting is not applied are mainly hedging commodity
\nderivatives and create volatility in operating profit. There was no significant ineffectiveness arising from
\ncash flow hedges in 2022.
\nAs of 31 December 2022, the one-day value-at-risk (VAR) with 99% confidence from loans, receivables
\nand derivatives was EUR 28.8 million (2021: 2.4 excluding Uniper) in the income statement and EUR 3.2
\nmillion (2021: 1.4 excluding Uniper) in equity. Income statement sensitivity resulted mainly from cash
\nflows in RUB, SEK and NOK, and equity sensitivity mainly from cash flows in CNY, USD and SEK.
\nTranslation exposure position includes net investments in foreign subsidiaries and associated
\ncompanies. Translation exposures in Fortum are generally not hedged as the majority of these assets are
\nconsidered to be long-term strategic holdings. In Fortum, this means mainly entities operating in Sweden
\nand Russia, whose base currency is not euro.
\nExchange differences arising from the translation of the net investment in foreign entities are taken to
\nequity. The net effect of exchange differences on equity attributable to equity holders mainly from RUB
\nand SEK was EUR -75 million in 2022 (2021: 184). Part of this translation exposure has been hedged and
\nthe notional amount of foreign currency hedges were EUR 2,813 million in 2022 (2021: 263). The foreign
\ncurrency hedge result amounted to EUR 41 million in 2022 (2021: -12). There was no significant
\nineffectiveness arising from net investment hedges in 2022.
56
\nInterest rate and currency derivatives by instrument 2022
\nNotional amount
Fair value
\nRemaining lifetimes
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nPosi-
\ntive
\nNega-
\ntive
Net
\nHedge accounting
\nForeign exchange derivatives
3,056
108
-
3,163
25
3
22
\nInterest rate swaps
740
825
1,350
2,915
112
120
-9
\nCross currency swaps
-
76
-
76
3
-
3
\nNon-hedge accounting
\nForeign exchange derivatives
8,445
36
-
8,481
93
51
42
\nInterest rate swaps
18
13
-
31
2
-
2
\nCross currency swaps
-
24
-
24
1
-
1
\nTotal
12,259
1,081
1,350
14,690
235
175
61
\nOf which long-term
119
121
-1
\nShort-term
116
54
62
\nInterest rate and currency derivatives by instrument 2021
\nNotional amount
Fair value
\nRemaining lifetimes
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver 5
\nyears
Total
\nPosi-
\ntive
\nNega-
\ntive
Net
\nHedge accounting
\nForeign exchange derivatives
282
136
-
417
9
2
7
\nInterest rate swaps
1,300
1,323
1,175
3,798
71
27
44
\nCross currency swaps
214
47
-
261
30
2
28
\nNon-hedge accounting
\nForeign exchange derivatives
15,404
1,050
-
16,455
204
111
93
\nInterest rate swaps
-
34
-
34
0
0
0
\nCross currency swaps
-
24
-
24
-
1
-1
\nTotal
17,200
2,613
1,175
20,989
315
143
172
\nOf which long-term
88
36
52
\nShort-term
227
107
120
\n4.4 Credit risk
\nFortum is exposed to counterparty risk whenever there is a contractual arrangement with an external
\ncounterparty.
\nCredit risk exposures relating to financial derivative instruments are often volatile and include both the
\nreplacement risk and the settlement risk. Exchange-traded derivatives are cleared through central clearing
\nparties (CCPs) or through clearing banks while over-the-counter (OTC) derivative contracts are concluded
\ndirectly with a number of different counterparties, including energy wholesalers and retailers, utilities,
\ntrading companies, energy companies, industrial end-users and financial institutions active in the financial
\nand energy markets. In order to mitigate the liquidity risk from increased margining requirements toward
\nCCPs, the share of hedges with OTC counterparties without margining requirements has increased.
\nConsequently, credit exposure from hedges with OTC counterparties has increased. In general, due to
\nFortum\u2019s net short position in Nordic power hedges credit exposure tends
to increase with the value of
\nhedges if Nordic power prices decrease. Currency and interest rate derivative counterparties are limited to
\ninvestment grade banks and financial institutions. International Swaps and Derivatives Association (ISDA)
\nMaster agreements, which include netting clauses and in some cases Credit Support Annex agreements,
\nare in place with most of these counterparties. The majority of commodity derivative counterparties have
\ninvestment-grade or comparable ratings. Master agreements, such as those published by ISDA and
\nEuropean Federation of Energy Traders (EFET), which include netting clauses, are in place with the
\nmajority of the counterparties.
\nDue to the financing needs and management of liquidity, Fortum has counterparty credit exposure
\ntowards a number of banks and financial institutions in the form of deposits and towards corporate issuers
\nof commercial papers, mainly in the Nordic market. The majority of the exposure is towards Fortum\u2019s key
\nrelationship banks, which are highly creditworthy institutions. Investments in commercial papers were all
\nwith investment grade issuers at 31 December 2022. Fortum also has exposure to the Russian financial
\nsector in terms of deposits by Fortum\u2019s Russian subsidiary with financial institutions, as
well as to banks
\nthat provide guarantees for suppliers and contracting parties. There are challenges in assessing the
\ncreditworthiness of Russian banks as credit ratings have been removed and in many cases there are no
\npublicly available financial information. The creditworthiness of banks and financial institutions is
\nmonitored so that mitigating actions can be taken as ratings or the financial situation changes. In Russia,
\nthis means using available information provided by government authorities and credit ratings issued by
\nlocal credit information agencies.
\nCredit risk relating to customers, suppliers and trading partners is spread across a wide range of
\nindustrial counterparties, energy companies, government and municipal entities, utilities, small
\nbusinesses, housing associations and private individuals over a range of geographic regions. The majority
\nof exposure is in the form of trade receivables from the sale of electricity, gas and heat in the Nordic
\nmarket, Poland and Russia. The credit risk in the electricity and heat sales business in Russia is deemed
\nto be higher than in the Nordic and Polish market.
\n4.4.1 Credit quality of major financial assets
\nFortum recognises loss allowance for expected credit losses (ECL) on financial assets classified to
\namortised cost category at each reporting date. The impairment model is applied to financial assets such
\nas trade receivables, deposits, commercial papers, and loan and other interest-bearing receivables. See
\n\ue001
Note 23
Trade and other receivables for details on expected credit losses recognised for trade
\nreceivables.
\nExpected credit loss is calculated on an individual counterparty basis for deposits, commercial papers
\nand loan and other interest-bearing receivables. No impairment loss is recognised on cash in bank
\naccounts since expected credit loss is immaterial due to low risk of default. The risk of default is evaluated
\nat each reporting date based on credit ratings to determine if credit risk has increased significantly. The
\nvalue of collateral and other measures taken to reduce credit risk (e.g. credit default insurance) is included
\nin the calculation of expected credit losses in the \u201closs given default\u201d ratio
.
\nA financial asset with an investment-grade rating is assumed to have low credit risk. A change of credit
\nrating from investment to non-investment grade constitutes a significant increase in credit risk. If the credit
\nrisk on the financial asset has not increased significantly since the initial recognition, loss allowance
\nequals to 12 month ECL. If the credit risk on the financial asset has increased significantly since initial
\nrecognition, loss allowance equals to the lifetime expected credit losses.
\nDeposits in Russian banks with a total cross carrying amount of EUR 356 million at 31 December 2022
\nwere considered as being exposed to significant increase in credit risk since initial recognition. For these
\ndeposits, ECL of EUR 109 million was recognised at 31 December 2022. Significant increase in credit risk
\nin Russian deposits resulted from deterior
ation of the counterparties\u2019 credit worthiness and the
\nconsequent increase in probability of default following from geopolitical and economic uncertainty in
\nRussia during 2022. During the first half of the year 2022, the rating agencies first downgraded the
\nRussian banks to the lowest rating categories and then withdrew the ratings. Consequently, the probability
\nof default for the Russian counterparties has been assumed to be the equivalent of the lowest rating
\ncategory for the purposes of calculating ECL.
57
\nThe loss allowance for interest-bearing receivables totalled EUR 117 million on 31 December 2022
\n(2021: 16). Amounts for interest-bearing receivables including bank deposits and derivative financial
\ninstruments recognised as assets are presented by counterparties in the following table.
\nFor derivative financial instruments the counterparty credit risk has been taken into account when
\ndetermining fair value. The impact of credit risk is measured on a counterparty basis through credit value
\nadjustment (CVA) method applying similar inputs and assumptions to which are used in the measurement
\nof ECL. See also
\ue001
Note 15
Financial assets and liabilities by fair value hierarchy for basis of fair value
\nestimations.
\nAll counterparties for currency and interest rate derivatives and the majority of counterparties for bank
\ndeposits have an external rating from S&P Global Ratings, Fitch and/or Moody\u2019s credit agencies, except
\nfor Russia. For counterparties rated by more than one rating agency, the lowest rating is used to
\ndetermine if it is investment grade.
\nIn the commodity derivatives and commercial paper market, there are a number of counterparties not
\nrated by S&P Global Ratings, Fitch or Moody\u2019s. For these counterparties, Fortum assigns an internal
\nrating. The internal rating categories that are considered to be comparable to investment grade have
\nsimilar financial metrics or display historical default rates which correspond to investment grade
\ncompanies rated by S&P Global Ratings, Fitch or Moody\u2019s.
\nCredit quality of major financial assets
\n2022
2021
\nEUR million
\nCarrying
\namount
\nof which
\npast due
\nCarrying
\namount
\nof which
\npast due
\nReceivables with investment grade or comparable rating
\nDeposits, commercial papers and cash in bank accounts
3,602
-
7,342
-
\nFair values of interest rate and currency derivatives
235
-
315
-
\nFair values of commodity derivatives on exchanges
394
-
27,856
-
\nFair values of OTC commodity derivatives
879
-
49,886
-
\nLoan and other interest bearing receivables
-
-
1,036
-
\nLease receivables
-
-
136
-
\nTotal receivables with investment grade or comparable rating
5,110
-
86,571
-
\nReceivables with non-investment grade or comparable rating
\nDeposits, commercial papers and cash in bank accounts
247
-
164
-
\nFair values of OTC commodity derivatives
321
-
4,433
-
\nLoan and other interest bearing receivables
39
-
59
-
\nTotal receivables with non-investment grade or comparable rating
607
-
4,656
-
\nOther receivables
\n1)
\nLoan receivables from associates and joint ventures
592
-
1,158
-
\nRestricted cash mainly given as collateral for commodity exchanges
27
-
59
-
\nCash in other bank accounts
70
-
87
-
\nOther receivables
3
-
-
-
\nTotal other receivables
692
-
1,304
-
\nTotal
6,409
-
92,531
-
\n1) Other receivables include financial assets which have not been divided to investment-grade and non-investment grade or comparable
\nratings.
\nChange in credit quality of major financial assets\u2019 total assets from 31 December 2022 is mainly due to
\nthe deconsolidation of Uniper at 30 September 2022
\n4.4.2 Financial instruments subject to master netting agreements
\nThe following tables present the recognised financial instruments that are offset, or subject to enforceable
\nmaster netting arrangements and other similar agreements but not offset. The column 'net amount' shows
\nthe impact on the Group's balance sheet if all netting rights were exercised.
\nNetting agreements for financial assets and liabilities 2022
\nEUR million
\nGross
\namount
\nGross
\namount
\nnetted on
\nthe balance
\nsheet
\n1)
\nNet amounts
\npresented
\non the
\nbalance
\nsheet
\nConditional
\nnetting
\namount
\n(netting
\nagreements)
\nFinancial
\ncollateral
\nreceived
\n/pledged
Net amount
\nFinancial assets
\nInterest-rate and currency derivatives
235
-
235
124
64
48
\nCommodity derivatives
3,349
1,755
1,594
957
5
632
\nTrade receivables
1,625
-
1,625
-
-
1,625
\nTotal
5,209
1,755
3,455
1,080
69
2,305
\nEUR million
\nFinancial liabilities
\nInterest-rate and currency derivatives
175
-
175
124
40
11
\nCommodity derivatives
6,309
1,755
4,554
957
-
3,598
\nTrade payables
720
-
720
-
-
720
\nTotal
7,203
1,755
5,449
1,080
40
4,329
\n1) Receivables and liabilities from electricity and other commodity exchanges arising against standard derivative contracts with same delivery
\nperiod are netted.
\nNetting agreements for financial assets and liabilities 2021
\nEUR million
\nGross
\namount
\nGross
\namount
\nnetted on
\nthe balance
\nsheet
\n1)
\nNet amounts
\npresented
\non the
\nbalance
\nsheet
\nConditional
\nnetting
\namount
\n(netting
\nagreements)
\nFinancial
\ncollateral
\nreceived
\n/pledged
Net amount
\nFinancial assets
\nInterest-rate and currency derivatives
315
-
315
129
153
33
\nCommodity derivatives
87,019
4,845
82,174
56,383
-1,576
27,368
\nTrade receivables
12,916
-
12,916
5,651
-
7,265
\nTotal
100,250
4,845
95,405
62,162
-1,423
34,666
\nEUR million
\nFinancial liabilities
\nInterest-rate and currency derivatives
143
-
143
129
5
9
\nCommodity derivatives
93,306
4,845
88,460
56,383
4,293
27,785
\nTrade payables
12,152
-
12,152
5,651
-
6,501
\nTotal
105,600
4,845
100,755
62,162
4,298
34,295
\n1) Receivables and liabilities from electricity and other commodity exchanges arising against standard derivative contracts with same delivery
\nperiod are netted.
\nChange in netting agreements for financial assets and liabilities\u2019 total assets and total liabili
ties from 31
\nDecember 2021 is mainly due to the deconsolidation of Uniper at 30 September 2022.
58
\n5 Capital risk management
\nAt the beginning of March 2023, the Fortum Board of Directors resolved on Fortum\u2019s new strategy
\nincluding new financial and sustainability targets as well as dividend policy. The renewed dividend policy
\u2013
\na payout ratio of 60-90% of comparable EPS
\u2013
reflec
ts the potential earnings fluctuations of Fortum\u2019s
\npower generation portfolio. For additional information, see
\ue001
Note 39
Events after the balance sheet date.
\nFor the year 2022, Fortum\u2019s Board of Directors proposes a dividend of EUR
0.91 per share which
\ncorresponds to 75% of the Group
\u2019
s comparable EPS of EUR 1.21 from continuing operations excluding
\nimpact from the Russian operations. The Board proposes that the dividend is paid in two instalments, in
\nthe second and fourth quarter of 2023.
\nThe long-term financial targets until 31 December 2022 were:
\n\u2022
Financial net debt/comparable EBITDA below 2x, defined as Alternative Performance Measure.
\n\u2022
Hurdle rates for new investments based on weighted average cost of capital (\u201cWACC\u201d)
\n\u2022
+100 basis points for green investments
\n\u2022
+200 basis points for other investments
\nOn 14 March 2022, S&P placed Fortum\u2019s and Uniper\u2019s BBB ratings on CreditWatch Negative. On 16 May
\n2022, S&P resolved the CreditWatch and affirmed Fortum\u2019s BBB rating with negative outlook. However,
\nUniper
\u2019s long
-term credit rating was downgraded by one notch from BBB to BBB-, also with negative
\noutlook.
\nOn 17 March 2022, Fitch Ratings affirmed its long-term credit rating for Fortum to BBB with stable outlook.
\nOn 5 July 2022, due to the Russian gas curtail
ment, S&P again placed Fortum\u2019s and Uniper\u2019s credit
\nratings on CreditWatch Negative. On 29 July 2022, following the announcements of the agreement with
\nthe German G
overnment on Uniper\u2019s stabilisation package, S&P resolved Uniper\u2019s CreditWatch Negative
\nby affirming the BBB- rating with negative outlook. Due to the strong governmental support, S&P now
\nconsiders Uniper a \u201cgovernment
-
related entity\u201d, which enabled Uniper to retain its investment grade
\nrating, despite an overall weaker stand-alone credit quality
. The negative outlook of Uniper\u2019s rating
\nreflects prevailing uncertainty around gas flows, which in S&P\u2019s view may necessitate an increase of the
\ngovernment package and the fact that details of the stabilisation package are still to be approved.
\nOn 3 Augu
st 2022, S&P affirmed Fortum\u2019s current BBB long
-term credit rating with negative outlook.
\nS&P assesses that the support package for Uniper will prevent further incremental costs for Fortum and
\nconsiders Fortum's financial exposure as capped. According to S&P, the negative outlook reflects
\nFortum's exposure to Uniper until the European Commission has approved the support package and the
\nlonger-term uncertainties about the company's strategy.
\nOn 5 August 2022, Fitch Ratings affirmed Fortum\u2019s current long
-term credit rating at BBB with negative
\noutlook. According to Fitch, the affirmation mainly reflects the rating agency\u2019s view that Fortum is well
-
\nshielded from the losses incurred by Fortum\u2019s German subsidiary Uniper, following Uniper\u2019s stabilisation
\npackage that was agreed with the German State.
\nFollowing the September announcement that Fortum will fully divest Uniper to the German State, the
\nrating agencies commented that the divestment of the Uniper stake was regarded as credit positive for
\nFortum, as it wi
ll improve the company\u2019s financial and risk profile. However, the rating agencies concluded
\nthat it was premature to determine the full effect of the Uniper divestment on Fortum\u2019s rating. Now that the
\nUniper divestment has been completed, the rating agencies are expected to update their ratings as
\nFortum also has published its new strategy.
\nFortum\u2019s objective is to have a solid investment grade rating of at least BBB to preserve financial
\nflexibility and good access to capital markets.
\nFinancial net debt/comparable EBITDA ratio
\nEUR million
Note
\nContinuing
\noperations
\n2022
\nFortum
\ntotal
\n1)
\n2021
\n+Interest-bearing liabilities
7,785
17,220
\n-
BS
Liquid funds
3,919
7,592
\n- Non-current securities
-
111
\n- Collateral arrangement securities
527
549
\n- Securities in interest-bearing receivables
527
660
\n-
BS
Margin receivables
2,607
9,163
\n+
BS
Margin liabilities
352
985
\n+ Net margin liabilities
-2,255
-8,179
\nFinancial net debt
27
1,084
789
\nIS
Operating profit
1,277
-588
\n+
IS
Depreciation and amortisation
566
1,281
\nEBITDA
1,842
693
\n-
IS
Items affecting comparability
593
3,124
\nComparable EBITDA
2,436
3,817
\nFinancial net debt/comparable EBITDA
0.4
0.2
\n1) 2021 figures based on continuing and discontinued operations (total).
\nFinancial net debt/comparable EBITDA excl. Russia
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, and in 2022 Fortum introduced new APMs to provide additional financial
\ninformation excluding Fortum\u2019s Russian operations. See also
\ue001
Note 1
Significant accounting policies.
\nEUR million
2022
\nFinancial net debt
1,084
\n- Interest-bearing liabilities, Russia
204
\n+ Liquid funds, Russia
247
\nFinancial net debt excl. Russia
1,127
\nComparable EBITDA from continuing operations excl. Russia
2,025
\nFinancial net debt/comparable EBITDA excl. Russia
0.6
\nSee
\ue001
Note 7
Comparable operating profit and comparable net profit for details on items affecting
\ncomparability, and
\ue001
Note 27
Interest-bearing liabilities, including further details of the financing and
\nliquidity status and see
\ue001
Definitions and reconciliations of key figures
.
\nComparable EBITDA is defined as an alternative performance measure and used as a component in
\nthe capital structure target 'Financial net debt-to-Comparable EBITDA'.
59
\n6 Segment reporting
\nSIGNIFICANT ACCOUNTING POLICIES
\nREVENUE RECOGNITION
\nFortum's operations comprise the provision of electricity, heating and cooling, gas and waste
\nmanagement services. Revenue streams can be divided into five groups: power sales to wholesale
\nmarkets, power sales to retail customers, heating sales, gas sales and waste treatment sales.
\nRevenue is recognised when goods are transferred or services are performed, i.e. when a
\nperformance obligation is satisfied and control of the good or service underlying the particular
\nperformance obligations is transferred to the customer. Revenue is shown at the price that Fortum
\nexpects to be entitled to and it is presented net of rebates, discounts, value-added tax and selective
\ntaxes, such as electricity tax. Revenues include effects from physically settled contracts for which own
\nuse exemption cannot be used according to IFRS 9, see
\ue001
Note 7
Comparable operating profit and
\ncomparable net profit. Accounting policies for the different revenue streams are described below.
\nPOWER SALES TO WHOLESALE MARKETS AND THROUGH BILATERAL CONTRACTS
\nPhysical electricity trades to wholesale markets are made at a spot price and thus there are no variable
\nelements. Electricity sales are recognised on delivery at the price defined in wholesale market. Fortum is
\nalso selling power to industrial customers and municipalities through bilateral contracts. These contracts
\ncan include fixed price components that are recognised in line with the customer\u2019s actual consumption
\nprofile, when the nature of the performance obligation is to deliver power instead of standing-ready to
\ndeliver power. When Fortum is acting as an agent in electricity trade by granting access to Nord Pool
\npower trading system, Fortum presents the bilateral trades between Fortum and the customer on a net
\nbasis and only the service fee is recorded as revenue.
\nPOWER SALES TO RETAIL CUSTOMERS
\nFortum\u2019s contracts with consumer and business customers cover electricity sales, while the distribution
\nservice is delivered by the transmission company operating the local network. There is only one
\nperformance obligation, which is to stand-ready to supply electricity to the customer. The transaction
\nprice generally includes both a fixed monthly charge and a variable fee based on the volume of
\nelectr
icity supplied. As Fortum\u2019s promise is to stand ready to deliver electricity, the fixed and variable
\ncomponents are recognised based on the fees chargeable from the customer. If automated meter
\nreading is not available, electricity consumption between the last meter reading and the end of
\nthe month is estimated.
\nHEAT SALES
\nIn many areas the district heating service covers both the distribution and sale of heat. Fortum is usually
\nresponsible for delivering the whole service, even when heat is being produced by a third party, and is
\nacting as a principal for heat sales as well. There is only one performance obligation, which is to stand-
\nready to supply heat to the customer. The fees charged from the customer generally comprise a
\nfixed monthly charge a
nd a variable fee based on the volume of heat supplied. As Fortum\u2019s promise is to
\nstand ready to deliver heat, the fixed and variable components are recognised based on the fees
\nchargeable from the customer. In Russia and Poland there are also areas where Fortum operates only
\nthe heat production facilities while some third party is responsible for the distribution of heat. In these
\nareas the performance obligation is to supply heat and revenue is recognised based on the volume of
\nheat that Fortum is entitled to charge from the customer.
\nGAS SALES
\nRevenues are generated from sales of gas via traded markets, as well as to retail and industrial
\ncustomers, and include hedges settled through physical delivery, which are recognised when delivery
\ntakes place and control is transferred to the customer. Gas sales include also revenues earned from the
\ntransportation of gas. Contracts generally contain one performance obligation for which the entire
\ntransaction price is recognised.
\nFor physically settled transactions that are in the scope of IFRS 15 (own-use transactions), revenue is
\nrecognised based on contract prices, as these reflect the economic character of the transactions and the
\ncontractually agreed consideration amounts. If IFRS 15 provides for a different method, for example
\nwhen constraint on variable considerations is applicable, contract prices are adjusted accordingly.
\nGas contracts can also include fixed price components that are recognised in line with the customer\u2019s
\nactual consumption profile, when the nature of the performance obligation is to deliver gas instead of
\nstanding-ready to deliver gas.
\nWASTE TREATMENT SALES
\nMajority of revenue from waste management services arises from fees charged for receiving waste from
\ncustomers (i.e. gate fees). The fee is usually determined based on the volume of waste received, there
\nare no variable elements in pricing. Fortum is required to treat the waste and this performance obligation
\nis satisfied when treatment has been performed. Transportation of the waste forms another performance
\nobligation. Fees for waste treatment and transportation services are separately agreed in the contract
\nand correspond to the price that would be charged for these services separately. Revenue for
\ntransportation service is recognised when the service has been provided.
\nWaste treatment sales include also various types of soil and landfill site projects, which mostly take
\nplace at customer sites. Fees charged are invoiced based on payment schedules agreed with the
\ncustomer. The customer obtains the benefit of the construction work simultaneously when the
\nconstruction work proceeds, and therefore project revenues are recognised over time. Progress of the
\nconstruction is best measured either through costs incurred, or the completed area of the construction
\nsite.
\nNETTING AND INTER-SEGMENT TRANSACTIONS
\nGeneration and City Solution segments sell their electricity production to Nord Pool and Consumer
\nSolutions segment buys its electricity from Nord Pool. For these segments eliminations of sales include
\neliminations of sales and purchases with Nord Pool that are netted at Group level on an hourly basis and
\nposted either as revenue or cost depending on if Fortum is a net seller or net buyer during any particular
\nhour. Intersegment sales, expenses and results for the different business segments are affected by
\nintragroup deliveries, which are eliminated on consolidation. Inter-segment transactions are based on
\ncommercial terms.
60
\n6.1 Business structure
\nFortum\u2019s reportable segments under IFRS are Generation, City Solutions, Consumer Solutions and
\nRussia. Other Operations includes corporate functions, R&D and technology development projects.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, and in 2022 Fortum introduced new APMs to provide additional financial
\ninformation excluding the Russia segment. Hence, a new subtotal for continuing operations excluding
\nRussia was introduced in segment information tables. The Uniper segment was classified as discontinued
\noperations in 2022. See also
\ue001
Note 1
Significant accounting policies,
\ue001
Note 3
Acquisitions, disposals,
\nassets held for sale and discontinued operations, and
\ue001
Definitions and reconciliations of key figures
.
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG Aktiebolag (OKG AB), with
\nFortum owning 45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March
\n2020 to 30 September 2022, with the results of the company being split between the Uniper segment and
\nthe Generation segment according to ownership. On deconsolidation of Uniper at 30 September 2022,
\nOKG AB was reclassified as an associated company. The reclassification resulted in the restatement of
\nthe Generation segment\u2019s 2021 financials.
\nDescription of reportable segments:
\n6.2 Segment structure
\nFortum discloses segment information in a manner consistent with internal reporting to Fortum\u2019s Board of
\nDirectors and Fortum Executive Management, led by the President and CEO. Fortum segments are
\nbased on the type of business operation, combined with one segment based on geographical area.
\nFortum\u2019s reportable segments are the business divisions Generation, City Solutions
, Consumer Solutions
\nand Russia.
\n6.3 Definitions for segment information
\nFortum\u2019s segment information discloses the financial measurements used in financial target setting and
\nforecasting, management\u2019s follow up of financial performance and allocation of resources in the Group\u2019s
\nperformance management process. See
\ue001
Note 1.4
Measures for performance.
\nSegment reporting is based on the same accounting policies as Fortum Group.
61
\n6.4 Segment information
\nConsolidated income statement
\nGeneration
\n1)
\nCity Solutions
\n1)
\nConsumer Solutions
Other Operations
\nTotal continuing
\noperations
\nexcl. Russia
Russia
\nTotal continuing
\noperations
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nPower sales
\n1)
\n3,600
2,660
252
205
4,026
2,253
0
0
7,878
5,118
856
761
8,734
5,879
\nHeat sales
0
0
505
612
0
0
0
0
505
612
156
137
661
749
\nGas sales
0
167
0
1
392
225
0
0
392
393
0
0
392
393
\nWaste treatment sales
0
0
237
250
0
0
0
0
237
250
0
0
237
250
\nOther sales
55
42
288
235
161
144
136
138
639
559
19
8
659
567
\nSales
3,655
2,869
1,282
1,302
4,578
2,622
136
138
9,651
6,931
1,031
906
10,682
7,837
\nInternal eliminations
645
-140
-75
-29
-30
-14
-106
-102
435
-285
0
0
434
-286
\nNetting of Nord Pool transactions
\n2)
\n-2,312
-1,128
-2,312
-1,128
\nIS
External sales
4,299
2,729
1,207
1,273
4,549
2,608
30
36
7,774
5,519
1,031
906
8,804
6,422
\nComparable EBITDA
1,765
1,287
177
317
173
123
-90
-114
2,025
1,612
411
404
2,436
2,016
\nIS
Depreciation and amortisation
-165
-164
-148
-182
-75
-71
-25
-28
-415
-445
-151
-142
-566
-587
\nIS
Comparable operating profit
1,600
1,123
28
135
97
52
-115
-142
1,611
1,167
260
261
1,871
1,429
\nImpairment charges and reversals
0
0
0
0
0
0
0
0
0
0
-905
-35
-905
-35
\nCapital gains and other related items
0
50
643
2,608
0
0
142
14
785
2,672
0
1
785
2,673
\nChanges in fair values of derivatives
\nhedging future cash flow
-177
-107
47
-72
-246
443
0
0
-376
264
-17
0
-393
264
\nOther
-20
0
1
0
0
0
-33
-6
-52
-6
-28
0
-80
-6
\nIS
Items affecting comparability
6, 7
-197
-57
690
2,536
-246
443
109
8
356
2,931
-949
-34
-593
2,897
\nIS
Operating profit
1,403
1,066
719
2,671
-149
495
-6
-134
1,967
4,098
-690
227
1,277
4,325
\nComparable share of profit/loss of
\nassociates and joint ventures
-49
0
14
42
0
0
-6
0
-40
42
30
62
-11
104
\nIS
Share of profit/loss of associates
\nand joint ventures
18
-194
64
14
42
0
0
-6
0
-185
106
-443
62
-629
168
\n1) Sales, both internal and external, include effects from realised hedging contracts. Effect on sales can be negative or positive depending on the average contract price and the realised spot price. Power sales in Fortum contains realised result from commodity derivatives, which have not had
\nhedge accounting status under IFRS 9, but have been considered operatively as hedges.
\n2) Sales and purchases with Nord Pool Spot are netted on Group level on an hourly basis and posted either as revenue or cost depending on whether Fortum is a net seller or net buyer during any particular hour.
\nGross investments / divestments
\nGeneration
City Solutions
Consumer Solutions
Other Operations
\nTotal continuing
\noperations
\nexcl. Russia
Russia
\nTotal continuing
\noperations
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nGross investments in shares
\n1)
\n3
3
7
4
2
0
-
21
237
29
245
4
36
33
281
\nCapital expenditure
16, 17
231
168
155
161
71
68
10
15
467
396
58
47
525
443
\nGross divestments of shares
3
-
129
1,213
3,870
0
0
150
19
1,363
4,017
1
18
1,365
4,034
\n1) From I/2022, acquisition of additional shares in Uniper are not included in gross investments in shares. For additional information, see
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
62
\nSegment assets and liabilities
\nGeneration
City Solutions
Consumer Solutions
Other Operations
Russia
Uniper
\n1)
\nTotal
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2021
2022
2021
\nNon-interest-bearing assets
5,347
5,545
2,128
2,874
1,801
1,496
238
283
1,614
1,923
27,137
11,128
39,258
\nBS
Participations in associates and joint
\nventures
18
937
1,032
77
74
-
-
25
32
211
678
644
1,249
2,461
\nEliminations
-373
-386
\nTotal segment assets
6,283
6,577
2,204
2,949
1,801
1,496
263
315
1,825
2,601
27,781
12,004
41,333
\nInterest-bearing receivables
21
1,284
3,107
\nBS
Deferred tax assets
28
933
2,149
\nOther assets
5,502
95,481
\nBS
Liquid funds
24
3,919
7,592
\nBS
Total assets
23,642
149,661
\nSegment liabilities
734
616
445
492
436
371
199
190
135
93
22,435
1,949
24,196
\nEliminations
-373
-386
\nTotal segment liabilities
1,576
23,810
\nBS
Deferred tax liabilities
28
152
827
\nOther liabilities
6,392
94,140
\nTotal liabilities included in capital
\nemployed
8,120
118,777
\nInterest-bearing liabilities
27
7,785
17,220
\nBS
Total equity
7,737
13,665
\nBS
Total equity and liabilities
23,642
149,661
\n1) As Uniper was deconsolidated at 30 September 2022
Uniper\u2019s balance sheet items are not included on Fortum\u2019s 31 December 2022 consolidated balance sheet. Consolidated balance s
heet at 31 December 2021 included Uniper.
\nComparable operating profit including comparable share of profit of associates and joint ventures and Comparable return on net assets
\nGeneration
City Solutions
Consumer Solutions
Russia
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
\nComparable operating profit
1,600
1,123
28
135
97
52
260
261
\nComparable share of profit/loss of associates and joint ventures
7, 18
-49
0
14
42
-
-
30
62
\nComparable operating profit including comparable share of profit of associates and joint ventures
1,551
1,123
42
177
97
52
290
323
\nSegment assets at the end of the year
6,283
6,577
2,204
2,949
1,801
1,496
1,825
2,601
\nSegment liabilities at the end of the year
734
616
445
492
436
371
135
93
\nComparable net assets
5,549
5,961
1,760
2,456
1,365
1,125
1,690
2,508
\nComparable net assets average
\n1)
\n5,739
5,925
1,833
2,915
1,068
746
2,570
2,516
\nComparable return on net assets, %
27.0
19.0
2.3
6.1
9.1
6.9
11.3
12.9
\n1) Average net assets are calculated using the opening balance of the financial
year and each quarter\u2019s closing value.
\nEmployees
\nGeneration
City Solutions
Consumer Solutions
Other Operations
\nTotal continuing
\noperations
\nexcl. Russia
Russia
\nTotal continuing
\noperations
\nDiscontinued
\noperations
\n(Uniper)
Total
\n2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nNumber of employees 31 December
1,155
1,116
1,691
1,766
1,179
1,176
963
961
4,988
5,019
2,724
2,627
7,712
7,646
N/A
11,494
7,712
19,140
\nAverage number of employees
1,278
1,153
1,676
1,964
1,177
1,091
989
976
5,120
5,183
2,706
2,862
7,826
8,045
8,723
11,751
16,549
19,796
63
\n6.5 Group-wide disclosures
\nThe Group\u2019s operating segments operate mainly in the Nordic countries and Russia. The Group\u2019s domicile
\nis Finland.
\nThe table below presents sales by geographical area based on customer location. Capital expenditure,
\nassets and personnel are reported where assets and personnel are located. Participations in associates
\nand joint ventures are not presented by location since these companies may have business in several
\ngeographical areas.
\nDue to the large number of customers and the variety of business activities, there is no individual
\ncustomer whose business volume is material to Fortum\u2019s tota
l business volume.
\nSales by geographical area based on customer location
\nEUR million
2022
2021
\nNordics
6,426
4,628
\nPoland
1,101
649
\nRussia
1,031
906
\nOther
246
239
\nIS
Total
8,804
6,422
\nNordic power production is not presented by country since Nordic power production is mainly sold through
\nNord Pool.
\nCapital expenditure by country
\nEUR million
2022
2021
\nFinland
258
160
\nSweden
116
103
\nNorway
38
58
\nPoland
44
34
\nRussia
58
47
\nOther
12
42
\nTotal
525
443
\nNon-current assets by country
\nEUR million
2022
2021
\nFinland
3,079
3,058
\nSweden
3,815
6,988
\nNorway
407
1,198
\nPoland
518
517
\nRussia
1,189
4,542
\nOther and eliminations
163
7,373
\nTotal
9,173
23,677
\nNon-current assets include intangible assets, property, plant and equipment and right-of-use assets as
\nwell as participations in associates and joint ventures.
\nNumber of employees on 31 December by country
\n2022
2021
\nFinland
2,529
2,377
\nSweden
914
1,755
\nNorway
395
606
\nPoland
635
594
\nRussia
2,724
6,902
\nOther
515
6,906
\nTotal
7,712
19,140
\n6.6 Other revenue-related disclosures
\nFortum anticipates revenues of EUR 29 million (2021: 1,340) from unsatisfied performance obligations. Of
\nthis total, EUR 26 million is attributable to 2023 (2021: EUR 453 million to 2022) and EUR 3 million to
\nyears after 2023 (2021: EUR 887 million to years after 2022). Change in anticipated revenues from
\nunsatisfied performance obligations from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.
64
\n7 Comparable operating profit and comparable net profit
\n7.1 Reconciliation of operating profit to comparable operating profit
\nFortum uses Alternative performance measures (APMs) in the financial target setting and forecasting,
\nmanagement\u2019s follow up of financial performance of segments and the Group as well as allocation of
\nresources in the Group\u2019s performance management process. The business performance of the operations
\ncannot be compared from one period to another without adjusting for items affecting comparability and
\ntherefore they are excluded from Comparable operating profit and Comparable EBITDA. Definitions are
\npresented in the section
\ue001
Definitions and reconciliations of key figures
.
\nReconciliation of operating profit to comparable operating profit 2022
\nEUR million
Unadjusted
\nImpairment
\ncharges and
\nreversals
\nCapital gains
\nand other
\nrelated items
\nChanges in
\nfair values of
\nderivatives
\nhedging
\nfuture cash
\nflow
Other
Reported
\nSales
8,827
-
-
-23
-
8,804
\nOther income
734
-
-785
153
-1
101
\nMaterials and services
-5,576
-
-
206
20
-5,350
\nEmployee benefits
-504
-
-
-
-
-504
\nDepreciation and amortisation
-1,471
905
-
-
-
-566
\nOther expenses
-734
-
-
57
61
-615
\nIS
Comparable operating profit
905
-785
393
80
1,871
\nIS
Items affecting comparability
-905
785
-393
-80
-593
\nIS
Operating profit
1,277
1,277
\nReconciliation of operating profit to comparable operating profit 2021
\nEUR million
Unadjusted
\nImpairment
\ncharges and
\nreversals
\nCapital gains
\nand other
\nrelated items
\nChanges in
\nfair values of
\nderivatives
\nhedging
\nfuture cash
\nflow
Other
Reported
\nSales
6,234
-
-
188
-
6,422
\nOther income
2,773
-
-2,673
-9
-
91
\nMaterials and services
-2,976
-
-
-443
-
-3,419
\nEmployee benefits
-496
-
-
-
-
-496
\nDepreciation and amortisation
-622
35
-
-
-
-587
\nOther expenses
-589
-
1
-
6
-582
\nIS
Comparable operating profit
35
-2,673
-264
6
1,429
\nIS
Items affecting comparability
-35
2,673
264
-6
2,897
\nIS
Operating profit
4,325
4,325
\nImpairment charges and reversals
\nImpairment charges and reversals of previously recognised impairments are adjusted from depreciation
\nand amortisation and presented in items affecting comparability. Impairments in 2022 include EUR 905
\nmillion impairment in the Russia segment. Impairments were recognised against goodwill, and property,
\nplant and equipment. See
\ue001
Note 19
Impairment testing. Impairments in 2021 included a tax-deductible
\nnon-cash impairment of EUR 35 million in connection with the sale of the Argayash CHP plant in Russia
\n(Russia segment).
\nCapital gains and other related items
\nCapital gains and other related items include capital gains and transaction costs from acquisitions, which
\nare adjusted from other income and other expenses, respectively.
\nCapital gains and other related items in 2022 includes EUR 638 million gain from the sale of the 50%
\nownership in the district heating company Fortum Oslo Varme AS in Norway, EUR 77 million gain from
\nthe sale of the 30% ownership in the public charging point operator for electric vehicles Recharge AS, as
\nwell as EUR 61 million gain from the sale of the e-mobility business Plugsurfing. Capital gains and other
\nrelated items in 2021 included EUR 2,350 million gain from the sale of the 50% stake in the Swedish
\ndistrict heating and cooling company, Stockholm Exergi Holding AB, EUR 254 million gain from the sale of
\nthe district heating business in the Baltics, and EUR 50 million gain from the sale of eight small
\nhydropower plants in Sweden. See
\ue001
Note 3.2
Disposals.
\nChanges in fair values of derivatives hedging future cash flow
\nUnrealised changes in the fair values of financial derivative instruments hedging future cash flows that do
\nnot qualify for hedge accounting and physical contracts that are treated as derivatives are recognised in
\nitems affecting comparability. For additional information, see
\ue001
Note 14
Financial assets and liabilities by
\ncategories.
\nImpacts from settlement of physical contracts that have been treated as derivatives are adjusted to
\nsales and materials and services to reflect the contract pricing as opposed to market pricing.
\nAdjustments are needed to improve the understanding of the financial performance when comparing
\nresults from one period to another.
\nOther
\nOther includes restructuring and cost management expenses, and other miscellaneous non-operating
\nitems, which are adjusted mainly from materials and services or other expenses.
65
\n7.2 Reconciliation from operating profit to comparable net profit
\nEUR million
Note
2022
2021
\nIS
Operating profit
1,277
4,325
\nIS
Items affecting comparability
6, 7.1
593
-2,897
\nIS
Comparable operating profit
1,871
1,429
\nIS
Share of profit/loss of associates and joint ventures
-629
168
\nAdjustments to share of profit/loss of associates and joint ventures
18
618
-65
\nComparable share of profit/loss of associates and joint ventures
-11
104
\nIS
Finance costs - net
-193
-161
\nAdjustments to finance costs - net
11
348
34
\nComparable finance costs - net
155
-127
\nComparable profit before income tax
2,014
1,405
\nIS
Income tax expense
556
-325
\nAdjustments to income tax expense
-1,010
34
\nComparable income tax expense
-454
-290
\nIS
Non-controlling interests
0
-23
\nAdjustments to non-controlling interests
-11
-1
\nComparable non-controlling interests
-11
-24
\nComparable net profit from continuing operations
1,550
1,091
\nComparable net profit from discontinued operations
3.4
-2,538
687
\nComparable net profit, total Fortum
-988
1,778
\nComparable earnings per share, continuing operations, EUR
13
1.74
1.23
\nComparable earnings per share, discontinued operations, EUR
3.4
-2.86
0.77
\nComparable earnings per share, total Fortum, EUR
13
-1.11
2.00
\nComparable share of profit/loss of associates and joint ventures
\nShare of profit/loss of associates and joint ventures is adjusted for significant items, similar to adjustments
\nmade to arriving at comparable net profit. In 2022, the share of profits of associates and joint ventures
\ninclude EUR 414 million
impairments related to Fortum\u2019s ownership in the Russian TGC
-1 and EUR 62
\nmillion of impairments of the renewables joint ventures in Russia. See
\ue001
Note 19
Impairment testing.
\nComparable finance costs - net
\nFinance costs
\u2013
net are adjusted for e.g. nuclear-related items recognised in other financial items - net,
\nfair value changes on financial items, as well as impairment charges and reversals of previously recorded
\nimpairment charges on financial items. In 2022, Finance costs
\u2013
net include expected credit losses of
\nEUR 117 million on Russian deposits and receivables, as well as EUR 171 million write down of other
\nshares. See
\ue001
Note 11
Finance costs
\u2013
net.
\nComparable income tax expense
\nIncome tax expense is adjusted for tax impacts on items affecting comparability, adjustments to finance
\ncosts
\u2013
net, tax rate changes and other onetime adjustments. In 2022, adjustments to income tax expense
\ninclude EUR 746 million relating to onetime tax impact realised in Ireland mainly due to the Uniper
\ndivestment. See
\ue001
Note 28
Deferred income taxes on the balance sheet.
\n7.3 Reconciliation of income statement alternative performance
\nmeasures excluding Russia
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, and in 2022 Fortum introduced new APMs to provide additional financial
\ninformation excluding Fortum\u2019s Russian operations. See also
\ue001
Note 1
Significant accounting policies.
\nEUR million
2022
2021
\nComparable net profit from continuing operations
1,550
1,091
\n- Comparable operating profit, Russia
260
261
\n- Comparable share of profit/loss of associates and joint ventures, Russia
30
62
\n- Comparable finance costs - net, Russia
324
-25
\n- Comparable income tax expense, Russia
-138
-55
\n- Comparable non-controlling interests, Russia
-2
-4
\nComparable net profit from continuing operations excl. Russia
1,076
851
\nComparable earnings per share from continuing operations excl. Russia, EUR
1.21
0.96
\nSee also
\ue001
Definitions and reconciliations of key figures
.
66
\n8 Other income and other expenses
\nACCOUNTING POLICIES
\nGOVERNMENT GRANTS
\nGovernment grants are recognised at their fair value when there is a reasonable assurance that the
\ngrant will be received and the Group will comply with all attached conditions. Government grants are
\ndeferred and recognised in the income statement to match with the related costs.
\n8.1 Other income
\nEUR million
2022
2021
\nRental income
25
21
\nOther
76
70
\nIS
Total
101
91
\n8.2 Other expenses
\nEUR million
2022
2021
\nOperation and maintenance costs
123
128
\nIT and telecommunication costs
112
108
\nProperty taxes
54
51
\nOther
326
294
\nIS
Total
615
582
\nThe major components recorded in other expenses are the external operation and maintenance costs of
\npower and heat plants. Other includes expenses relating to properties and other operative expenses.
\nAuditors\u2019 fees
\nEUR million
2022
2021
\nAudit fees
2.7
2.9
\nAudit-related assignments
0.3
0.5
\nOther assignments
-
0.7
\nTotal
3.0
4.1
\nDeloitte Oy is the appointed auditor until the next Annual General Meeting in 2023.
\nAudit fees include fees for the audit of the consolidated financial statements, review of interim reports,
\nas well as fees for the audit of Fortum Corporation and its subsidiaries. Audit-related assignments include
\nfees for assurance of sustainability reporting, and other assurance and associated services related to the
\naudit. Other assignments consist of advisory services.
\n9 Materials and services
\nEUR million
2022
2021
\nMaterials
4,748
2,861
\nMaterials purchased from associated and joint ventures
421
368
\nExternal services
127
132
\nTransmission costs
53
57
\nIS
Total
5,350
3,419
\nMaterials consists mainly of coal, gas and nuclear fuels.
\nMaterials purchased from associates and joint ventures consist of nuclear and hydropower purchased
\nat production cost (including interest costs and production taxes) and purchased steam. Total materials
\nand services include production taxes of EUR 39 million (2021: 35), including hydro power related
\nproperty taxes of EUR 13 million (2021: 12). Taxes related to nuclear and hydro production are included in
\ntaxes paid through purchases from associates and joint ventures. See
\ue001
Note 38
Related party
\ntransactions.
67
\n10 Employee benefits and Board remuneration
\nEUR million
2022
2021
\nWages and salaries
386
370
\nPensions
\nDefined contribution plans
14
42
\nDefined benefit plans
10
7
\nSocial security costs
64
51
\nShare-based incentives
7
7
\nOther employee costs
22
20
\nIS
Total
504
496
\nThe compensation package for Fortum\u2019s employees consists of salaries, fringe benefits, short
-term
\nincentives, profit sharing paid to the Personnel Fund (in Finland) and long-term incentives.
\nFor further information on pensions see
\ue001
Note 31
Pension obligations.
\n10.1 Short-term incentives
\nAs a main principle, all employees are covered by the programme or alternatively by a business specific
\nor a comparable local variable pay arrangement. Short-term incentive (STI) programmes are designed to
\nsupport the achievement of the Group\u2019s financial and other relevant targets on an annual basis.
\nThe Board of Directors determines the performance criteria and award levels for the Fortum Executive
\nManagement. The awards are based on the achievement of Group financial performance, divisional
\ntargets and individual targets. The target incentive opportunity is 20% and the maximum incentive
\nopportunity is 40% of the annual base salary. The Board of Directors assesses the performance of the
\nPresident and CEO and the members of the Fortum Executive Management on a regular basis.
\nAwards for other employees are based on a combination of Group, divisional, functional and personal
\nor team targets. The targets are set in annual performance discussions held at the beginning of
\neach year. Awards under the STI programme are paid solely in cash.
\n10.2 Long-term incentives
\nThe purpose of long-term incentive programmes is to support the delivery of sustainable long-term
\nperformance, align the interests of management with those of shareholders, and support in committing
\nand retaining key individuals.
\nLTI programme provides participants with the opportunity to earn company shares. Under the LTI
\nprogramme, and subject to the decision of the Board of Directors, a new LTI plan commences annually.
\nThe Board of Directors approves participation of the Fortum Executive Management members in each
\nannually commencing LTI plan. Subject to a decision by the Board of Directors, the President and CEO is
\nauthorised to decide on individual participants and potential maximum awards for other participants than
\nthe Fortum Executive Management in accordance with the nomination guidelines approved by the Board
\nof Directors. Participation in the LTI plan precludes the individual from being a member in the Fortum
\nPersonnel Fund.
\nEach LTI plan begins with a three-year earnings period, during which participants may earn share rights
\nif the performance criteria set by the Board of Directors are fulfilled. If the minimum performance criteria
\nare not met, no shares will be awarded. If performance is exceptionally good and the targets approved by
\nthe Board of Directors are achieved, the combined gross value of all variable compensation cannot
\nexceed 120% of the person\u2019s annual salary in any calendar
year. After the earnings period has ended and
\nthe relevant taxes and other employment-related expenses have been deducted, participants are paid the
\nnet balance in the form of shares.
\nThe share awards are not subject to a lock-up period. However, Fortum Executive Management
\nmembers aggregate ownership of Fortum shares has to be greater than or equal to their annual salary.
\nThose members, whose aggregate ownership of Fortum shares does not yet fulfil the shareholding
\nrequirement are required to retain at least 50% of the shares received until the required level of
\nshareholding is met.
\nThe Restricted share programme is supplementing the current LTI programme. The Restricted share
\nprogramme is following the main terms and conditions of the general LTI programme with the exception
\nthat the allocated shares will be delivered after the three-year plan period independent of performance
\nmeasures, subject to continued employment. The Restricted share programme is designated for special
\npurposes defined by the Board of Directors, such as retention.
\nThe Board of Directors has the right to revise the targets set in the incentive plans, deviate from the
\npayment based on achievement of the set earnings criteria, or to discontinue any ongoing incentive plan.
\nThe share plans under the LTI arrangement are accounted for as partly equity- and partly cash-settled
\narrangements. The earned reward that the participants receive in shares is accounted for as an equity-
\nsettled transaction. For participants receiving cash only, the total arrangement is accounted for as cash-
\nsettled transaction. The reward is recognised as an expense during the earnings period with a
\ncorresponding increase in the liabilities for transactions settled in cash, and a corresponding increase in
\nequity for the transactions settled in shares. The social charges related to the arrangement payable by the
\nemployer are accrued as a liability. The liabilities for share-based plans including social charges at the
\nend of the year 2022 was EUR 12 million (2021: 12), including EUR 10 million (2021: 9) recorded in
\nequity.
\nAt year end 2022, approximately 140 key employees are participants in at least one of the ongoing LTI
\nplans.
\nShares granted
\nThe following table presents changes in the number of share rewards:
\nNumber of shares
2022
2021
\n1 January
1,818,093
1,603,146
\nGranted
594,400
920,517
\nSettled
-240,867
-410,830
\nExpired or forfeited
-775,437
-294,740
\nOutstanding 31 December
1,396,189
1,818,093
\nExpired or forfeited shares in 2022 include also the impact from the remuneration restrictions of Fortum
\nExecutive Management members according the terms of Solidium bridge financing with the Finnish state.
\n10.3 Employee share savings programme
\nThe purpose of Fortum's employee share savings programme is to motivate Fortum employees to invest
\nand retain ownership in the company.
\nThe programme includes annually commencing savings periods during which employees can save a
\nproportion of their salaries and purchase Fortum shares with the accrued savings.
\nFor each savings period participants will, as a gross reward, be granted one matching share for each
\ntwo purchased savings shares after approximately three years from the beginning of the savings period.
\nThe prerequisites for receiving matching shares are that the participant holds the purchased savings
\nshares until the end of the holding period, and that his or her employment has not ended before the end of
\nthe holding period.
68
\nEach plan consists of one-year savings period followed by two-year holding period. Shares are
\npurchased with the accumulated savings at the market price quarterly after the release of Fortum\u2019s interim
\nreports. The programme is accounted for as an equity-settled transaction, and the cost related to
\nmatching shares is recognised as expense during the vesting period.
\n10.4 Fortum Personnel Fund
\nThe Fortum Personnel Fund (for employees in Finland only) has been in operation since 2000. The Board
\nof Directors determines the criteria for the fund\u2019s annual profit
-sharing bonus. Members of the personnel
\nfund are the permanent and fixed-term employees of the Group.
\nThe profit-sharing received by the fund is
distributed equally between the members. Each employee\u2019s
\nshare is divided into a tied amount and an amount available for withdrawal. It is possible to transfer a
\nmaximum of 15% of capital from the tied amount to the amount available for withdrawal each year.
\nThe fund\u2019s latest financial
year ended at 30 April 2022 and the fund then had a total of 2,553 members
\n(2021: 2,508). At the end of April 2022 Fortum contributed EUR 4.3 million (2021: 0.4) to the personnel
\nfund as an annual profit-sharing bonus based on the financial results of 2021. The combined amount of
\nmembers\u2019 shares in the fund was EUR 20 million (2021: 20).
\n10.5 The President and CEO and the Fortum Executive Management
\n(FEM) remuneration
\nIn the end of 2022 Fortum Executive Management (FEM) consists of eight members, including the
\nPresident and CEO. The following table presents the total remuneration of the President and CEO and the
\nFEM and takes into account the changes in FEM during the year. The expenses are shown on accrual
\nbasis.
\nOn 6 September 2022, Fortum announced that it had agreed with the Finnish State on a bridge
\nfinancing arrangement. In accordance with the Solidium bridge financing facility with the Finnish State,
\nFortum Executive Management members will not be paid any short- or long-term incentives that are
\naccumulated in 2022 and 2023.
\nManagement remuneration
\n2022
2021
\nEUR thousand
\nMarkus
\nRauramo,
\nPresident
\nand CEO
\n3)
\nOther FEM
\nmembers
\n3)
\nMarkus
\nRauramo,
\nPresident
\nand CEO
\n3)
\nOther FEM
\nmembers
\n3)
\nSalaries and fringe benefits
1,549
3,447
1,559
3,727
\nShort-term incentives
\n1)
\n-
100
423
896
\nLong-term incentives
\n2)
\n816
756
1,334
2,276
\nPensions (statutory)
271
591
311
829
\nPensions (voluntary)
315
717
315
536
\nSocial security expenses
53
221
69
405
\nTotal
3,004
5,831
4,011
8,670
\n1) Including separate project awards paid to certain FEM members in August 2022.
\n2) LTI costs for 2022 relate to LTI plans decided before 2022. Costs are accrued over the vesting period.
President and CEO\u2019s costs for 2021
\nare updated for the share plan 2019-2021.
\n3) In addition to the information provided in the above table, compensation for the membership in the Supervisory Board of Uniper SE for the
\nPresident and CEO Markus Rauramo was EUR 157 thousand (2021:305), and for other FEM members, EUR 157 thousand (2021: 255). In
\n2022 this compensation is for the period that Uniper has been consolidated as subsidiary.
\nThe annual contribution for the President and CEO Markus Rauramo's pension arrangement is 20% of the
\nannual fixed compensation. The annual fixed compensation consists of base salary and fringe benefits.
\nThe President and CEO's retirement age is determined in accordance with the Finnish Employees\u2019
\nPension Act. In case his assignment is terminated before the retirement age, the President and CEO is
\nentitled to retain the benefits accrued in the arrangement up to that time.
\nFor the other members of the FEM, the retirement age varies between 63 and 65, or is determined in
\naccordance wi
th the Finnish Employees\u2019 Pension Act. According to Group policy, all new supplementary
\npension arrangements are defined contribution plans. The pension premium for FEM members is 20% of
\nthe annual base salary. In the end of 2022, the additional pension arrangements for the President and
\nCEO and other FEM members are defined contribution pension plans and thus no liability has been
\nrecognised on the balance sheet.
\nIn the event that Fortum decides to give notice of termination to the President and CEO, he is entitled to
\nthe salary for the notice period (6 months) and a severance pay equal to 6
months\u2019 salary. For other FEM
\nmembers, the notice period for both parties is six months, and in case the company terminates the
\ncontract, members are usually entitled to the salary for the notice period and a severance pay equal to 6
\nmonths\u2019 salary.
\nNumber of shares delivered to the management
\nThe table below shows the number of shares delivered to the President and CEO and other FEM
\nmembers under the LTI arrangements. FEM members whose aggregate ownership of Fortum shares
\ndoes not yet fulfil the shareholding requirement are required to retain at least 50% of the shares received
\nuntil the required level of shareholding is met.
\n2022
\n2
)
\n2021
\n3)
\nFEM members at 31 December 2022
\nMarkus Rauramo, CEO
12,661
25,921
\nNebahat Albayrak, member of FEM from 1 June 2021
-
-
\nEveliina Dahl, member of FEM from 1 May 2021
1,127
N/A
\nBernhard G\u00fcnther, member of FEM from 1 February 2021
-
-
\nPer Langer
3,102
4,555
\nSimon-Erik Ollus, member of FEM from 29 March 2021
1,847
3,046
\nMikael R\u00f6nnblad
4,112
5,985
\nNora Steiner-Forsberg, member of FEM from 1 May 2021
716
N/A
\nFormer FEM members
\nArun Aggarwal, member of FEM until 17 November 2021
-
5,304
\nAlexander Chuvaev, member of FEM until 1 September 2022
\n1)
\n16,034
20,013
\nRisto Penttinen, member of FEM until 30 April 2021
-
4,906
\nArto R\u00e4ty, member of FEM until 31 May 2021
-
4,476
\nSirpa-Helena Sormunen, member of FEM until 30 April 2021
-
4,992
\nTotal
39,599
79,198
\n1) Estimated number of shares after local tax and tax-related deductions. Due to local legislation, share rights were paid in cash instead of
\nshares.
\n2) Share delivery based on share plan 2019-2021.
\n3) Share delivery based on share plan 2018-2020.
69
\n10.6 Board of Directors and management shareholding
\nOn 31 December 2022, the members of the Board of Directors owned a total of 15,370 shares (2021:
\n5,000), which corresponds to 0.00% (2021:
0.00%) of the company\u2019s shares and voting rights.
\nNumber of shares held by members of the Board of Directors
\n2022
2021
\nBoard members at 31 December 2022
\nVeli-Matti Reinikkala, Chair
7,029
5,000
\nAnja McAlister, Deputy Chair
1,446
-
\nRalf Christian
985
-
\nLuisa Delgado
985
-
\nEssimari Kairisto
985
-
\nTeppo Paavola
985
-
\nPhilipp R\u00f6sler
985
-
\nAnnette Stube
985
-
\nKimmo Viertola
985
-
\nTotal
15,370
5,000
\nThe President and CEO and other members of the FEM owned a total of 197,210 shares (2021: 224,369),
\nwhich corresponds to approximately 0.02% (2021: 0.03%) of the company\u2019s shares and voting rights.
\nNumber of shares held by members of the Fortum Executive Management
\n2022
2021
\nFEM members at 31 December 2022
\nMarkus Rauramo
112,739
99,308
\nNebahat Albayrak
555
-
\nEveliina Dahl
2,554
806
\nBernhard G\u00fcnther
555
-
\nPer Langer
52,265
48,971
\nSimon-Erik Ollus
6,462
3,854
\nMikael R\u00f6nnblad
20,619
16,454
\nNora Steiner-Forsberg
1,461
374
\nFormer FEM members
\nAlexander Chuvaev
N/A
54,602
\nTotal
197,210
224,369
\n10.7 Board remuneration
\nThe Board of Directors comprises five to ten members who are elected at the Annual General Meeting for
\na one-year term of office, which expires at the end of the first Annual General Meeting following the
\nelection. The Board of Directors consists of nine members at the end of 2022.
\nThe Annual General meeting confirms the yearly compensation for the Board of Directors. Board
\nmembers are not offered any long-term incentive benefits or participation in other incentive schemes.
\nThere are no pension arrangements for the Board members. Social security costs were not paid in 2022
\n(2021: 2).
\nFees for the Board of Directors
\nEUR thousand
2022
2021
\nAnnual fee for the Board work
\nChair
88.8
77.2
\nDeputy Chair
63.3
57.5
\nChair of the Audit and Risk Committee
\n1)
\n63.3
57.5
\nMembers
43.1
40.4
\nFixed fee for the Committee work
\nMember of the Audit and Risk Committee
3.0
N/A
\nChair of the Nomination and Remuneration Committee
5.0
N/A
\nMember of the Nomination and Remuneration Committee
2.0
N/A
\nChair of any additional Committee established by a Board decision
5.0
N/A
\nMember of any additional Committee established by a Board
\ndecision
2.0
N/A
\n1) If not simultaneously Chair or Deputy Chair of the Board.
\nEvery member of the Board of Directors receives a fixed annual fee for the Board work and a meeting fee
\nfor each meeting attended. The annual fee for the Board work is paid in company shares and in cash in
\nsuch a way that approximately 40% of the amount of the annual fee is payable in shares acquired on
\nbehalf and in the name of the Board members, and the remainder in cash. The company pays the costs
\nand the transfer tax related to the purchase of the company shares.
\nA new fixed fee for the Committee work was introduced in 2022. A meeting fee of EUR 800 is paid for
\nBoard and Committee meetings, or EUR 1,600 in case the member travels to the meeting outside his/her
\ncountry of residence. When a member participates in the meeting via remote connection, or for the
\ndecisions that are confirmed without convening a meeting, the meeting fee will be EUR 800. Fees for the
\nCommittee work and the meeting fees are paid fully in cash.
\nThe travel expenses of Board members are compensated in accordance with the company
\u2019s travel
\npolicy.
\nCompensation for the Board of Directors
\nEUR thousand
2022
2021
\nBoard members at 31 December 2022
\nVeli-Matti Reinikkala, Chair from 28 April 2021
181
92
\nAnja McAlister, Deputy Chair from 28 April 2021
122
65
\nRalf Christian, member of the board from 28 March 2022
90
N/A
\nLuisa Delgado, member of the board from 28 April 2021
102
34
\nEssimari Kairisto, Chair of the Audit and Risk Committee
135
76
\nTeppo Paavola
117
58
\nPhilipp R\u00f6sler
101
55
\nAnnette Stube
105
57
\nKimmo Viertola, member of the board from 28 March 2022
86
N/A
\nFormer Board members
\nEva Hamilton, member of the board until 28 April 2021
-
19
\nMatti Lievonen, Chair until 28 April 2021
-
32
\nKlaus-Dieter Maubach, member of the board until 28 April 2021
\n1)
\n-
15
\nTotal
1,039
504
\n1) In 2021 in addition to the information provided in the above table, the estimated compensation for the membership in the Supervisory
\nBoard of Uniper SE for Klaus-Dieter Maubach was EUR 51 thousand.
70
\n11 Finance costs
\u2013
net
\nEUR million
Note
2022
2021
\nInterest expense
\nBorrowings
-181
-154
\nLeasing and other interest expenses
-3
-4
\nCapitalised borrowing costs
17
5
3
\nIS
Total
-179
-154
\nInterest income
\nLoan receivables and deposits
58
23
\nLeasing and other interest income
29
2
\nIS
Total
87
25
\nOther financial items - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
29
-71
-35
\nFair value changes, impairments and reversals
-303
1
\nUnwinding of discounts on other provisions and pension obligations
30, 31
7
0
\nOther financial expenses and income
266
2
\nIS
Total
-101
-32
\nIS
Finance costs - net
-193
-161
\nEUR million
Note
2022
2021
\nIS
Finance costs - net
-193
-161
\nAdjustments to finance costs - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
71
35
\nFair value changes, impairments, reversals and other adjustments
\n1)
\n276
-1
\nComparable finance costs - net
155
-127
\n1) Other adjustments in 2022 include EUR 27 million interest income from tax authorities on refunded tax payment.
\nSee
\ue001
Definitions and reconciliations of key figures
.
\nInterest expenses on borrowings totalled EUR 181 million (2021: 154) including interest expenses on
\nloans of EUR 194 million (2021: 130), and EUR -12 million (2021: 24) interest cost
\u2013
net from derivatives
\nhedging the loan portfolio.
\nInterest income, EUR 87 million (2021: 25), includes EUR 44 million (2021: 13) interest income from
\nshareholder loan receivables and other loan receivables, and EUR 14 million (2021: 10) from deposits.
\nInterest income from leases and other interest income EUR 29 million (2021: 2) include EUR 27 million
\ninterest income from tax authorities on refunded tax payment. See more information in
\ue001
Note 37
Legal
\nactions and official proceedings.
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear provisions relate to Loviisa
\nnuclear plant. For additional information see
\ue001
Note 29
Nuclear-related assets and liabilities.
\nFair value changes, impairments and reversals EUR -303 million in 2022 include expected credit losses
\nof EUR -117 million on Russian deposits and receivables, as well as EUR -171 million write down of other
\nshares.
\nOther financial expenses and income EUR 266 million in 2022 include mainly foreign exchange gains
\nfrom Russian rouble receivables and closing of Russian rouble hedges.
\nInterest rate and currency derivatives in finance costs
\u2013
net
\nEUR million
2022
2021
\nInterest rate and cross currency swaps
\nInterest expenses on borrowings
16
16
\nExchange rate difference from derivatives
-16
-12
\nRate difference in fair value gains and losses on financial instruments
\n1)
\n-65
-55
\nTotal fair value change of interest rate derivatives in finance costs - net
-65
-51
\nForeign exchange derivatives
\nInterest expenses on borrowings
-4
-40
\nExchange rate difference from derivatives
217
-15
\nRate difference in fair value gains and losses on financial instruments
-8
4
\nTotal fair value change of currency derivatives in finance costs - net
205
-51
\nTotal
140
-102
\n1) Fair value gains and losses on financial instruments include fair value change of hedging derivatives in fair value hedge relationship to
\nEUR -66 million (2021: -55).
71
\n12 Income tax expense
\n12.1 Profit before tax by country
\nEUR million
2022
2021
\nFinland
592
561
\nSweden
583
2,798
\nIreland
754
216
\nGermany
-110
95
\nRussia
-1,437
-89
\nOther
72
751
\nIS
Total
455
4,332
\nProfit before tax by country represents the respective
countries\u2019 part of total profit before tax for Fortum
\nGroup according to IFRS, based on the same accounting principles as consolidated financial statements.
\nThis means that the respective country profits include such items as for example share of profits from
\nassociates and joint ventures, effects of accounting for derivatives under IFRS standards and other group
\nlevel consolidation adjustments, which are not included in taxable profits in the local subsidiaries.
\n12.2 Major components of income tax expense by country
\nEUR million
2022
2021
\nCurrent taxes
\nFinland
-206
-107
\nSweden
-120
-98
\nIreland
11
-85
\nGermany
0
-11
\nRussia
-42
-4
\nOther
-36
-48
\nTotal
-392
-353
\nDeferred taxes
\nFinland
90
-1
\nSweden
-53
37
\nIreland
704
45
\nGermany
0
-1
\nRussia
148
-
\nOther
44
-55
\nTotal
934
26
\nAdjustments recognised for current tax of prior periods
\nFinland
0
0
\nSweden
8
0
\nIreland
0
0
\nGermany
0
0
\nRussia
7
0
\nOther
-1
3
\nTotal
15
2
\nIS
Income tax expense
556
-325
\n12.3 Income tax rate reconciliation
\nThe table below explains the difference between the theoretical enacted tax rate in Finland compared to
\nthe tax rate in the consolidated income statement.
\nEUR million
2022
%
2021
%
\nProfit before tax
455
4,332
\nTax calculated at nominal Finnish tax rate
-91
20.0
-866
20.0
\nDifferences in tax rates in other jurisdictions
48
-10.6
-9
0.2
\nTax rate changes
-
-
1
0.0
\nTax exempt capital gains
117
-25.7
562
-13.0
\nOther items impacting comparable tax expense
668
-146.7
-
-
\nTax exempt income and other non-deductible expenses
-5
1.2
-6
0.1
\nShare of profit of associates and joint ventures
-126
27.7
31
-0.7
\nTaxes related to dividend distributions
-
-
-12
0.3
\nTax effects of changes in value and non-recognition of deferred
\ntaxes
-41
8.9
-30
0.7
\nOther items
-17
3.6
1
0.0
\nAdjustments recognised for taxes of prior periods
3
-0.6
3
-0.1
\nIS
Income tax expense
556
-122.1
-325
7.5
\nKey tax indicators:
\n\u2022
The weighted average applicable income tax rate for 2022 is 9.4% (2021: 20.2%).
\n\u2022
The effective income tax rate in the income statement for 2022 is -122.1% (2021: 7.5%).
\n\u2022
The comparable effective income tax rate for 2022 is 22.4% (2021: 22.2%).
\nSee
\ue001
Note 7
Comparable operating profit and comparable net profit and
\ue001
Definitions and
\nreconciliations of key figures
.
\nThe major items affecting the effective income tax rate are as follows:
\n\u2022
Tax exempt capital gains decreased the rate by 25.7% (2021: 13.0%). Gains mainly relate to the sale of
\nFortum Oslo Varme AS in Norway.
\n\u2022
Other items impacting comparable tax expense include other tax exempt or non-deductible items and
\ntax impacts from group internal items. These items decreased the rate by 146.7% (2021: 0.0%). Impact
\nis realised in Ireland leading to creation of deferred tax asset of tax loss carry forward. This tax loss
\ncarry forward is a consequence of the disposal of Uniper SE and write down of Russian assets.
\n\u2022
Tax effects of changes in value and non-recognition of deferred taxes during 2022 increased the
\neffective tax rate by 8.9% (2021: 0.7%), mainly due to derecognition of deferred tax assets on tax losses
\ncarry forwards in Ireland.
72
\n13 Earnings and dividend per share
\nACCOUNTING POLICIES
\nEARNINGS PER SHARE
\nBasic earnings per share is calculated by dividing the net profit attributable to the owners of the parent
\ncompany by the weighted average number of ordinary shares in issue during the year, excluding
\nordinary shares purchased by the Group and held as treasury shares.
\nDIVIDENDS
\nDividends proposed by the Board of Directors are not recognised in the financial statements until they
\nhave been approved by the company's shareholders at the Annual General Meeting.
\n13.1 Earnings per share
\nEarnings per share, basic
\n2022
2021
\nIS
Profit attributable to owners of the parent, continuing operations (EUR million)
1,011
3,985
\nIS
Profit attributable to owners of the parent, total Fortum (EUR million)
-2,416
739
\nWeighted average number of shares (thousand)
889,204
888,294
\nBasic earnings per share, continuing operations (EUR )
1.14
4.49
\nBasic earnings per share, total Fortum (EUR )
-2.72
0.83
\nAs Fortum currently has no dilutive instruments outstanding, diluted earnings per share is the same as
\nbasic earnings per share.
\nComparable earnings per share
\n2022
2021
\nComparable net profit, continuing operations (EUR million)
1,550
1,091
\nComparable net profit, total Fortum (EUR million)
-988
1,778
\nWeighted average number of shares (thousand)
889,204
888,294
\nComparable earnings per share, continuing operations (EUR )
1.74
1.23
\nComparable earnings per share, total Fortum (EUR )
-1.11
2.00
\nComparable earnings per share, continuing operations excl. Russia
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, and in 2022 Fortum introduced new APMs to provide additional financial
\ninformation excluding Fortum\u2019s Russian operation
s. See also
\ue001
Note 1
Significant accounting policies.
\n2022
2021
\nComparable net profit from continuing operations excl. Russia (EUR million)
1,076
851
\nWeighted average number of shares (thousand)
889,204
888,294
\nComparable earnings per share, continuing operations excl. Russia (EUR )
1.21
0.96
\nSee
\ue001
Definitions and reconciliations of key figures
.
\n13.2 Dividend per share
\nThe Board of Directors proposes that a dividend of EUR 0.91 per share be paid for the financial year
\n2022. The dividend will be paid in two instalments. Based on the number of shares registered as at 1
\nMarch 2023, the total amount of dividend would be EUR 817 million. These Financial statements do not
\nreflect this dividend.
\nA dividend for 2021 of EUR 1.14 per share, amounting to a total of EUR 1,013 million, was decided in
\nthe Annual General Meeting on 28 March 2022. The dividend was paid on 6 April 2022
\nA dividend for 2020 of EUR 1.12 per share, amounting to a total of EUR 995 million, was decided in the
\nAnnual General Meeting on 28 April 2021. The dividend was paid on 7 May 2021.
73
\n14 Financial assets and liabilities by categories
\nACCOUNTING POLICIES
\nFINANCIAL ASSETS
\nFortum classifies its financial assets in the following categories according to IFRS 9: financial assets at
\namortised cost, financial assets at fair value through profit or loss and financial assets at fair value
\nthrough other comprehensive income. The classification is made at initial recognition and depends on
\nthe financial asset's contractual cash flow characteristics and the Group's business model for managing
\nthem.
\nIn order for the financial asset to be classified and measured at amortised cost or fair value through
\nother comprehensive income, it needs to give rise to cash flows that are solely payments of the principal
\nand interest on the principal amount outstanding (SPPI). This assessment is referred to as the SPPI test
\nand is performed at an instrument level. When the SPPI criteria is not met, financial assets are classified
\nto fair value through profit or loss category.
\nFinancial assets are presented as non-current assets unless they are held for trading, expected to be
\nrealised within 12 months at the closing date or they have a maturity of under 12 months at closing date.
\nThese are classified as current assets.
\nFINANCIAL ASSETS AT AMORTISED COST
\nFortum measures financial assets at amortised cost when the financial asset is included in the held-to-
\ncollect business model with fixed or determinable payments that are payments of amount outstanding or
\ninterest on it. They arise when the Group provides money, goods or services directly to a debtor.
\nFinancial assets at amortised cost include non-derivative financial assets with fixed or determinable
\npayments that are not quoted in an active market.
\nFinancial assets at amortised cost are subject to impairment using expected credit loss (ECL) model.
\nGains and losses from derecognition of the asset are recognised in profit and loss.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
\nFinancial assets at fair value through profit or loss include financial assets held for trading in the short
\nterm, financial assets designated upon initial recognition irrevocably as fair value through profit or loss
\nand financial assets mandatorily recognised at fair value through profit or loss according to IFRS 9.
\nDerivatives are classified as held for trading unless they are designated as effective hedging
\ninstruments.
\nGains and losses arising from changes in the fair value are included in the income statement in the
\nperiod in which they arise.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
\nOther equity investments designated at fair value through other comprehensive income are not subject
\nto impairment assessment and accumulated reserves are not recycled to profit or loss upon
\nderecognition. Dividends received are recognised in profit and loss.
\nDERECOGNITION
\nFortum derecognises financial assets when the rights to receive cash flows from the assets have expired
\nor when it has substantially transferred the risks and rewards of the assets outside of the Group.
\nIMPAIRMENT
\nFortum recognises an allowance for expected credit losses (ECL) according to IFRS 9 for financial
\nassets measured at amortised cost. See further information on ECL in
\ue001
Note 4.4.1
Credit quality of
\nmajor financial assets and in
\ue001
Note 23
Trade and other receivables.
\nFinancial assets measured at fair value through profit or loss are not included in ECL assessment as
\nthey are already measured at fair value. A financial asset is written-off when there is no reasonable
\nexpectation of recovering the contractual cash flows.
\nFINANCIAL LIABILITIES
\nAll financial liabilities are recognised initially at fair value. In the case of loans and borrowings and
\npayables, incurred transaction costs are deducted. In subsequent periods, all financial liabilities, except
\nderivatives and financial liabilities which the Group has at initial recognition irrevocably designated at fair
\nvalue through profit or loss, are stated at amortised cost; any difference between proceeds (net of
\ntransaction costs) and the redemption value is recognised as interest cost over the period of the
\nborrowing using the effective interest rate method.
\nDerivative financial instruments entered into by the Group, that are not designated as hedging
\ninstruments are classified as liabilities at fair value through profit and loss. Amortisation of the effective
\ninterest rate and gains and losses of liabilities are recognised in the income statement.
\nGroup\u2019s financial liabilities include trade and other payables, loans and borrowings and derivative
\nfinancial instruments. Borrowings or portion of borrowings being hedged with a fair value hedge are
\nrecognised at fair value through profit or loss. Derecognition of financial liabilities takes place when the
\nGroup has fulfilled the contractual obligations.
\nACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
\nWithin the ordinary course of business, the Group routinely enters into sale and purchase transactions
\nfor commodities. Contracts that were entered into and continue to be held for the purpose of receipt or
\ndelivery of the commodity in accordance with the Group's expected sale, purchase or usage
\nrequirements are not within the scope of IFRS 9 (\"own use exemption\"). Physical contracts to buy or sell
\na non-financial item, which are fair valued using the fair value option to off-set accounting mismatch, or
\nwhere own use exemption or hedge accounting cannot be applied are fair valued through the income
\nstatement.
\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and
\nare subsequently remeasured at their fair value. Gains and losses resulting from the initial fair value
\nmeasurement of a
derivative (\u201cday one\u201d gains and losses) are eliminated against the corresponding
\nderivative asset or liability, if the initial fair value is determined based on valuation model with input
\nparameters that are unobservable from active markets. For derivatives whose initial fair value is
\nevidenced by a quoted price in an active market for an identical contract or based on a valuation
\ntechnique that uses only data from observable markets, gains and losses from the initial measurement
\nare accounted for similarly to gains or losses on the subsequent measurement.
\nThe method of recognising the resulting gain or loss on the subsequent measurement depends on
\nwhether the derivative is designated as a hedging instrument eligible for hedge accounting, and if so, the
\nnature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of
\nhighly probable forecast transactions (cash flow hedges); (2) hedges of the fair value of recognised
\nassets or liabilities, or unrecognised firm commitments (fair value hedge); or (3) hedges of net
\ninvestments in foreign operations.
\nThe Group documents at the inception of the transaction the relationship between hedging
\ninstruments and hedged items, whether the hedged item is one or several risk components separately or
\nin aggregation, as well as its risk management objective and strategy for undertaking various hedge
\ntransactions. When applying hedge accounting the Group also documents its assessment, of whether
\nthe derivatives that are used in hedging transactions are meeting the hedge accounting effectiveness
\ncriteria: (1) there is an economic relationship between the hedged item and the hedging instrument, (2)
\nthe effect of credit risk does not dominate the value changes that result from that economic relationship;
\nand (3) the hedge ratio of the hedging relationship is the same as applied in the risk management. The
\nGroup also documents its assessment, both at hedge inception and on an ongoing basis, of whether the
\nderivatives that are used in hedging transactions are highly effective by assessing the prospective
\ncapacity of the derivatives in offsetting changes in fair values or cash flows of hedged items. Hedge
\naccounting is discontinued only when the hedging relationship ceases to meet the hedge effectiveness
\ncriteria.
74
\nCASH FLOW HEDGE
\nThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash
\nflow hedges are recognised in equity. Gain or loss relating to the ineffective portion is recognised
\nimmediately in the income statement. Amounts accumulated in equity are recycled in the income
\nstatement in the periods when the hedged item will affect profit and loss (e.g. when the forecasted sale
\nthat is hedged takes place). However, when the forecast transaction that is hedged results in the
\nrecognition of a non-financial asset (e.g. inventory) or a liability, the gains and losses previously deferred
\nin equity are transferred from equity and included in the initial measurement of the cost of the asset or
\nliability. When a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
\nexisting in equity is recognised in the income statement when the forecast transaction is ultimately also
\nrecognised in the income statement. When a forecasted transaction is no longer expected to occur, the
\ncumulative gain or loss that was reported in equity is immediately recognised in the income statement.
\nFortum hedges its exposure to commodity market risks and applies hedge accounting by risk
\ncomponents. Hedge accounting is applied to Nordic electricity price risk, where the Nordic area priced
\nphysical electricity delivery is commonly divided into three risk components: (1) system price risk, (2)
\nelectricity price area difference risk (EPAD) and (3) currency risk. For each of these separate risk
\ncomponents there are specific derivative contracts available, which each are being effective hedges for
\nthe associated risk components.
\nIn addition, hedge accounting is applied to certain derivative contracts hedging gas price risk. These
\nare physically settled fixed-price forward and futures contracts, for which the own-use exemption cannot
\nbe applied (failed own-use contracts), where the contract constitutes an effective hedge of cash flows of
\nthe gas volumes to be delivered (\u201call
-
in one\u201d hedge).
\nFAIR VALUE HEDGE
\nChanges in the fair value of derivatives that are designated and qualify as fair value hedges are
\nrecorded in the income statement, together with any changes in the fair value of the hedged asset or
\nliability that are attributable to the hedged risk.
\nIf the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount
\nof a hedged item for which the effective interest method is used is amortised to profit or loss for the
\nperiods until maturity of the hedged item.
\nNET INVESTMENT HEDGING IN FOREIGN OPERATIONS
\nHedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any
\ngain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in
\nequity; the gain or loss relating to the ineffective portion is recognised immediately in the income
\nstatement. Gains and losses accumulated in equity are included in the income statement when the
\nforeign operation is disposed of.
\nDERIVATIVES THAT DO NOT QUALIFY FOR HEDGE ACCOUNTING
\nCertain derivative instruments representing economic hedging relationship do not qualify for hedge
\naccounting. Unrealised fair value changes of non-hedge accounted commodity derivatives hedging
\nfuture cash flow and physical contracts that are accounted for as derivatives within the scope of IFRS 9
\nare recognised in items affecting comparability in the income statement. Gains and losses on interest
\nrate and currency derivative instruments are recognised in finance costs
\u2013
net with corresponding hedge
\nitems.
\nFinancial assets and liabilities in the tables below are split into categories in accordance with IFRS 9.
\nThe categories are further divided into classes which are the basis for valuing a respective asset or
\nliability. Further information can be found in the Notes mentioned in the table.
75
\nFinancial assets by category 2022
\nAmortised cost
Fair value through profit or loss
\nFair value through other
\ncomprehensive income
\nEUR million
Note
\nHedge accounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther
\nfinancial assets
\nNet investment
\nand Cash flow
\nhedges
\nOther equity
\ninvestments
\nLease
\nreceivables
\nTotal
\nfinancial assets
\nFinancial instruments in non-current assets
\nOther non-current assets
20
85
543
628
\nDerivative financial instruments
4
\nCommodity derivatives
170
54
224
\nInterest rate and currency derivatives
84
3
33
119
\nLong-term interest-bearing receivables
21
593
31
624
\nTotal financial instruments in non-current assets
677
84
174
574
86
-
-
1,595
\nFinancial instruments in current assets
\nDerivative financial instruments
4
\nCommodity derivatives
594
776
1,370
\nInterest rate and currency derivatives
1
92
23
116
\nTrade receivables
23
1,625
1,625
\nOther receivables
23
142
142
\nShort-term interest-bearing receivables
21
122
535
3
660
\nLiquid funds
24
3,919
3,919
\nTotal financial instruments in current assets
5,808
1
687
535
799
-
3
7,832
\nTotal
6,486
84
860
1,109
885
-
3
9,427
\nFinancial assets by category 2021
\nAmortised cost
Fair value through profit or loss
\nFair value through other
\ncomprehensive income
\nEUR million
Note
\nHedge accounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther
\nfinancial assets
\nNet investment
\nand Cash flow
\nhedges
\nOther equity
\ninvestments
\nLease
\nreceivables
\nTotal
\nfinancial assets
\nFinancial instruments in non-current assets
\nOther non-current assets
20
316
136
118
570
\nDerivative financial instruments
4
\nCommodity derivatives
16,955
53
17,009
\nInterest rate and currency derivatives
49
34
5
88
\nLong-term interest-bearing receivables
21
2,125
147
119
2,392
\nTotal financial instruments in non-current assets
2,441
49
16,989
284
58
118
119
20,058
\nFinancial instruments in current assets
\nDerivative financial instruments
4
\nCommodity derivatives
64,750
416
65,165
\nInterest rate and currency derivatives
22
170
34
226
\nTrade receivables
23
12,916
12,916
\nOther receivables
23
1,927
13
1,940
\nShort-term interest-bearing receivables
21
145
553
17
715
\nLiquid funds
24
7,545
47
7,592
\nTotal financial instruments in current assets
22,533
22
64,920
613
450
-
17
88,555
\nTotal
24,974
71
81,909
897
507
118
136
108,613
76
\nFinancial liabilities by category 2022
\nAmortised cost
Fair value through profit or loss
\nFair value
\nthrough other
\ncomprehensive
\nincome
\nEUR million
Note
\nHedge
\naccounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther financial
\nliabilities
\nNet investment
\nand Cash flow
\nhedges
Lease liabilities
\nTotal financial
\nliabilities
\nFinancial instruments in non-current liabilities
\nInterest-bearing liabilities
27
2,978
580
\n1)
\n100
3,658
\nDerivative financial instruments
4
\nCommodity derivatives
245
390
635
\nInterest rate and currency derivatives
119
-
2
121
\nTotal financial instruments in non-current liabilities
2,978
699
245
392
100
4,413
\nFinancial instruments in current liabilities
\nInterest-bearing liabilities
27
3,581
527
19
4,127
\nDerivative financial instruments
4
\nCommodity derivatives
553
3,366
3,919
\nInterest rate and currency derivatives
2
51
1
54
\nTrade payables
33
720
720
\nOther liabilities
33
185
185
\nTotal financial instruments in current liabilities
4,486
2
604
527
3,367
19
9,005
\nTotal
7,463
701
849
527
3,759
119
13,419
\n1) Fair valued part of bond in fair value hedge relationship.
\nFinancial liabilities by category 2021
\nAmortised cost
Fair value through profit or loss
\nFair value
\nthrough other
\ncomprehensive
\nincome
\nEUR million
Note
\nHedge
\naccounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther financial
\nliabilities
\nNet investment
\nand Cash flow
\nhedges
Lease liabilities
\nTotal financial
\nliabilities
\nFinancial instruments in non-current liabilities
\nInterest-bearing liabilities
27
6,087
1,669
\n1)
\n945
8,701
\nDerivative financial instruments
4
\nCommodity derivatives
16,373
248
16,621
\nInterest rate and currency derivatives
9
8
18
36
\nTotal financial instruments in non-current liabilities
6,087
1,678
16,381
-
267
945
25,358
\nFinancial instruments in current liabilities
\nInterest-bearing liabilities
27
7,840
549
130
8,519
\nDerivative financial instruments
4
\nCommodity derivatives
68,905
2,934
71,839
\nInterest rate and currency derivatives
2
103
2
107
\nTrade payables
33
12,152
12,152
\nOther liabilities
33
425
425
\nTotal financial instruments in current liabilities
20,417
2
69,008
549
2,936
130
93,043
\nTotal
26,503
1,680
85,390
549
3,202
1,075
118,400
\n1) Fair valued part of bond in fair value hedge relationship.
77
\n15 Financial assets and liabilities by fair value hierarchy
\nACCOUNTING POLICIES
\nFair value measurements are classified using a fair value hierarchy i.e. Level 1, Level 2 and Level 3 that
\nreflects the significance of the inputs used in making the measurements.
\nFAIR VALUES UNDER LEVEL 1 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 1 is based on unadjusted quoted
\nprices in active markets at the closing date. Level 1 consist e.g. commodity derivatives traded in active
\nmarkets.
\nFAIR VALUES UNDER LEVEL 2 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 2 is based on observable input
\nparameters, which are other than quoted prices.
\nThe fair value of financial instruments traded in active markets in Level 2 is calculated using prices
\nderived from quoted market prices at the closing date. Known calculation techniques, such as estimated
\ndiscounted cash flows, are used to determine fair value of interest rate and currency financial
\ninstruments. The fair value of interest-rate swaps is calculated as the present value of the estimated
\nfuture cash flows. The fair value of forward foreign exchange contracts is determined using forward
\nexchange market rates at the closing date. Fair values of options are determined by using option
\nvaluation models. The fair value of financial liabilities is estimated by discounting the future contractual
\ncash flows at the current market interest rate that is available to the Group for similar financial
\ninstruments. The counterparty credit risk has been taken into account when determining fair value. The
\ncredit risk is determined based on a portfolio valuation in a bilateral approach.
\nThe Group bases the calculation on existing market conditions at each closing date. Financial
\ninstruments used in Fortum are standardised products that are either cleared via exchanges or widely
\ntraded in the market. Credit risk from trading commodity derivatives is mitigated by clearing trades
\nthrough exchanges or by limiting trades to OTC counterparties considered to be creditworthy, or secured
\nby credit worthy guarantees. Financial derivatives are traded with credit worthy financial institutions with
\ninvestment grade ratings.
\nFAIR VALUES UNDER LEVEL 3 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 3 is based on unobservable input
\nparameters.
\nLevel 3 consist mainly investments in unlisted shares classified as other investments for which the fair
\nvalue can't be reliably measured and derivative financial instrument for which the fair value has been
\ndetermined using valuation techniques with unobservable inputs. The input parameters of Level 3 of the
\nfair value hierarchy for equity investments are specified taking into account economic developments and
\navailable industry and corporate data. The counterparty credit risk has been adjusted when determining
\nthe fair value.
78
\nFinancial assets
\nLevel 1
Level 2
Level 3
Netting
\n2)
\nTotal
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nIn non-current assets
\nOther investments
\n1)
\n20
-
71
-
46
543
99
543
216
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
54
62
-9
54
53
\nNon-hedge accounting
85
5,136
58
11,708
57
207
-30
-96
170
16,955
\nInterest rate and currency derivatives
4
\nHedge accounting
116
54
116
54
\nNon-hedge accounting
3
34
3
34
\nInterest-bearing receivables
-
111
31
36
31
147
\nTotal in non-current assets
85
5,318
231
11,904
631
342
-30
-105
917
17,459
\nIn current assets
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
781
50
542
572
-546
-207
777
416
\nNon-hedge accounting
1,129
22,876
252
45,575
9
326
-796
-4,028
594
64,750
\nInterest rate and currency derivatives
4
\nHedge accounting
23
57
23
57
\nNon-hedge accounting
92
170
92
170
\nOther receivables
-
13
-
13
\nInterest-bearing receivables
527
596
7
4
535
600
\nTotal in current assets
2,437
23,522
909
46,387
16
330
-1,342
-4,235
2,021
66,006
\nTotal
2,522
28,840
1,140
58,291
648
672
-1,372
-4,340
2,938
83,465
\n1) Other investments mainly include shares in unlisted companies.
\n2) Receivables and liabilities from standard electricity and other commodity derivative contracts against exchanges with same delivery period are netted in Fortum, except Uniper segment included in 31 Dec 2021 balances.
79
\nFinancial liabilities
\nLevel 1
Level 2
Level 3
Netting
\n2)
\nTotal
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nIn non-current liabilities
\nInterest-bearing liabilities
\n1)
\n27
580
1,669
580
1,669
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
390
257
-9
390
248
\nNon-hedge accounting
38
4,874
234
11,336
4
259
-30
-96
246
16,373
\nInterest rate and currency derivatives
4
\nHedge accounting
121
27
121
27
\nNon-hedge accounting
-
8
-
8
\nTotal in non-current liabilities
38
4,874
1,324
13,298
4
259
-30
-105
1,336
18,326
\nIn current liabilities
\nInterest-bearing liabilities
27
527
549
527
549
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
2,672
420
1,240
2,721
-546
-207
3,366
2,934
\nNon-hedge accounting
883
20,316
465
52,531
1
86
-796
-4,028
553
68,905
\nInterest rate and currency derivatives
4
\nHedge accounting
3
4
3
4
\nNon-hedge accounting
51
103
51
103
\nTotal in current liabilities
3,555
20,736
2,286
55,908
1
86
-1,342
-4,235
4,500
72,496
\nTotal
3,593
25,610
3,610
69,205
5
345
-1,372
-4,340
5,836
90,822
\n1) Fair valued part of bonds when hedge accounting is applied (fair value hedge).
\n2) Receivables and liabilities from standard electricity and other commodity derivative contracts against exchanges with same delivery period are netted in Fortum, except Uniper segment included in 31 Dec 2021 balances.
\nAt the end of December 2022, the net fair value of commodity derivatives was EUR -2,960 million, including assets of EUR 1,594 million and liabilities of EUR 4,554 million (EUR -6,225 million in December 2021,
\nincluding assets of EUR 82 billion and liabilities of EUR 88 billion). The change from December 2021 mainly relates to deconsolidation of Uniper at 30 September 2022 which was dampened by impacts from increased
\ncommodity market prices affecting the continuing operations.
\nNet fair value amount of interest rate and currency derivatives was EUR 61 million, including assets EUR 235 million and liabilities EUR 175 million. Fortum has cash collateral agreements with some counterparties. At
\nthe end of December 2022 Fortum had received EUR 64 million from collateral agreements. The received cash has been booked as short-term liability.
\nThe increase in other investments in fair value hierarchy level 3 mainly relate to the 1.3 GW portfolio of wind projects in R
ussia. Uniper\u2019s fair valued l
ong-term gas supply contracts accounted for as derivatives, EUR
\n3,529 million, were transferred from level 2 to level 3 during the reporting period due to changed market situation affecting the inputs used to determine the credit value adjustment. Uniper deconsolidation decreased total
\nlevel 3 fair values by EUR 1,416 million. There were no other transfers out of level 3. Gains and losses of level 3 items in consolidated income statement are presented mainly in items affecting comparability. See
\n\ue001
Not
e
7
Comparable operating profit and comparable net profit.
\nChanges in fair value hierarchy Level 3
\nEUR million
1 Jan 2022
Purchases
Sales
Settlements
\nGains / losses in
\nincome
\nstatement
\nTransfers and
\nadditions into
\nlevel 3
\nGains / losses
\nin OCI
\nDisposal of
\nsubsidiary
\ncompanies
31 Dec 2022
\nOn balance sheet, net
\nOther investments
99
19
-17
-126
572
-2
-2
543
\nCommodity derivatives, fair values
765
135
-104
-1,903
3,529
-1
-2,360
61
\nCommodity derivatives, day-1 gains and losses
-575
2
24
-397
946
-
\nInterest bearing receivables
40
-4
3
39
\nTotal on balance sheet, net
329
21
118
-84
-2,423
4,101
-3
-1,416
643
80
\n16 Intangible assets
\nACCOUNTING POLICIES
\nIntangible assets, except goodwill, are stated at historical cost less accumulated amortisation and
\nimpairment losses; and amortised on a straight-line basis over their expected useful lives.
\nThe assets\u2019 residual values and useful lives
are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
\nGOODWILL
\nGoodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of
\nnet identifiable assets of the acquired subsidiary, associate or joint venture at the date of acquisition.
\nGoodwill on acquisitions of subsidiaries is included in intangible assets and tested annually for
\nimpairment. Goodwill on acquisition of associates and joint ventures is included in investments in
\nassociates and joint ventures and is tested for impairment as part of the overall balance. Goodwill is
\ncarried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed.
\nGains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity
\nsold.
\nCONTRACT-BASED INTANGIBLE ASSETS
\nMajority of contract-based intangible assets are concession rights in Germany, which are valued at
\namortised costs. Contract-based intangible assets in 2021 related to Uniper.
\nRESEARCH AND DEVELOPMENT COSTS
\nResearch and development costs are recognised as expense as incurred and included in other
\nexpenses in the consolidated income statement. If development costs are expected to generate future
\nincome, they are capitalised as intangible assets and depreciated over the period of the income streams.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nASSIGNED VALUES AND USEFUL LIVES IN ACQUISITIONS
\nIn an acquisition acquired intangible and tangible assets are fair valued and their remaining useful lives
\nare determined. Management believes that the assigned values and useful lives, as well as the underlying
\nassumptions, are reasonable. Different assumptions and assigned lives could have a significant impact
\non the reported amounts.
\nThe Group has significant carrying values in property, plant and equipment, intangible assets and
\nparticipations in associated companies and joint ventures which are tested for impairment according to
\nthe accounting policy. See further information on the impairment testing in
\ue001
Note 19
Impairment testing.
\nGoodwill
Contract-based
Other
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
\nCost 1 January
1,021
1,069
1,334
1,328
1,586
1,514
3,941
3,911
\nTranslation differences and other
\nadjustments
10
22
-5
29
-96
27
-91
78
\nCapital expenditure
1
-
-
-
125
118
126
119
\nDisposals
-
-
-
-1
-71
-21
-71
-21
\nDisposal of subsidiary companies
\n1)
\n-615
-70
-1,329
-22
-664
-58
-2,608
-150
\nReclassifications
-
-
-
-
48
6
48
6
\nCost 31 December
417
1,021
-
1,334
929
1,586
1,346
3,941
\nAccumulated depreciation 1 January
-
-
820
794
955
850
1,775
1,643
\nTranslation differences and other
\nadjustments
-
-
-6
29
-85
16
-91
45
\nDisposals
-
-
-
-1
-71
-20
-71
-21
\nDisposal of subsidiary companies
\n1)
\n-
-
-830
-22
-447
-37
-1,277
-59
\nReclassifications
-
-
-
-
34
-
34
-
\nDepreciation for the year
-
-
14
20
130
144
144
164
\nImpairment charges
\n2)
\n167
-
1
-
6
2
174
2
\nAccumulated depreciation 31 December
167
-
-
820
521
955
689
1,775
\nBS
Carrying amount 31 December
250
1,021
-
514
408
632
657
2,167
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\n2) See
\ue001
Note 19
Impairment testing.
\nChanges during the year include Uniper until 30 September 2022.
\nGoodwill in groups of cash-generating units
\nGoodwill is allocated to operating segments corresponding to groups of cash-generating units that benefit
\nfrom the synergies of the acquired goodwill.
\nEUR million
2022
2021
\nConsumer Solutions
214
223
\nCity Solutions
36
137
\nUniper
-
515
\nRussia
-
144
\nTotal
250
1,021
\nOther intangible assets
\nOther intangible assets include customer contracts, and costs for software products and software
\nlicenses.
81
\n17 Property, plant and equipment and right-of-use assets
\nACCOUNTING POLICIES
\nProperty, plant and equipment mainly include power and heat production-related buildings, structures
\nand machinery, waterfall rights, and other buildings and machinery.
\nProperty, plant and equipment are stated at historical cost less accumulated depreciation and
\nimpairment losses on the consolidated balance sheet. Historical cost includes expenditure that is directly
\nattributable to the acquisition of an item. Borrowing costs are included in the cost of qualified assets.
\nAdditionally, the cost of an item of property, plant and equipment includes the estimated cost of its
\ndismantlement, removal or restoration when there is a contractual obligation towards a third party, or a
\nlegal obligation.
\nAcquired assets on the acquisition of a new subsidiary are stated at their fair values at the date of
\nacquisition.
\nSee
\ue001
Note 30
Other provisions for information about asset retirement obligations,
\ue001
Note 29
Nuclear-
\nrelated assets and liabilities, for information about provisions for decommissioning nuclear power plants
\nand
\ue001
Note 34
Leases, for information about right-of-use assets.
\nLand, water areas and waterfall rights are not depreciated since they have indefinite useful lives.
\nDepreciation on other assets is calculated using the straight-line method to allocate their cost to their
\nresidual values over their estimated useful lives, as follows:
\n\u2022
Buildings and structures: 10-50 years
\n\u2022
Machinery and equipment: 3-65 years
\nSubsequent costs are included in the asset\u2019s carrying amount or recognised as a separate asset, as
\nappropriate, only when it is probable that future economic benefits associated with the item will flow to
\nthe Group and the cost of the item can be measured reliably. All other repairs and maintenance
\nexpenses are charged to the income statement during the financial period in which they are incurred.
\nThe assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
\nEconomic lives and book values of property, plant and equipment reflect approved actions towards
\nFortum\u2019s climate
-related targets.
\nBORROWING COSTS
\nBorrowing costs directly attributable to the construction of qualifying assets are added to the cost of
\nthose assets. Qualifying assets are assets that take a substantial time to get ready for their intended use
\nor sale.
82
\nLand and waterfall rights
Buildings and structures
Machinery, equipment and other
\nAdvances paid and
\nconstruction in progress
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nCost 1 January
4,371
4,436
10,574
10,400
32,996
32,285
1,172
1,602
49,113
48,723
\nTranslation differences and other adjustments
-275
-75
422
145
588
444
-166
41
569
554
\nAcquisition of subsidiary companies
8
-
8
-
-
-
6
-
21
-
\nCapital expenditure
\n1)
\n4
6
13
56
49
232
758
754
824
1,046
\nAdditions to right-of-use assets
6
34
29
41
12
97
-
-
47
173
\nDecreases in right-of-use assets
-
-
-18
-11
-12
-21
-
-
-30
-32
\nNuclear asset retirement cost
-
-
-
-
-9
56
-
-
-9
56
\nDisposals
-4
-14
-35
-33
-149
-337
-3
-8
-190
-392
\nDisposal of subsidiary companies
\n2)
\n-1,680
-17
-7,645
-257
-26,086
-602
-1,033
-100
-36,444
-975
\nReclassifications
-
2
58
233
135
841
-222
-1,116
-28
-41
\nCost 31 December
2,429
4,371
3,406
10,574
7,525
32,996
513
1,172
13,872
49,113
\nAccumulated depreciation 1 January
279
280
6,164
5,936
23,460
22,983
162
157
30,064
29,357
\nTranslation differences and other adjustments
-7
4
199
143
63
180
-4
-2
252
325
\nAcquisition of subsidiary companies
-
-
1
-
-
-
-
-
1
-
\nDisposals
-
-10
-33
-32
-100
-331
-1
-1
-134
-373
\nDisposal of subsidiary companies
\n2)
\n-275
-1
-5,089
-78
-20,589
-269
-164
-
-26,116
-348
\nDecreases in right-of-use assets
-
-
-5
-1
-10
-12
-
-
-15
-13
\nDepreciation for the year
11
5
316
180
666
932
-
1
994
1,117
\nImpairment charges
\n3)
\n1
-
518
19
1,050
15
5
-
1,574
34
\nReclassifications
-3
-
-83
-3
72
-40
-
8
-14
-35
\nAccumulated depreciation 31 December
5
279
1,989
6,164
4,612
23,460
-
162
6,606
30,064
\nBS
Carrying amount 31 December
2,424
4,093
1,417
4,410
2,913
9,536
513
1,010
7,266
19,049
\n1) Includes EUR 51 million (2021: 50) of other asset retirement costs.
\n2) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\n3) See
\ue001
Note 19
Impairment testing.
\nChanges during the year include Uniper until 30 September 2022.
\nProperty, plant and equipment that are subject to restrictions in the form of real estate mortgages amount to EUR 167 million (2021: 81). See
\ue001
Note 36
Pledged assets and contingent liabilities.
\nBorrowing costs of EUR 5 million relating to continuing operations were capitalised in 2022 (2021: 3). The interest rate used for capitalising borrowing costs varied from 2% to 10% (2021: 2%-7%). For constructions
\nfinanced by the Group, a uniform rate may be used based on interest rates of financial liabilities, including leases.
\nProperty, plant and equipment includes right-of-use assets from leases in which Fortum acts as the lessee. See
\ue001
Note 34
Leases.
83
\n18 Participations in associated companies and joint
\nventures
\nACCOUNTING POLICIES
\nThe Group\u2019s i
nterests in associated companies and jointly controlled entities are accounted for using the
\nequity method of accounting. Assets acquired and liabilities assumed in the investment in associates or
\njoint ventures are measured initially at their fair values at the acquisition date. The excess of the cost of
\nacquisition over the fair value of the Group\u2019s share of the identifiable net assets acquired is recorded as
\ngoodwill.
\nThe Group\u2019s share of its associates or joint ventures post
-acquisition profits or losses after tax, and
\nthe expenses related to the adjustments to the fair values of the assets and liabilities assumed are
\nrecognised in the income statement. The cumulative post-acquisition movements are adjusted against
\nthe carrying amount of the investment.
The Group\u2019s share of post
-acquisition adjustments to associates
\nor joint ventures equity that has not been recognised in the associate\u2019s or joint venture\u2019s income
\nstatement, is recognised directly in Group\u2019s shareholder\u2019s equity, and against the carrying a
mount of the
\ninvestment.
\nWhen the Group\u2019s share of losses in an associate or a joint venture equals or exceeds its interest in
\nthe associate or joint venture, including any other unsecured receivables, the Group does not recognise
\nfurther losses, unless it has incurred obligations or made payments on behalf of the associate or joint
\nventure.
\nMaterial unrealised gains on transactions between the Group and its associates or joint ventures are
\neliminated to the extent of the Group\u2019s interest in the associate o
r joint venture. Material unrealised
\nlosses are also eliminated, unless the transaction provides evidence of an impairment of the asset
\ntransferred. Accounting policies of associates or joint ventures have been changed where necessary to
\nensure consistency with the policies adopted by the Group.
\nIf more recent information is not available, the share of the profit of certain associated or joint venture
\ncompanies is included in the consolidated accounts based on the latest available information.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
\nManagement is required to make significant judgements when assessing the nature of Fortum\u2019s interest
\nin its investees and when considering the classification of Fortum\u2019s joint arrangements. In the
\nclassification, emphasis has been put on decision making, legal structure, financing and risks of the
\narrangements.
\nManagement judgement is required when testing the carrying amounts for participations in associated
\ncompanies and joint ventures for impairment. See
\ue001
Note 19
Impairment testing for more information.
\n18.1 Principal associated companies and joint ventures
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
OKG AB
TVO Oyj
\nNature of the relationship
Co-owned
\nnuclear company
\nCo-owned
\nhydro company
\nCo-owned
\nnuclear company
\nCo-owned
\nnuclear company
\nClassification
Associated
\ncompany
\nAssociated
\ncompany
\nAssociated
\ncompany
\nJoint venture
\nSegment
Generation
Generation
Generation
Generation
\nDomicile
Sweden
Finland
Sweden
Finland
\nOwnership interest, %
\n1)
\n26
58
46
26
\nVotes, %
26
28
46
26
\n1) Kemijoki and TVO have different series of shares. The ownership interest varies due to the changes in equity assigned to the different
\nshare series. In 2022 there were no changes in the ownership interests in Kemijoki and TVO.
\nShareholdings in power production companies
\nPower plants are often built jointly with other power producers. Under the consortium agreements, each owner is
\nentitled to electricity in proportion to its share of ownership, or other agreements, and each owner is liable for an
\nequivalent portion of costs. The production companies are not profit making, since the owners purchase
\nelectricity at production cost, including interest cost and production taxes. The share of profit of these companies
\nis mainly IFRS adjustments (e.g. accounting for nuclear-related assets and liabilities) and depreciations on fair
\nvalue adjustments from historical acquisitions since the companies are not profit making under local accounting
\nprinciples.
\nFortum has material shareholdings in such power production companies (mainly nuclear and hydro) that are
\nconsolidated using equity method either as associated companies (Forsmarks Kraftgrupp AB, Kemijoki Oy and
\nOKG) or as joint venture (Teollisuuden Voima Oyj (TVO)).
\nIn Sweden, nuclear production company shareholdings are 25.5% ownership of the shares in Forsmarks
\nKraftgrupp AB and 45.5% ownership of the shares in OKG AB. Excluding non-controlling interests in the
\nsubsidiaries, Fortum\u2019s participation
in the companies are 22.2% and 43.4% respectively, which reflects the share
\nof electricity produced that Fortum can sell further to the market. The minority part of the electricity purchased is
\ninvoiced further to each minority owner according to their respective shareholding and treated as pass-through.
\nIn Finland, Fortum has an ownership in power production company TVO that has two series of shares which
\nentitle the shareholders to electricity produced in the different power plants owned by TVO. Shares in series A
\nentitle to electricity produced in nuclear power plants Olkiluoto 1 and 2 and Fortum owns 26.6% of these shares.
\nSeries B entitles to electricity in the nuclear power plant currently under test production phase, Olkiluoto 3, and
\nFortum\u2019s ownersh
ip in this share series is 25.0%.
\nSee also Associated companies in
\ue001
Note 29
Nuclear-related assets and liabilities.
\nThe most significant hydro production company shareholding is 63.8% of the hydro shares and 26.7% of the
\nmonetary shares in Kemijoki Oy. Each owner of hydro shares is entitled to the hydropower production in
\nproportion to its hydro shareholding.
\nChanges in shareholdings in principal associated companies and joint ventures
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG Aktiebolag (OKG AB), with Fortum
\nowning 45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March 2020 to 30
\nSeptember 2022. On deconsolidation of Uniper at 30 September 2022, OKG AB was reclassified as an
\nassociated company.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path. Therefore, TGC-1 is no longer classified as a principal associated company
\nat 31 December 2022.
\nOn 20 September 2021, Fortum concluded the sale of its 50% ownership in the Swedish district heating
\nand cooling company Stockholm Exergi Holding AB (publ). See also
\ue001
Note 3.2.2
Other disposals.
84
\nSummarised financial information of the principal associated companies in 2022
\nEUR million
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
OKG AB
\nBalance sheet
31 Dec 2021
31 Dec 2021
31 Dec 2021
\nNon-current assets
2,393
489
825
\nCurrent assets
525
5
184
\nNon-current liabilities
2,783
289
920
\nCurrent liabilities
105
154
76
\nEquity
31
52
13
\nAttributable to the owners of the parent
31
52
13
\nAttributable to non-controlling interests
-
-
-
\nStatement of comprehensive income
\n1 Jan 2021 -
\n31 Dec 2021
\n1 Jan 2021 -
\n31 Dec 2021
\n1 Jan 2021 -
\n31 Dec 2021
\nSales
594
50
312
\nProfit or loss
-
1
2
\nAttributable to the owners of the parent
-
1
2
\nAttributable to non-controlling interests
-
-
-
\nTotal comprehensive income
-
1
2
\nAttributable to the owners of the parent
-
1
2
\nAttributable to non-controlling interests
-
-
-
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the associate 1 January
12
30
-
\nReclassification
-4
6
\nChange in share of profit and OCI items
-1
-
\nGroup's interest in the equity of the associate
\n31 December
8
30
6
\nFair values on acquisitions and different accounting
\nprinciples
\n1)
\n77
148
-6
\nCarrying amount 31 December
85
178
-
\n1) Impact of different accounting principles include mainly IFRS adjustments for nuclear-related assets and liabilities, capitalised borrowing
\ncosts and fair value adjustment for the acquired assets and liabilities. Fortum records its share of nuclear-related assets and liabilities in its
\nnuclear associated companies according to equity method. The basis for recognition is similar as for Loviisa power plant, see accounting
\nprinciples in
\ue001
Note 29
Nuclear-related assets and liabilities.
\n2) The market quotation was impacted by the limited free float of TGC-1 shares in 2021.
\nSummarised financial information of the principal associated companies in 2021
\nEUR million
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
TGC-1
\nBalance sheet
31 Dec 2020
31 Dec 2020
30 Sept 2021
\nNon-current assets
2,619
483
1,863
\nCurrent assets
441
7
273
\nNon-current liabilities
2,899
323
213
\nCurrent liabilities
128
116
223
\nEquity
33
52
1,700
\nAttributable to the owners of the parent
33
52
1,548
\nAttributable to non-controlling interests
-
-
153
\nStatement of comprehensive income
\n1 Jan 2020 -
\n31 Dec 2020
\n1 Jan 2020 -
\n31 Dec 2020
\n1 Oct 2020 -
\n30 Sept 2021
\nSales
561
53
1,136
\nProfit or loss
-1
1
104
\nAttributable to the owners of the parent
-1
1
103
\nAttributable to non-controlling interests
-
-
2
\nTotal comprehensive income
-1
1
105
\nAttributable to the owners of the parent
-1
1
103
\nAttributable to non-controlling interests
-
-
2
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the associate 1 January
12
30
409
\nChange in share of profit and OCI items
-
-
31
\nDividends received
-
-
-14
\nTranslation differences and other adjustments
-
-
39
\nGroup's interest in the equity of the associate
\n31 December
12
30
464
\nFair values on acquisitions and different accounting
\nprinciples
\n1)
\n479
149
-8
\nCarrying amount 31 December
491
179
456
\nMarket value of listed shares
\n2)
\n135
85
\nSummarised financial information of the principal joint ventures
\n2022
2021
\nEUR million
TVO Oyj
TVO Oyj
\nBalance sheet
31 Dec 2022
31 Dec 2021
\nNon-current assets
8,308
7,946
\nCurrent assets
863
716
\nof which cash and cash equivalents
353
172
\nNon-current liabilities
6,517
5,967
\nof which non-current interest-bearing liabilities
5,223
4,599
\nCurrent liabilities
437
632
\nof which current financial liabilities
259
449
\nEquity
2,218
2,063
\nAttributable to the shareholders of the company
2,218
2,063
\nAttributable to non-controlling interests
-
-
\nStatement of comprehensive income
\n1 Jan 2022 -
\n31 Dec 2022
\n1 Jan 2021 -
\n31 Dec 2021
\nSales
358
299
\nDepreciation and amortisation
-47
-44
\nInterest income
6
5
\nInterest expense
-81
-42
\nIncome tax expense or income
0
-
\nProfit or loss
-48
-20
\nOther comprehensive income
212
44
\nTotal comprehensive income
164
25
\nAttributable to the shareholders of the company
164
25
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the joint venture at 1 January
523
518
\nChange in share of profit and OCI items
41
5
\nGroup's interest in the equity of the joint venture 31 December
564
523
\nFair values on acquisitions and different accounting principles
\n1)
\n-9
3
\nCarrying amount 31 December
556
526
\n1) Impact of different accounting principles include mainly IFRS adjustments for nuclear-related assets and liabilities and capitalised
\nborrowing costs. Fortum records its share of nuclear-related assets and liabilities in its nuclear associated companies according to equity
\nmethod. The basis for recognition is similar as for Loviisa power plant, see accounting principles in
\ue001
Note 29
Nuclear-related assets and
\nliabilities.
\n18.2 Participations in and share of profits from associated companies
\nand joint ventures
\nParticipations in associated companies and joint ventures on the balance sheet
\nEUR million
2022
2021
\nPrincipal associates
262
1,126
\nPrincipal joint ventures
556
526
\nOther associates
158
309
\nOther joint ventures
273
500
\nBS
Total
1,249
2,461
\nChanges in participation during the year
\n2022
2021
\nEUR million
\nAssociated
\ncompanies
\nJoint
\nventures
\nAssociated
\ncompanies
\nJoint
\nventures
\nOpening balance 1 January
1,435
1,026
1,508
1,404
\nInvestments
5
9
6
39
\nShare of profit of associates and joint ventures
-542
-16
104
88
\nDividend income received
-21
-16
-37
-76
\nDivestments and capital returns
\n1)
\n-15
-13
-18
-551
\nDisposal of subsidiary companies
\n2)
\n-527
-109
-
-
\nReclassifications
70
-137
-152
94
\nOCI items in associates and joint ventures
1
40
-1
39
\nTranslation differences and other adjustments
14
45
26
-12
\nCarrying amount at 31 December
421
828
1,435
1,026
\n1) Divestments and capital returns in 2021 mainly relate to the sale of Stockholm Exergi AB.
\n2) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022. Disposal of subsidiary companies and
\nReclassifications include EUR -671 million from the deconsolidation of Uniper at 30 September 2022.
\nDuring 2022 Fortum received EUR 37 million (2021: 113) in dividends from associates and joint
\nventures. 2021 included EUR 42 million dividends from Stockholm Exergi.
\nThe share of profits of associates and joint ventures include EUR 414 million impairments related to
\nFortum\u2019s ownership in the Russian TGC
-1 and EUR 62 million of impairments of the renewables joint
\nventures in Russia. See
\ue001
Note 19
Impairment testing.
\nFor information about investments and divestments of shares in associated companies and joint
\nventures, see
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
86
\nShare of profit of associates and joint ventures
\nEUR million
2022
2021
\nPrincipal associates
\nForsmarks Kraftgrupp AB
-78
40
\nKemijoki Oy
-1
-1
\nOKG AB
-99
28
\nPrincipal associates, total
-178
67
\nPrincipal joint ventures
\nTVO Oyj
-13
-3
\nPrincipal joint ventures, total
-13
-3
\nOther associates
-420
33
\nOther joint ventures
-17
72
\nIS
Total
-629
168
\nThere are no unrecognised share of losses of associated companies and joint ventures.
\nComparable share of profit of associates and joint ventures
\nEUR million
2022
2021
\nIS
Share of profit/loss of associates and joint ventures
-629
168
\nAdjustments to share of profit/loss of associates and joint ventures
618
-65
\nComparable share of profit/loss of associates and joint ventures
-11
104
\nIn 2022, the adjustment to share of profits of associates and joint ventures include EUR 414 million
\nimpairments related to Fortum\u2019s ownership in the Russian TGC
-1 and EUR 62 million of impairments of
\nthe renewables joint ventures in Russia. See
\ue001
Note 19
Impairment testing.
\n19 Impairment testing
\nACCOUNTING POLICIES
\nThe carrying values of goodwill, other intangible assets, property, plant and equipment, right-of-use
\nassets, and non-financial investments are reviewed regularly for indication of impairment.
\nIndications of impairment are business-specific and are thus analysed separately by each segment;
\nand include risks, such as changes in electricity and fuel prices, regulatory/political risks relating to
\nenergy taxes, price regulations, and limitations to the lifetime of assets.
\nImpairment testing is performed if there is an indication of impairment; and the asset is written down to its
\nrecoverable amount if its carrying amount is greater than the estimated
re
coverable amount.
\nIn addition, goodwill and other intangible assets that have an
indefinite useful life, and as such are not
\nsubject to amortisation, are tested annually for impairment, even if there is no indication of impairment.
\nImpairment testing is performed and documented annually in connection with the long-term forecasting
\nprocess.
\nAnnual impairment testing is performed on a cash-generating unit level. Fortum defines cash-
\ngenerating unit as the smallest group of assets that generate cash flows that are independent of the cash
\nflows generated by other assets.
\nGoodwill is allocated to groups of cash-generating units that benefit from the synergies of the acquired
\ngoodwill.
\nFortum uses value in use to establish the recoverable amount of cash-generating units. Value in use
\nis determined by discounting future cash flows expected to be derived from group of assets. The
\ncarrying amount of group of cash generating units comprises net operating assets, including goodwill
\nand fair value adjustments arising from
acquisitions.
\nNon-financial assets, other than goodwill, that have been impaired in the past are reviewed for possible
\nreversal of
impairment at each reporting date.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS
\nRELATED TO IMPAIRMENT TESTING
\nImpairment testing is forward-looking and requires management to make certain assumptions, as
\nexplained below.
\nThe recoverable amounts of cash-generating units are determined by value in use calculations. These
\ncalculations are based on estimated discounted future cash flows in local currency from most recent,
\nlong-term forecast, and / or long-term assumptions approved by management. Cash flows cover an
\nexplicit forecast period of three years for City Solutions CGU and six years for Consumer Solutions
\nCGU. Cash flow projections beyond the explicit forecast period are estimated by extrapolating
\nprojections using a steady or declining growth rate.
\nThe period covered by cash flows is related to the useful lives of the assets being reviewed for
\nimpairment. The growth rate used to extrapolate the cash flow projections until the end of assets' useful
\nlives is in line with the assumed inflation, taking into consideration market outlook forecast. Cash flows
\narising from future investments, such as new plants, are excluded; unless projects have been started, in
\nwhich case the cash outflow needed to complete the started projects is included.
\nThe discount rates reflect current assessments of the time value of money and relevant market risk
\npremiums specific to each cash generating unit, reflecting risks and uncertainties for which the future
\ncashflow estimates have not been adjusted.
\nPreparation of these cash flow estimates requires management to make assumptions relating to
\nfuture expectations. Assumptions vary depending on the business the tested assets are in. Approved
\nactions towards Fortum\u2019s climate targets are reflected in the assumptions used in the impairment testing.
\nKey assumptions used in impairment testing are presented below, as well as the basis for determining
\nthe value of each assumption. Assumptions are based on internal and external data that are consistent
\nwith observable market information, when applicable.
87
\nKey assumptions
Basis for determining the value for key assumptions
\nPower market development, recycling
\nand waste solutions market
\ndevelopment
\nHistorical analysis and prospective forecasting
\nRegulation framework
Current market setup and prospective forecasting
\nUtilisation of power plants and
\ntreatment facilities
\nPast experience, technical assessment and forecasted market development
\nForecasted maintenance investments
Past experience, technical assessment and planned maintenance work
\nDiscount rate
Mostly market based information
\nImpairment testing due to triggering event
\nOn 24 February 2022, Russia started a widespread invasion into Ukraine. As a consequence, the US, the
\nEU and the UK, amongst others, imposed sanctions targeting Russia\u2019s ability to access capital and
\nfinancial markets, sanctioning numerous individuals and banks; as well as trading in general. The war, the
\nresulting sanctions, and the impact on business operations was considered as an impairment indicator,
\nwhich triggered impairment testing on the Russia cash-generating unit (CGU) at 31 March 2022.
\nFor goodwill, other intangible assets, property, plant and equipment, and right-of-use assets, Fortum
\nuses value in use to establish the recoverable amount of CGUs. Value in use is determined by
\ndiscounting future cash flows expected to be derived from a group of assets. In order to reflect the
\nuncertainty related to the Russia-Ukraine geopolitical situation at 31 March 2022, Fortum used the
\nexpected cash flow approach with three different probability-weighted cash flow scenarios prepared by the
\nmanagement: the base scenario with 40% weighting, as well as two different downside scenarios, each
\nwith 30% weighting. Cash flows used for annual impairment testing at the previous year end were based
\non the most likely scenario. In addition, Fortum updated the discount rate for Russia CGU. Discount rate
\nfrom 11% to 31% was applied on a reducing scale over the cash flow period, with higher discount rate in
\nthe first three years.
\nThe recoverable amount of the Russian associate TCG-1 was based on fair value less costs of disposal
\nusing two different probability-weighted scenarios prepared by the management. The scenarios were
\nconsistent with external sources of information, the recoverable amount corresponding to fair value
\nhierarchy level 3.
\nThe recoverable amount of the Russia CGU (Russia segment) was below the book value resulting in
\nEUR 445 million impairment charge in I/2022. Impairment was recognised against goodwill, property,
\nplant and equipment and participations in associates and joint ventures.
\nDiscontinued operations (Uniper)
\nImpairment testing was also performed on the Unipro CGU at 31 March 2022. Unipro CGU was
\nreclassified as discontinued operations in III/2022. The recoverable amount of the Unipro CGU was below
\nthe book value resulting in EUR 555 million impairment charge in I/2022.
\nAnnual impairment testing
\nAnnual impairment testing was performed as at 31 December 2022.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, however there are no decisions and these processes might take some
\ntime and are subject to regulatory approvals, Fortum continues to classify its Russian operations as
\ncontinuing. Fortum generally uses value in use to establish the recoverable amount of CGUs. However, in
\nconnection with the annual impairment testing as of 31 December 2022, management concluded that due
\nto the increasingly complex operating environment and prolonged uncertainty regarding the future of its
\nRussian operations, fair value less costs of disposal is now more appropriate method to establish the
\nrecoverable amount of the Russia CGU. Fair value less costs of disposal for the Russia CGU was
\ndetermined by an external party and is based on discounted cash flow model using 12.8% to 13.9%
\ndiscount rate. Management made an additional risk adjustment to account for market restrictions. The
\nvaluation method is consistent with external sources of information, the recoverable amount
\ncorresponding to fair value hierarchy level 3. Management estimates that value in use method would not
\ngive a higher value to the Russia CGU.
\nThe recoverable amount of the Russian associate TGC-1 was based on fair value less costs of disposal
\nusing quoted market price, the recoverable amount corresponding to fair value hierarchy level 2.
\nThe recoverable amount of the Russia CGU (Russia segment) was below the book value resulting in
\nEUR 778 million impairment charge in the Russia CGU. Impairments were recognised against property,
\nplant and equipment and participations in associates and joint ventures. Total impairment charges in 2022
\nfor the Russia CGU amount to EUR 1,697 million, including EUR 905 million impairment of intangible
\nassets and property, plant and equipment, EUR 475 million impairment of participations in associates and
\njoint ventures, EUR 145 million expected credit losses on Russian deposits and receivables, as well as
\nEUR 171 million write down of other shares.
The remaining book value of Russia segment\u2019s net assets is
\napproximately EUR 1.7 billion at 31 December 2022 (31 Dec 2021: 2.5). The book value is based on the
\nassumption that the controlled exit can be executed, and that other assumptions made by management
\nrealise as expected. The carrying amount of the Russia CGU is equal to its recoverable amount, meaning
\nthat any detrimental future changes may cause further impairment.
\nSee also
\ue001
Note 2
Critical accounting estimates and judgements.
\nThe table below presents long-term pre-tax discount rates used in impairment testing by cash generating
\nunits:
\nDiscount rate %
2022
2021
\nConsumer Solutions
\n1)
\n7.6-9.8
4.5-5.6
\nCity Solutions
\n1)
\n7.4
4.8
\nRussia
12.8-13.9
11.7
\nUniper
\n1)
\nN/A
4.6-11.7
\n1) Discount rate depends on location and type of business.
\nAt 31 December 2022, the recoverable amounts of Consumer Solutions and City Solutions CGUs were
\ngreater than their carrying values and therefore no impairments were booked.
\nThe Group has considered the sensitivity of key assumptions as part of the impairment testing. When
\ndoing this, any consequential effect of the change on the other variables has also been considered. The
\ncalculations are most sensitive to changes in estimated future EBITDA levels, and changes in discount
\nrate. Management estimates that no reasonably possible change in the discount rate used, or in future
\nearnings would cause the carrying amount to exceed its recoverable amount in Consumer Solutions or
\nCity Solutions cash generating units.
88
\n20 Other non-current assets
\nEUR million
2022
2021
\nOther investments
543
254
\nInterest-free receivables
85
316
\nBS
Total
628
570
\nOther investments mainly include certain subsidiaries that are not included in the consolidated financial
\nstatements on materiality grounds, accounted for outside the scope of IFRS 9 and measured at cost, as
\nwell as shares in unlisted companies. Change in other investments from 31 December 2021 is mainly due
\nto the 1.3 GW portfolio of wind projects in Russia, as well as the deconsolidation of Uniper at 30
\nSeptember 2022.
\nInterest-free receivables mainly include prepaid expenses. Change in interest-free receivables from 31
\nDecember 2021 is mainly due to the deconsolidation of Uniper at 30 September 2022.
\n21 Interest-bearing receivables
\nEUR million
2022
2021
\nInterest-bearing receivables
1,281
2,971
\nFinance lease receivables
3
136
\nTotal
1,284
3,107
\n2022
2021
\nEUR million
\nCarrying
\namount
\nFair
\nvalue
\nCarrying
\namount
\nFair
\nvalue
\nLong-term loan receivables from associates and joint ventures
593
612
1,138
1,185
\nNon-current securities
-
-
111
111
\nOther long-term interest-bearing receivables
31
31
1,024
1,024
\nTotal long-term interest-bearing receivables
624
643
2,273
2,320
\nCollateral arrangement securities
527
527
549
549
\nOther short-term interest-bearing receivables
130
130
149
149
\nTotal short-term interest-bearing receivables
657
657
698
698
\nTotal
1,281
1,301
2,971
3,018
\nChanges in interest-bearing receivables from 31 December 2021 are mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nLong-term interest-bearing receivables include receivables from associated companies and joint
\nventures of EUR 593 million (2021: 1,138). These receivables include EUR 498 million from Swedish
\nnuclear companies, Forsmarks Kraftgrupp AB and OKG AB (2021: 955 Forsmarks Kraftgrupp AB and
\nRinghals AB), which are mainly funded with shareholder loans, pro-
rata to each shareholder\u2019s ownership
.
\n22 Inventories
\nACCOUNTING POLICIES
\nInventories are stated at the lower of cost and net realisable value being the estimated selling price for
\nthe end product, less applicable variable selling expenses and other production costs. Cost is generally
\ndetermined using the weighted average cost method.
\nInventories which are acquired for the purpose of buying and selling commodities in the near future,
\ngenerating profit from the fluctuation in market price, are stated at fair value less cost to sell.
\nEMISSION ALLOWANCES
\nInventories include CO
2
emission allowances for covering emissions caused by power and heat
\nproduction. CO
2
emission allowances received free of charge are accounted at nominal value.
\nPurchases of CO
2
emissions allowances meeting the IFRS 9 \u201cown
use\u201d
-criteria, are accounted for at
\ncontracted purchase price. Purchases of CO
2
emission allowances, which have failed to meet the \u201cown
\nuse\u201d \u2013
criteria, and are thus accounted for as derivatives, are recognised at market price applicable at the
\ntime of delivery.
\nCO
2
emission costs are settled by returning the emission allowances. The obligation for CO
2
emission
\ncosts is presented in Other payables, see
\ue001
Note 33
Trade and other payables. To the extent that the
\nGroup already holds allowances to cover the emission costs, the obligation is measured at the carrying
\namount of those allowances. Any shortfall of allowances needed to cover the settlement obligation is
\nvalued at the current market value of allowances.
\nThe emission cost is recognised in the consolidated income statement within materials and services.
\nEUR million
2022
2021
\nRaw materials and supplies
298
703
\nGoods purchased for resale
-
1,247
\nEmission rights and green certificates
112
168
\nOther
55
156
\nBS
Total
465
2,275
\nRaw materials and supplies mainly consist of fuels consumed in the production process, or in the
\nrendering of services; and include, in particular, coal, uranium and nuclear fuel rods. Goods purchased for
\nresale include gas and coal inventories. Other mainly consists of work in progress and finished goods.
\nChange in inventories from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30
\nSeptember 2022.
\nIn 2021, inventories stated at fair value less costs to sell amounted to EUR 74 million and related to
\nUniper.
89
\n23 Trade and other receivables
\nACCOUNTING POLICIES
\nTrade receivables include revenue based on an estimate of electricity, gas, heat and cooling already
\ndelivered but not yet measured and not yet invoiced.
\nImpairment losses for trade receivables are calculated according to the expected credit loss (ECL)
\nmodel. Loss allowances on trade receivables are measured at an amount equal to lifetime expected
\ncredit losses.
\nAn allowance is made on the balance sheet for the expected future credit losses and remains on the
\nbalance sheet until it is written off as a credit loss or reversed. Allowances may remain on the balance
\nsheet for several years pending the outcome of collection processes and court proceedings. Write-off
\npolicies differ by country depending on local legislation and assessment of recovery possibilities. For
\nlarge trade receivables, ECL is calculated for the individual customer based on the estimated probability
\nof default and expected recovery rate for the customer. These estimates are derived from available
\nmarket data when possible, or based on the customer\u2019s rating. Adjustments are made if there are
\nindications of decreased creditworthiness, e.g. based on payment behaviour. ECL for trade receivables
\nfrom small customers are calculated on portfolio basis by country and business segment. The credit loss
\nallowances are based on historical analysis of losses when possible, or on average default rates for
\ncustomers based on externally available information. These rates are adjusted if there are any forward-
\nlooking indicators showing changes in expected credit losses. Trade receivables overdue more than
\n180 days are generally considered to be credit-impaired and allowances are made for the full amount,
\nadjusted for expected recovery rates.
\nEUR million
2022
2021
\nTrade receivables
1,625
12,916
\nOther
142
1,940
\nBS
Total
1,767
14,856
\nOther category includes other operating assets, accrued income and prepaid expenses. Change in trade
\nand other receivables from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30
\nSeptember 2022.
\nTrade receivables
\nAgeing analysis of trade receivables
\n2022
2021
\nEUR million
Gross
\nExpected
\ncredit
\nloss
\nallowance
\nExpected
\ncredit
\nloss rate,
\n%
Gross
\nExpected
\ncredit
\nloss
\nallowance
\nExpected
\ncredit
\nloss rate,
\n%
\nNot past due
1,541
3
0
12,662
14
0
\nPast due 1-30 days
70
3
4
192
5
2
\nPast due 31-90 days
9
2
22
22
9
42
\nPast due 91-180 days
6
3
50
34
16
48
\nPast due more than 181 days
77
67
87
204
154
75
\nTotal
1,703
78
5
13,114
198
2
\nChanges in expected credit loss allowance
\nEUR million
2022
2021
\n1 January
198
178
\nExpected credit loss allowance recognised during the year
78
43
\nDisposal of subsidiary companies
-168
-
\nWrite-offs
-39
-25
\nTranslation differences and other changes
9
3
\n31 December
78
198
\nChanges during the year include Uniper until 30 September 2022.
\nTrade receivables by currency (Gross)
\nEUR million
2022
2021
\nEUR
461
9,966
\nNOK
456
353
\nSEK
406
346
\nPLN
207
143
\nRUB
163
295
\nUSD
3
1,196
\nGBP
-
795
\nOther
7
20
\nTotal
1,703
13,114
\nTrade receivables are arising from a large number of customers mainly in EUR, NOK and SEK mitigating
\nthe concentration of risk.
\nFor further information regarding credit risk management and credit risks, see
\ue001
Counterparty and
\ncredit risks
in the Operating and financial review and
\ue001
Note 4.4
Credit risk.
90
\n24 Liquid funds
\nACCOUNTING POLICIES
\nCash and cash equivalents in Liquid funds include cash in hand, deposits held at call with banks and
\nother short-term, highly liquid investments with original maturities of three months or less. Cash and
\ncash equivalents, deposits and commercial papers are measured at amortised cost. Fixed-term
\nsecurities are measured at fair value through profit or loss.
\nDrawn amount of bank overdrafts are shown within borrowings in current liabilities on the balance
\nsheet. Trading-related cash collaterals are included in margin receivables and otherwise restricted cash
\nis treated as short-term interest-bearing receivables.
\nEUR million
2022
2021
\nCash at bank and in hand
2,673
3,858
\nDeposits and securities with maturity under 3 months
1,098
3,687
\nCash and cash equivalents
3,771
7,545
\nDeposits and commercial papers with maturity more than 3 months
147
-
\nSecurities, fixed-term with maturity more than 3 months
-
47
\nDeposits and securities, maturity over 3 months but less than 12 months
147
47
\nBS
Total
3,919
7,592
\nChanges in liquid funds from 31 December 2021 are mainly due to the deconsolidation of Uniper at 30
\nSeptember 2022.
\nAt the end of the reporting period, the Group\u2019s liquid funds totalled EUR 3,919 million (2021: 7,592).
\nLiquid funds include EUR 247 million relating to Fortum\u2019s Russian operations (2021: 300). These funds
\nare not available to the other Group companies as payment transactions with the Russian Federation are
\nsubject to general restrictions.
\nLiquid funds totalling EUR 3,600 million (2021: 7,342) are placed with counterparties that have an
\ninvestment grade credit rating.
\nAt the end of the reporting period, Fortum had undrawn committed credit facilities amounting to EUR
\n7,200 million. The undrawn facilities consisted of EUR 2,000 million Liquidity revolving credit facility
\nmaturing in June 2023 (6+6 months extension options by Fortum), EUR 2,400 million Core revolving credit
\nfacility maturing in June 2025 (1+1 year extension options by the lenders), EUR 2,000 million Solidium
\nbridge financing facility maturing in September 2023 and EUR 800 million bilateral revolving credit facility
\nmaturing in December 2023. In addition, Fortum has EUR 100 million committed overdraft limits that are
\nvalid until further notice.
\nThe EUR 3,000 million revolving credit facility with maturity in July 2022 was cancelled in June 2022
\nand the EUR 1,750 million revolving credit facility with maturity in June 2023 was repaid and cancelled in
\nJune 2022.
\nFor further information regarding credit risk management and credit risks, see
\ue001
Note 4.4
Credit risk.
\n25 Share capital
\n2022
2021
\nEUR million
\nNumber of
\nshares
\nShare
\ncapital
\nNumber of
\nshares
\nShare
\ncapital
\nRegistered shares at 1 January
888,294,465
3,046
888,294,465
3,046
\nShare issue to Solidium Oy
8,970,000
-
-
-
\nRegistered shares at 31 December
897,264,465
3,046
888,294,465
3,046
\nFortum Corporation has one class of shares. By the end of 2022, a total of 897,264,465 shares had been
\nissued. Each share entitles the holder to one vote at the Annual General Meeting. All shares entitle
\nholders to an equal dividend. At the end of 2022 For
tum Corporation\u2019s share capital, paid in its entirety
\nand entered in the trade register, was EUR 3,046,185,953.00.
\nOn 6 September 2022, Fortum announced that it had agreed with the Finnish State on a EUR 2.35
\nbillion bridge financing arrangement. On 26 September 2022, Fortum announced to draw the first tranche
\nof the liquidity facility, EUR 350 million. As a condition in the agreement following the first draw down, the
\nFinnish State-owned holding company, Solidium Oy, was entitled to subscribe 8,970,000 new ordinary
\nregistered shares in Fortum in a directed share issue, without payment. The share issue to Solidium Oy
\nwas resolved in the Extraordinary General Meeting on 23 November 2022 and the new shares were
\nregistered with the Finnish trade register on 25 November 2022. The new shares carry full shareholder
\nrights, including the right to dividend, as of the registration date. The total amount of shares outstanding in
\nthe company after the registration of the new shares is 897,264,465. As a consequence, the shares under
\nthe control of the State of Finland has increased from 50.76% to 51.26%.
\nFortum Corporation\u2019s shares are listed on Nasdaq Helsinki. The trading code is FORTUM. Fortum
\nCorporation\u2019s shares are in the Finnish book entry system maintained by Eur
oclear Finland Ltd.
\nDetails on the President and CEO and other members of the Fortum Executive Management Team\u2019s
\nshareholdings and interest in the equity incentive schemes is presented in
\ue001
Note 10
Employee benefits
\nand Board remuneration.
\n25.1 Authorisations from the Annual General Meeting 2022
\nIn 2022, the Annual General Meeting decided to authorise the Board of Directors to decide on the
\nrepurchase and disposal of the company\u2019s own shares up to a maximum number of 20,000,000 shares,
\nwhich corresponded to approximately 2.25% of all the shares in the company on 28 March 2022. Only the
\nunrestricted equity of the company can be used to repurchase own shares on the basis of the authorisation.
\nThese authorisations are effective until the next Annual General Meeting and, in any event, for a period no
\nlonger than 18 months. These authorisations had not been used as per 1 March 2023.
\n25.2 Convertible bond loans and bonds with warrants
\nFortum Corporation has not issued any convertible bonds or bonds with attached warrants, which would
\nentitle the bearer to subscribe for Fortum shares. The Board of Directors of Fortum Corporation has no
\nunused authorisations from the General Meeting of shareholders to issue convertible bond loans or bonds
\nwith warrants or increase th
e company\u2019s share capital.
91
\n26 Non-controlling interests
\nPrincipal non-controlling interests
\nEUR million
2022
2021
\nUniper, Germany
-
1,318
\nFortum Oslo Varme AS Group, Norway
-
150
\nOther
67
66
\nBS
Total
67
1,534
\nChange in non-controlling interests from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nUniper
\nEUR million
2021
\nSales
105,992
\nProfit for the period
-4,122
\nDividends paid to non-controlling interests
-157
\nTotal cash flows
2,663
\nCurrent assets
91,093
\nCurrent liabilities
95,331
\nCurrent net liabilities
-4,238
\nNon-current assets
27,683
\nNon-current liabilities
25,782
\nNon-current net assets
1,901
\nNet liabilities
-2,337
\nof which attributable to non-controlling interests
1,318
\nOwnership interests held by non-controlling interests (%)
22
\n27 Interest-bearing liabilities
\nFinancial net debt and adjusted net debt
\nEUR million
2022
2021
\n+ Interest-bearing liabilities
7,785
17,220
\n-
BS
Liquid funds
3,919
7,592
\n- Non-current securities
-
111
\n- Collateral arrangement securities
527
549
\n- Securities in interest-bearing receivables
527
660
\n-
BS
Margin receivables
2,607
9,163
\n+
BS
Margin liabilities
352
985
\n+/- Net margin liabilities/receivables
-2,255
-8,179
\nFinancial net debt
1,084
789
\n+
BS
Pension obligations
13
1,190
\n+ Other asset retirement obligations
19
872
\n-
BS
Share of Finnish and Swedish Nuclear Waste Funds
966
3,515
\n+
BS
Nuclear provisions
966
3,891
\n+ Nuclear provisions net of assets in Nuclear Waste Funds
0
375
\n+ Total provisions net of assets in Nuclear Waste Funds
33
2,438
\nAdjusted net debt
1,117
3,227
\nFortum has a collateral arrangement to release cash from the Nordic Power Exchange. This arrangement
\nis presented with equal amounts, EUR 527 million (2021: 549), as a short-term interest-bearing liability
\nand an interest-bearing receivable.
\nUnderfunded pension obligations and asset retirement obligations, net of share in nuclear waste funds,
\nare included in adjusted net debt.
\nInterest-bearing liabilities
\nEUR million
2022
2021
\nNon-current loans
3,558
7,756
\nCurrent loans
4,108
8,389
\nTotal loans
7,666
16,144
\nNon-current lease liabilities
100
945
\nCurrent lease liabilities
19
130
\nTotal lease liabilities
119
1,075
\nTotal
7,785
17,220
92
\nEUR million
2022
2021
\nBonds
1,545
2,706
\nLoans from financial institutions
980
3,715
\nReborrowing from the Finnish State Nuclear Waste Management Fund
918
916
\nLease liabilities
100
945
\nOther long-term interest-bearing liabilities
115
419
\nBS
Total long-term interest-bearing liabilities
3,658
8,701
\nCurrent portion of long-term bonds
1,090
999
\nCurrent portion of loans from financial institutions
539
468
\nCurrent portion of other long-term interest-bearing liabilities
-
264
\nCommercial paper liabilities
475
3,129
\nCurrent portion of lease liabilities
19
130
\nCollateral arrangement liability
527
549
\nOther short-term interest-bearing liabilities
1,477
2,980
\nBS
Total short-term interest-bearing liabilities
4,127
8,519
\nTotal
7,785
17,220
\nLoans
\nRepricing
\nEUR million
\nEffective
\ninterest
\nrate, %
\nCarrying
\namount
\n2022
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
\nFair
\nvalue
\n2022
\nCarrying
\namount
\n2021
\nFair
\nvalue
\n2021
\nBonds
1.8
2,634
1,088
715
832
2,569
3,705
3,919
\nLoans from financial institutions
4.5
1,519
1,343
-
177
1,545
4,183
4,222
\nReborrowing from the Finnish
\nState Nuclear Waste
\nManagement Fund
\n1)
\n0.5
918
918
-
-
938
1,165
1,213
\nOther long-term loans
4.6
115
82
-
33
126
433
463
\nTotal long-term loans
\n2)
\n2.4
5,187
3,430
715
1,042
5,178
9,487
9,817
\nCollateral arrangement liability
0.9
527
527
-
-
527
549
549
\nCommercial paper liabilities
2.9
475
475
-
-
475
3,129
3,129
\nOther short-term loans
7.2
1,477
1,477
-
-
1,477
2,980
2,980
\nTotal short-term loans
5.0
2,479
2,479
-
-
2,479
6,658
6,658
\nTotal
\n3)
\n3.3
7,666
5,909
715
1,042
7,657
16,144
16,475
\n1) The reborrowing from the Finnish State Nuclear Waste Management Fund includes the part relating to Loviisa nuclear power plant as well
\nas borrowing done through TVO.
\n2) Includes current portion of long-term loans of EUR 1,629 million (2021: 1,731).
\n3) The average interest rate on loans and derivatives was 3.9% (2021: 1.3%).
\nChanges in interest-bearing liabilities from 31 December 2021 are mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nIn January 2022, Fortum repaid the drawn amount of EUR 500 million of its EUR 800 million bilateral
\nrevolving credit facility. In March 2022, Fortum repaid EUR 247 million of the nuclear waste fund loans
\ntotalling EUR 918 million after the repayment.
\nIn June 2022, Fortum drew EUR 800 million of its EUR 800 million bilateral revolving credit facility.
\nFortum signed a new EUR 5,500 million revolving credit facility which consists of a EUR 3,100 million
\nLiquidity revolving credit facility and a EUR 2,400 million Core revolving credit facility. Fortum drew EUR
\n2,000 million from the Liquidity revolving credit facility and at the same time repaid and cancelled the EUR
\n1,750 million revolving credit facility. The remaining balance of the bridge loan, EUR 450 million, was
\nprepaid in June 2022.
\nIn July 2022, Fortum executed the second drawdown of EUR 600 million from the Liquidity revolving
\ncredit facility. In August 2022, Fortum drew the remaining EUR 500 million from the Liquidity revolving
\ncredit facility and furthermore drew EUR 1,000 million from the Core revolving facility.
\nIn September 2022, Fortum utilised the remaining part, EUR 1,400 million, of the Core revolving credit
\nfacility. Fortum repaid a maturing bond of EUR 1,000 million in September 2022. Additionally, Fortum
\nsigned a EUR 2,350 million bridge financing facility with Finnish State-owned company Solidium. Fortum
\ndrew EUR 350 million from the Solidium bridge financing facility in September 2022.
\nIn November 2022, Fortum repaid EUR 1,400 million part of the Core revolving credit facility and
\nFortum used the one year extension option of the EUR 800 million bilateral revolving credit facility to
\nmature in December 2023. In December 2022, Uniper repaid the shareholder loan of EUR 4,000 million to
\nFortum. Fortum repaid the remaining EUR 1,000 million of the Core revolving credit facility, EUR 2,000
\nmillion of the Liquidity credit facility and the EUR 800 million bilateral revolving credit facility was fully
\nrepaid in December 2022.
\nCurrent loans, EUR 4,108 million (2021: 8,389), include the current portion of long-term loans, EUR
\n1,629 million (2021: 1,731), and short-term loans EUR 2,479 million (2021: 6,658).
\nCurrent portion of long-term loans, EUR 1,629 million, consist of maturing bonds and loans from
\nfinancial institutions. Maturing bonds include EUR 1,000 million bond maturing in February 2023 and EUR
\n90 million Swedish krona bond maturing in June 2023. Maturing loans from financial institutions include
\nEUR 500 million loan maturing in June 2023 (with 8-month extension option by Fortum).
\nShort-term loans, EUR 2,479 million, include EUR 1,100 million drawdowns from Liquidity revolving
\ncredit facility (with 6+6 months extension options by Fortum), a EUR 350 million drawdown from Solidium
\nbridge financing facility and use of commercial paper programmes of EUR 475 million.
\nThe average interest rate for the portfolio of EUR loans was 3.1% at the balance sheet date (2021:
\n0.6%). The average interest rate on total loans and derivatives was 3.9% at the balance sheet date (2021:
\n1.3%).
\nInterest-bearing liabilities of EUR 7,785 million include EUR 204 million interest-bearing liabilities
\nrelating to Fortum\u2019s Russian operations,
which consists of EUR 199 million loans and EUR 5 million lease
\nliabilities.
\nFor more information, see
\ue001
Note 4
Financial risk management,
\ue001
Note 34
Leases,
\ue001
Note 36
Pledged
\nassets and contingent liabilities and
\ue001
Note 38
Related party transactions.
93
\nReconciliation of interest-bearing liabilities
\nNon-cash changes
\nEUR million
1 Jan 2022
\nDivestment of
\nsubsidiary
\ncompanies
\nCash flow from
\nfinancing activities
\n1)
\nNon-cash collateral
\narrangement
\nValuation
\ndifferences/
\nChange in
\nconsolidation
Lease liabilities
31 Dec 2022
\nBonds
3,705
-1,000
-71
2,634
\nReborrowing from the Finnish State Nuclear Waste Management Fund
1,165
-247
918
\nFinancial and other interest-bearing liabilities
\n2)
\n11,274
-19,723
9,672
-21
2,910
4,113
\nLease liabilities
1,075
-874
-104
22
119
\nTotal
17,220
-20,597
8,320
-21
2,840
22
7,785
\nNon-cash changes
\nEUR million
1 Jan 2021
\nDivestment of
\nsubsidiary
\ncompanies
\nCash flow from
\nfinancing activities
\nNon-cash collateral
\narrangement
\nValuation
\ndifferences/
\nChange in
\nconsolidation
Lease liabilities
31 Dec 2021
\nBonds
4,258
-500
-52
3,705
\nReborrowing from the Finnish State Nuclear Waste Management Fund
1,145
21
1,165
\nFinancial and other interest-bearing liabilities
4,204
-202
7,120
117
35
11,274
\nLease liabilities
1,055
-152
173
1,075
\nTotal
10,662
-202
6,488
117
-17
173
17,220
\n1) Repayments and borrowings from continuing and discontinued operations.
\n2) Other interest-bearing liabilities include impact from Uniper deconsolidation as well as Uniper and OKG AB shareholder loans which were previously eliminated in group consolidation.
\nBond issues
\nIssued/Maturity
\nInterest
\nbasis
\nInterest
\nrate, %
\nEffective
\ninterest, %
Currency
\nNominal
\nvalue
\nmillion
\nCarrying
\namount
\nEUR
\nmillion
\nFortum Corporation EUR 8,000 million EMTN Programme
\n1)
\n2019/2023
Fixed
0.875
0.996
EUR
1,000
998
\n2019/2026
Fixed
1.625
1.638
EUR
750
715
\n2019/2029
Fixed
2.125
2.247
EUR
750
735
\n2013/2023
Floating
Stibor 3M+1.13
SEK
1,000
90
\n2013/2043
Fixed
3.500
3.719
EUR
100
97
\nTotal outstanding carrying amount 31 December 2022
2,634
\n1) EMTN = Euro Medium Term Note
94
\n28 Income taxes on the balance sheet
\nACCOUNTING POLICIES
\nThe tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as
\nreported in the consolidated income statement, because of items of income or expense that are taxable
\nor deductible in other years and items that are never tax
able or deductible. The Group\u2019s liability for
\ncurrent tax is calculated using tax rates that have been enacted or substantively enacted by the end of
\nthe reporting period.
\nDeferred tax is provided in full, using the balance sheet approach on temporary differences arising
\nbetween the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
\nstatements. However, if the deferred tax arises from initial recognition of an asset or liability in a
\ntransaction other than a business combination that at the time of the transaction affects neither
\naccounting nor taxable profit or loss, it is not accounted for. Deferred tax is determined using tax rates
\n(and laws) that have been enacted or substantially enacted by the closing date and are expected to
\napply when the related deferred tax asset is realised or the deferred tax liability is settled.
\nDeferred tax assets are recognised to the extent that it is probable that future taxable profit will be
\navailable against which the temporary differences can be utilised. Deferred tax assets are set off against
\ndeferred tax liabilities if they relate to income taxes levied by the same taxation authority.
\nDeferred tax is provided on temporary differences arising from investments in subsidiaries, associates
\nand joint ventures, except where the timing of the reversal of the temporary difference is controlled by
\nthe Group, and it is probable that the temporary difference will not be reversed in the foreseeable future.
\nThe Group recognises liabilities for anticipated tax dispute issues based on estimates of whether
\nadditional taxes will be due. No provision will be recognised in the financial statements if Fortum
\nconsiders the claims unjustifiable. Therefore, if taxes regarding ongoing tax disputes have to be paid
\nbefore final court decisions, they are booked as a receivable. Where the final outcome of these matters
\nis different from the amounts that were initially recorded, such differences will impact the income tax and
\ndeferred tax provisions in the period in which such determination is made.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS AND
\nESTIMATES REGARDING FUTURE TAX CONSEQUENCES
\nFortum has deferred tax assets and liabilities which are expected to be realised through the income
\nstatement over the extended periods of time in the future. In calculating the deferred tax items, Fortum is
\nrequired to make certain assumptions and estimates regarding the future tax consequences attributable
\nto differences between the carrying amounts of assets and liabilities as recorded in the financial
\nstatements and their tax basis.
\nAssumptions made include the expectation that future operating performance for subsidiaries will be
\nconsistent with historical levels of operating results, recoverability periods for tax loss carry-forwards will
\nnot change, and that existing tax laws and rates will remain unchanged into foreseeable future. Fortum
\nbelieves that it has prudent assumptions in developing its deferred tax balances.
\nFortum continually evaluates the probability of utilising deferred tax assets and considers various
\nfactors that, in addition to the actual and planned earnings of the past, take into account medium-term
\nand long-term planning. The basis for recognising deferred tax assets is an estimate by management of
\nthe extent to which it is probable that there will be sufficient taxable profit in the foreseeable future
\nagainst which the unused tax losses, tax credits and deductible temporary differences can be offset.
\nAssumptions and estimates regarding main uncertain tax positions are supported by external legal
\ncounsel or expert opinion.
\nIf the actual final outcome (regarding tax disputes) would differ negatively from management\u2019s
\nestimates with 10%, the Group would need to increase the income tax liability by EUR 4 million at 31
\nDecember 2022.
\n28.1 Deferred taxes on the balance sheet
\n2022
2021
\nEUR million
1 Jan
Change
31 Dec
1 Jan
Change
31 Dec
\nBS
Deferred tax assets
2,149
-1,215
933
1,089
1,060
2,149
\nBS
Deferred tax liabilities
-827
676
-152
-952
125
-827
\nNet deferred taxes
1,321
-539
782
138
1,184
1,321
\nDeferred tax assets are recognised to the extent it is probable that future taxable profit will be available
\nagainst which the unused tax losses, unused tax credits and deductible temporary differences can be
\nutilised in the relevant jurisdictions. As of 31 December 2022, Fortum has recognised deferred tax assets
\nof EUR 933 million (2021: EUR 2,149 million).
\nDeferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
\ncurrent tax assets against current tax liabilities and when the deferred income taxes relate to the same
\nfiscal authority.
95
\nMovement in deferred tax assets and liabilities 2022
\nEUR million
Intangible assets
\nProperty, plant and
\nequipment and
\nright-of-use assets
Pension obligations
Provisions
\nDerivative financial
\ninstruments
\nTax losses and tax
\ncredits carry-
\nforward
Other
Net deferred taxes
\n1 January 2022
-200
-1,551
268
1,658
1,476
146
-476
1,321
\nCharged to income statement
-15
275
-16
5,869
29
702
215
7,061
\nCharged to other comprehensive income
-
-
-33
-
248
-
-
215
\nExchange rate differences, reclassifications and other changes
5
-85
-144
-38
-39
-9
40
-269
\nDisposals of subsidiary companies
\n1)
\n156
830
-77
-7,509
-1,126
-89
269
-7,546
\n31 December 2022
-54
-530
-3
-19
589
751
48
782
\nMovement in deferred tax assets and liabilities 2021
\nEUR million
Intangible assets
\nProperty, plant and
\nequipment and
\nright-of-use assets
Pension obligations
Provisions
\nDerivative financial
\ninstruments
\nTax losses and tax
\ncredits carry-
\nforward
Other
Net deferred taxes
\n1 January 2021
-241
-1,228
542
1,273
-63
168
-312
138
\nCharged to income statement
44
-282
-156
395
1,258
-23
-161
1,076
\nCharged to other comprehensive income
-
-
-98
-
269
-
0
171
\nExchange rate differences, reclassifications and other changes
-2
-44
-20
-10
11
1
0
-63
\nAcquisitions and disposals
0
2
-
0
0
0
-3
-1
\n31 December 2021
-200
-1,551
268
1,658
1,476
146
-476
1,321
\n1) Disposals of subsidiary companies in 2022 included EUR 7 595 million from the deconsolidation of Uniper as of 30 September 2022. See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022. Charges to income statement regarding Uniper is presented in the results from discontinued operations. See
\ue001
Note 3.4
Discontinued operations.
\nNet change in deferred taxes from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30 September 2022. The decrease was partly offset by an increase in deferred tax assets related to derivatives
\ncaused by high commodity market prices. The increase in deferred tax assets on tax loss carry forward is mainly in Ireland and caused by the Uniper divestment and Russia related impairments. Fortum has prepared a
\ncomprehensive forecast to assess the future profitability of the Irish legal entity holding the loss carried forward, and has relied on this estimate to support the value of the deferred tax asset of EUR 706 million at 31
\nDecember 2022.
96
\nExpiry of tax losses carried forward and recognised deferred tax assets
\n2022
2021
\nEUR million
\nTax
\nlosses
\nDeferred
\ntax
\nasset
\nTax
\nlosses
\nDeferred
\ntax
\nasset
\nTax losses carried forward without expiration date
\n1)
\n5,836
749
675
132
\nTax losses carried forward with expiration date
9
2
58
8
\nTotal
5,844
751
733
139
\n1) Majority relates to Ireland.
\nDeferred tax assets are recognised for tax losses carried forward to the extent that realisation of the
\nrelated tax benefit through future profits is probable. The increase is mainly in Ireland related to impacts
\ncaused by Uniper divestment.
\nUnrecognised deferred tax
\nThe amount of temporary differences, tax losses carried forward and tax credits for which no deferred tax
\nasset was recognised due to uncertainty of utilisation:
\nEUR million
2022
2021
\nTemporary differences
280
4,910
\nTax losses carried forward
108
463
\nTax credits
5
3
\nTotal
393
5,376
\nThe decrease of unrecognised amounts of temporary differences and losses carry forwards is mainly due
\nto the deconsolidation of Uniper at 30 September 2022. The unrecognised temporary differences in 2022
\nmainly relate to Germany.
\nDeferred tax liabilities were not recognised on temporary differences of EUR 476 million (2021: 164)
\nrelating to investments in subsidiaries as Fortum can control the reversal effect, and it is probable that
\ntemporary differences will not be reversed in the foreseeable future. Such temporary differences are
\nmainly related to undistributed taxable profits from Russia.
\n28.2 Income tax receivables
\nEUR million
2022
2021
\nBelgium
36
113
\nOther
35
48
\nBS
Total
71
161
\nIncome tax receivable in Belgium relates to ongoing tax disputes on income tax assessments for
\nthe years 2008
\u2013
2012. Total amount of these taxes was EUR 113 million, which was booked as a
\nreceivable on the consolidated balance sheet on 31 December 2021. On 29 June 2022, the Antwerp court
\nof First Instance, Belgium, ruled in favour of Fortum on the company\u2019s income tax assessments in
\nBelgium for the years 2009-2012, and in September 2022, the Belgian tax authorities refunded Fortum the
\npaid taxes amounting to EUR 78 million. The amount for the year 2008, EUR 36 million, continues to be
\nrecognised on the balance sheet. See
\ue001
Note 37
Legal actions and official proceedings.
\nOther income tax receivables reflect corporate income taxes paid mainly in relation to the financial year,
\nas well as payments according to received tax audit assessments in relation to previous years.
\n29 Nuclear-related assets and liabilities
\nACCOUNTING POLICIES
\nFortum owns Loviisa nuclear power plant in Finland. In Fortum's consolidated balance sheet, Share in
\nthe Nuclear Waste Funds and the Nuclear provisions relate to Loviisa nuclear power plant.
\nComparatives include also Barseb\u00e4ck Kraftbolag AB and OKG Aktiebolag AB.
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG AB, with Fortum owning
\n45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March 2020 to 30
\nSeptember 2022. On deconsolidation of Uniper on 30 September 2022, OKG AB was reclassified as an
\nassociated company. Uniper\u2019s 100% owners
hip in Barseb\u00e4ck Kraftbolag AB was also deconsolidated.
\nFortum\u2019s shares in the Nuclear Waste Funds are accounted for according to IFRIC 5, Rights to
\ninterests arising from decommissioning, restoration and environmental rehabilitation funds which states
\nthat the fund assets are measured at the lower of fair value or the value of the related liabilities since
\nFortum does not have control or joint control over the Nuclear Waste Funds. The Nuclear Waste Funds
\nare managed by governmental authorities. The related provisions are the provision for decommissioning
\nand the provision for disposal of spent fuel.
\nThe fair values of the provisions are calculated according to IAS 37 by discounting the separate future
\ncash flows, which are based on estimated future costs and actions already taken. The initial net present
\nvalue of the provision for decommissioning (at the time of commissioning the nuclear power plant) has
\nbeen included in the investment cost and is depreciated over the estimated operating time of the nuclear
\npower plant. Changes in the technical plans etc., which have an impact on the future cash flow of the
\nestimated costs for decommissioning, are accounted for by discounting the additional costs to the
\ncurrent point in time. The increased asset retirement cost due to the increased provision for
\ndecommissioning is added to property, plant and equipment and depreciated over the remaining
\nestimated operating time of the nuclear power plant. For power plant units taken from use the increase is
\nrecognised immediately in the income statement.
\nThe provision for spent fuel covers the future disposal costs for fuel used until the end of the
\naccounting period. Costs for disposal of spent fuel are expensed during the operating time based on fuel
\nusage. The impact of the possible changes in the estimated future cash flow for related costs is
\nrecognised immediately in the income statement based on the accumulated amount of fuel used until the
\nend of the accounting period. The related interest costs due to unwinding of the provision is recognised
\nin other financial items - net.
\nThe interest income and possible fair valuation effects on the Nuclear Waste Funds assets are
\npresented in other financial items - net.
\nFortum's actual share of the Nuclear Waste Funds can be higher than the carrying value of the Fund
\nin the balance sheet. The legal nuclear liability should be fully covered by payments and guarantees to
\nthe Nuclear Waste Fund in Finland. The same applies in Sweden for the nuclear power plants that are
\ntaken out of operation. For Swedish nuclear power plants in operation the nuclear liability should be fully
\ncovered at the end of the plants operating lifetimes. The difference between the legal liability and
\nprovisions can be material per power plant, as the legal liability in Finland is not discounted while the
\nprovisions are and in Sweden the legal liability is based on different assumptions than the provisions.
\nThe annual fees to the Fund are based on changes in the legal liability, the return generated in the
\nNuclear Waste Fund and incurred costs of taken actions.
\nFortum also has minority interests in other nuclear power companies, i.e. Teollisuuden Voima Oyj
\n(TVO) in Finland and Forsmarks Kraftgrupp AB (Forsmark) in Sweden. The minority shareholdings are
\nclassified as associated companies and joint ventures and are consolidated with equity method. Both the
\nFinnish and the Swedish companies are non-profit making, i.e. electricity production is invoiced to the
\nowners at cost according to local GAAP. Accounting policies of the associates regarding nuclear-related
\nassets and liabilities have been changed where necessary to ensure consistency with the policies
\nadopted by the Group.
97
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS MADE
\nWHEN ESTIMATING PROVISIONS RELATED TO NUCLEAR PRODUCTION
\nThe provision for future obligations for nuclear waste management including decommissioning of
\nFortum's nuclear power plants and related spent fuel is based on long-term cash flow forecasts of
\nestimated future costs. The main assumptions are technical plans, timing, cost estimates and discount
\nrate. The technical plans, timing and cost estimates are approved by governmental authorities.
\nAny changes in the assumed discount rate would affect the provision. If the discount rate used would
\nbe lowered, the provision would increase. For the power plants where the actual Share of the Nuclear
\nWaste Fund is higher than the provision an increase in provisions would be offset by an increase in the
\nrecorded share of Fortum's part of the Nuclear Waste Funds on the balance sheet. The total effect on
\nthe income statement would be positive since the decommissioning part of the provision is treated as an
\nasset retirement obligation. This situation will prevail as long as the actual Share of the Nuclear Waste
\nFund is higher than recognised in the balance sheet and IFRS is limiting the carrying value of the assets
\nto the amount of the provision since Fortum does not have control or joint control over the fund.
\nBoth in Finland and in Sweden nuclear operators are legally obligated for the decommissioning of the
\nplants and the disposal of spent fuel (nuclear waste management). In both countries the nuclear operators
\nare obligated to secure the funding of nuclear waste management by paying to government operated
\nnuclear waste funds. The nuclear operators also have to give securities to guarantee that sufficient funds
\nexist to cover future expenses of decommissioning of the power plant and the disposal of spent fuel.
\n29.1 Nuclear-related assets and liabilities for consolidated nuclear
\npower plants
\nEUR million
2022
2021
\nCarrying values on the balance sheet
\nBS
Nuclear provisions
966
3,891
\nBS
Fortum's share of the Nuclear Waste Funds
966
3,515
\nFortum's share of the fair value of the net assets in the Nuclear Waste Funds in Finland and Sweden
1,148
3,924
\nShare of fund not recognised on the balance sheet
182
408
\nNuclear provision and fund accounted according to IFRS
\nNuclear provisions include the provision for decommissioning and the provision for disposal of spent fuel.
\nThe carrying value of the nuclear provisions, calculated according to IAS 37, decreased by EUR 2,924
\nmillion compared to 31 December 2021, totalling EUR 966 million at 31 December 2022. The decrease is
\nmainly due to the deconsolidation of Uniper. Cost estimate and technical plan updates did not have a
\nsignificant effect on Fortum\u2019s financials.
\nFortum's share of the Nuclear Waste Funds are from an IFRS perspective overfunded by EUR 182
\nmillion, since Fortum's share of the Funds on 31 December 2022 was EUR 1,148 million and the carrying
\nvalue on the balance sheet was EUR 966 million. The Fund on Fortum's balance sheet can at maximum
\nbe equal to the amount of the provisions according to IFRS. As long as the Fund is overfunded from an
\nIFRS perspective, the other financial items - net, is adjusted positively if the provisions increase more than
\nthe Fund, and negatively if the provision decreases below the actual value of the fund.
\nLegal liability for Loviisa nuclear power plant
\nThe legal liability on 31 December 2022, decided by the Ministry of Economic Affairs and Employment in
\nDecember 2022, was EUR 1,197 million.
\nThe legal liability is based on a cost estimate, which is updated every year; and a technical plan, which
\nis updated every three years. The legal liability is determined by assuming that the decommissioning
\nwould start at the beginning of the year following the assessment year and discounting is not applied in
\ndetermining the amount.
Finnish nuclear operators submitted updated technical plan and cost estimates to
\nthe Ministry of Economic Affairs and Employment in June 2022. The decision on the updated legal liability
\nfrom the Ministry of Economic Affairs and Employment was received in December 2022.
\nFortum\u2019s share in the Finnish Nuclear Waste Fund
\nAccording to Nuclear Energy Act, Fortum is obligated to contribute funds in full to the State Nuclear Waste
\nManagement Fund to cover the legal liability. Fortum contributes funds to the Finnish State Nuclear Waste
\nManagement Fund based on the yearly funding obligation target decided by the governmental authorities
\nin connection with the decision of size of the legal liability. The current funding obligation target decided in
\nDecember 2022 is EUR 1,197 million.
\nNuclear provisions
\nEUR million
2022
2021
\n1 January
3,891
3,866
\nIncrease in provisions
40
211
\nProvision used
-145
-189
\nProvision reversed
-16
-
\nUnwinding of discount
65
65
\nExchange rate differences
-173
-62
\nDisposal of subsidiary companies
\n1)
\n-2,696
-
\nBS
31 December
966
3,891
\nBS
Fortum's share in the Nuclear Waste Funds
966
3,515
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022.
\nBorrowing from the State Nuclear Waste Management Fund
\nParticipants in the Finnish State Nuclear Waste Management Fund are allowed to borrow from the fund
\naccording to certain rules. Fortum uses the right to borrow back and has pledged shares in Kemijoki Oy
\nas security for the loans. The loans are renewed yearly. See
\ue001
Note 27
Interest-bearing liabilities and
\n\ue001
Note 36
Pledged assets and contingent liabilities.
\n29.2 Nuclear power plants in associated companies and joint ventures
\nOKG, Forsmark and TVO are non-profit making companies, i.e. electricity production is invoiced to the
\nowners at cost. Invoiced cost is accounted for according to local GAAP. In addition to the invoiced
\nelectricity production cost, Fortum makes IFRS adjustments to comply with Fortum's accounting
\nprinciples. These adjustments include also Fortum's share of the companies' nuclear waste funds and
\nnuclear provisions.
\nThe tables below present the 100% figures relating to nuclear funds and provisions for the companies
\nas well as Fortum's net share.
98
\nTVO's total nuclear related assets and liabilities (100%)
\nEUR million
2022
2021
\nCarrying values in TVO with Fortum assumptions
\nNuclear provisions
1,620
1,713
\nShare of the State Nuclear Waste Management Fund
1,157
1,159
\nNet amount
-463
-554
\nof which Fortum's net share consolidated with equity method
-116
-139
\nTVO's legal liability and actual share of the State Nuclear Waste Management Fund
\nLiability for nuclear waste management according to the Nuclear Energy Act
1,840
1,816
\nShare in the State Nuclear Waste Management Fund
1,436
1,451
\nShare of the fund not recognised on the balance sheet
279
292
\nTVO's legal liability, provision and share of the fund are based on the same principles as described above
\nfor Loviisa nuclear power plant. The liabilities and shares in the Fund are calculated and recorded
\nseparately for OL1/OL2 plant units and OL3 plant unit, as the corresponding total cost estimates are
\nprepared separately. The updated technical plan did not have a material impact on Fortum\u2019s share in
\nTVO\u2019s nuclear related assets and liabilities.
\nThe difference between TVO's share in the State Nuclear Waste Management Fund and the carrying
\nvalue of the TVO's share in the Fund is due to IFRIC 5, which requires that the carrying amount of the
\nshare in the State Nuclear Waste Management Fund is the lower of fair value or the value of the related
\nliability. On 31 December 2022 the OL1/OL2 plant units' share in the Fund is higher than the provision
\naccording to IFRS. The OL3 plant unit's share in the Fund is on the other hand lower than the provision
\naccording to IFRS. TVO's share of the Finnish State Nuclear Waste Management Fund is from an IFRS
\nperspective overfunded by EUR 279 million (of which Fortum's share is EUR 74 million), since TVO's
\nshare of the Fund on 31 December 2022 was EUR 1,436 million and the carrying value on the
\nconsolidated balance sheet with Fortum assumptions was EUR 1,157 million.
\nParticipants in the Finnish State Nuclear Waste Management Fund are allowed to borrow from the fund
\naccording to certain rules. Fortum is using the right to reborrow funds through TVO based on its
\nownership. See more information in
\ue001
Note 27
Interest-bearing liabilities.
\nOKG\u2019s and Forsmark\u2019s total nuclear related assets and liabilities (100%)
\nEUR million
2022
2021
\nOKG's and Forsmark's nuclear-related assets and liabilities with Fortum
\nassumptions
\n1)
\nNuclear provisions
4,641
2,634
\nShare in the State Nuclear Waste Management Fund
3,200
2,397
\nNet amount
-1,441
-237
\nof which Fortum's net share consolidated with equity method
-456
-76
\n1) Comparatives do not include OKG AB as it is included in the comparatives of consolidated nuclear power plants. Comparatives include
\nUniper's minority ownership of Forsmark which is now deconsolidated.
\nIn Sweden, Svensk K\u00e4rnbr\u00e4nslehantering AB (SKB), a company owned by the nuclear operators, takes
\ncare of all nuclear waste management-related activities on behalf of nuclear operators. SKB receives its
\nfunding from the Swedish Nuclear Waste Fund, which in turn is financed by the nuclear operators.
\nNuclear waste fees and guarantees are normally updated every three years by governmental decision
\nafter a proposal from the Swedish Radiation Safety Authority (SSM). The proposal is based on cost
\nestimates done by SKB and the license holders. An updated technical plan for nuclear waste
\nmanagement was decided by SKB in December 2022. In December 2020, the Swedish government
\ndecided the waste fees and guarantees for year 2021 only, and in January 2022 for 2022-2023. Nuclear
\nwaste fees paid by licensees with a unit/units that are still in operation are currently based on future costs
\nwith the assumed lifetime of 50 years for each unit of a nuclear power plant. The fee is calculated in
\nrelation to the energy delivered and set as an amount of \u00f6re (1 \u00f6re = SEK 0.01) per kWh delivered.
\nStatus of TVO\u2019s Olkiluoto 3 project
\nFortum is participating in the country's fifth nuclear power plant unit, Olkiluoto 3 (OL3), through the
\nshareholding in Teollisuuden Voima Oyj (TVO) with an approximately 25% share representing some 400
\nMW in capacity. Olkiluoto 3 (OL3), currently under test production phase, was procured as a fixed-price
\nturnkey project from a consortium (Plant Supplier) formed by Areva GmbH, Areva NP SAS and Siemens
\nAG. As stipulated in the plant contract, the consortium companies have joint and several liability for the
\ncontractual obligations.
\nIn March 2018, TVO signed a comprehensive settlement agreement with the plant supplier consortium
\ncompanies Areva NP, Areva GmbH, and Siemens AG as well as with Areva Group parent company Areva
\nSA, a company wholly owned by the French State. The settlement agreement was amended with
\nagreements signed in June 2021. The supplier consortium companies committed to ensuring that the
\nfunds dedicated to the completion of the OL3 project will be adequate and will cover all applicable
\nguarantee periods, including setting up a trust mechanism funded by Areva companies to secure the
\nfinancing of the costs of completing the OL3 project. During the period under review, the fund, which was
\npreviously replenished in July 2021, has been used to cover costs incurred to the Areva companies for the
\ncompletion of the OL3 project in accordance with the settlement agreement.
\nOn 12 March 2022, OL3 was connected to the national grid and electricity production started. The
\nelectricity power level was gradually increased to approximately 850 megawatts, until the production tests
\nwere interrupted on 26 April 2022 due to the boron pumps unexpectedly switching on. Simultaneously, a
\nleak in the generator\u2019s cooling system was observed. Foreign material detached from the steam guide
\nplates was found in the turbine\u2019s steam reheater in May
2022, which required repair work. The work was
\ncompleted on 8 August 2022. TVO communicated on 11 August 2022 that a turbine automation update of
\napproximately two weeks would be carried out. The test production continued on 28 August 2022 with
\ntests at a 60% power level. On 6 September 2022, STUK granted
permission to increase OL3\u2019s power
\nlevel to over 60% and from thereon to 100%. According to STUK, the production tests and investigations
\nconducted so far showed that OL3 has worked safely, and that increasing the plant unit\u2019s power level can
\nbe continued. Tests at an 80% power level were started on 9 September 2022. Tests at full power,
\napproximately 1,600 megawatts, were started on 30 September 2022. Test production was interrupted on
\n18 October 2022 due to damage detected in the internals of feedwater pumps
in OL3\u2019s
turbine island.
\nTest production continued 27 December 2022 after investigations into the damage were mainly
\ncompleted.
\nAccording to latest information received from the Plant Supplier, OL3\u2019s regular electricity production is
\nto start in April 2023. The Plant Supplier is obliged to complete the plant unit in accordance with the plant
\ncontract and settlement agreements.
\nNuclear-related guarantees
\nIn addition to nuclear waste fees nuclear power companies provide guarantees for any uncovered liability
\nand unexpected events.
\nFor more information regarding Fortum's guarantees given on behalf of nuclear companies, see
\n\ue001
Note 36
Pledged assets and contingent liabilities.
99
\n30 Other provisions
\nACCOUNTING POLICIES
\nProvisions are recognised when the Group has a present legal or constructive obligation to a third party
\nas a result of past events, it is probable that an outflow of resources will be required to settle the
\nobligation and the amount can be reliably estimated.
\nProvisions are measured at the present value of the expenditures expected to be required to settle the
\nobligation at the reporting date using a discount rate that reflects current market assessment of the time
\nvalue of money. When risk is not covered in the estimated cash flows, the discount rate also includes the
\nrisks specific to the obligation.
\nIncrease in the provision due to the passage of time and changes in provisions due to changes in
\ndiscount rates are recognised as interest expense in the consolidated income statement. Changes in
\nprovisions, except for changes in asset retirement obligations, are recognised in the consolidated
\nincome statement.
\nASSET RETIREMENT OBLIGATIONS
\nAsset retirement obligations for the decommissioning or dismantling of property, plant and equipment
\nare recognised either when there is a contractual obligation towards a third party or a legal obligation.
\nThe obligation is generally based on detailed cost estimates validated by external experts.
\nThe asset retirement obligation is recognised as part of the cost of an item of property, plant and
\nequipment when the asset is put in service. Costs are depreciated over the remainder of the asset's
\nuseful life. Changes in asset retirement obligations are recognised in property, plant and equipment on
\nthe consolidated balance sheet; unless the item of property, plant and equipment has already been fully
\ndepreciated when changes are recognised in the consolidated income statement.
\nONEROUS CONTRACT PROVISIONS
\nAn onerous contract provision is recognised for a contract under which the unavoidable costs of meeting
\nthe obligations under the contract exceed the economic benefits expected to be received under it.
\nUnavoidable costs is the lower of the excess obligation from the performance under the contract, and
\nany potential penalties or compensation arising in the event of non-performance.
\nENVIRONMENTAL PROVISIONS
\nEnvironmental provisions are recognised based on the current interpretation of environmental laws and
\nregulations when it is probable that a present obligation has arisen, and the amount of such liability can
\nbe reliably estimated. The obligation is generally based on detailed cost estimates validated by external
\nexperts.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS MADE
\nWHEN ESTIMATING PROVISIONS
\nProvisions for present obligations require management judgment in determining whether it is probable
\nthat an outflow of economic benefits will be required to settle the obligation. Estimation is required in
\ndetermining the value of the obligation as the amount recognised as a provision is based on the best
\nestimate of unavoidable costs required to settle the obligation at the end of the reporting period. When
\nestimating unavoidable costs, management may be required to consider a range of possible outcomes
\nand their associated probabilities, risks and uncertainties surrounding the events and circumstances, as
\nwell as making assumptions of the timing of payment. Estimation is also required in determining the rate
\nused to discount provisions to present value. Changes in estimates of timing or amounts of costs
\nrequired to settle the obligation may become necessary as time passes and/or more accurate
\ninformation becomes available.
\nEUR million
\nSupplier-
\nand
\ncustomer-
\nrelated
\nAsset
\nretire-
\nment
\nPower
\nproduc-
\ntion
\nrelated
\nGas distri-
\nbution-
\nrelated
\nEnvironmental
\nremediation
\nand
\nsimilar
\nPersonnel-
\nrelated
Other
Total
\n1 January 2022
2,893
872
653
354
253
368
1,013
6,406
\nIncrease in provisions
26,590
8
12
9
11
61
218
26,909
\nProvisions used
-1,647
-4
-
-66
-9
-94
-56
-1,877
\nUnused provisions reversed
-295
-50
-
-66
-2
-56
-139
-608
\nExchange rate
\ndifferences and other
\nchanges
-1
-1
-
-1
-1
1
-94
-96
\nUnwinding of discounting
-76
-36
-112
-27
-24
-28
-19
-322
\nDisposal of subsidiary
\ncompanies
\n1)
\n-27,465
-770
-552
-203
-186
-253
-852
-30,281
\n31 December 2022
-
19
-
-
41
-
70
130
\nBS
Of which current
\nprovisions
-
-
-
-
-
-
13
13
\nBS
Of which non-current
\nprovisions
-
19
-
-
41
-
58
118
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022.
\nProvisions for supplier- and customer-related obligations in 2021 related to Uniper and included EUR
\n2.6 billion of onerous contract provisions for procurement of electricity sales contracts for which the own-
\nuse exemption under IFRS 9 is applied, and to long-term infrastructure purchase contracts used in the
\ngas storage business.
\nProvisions for asset retirement obligations consist of obligations for conventional power plants. The
\nmajority of the provision is estimated to be used within 5-10 years. In 2021, provisions for asset retirement
\nobligations were mainly related to Uniper and consisted of obligations for conventional and renewable
\nenergy power plants, including the conventional plant components in the nuclear power segment; as well
\nas provisions for environmental improvements at gas storage facilities.
\nPower production-related provisions in 2021 related to Uniper and consisted mainly of provisions from
\nthe hydroelectric power business.
\nGas distribution-related provisions in 2021 related to Uniper and consisted mainly of onerous contract
\nprovisions for gas transportation and regasification.
\nEnvironmental provisions mainly include provisions for redevelopment and water protection measures,
\nthe rehabilitation of contaminated sites, and other environmental improvement measures. The majority of
\nthe provision is estimated to be used within 10-15 years.
\nPersonnel-related provisions in 2021 related to Uniper and mainly included provisions for performance-
\nbased compensation components, long-service bonus obligations, in-kind obligations, restructuring and
\nother deferred personnel costs.
\nOther provisions include a number of individually immaterial items, and in 2021 mainly related to
\nUniper.
\nFor provisions for decommissioning, and provision for disposal of spent fuel for nuclear production, see
\n\ue001
Note 29
Nuclear-related assets and liabilities.
100
\n31 Pension obligations
\nACCOUNTING POLICIES
\nThe Group companies have various pension schemes in accordance with the local conditions and
\npractices in the countries in which they operate. The schemes are generally funded through various
\npension vehicles including payments to insurance companies, Group\u2019s pension funds and other
\nseparate arrangements. The Group has both defined benefit and defined contribution plans.
\nFor defined benefit plans, pension costs are assessed using the projected unit credit method. The
\ncost of providing pensions is charged to the income statement as to spread the service cost over the
\nservice lives of employees. Current and past service cost, as well as gains or losses from settlements
\nare reported under personnel costs. The net interest is reported in financial items.
\nThe defined benefit obligation is calculated annually on the balance sheet date and is measured as
\nthe present value of the estimated future cash flows using interest rates of high-quality corporate bonds,
\nor similar, that have terms to maturity approximating to the terms of the related pension liability. The plan
\nassets for pensions are valued at market value. The net liability recognised on the balance sheet is the
\ndefined benefit obligation at the closing date less the fair value of plan assets.
\nAny net asset position that might arise from offsetting the present value of the defined benefit obliga-
\ntions against the corresponding fair value of plan assets is recognised taking into account the applicable
\nasset restrictions. Such an asset position is reported in Other non-current assets on the balance sheet.
\nIn the case of a plan amendment, curtailment or settlement (each a \"plan event\") occurring in a
\ndefined benefit plan during an annual reporting period, the current service cost and the net interest on
\nthe net liability or asset are remeasured for the remainder of the reporting period after the plan event.
\nThe actuarial assumptions applicable as of the date of the plan event are to be used as the basis for
\nsuch remeasurement. When the benefits of a plan are changed, or when a plan is curtailed, the resulting
\nchange in the present value of the defined benefit obligation that relates to past service, or the gain or
\nloss related to a curtailment is recognised immediately in profit or loss. Gains or losses on settlements of
\ndefined benefit plans are recognised when the settlement occurs.
\nRemeasurements of the net defined benefit liability or asset include actuarial gains and losses that
\nmay arise especially from differences between estimated and actual variations in underlying
\nassumptions about demographic and financial variables; and, additionally, from developments in these
\nassumptions as of each reporting date. Additionally included is the difference between the actual return
\non plan assets and the interest income on plan assets contained in the net interest result, as well as any
\nchange in the effect of the asset ceiling, excluding amounts already included in net interest.
\nRemeasurement results and related deferred taxes are recognised in full in the period in which they
\noccur and are reported in other comprehensive income.
\nThe Group's contributions to defined contribution plans are charged to the income statement in the
\nperiod to which the contributions relate.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nASSUMPTIONS USED TO DETERMINE FUTURE PENSION OBLIGATIONS
\nThe present value of the pension obligations is based on actuarial calculations that use several
\nassumptions. Any changes in these assumptions will impact the carrying amount of pension obligations.
\nFortum\u2019s pension arrangements
\nFinland
\nThe statutory pension benefits (as determined in Emp
loyee\u2019s Pension Act /TyEL) in Finland provide the
\nemployees\u2019 pension coverage for old age, disability and death of a family provider. The benefits are
\ninsured with an insurance company, and determined to be defined contribution plans.
\nIn addition, the Group has historical old-age and survivor pension benefits with the Fortum Pension
\nFund covering a limited number of people. The Fortum Pension Fund is a closed fund managed by a
\nBoard, consisting of both employers' and employees' representatives. The promised benefit is defined in
\nthe rules of the Fund, mostly at a maximum of 66% of the salary basis. The salary basis is an average of
\nthe ten last years' salaries, which are indexed by a common salary index to the accounting year. After
\nretirement the benefits payable are indexed yearly with the TyEL-index.
\nThe Fund is operating under the regulation from the Financial Supervisory Authority (FSA). The liability
\nhas to be fully covered according to the regulations. The national benefit obligation related to the defined
\nbenefit plans is calculated so that the promised benefit is fully funded until retirement.
\nPension arrangements related to disposed operations (Uniper)
\nThe comparative period includes Uniper\u2019s defined benefit pension arrangements, mostly in Germany an
d
\nUnited Kingdom. As Uniper was deconsolidated on 30 September 2022, Fortum does not have any
\nmaterial arrangements in these countries as of 31 December 2022.
\nGermany
\nThe majority of active and former employees are covered by occupational benefit plans in addition to the
\nstate retirement benefits. The benefits offered under these plans primarily include retirement, disability
\nand survivor benefits. The majority of the reported pension obligation for the active employees arises from
\nthe \u201dBAS Plan\u201d and from the \u201dZukunftssicherung\u201d plan, that have been closed to the new hires since 2008.
\nThe only plan open to new hires is a defined contribution-
oriented benefit plan, which is based on \u201cunits of
\ncapital\u201d.
\nPension plans are funded through designated pension vehicles that are legally distinct from the
\ncompany. Plan assets are funded in form of \u201cPensionskassen\u201d and a Group
-wide pension fund as well as
\nin the form of a Contractual Trust Arrangement (CTA). Only the \u201cPensionskassen\u201d vehicles and the
\npension fund are subject to regulatory provisions in relation to the investment of capital and funding
\nrequirements. For the CTA, there are only funding rules stipulated in a corporate agreement.
\nUnited Kingdom
\nThere are three pension plans in the United Kingdom, one defined contribution plan and two defined
\nbenefit plans. The defined benefit plans were closed for new hires since 2005 and 2008, respectively.
\nSince the closure of these plans, new hires have been joining the open defined contribution plan.
\nPlan assets are administered by a trustee which is independent from the group and wholly responsible
\nfor the investment of the plan assets.
\nOther countries
\nAs of December 2022, there were no material defined benefit pension arrangements in Fortum\u2019s other
\noperating countries.
101
\nMain risks relating to defined benefit plans
\nTypical risk factors for defined benefit plans are changes in discount rates, risks related to other actuarial
\nassumptions, as well as investment and volatility risks.
\nChange in discount rate
\nThe discount rate used to calculate the defined benefit obligation (according to IFRS) depends on the
\nvalue of corporate bond yields as at the reporting date. A decrease in yields increases the benefit
\nobligation that is often only partially offset by an increase in the value of fixed income holdings.
\nRisk related to other actuarial assumptions
\nAssumptions for future inflation, salary levels and mortality are used for actuarial calculations. Should the
\nactual outcome differ from these assumptions, the liability may increase.
\nInvestment and volatility risk
\nPension plan assets are allocated to different asset classes based on the statutory legislation or
\ninvestment strategy of the corresponding pension plan. Depending on the pension plan, underlying
\ninvestment man
agement plans are updated on a regular basis. If the return of the fund\u2019s assets is not
\nenough to cover the raise in liability and benefit payments over the financial year, then, in certain
\nlegislations, the employer has to fund the deficit with contributions, unless the fund has sufficient covering.
\nMovement in the net defined benefit liability
\nDefined benefit
\nobligation
\nFair value
\nof plan assets
\nNet defined benefit
\nasset(-)/liability(+)
\nEUR million
2022
2021
2022
2021
2022
2021
\n1 January
4,437
4,636
-3,290
-3,117
1,146
1,519
\nIncluded in consolidated income statement
\n1)
\nCurrent service cost
49
73
-
-
50
73
\nPast service cost
1
30
-
-
1
30
\nSettlements
-138
-4
2
1
-136
-3
\nNet interest
44
43
-34
-31
10
12
\n-44
142
-32
-28
-76
113
\nIncluded in OCI
\nRemeasurement gains(-)/losses(+)
-1,513
-297
905
-121
-608
-418
\nActuarial gains/losses arising from changes in
\nfinancial assumptions
-1,517
-279
-
-
-1,517
-279
\nActuarial gains/losses arising from experience
\nadjustments
4
-18
-
-
4
-18
\nReturn on plan assets (excluding amounts
\nincluded in net interest expense)
-
-
905
-122
905
-122
\nExchange rate differences and other changes
-22
52
35
-50
12
2
\n-1,536
-245
940
-171
-596
-416
\nOther
\nContributions paid by/to the employer
-
-
11
-64
11
-64
\nBenefits paid
-81
-95
78
90
-2
-5
\nAcquisitions of subsidiary companies
1
-
0
-
1
-
\nDisposals of subsidiary companies
\n2)
\n-2,511
-
2,012
-
-499
-
\nTransfer to assets held for sale
-
0
-
0
-
0
\n31 December
267
4,437
-280
-3,290
-13
1,146
\nPresent value of funded defined obligation
263
4,405
\nFair value of plan assets
-280
-3,290
\nFunded status
-17
1,115
\nPresent value of unfunded obligation
\n3)
\n4
32
\nNet liability arising from defined benefit obligation
-13
1,146
\nPension assets included in other non-current
\nassets on the balance sheet
27
44
\nBS
Pension obligations on the balance sheet
13
1,190
\n1) Net interest is presented in financial items in the income statement. The rest of costs related to defined benefit plans are included in staff
\ncosts (row defined benefits plans in the staff cost specification in
\ue001
Note 10
Employee benefits and Board remuneration) and in 2021 also
\nItems affecting comparability. In 2022 part of settlements are netted with defined contribution plans costs in income statement.
\n2) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\n3) The unfunded obligation in 2022 relates to arrangements in Russia and Poland. In 2021 it relates mainly to Germany.
\nChanges during the year include Uniper until 30 September 2022.
\nContributions expected to be paid during 2023 total EUR 5 million.
102
\nFair value of plan assets
\n2022
2021
\nEUR million
Quoted
Unquoted
Total
Quoted
Unquoted
Total
\nEquity instruments
88
7
94
1,327
8
1,335
\nDebt instruments
105
40
145
1,025
183
1,208
\nCash and cash equivalents
-
18
18
-
104
104
\nReal estate
-
12
12
-
234
234
\nInvestment funds
-
-
-
396
-
396
\nOther assets
-
11
11
0
14
14
\nTotal
193
88
280
2,748
543
3,290
\nA specification of plan assets has not been available for pension plans financed through an insurance
\ncompany. In these cases, the fair value of plan assets has been included in other assets.
\nDerivatives used to hedge the risks have been allocated to the respective asset classes.
\nThe actual return on plan assets totalled EUR -12 million (2021: 145).
\nAmounts recognised on the balance sheet by country 2022
\nEUR million
Finland
Germany
\nUnited
\nKingdom
\nOther
\ncountries
Total
\nPresent value of funded obligations
205
-
-
58
263
\nFair value of plan assets
-225
-
-
-56
-280
\nDeficit(+)/surplus(-)
-19
-
-
2
-17
\nPresent value of unfunded obligations
-
-
-
4
4
\nNet asset(-)/liability(+) on the balance sheet
-19
-
-
6
-13
\nPension asset included in non-current assets
21
-
-
6
27
\nBS
Pension obligations on the balance sheet
1
-
-
12
13
\nAmounts recognised on the balance sheet by country 2021
\nEUR million
Finland
Germany
\nUnited
\nKingdom
\nOther
\ncountries
Total
\nPresent value of funded obligations
283
3,147
719
256
4,405
\nFair value of plan assets
-251
-2,122
-756
-161
-3,290
\nDeficit(+)/surplus(-)
32
1,025
-36
93
1,115
\nPresent value of unfunded obligations
-
26
-
6
32
\nNet asset(-)/liability(+) on the balance sheet
32
1,051
-36
99
1,146
\nPension asset included in non-current assets
-
7
36
1
44
\nBS
Pension obligations on the balance sheet
32
1,058
-
100
1,190
\nThe principal actuarial assumptions used
\n2022
2021
\n%
Finland
Germany
\nUnited
\nKingdom
Finland
Germany
\nUnited
\nKingdom
\nDiscount rate
3.80
-
-
1.00
1.20
2.00
\nFuture salary increases
2.70
-
-
2.30
2.30
3.00
\nFuture pension increases
2.80
-
-
2.40
1.80
3.10
\nRate of inflation
2.60
-
-
2.10
1.80
3.20
\nThe discount rate in Finland is based on high quality European corporate bonds with maturity that best
\nreflects the estimated term of the defined benefit pension plans. The discount rate in Germany is based
\non the returns on high-quality EURO corporate bonds available at the end of the respective reporting
\nperiod, and take into account the average duration of the respective underlying benefit obligations. The
\nUnited Kingdom discount rate is based on currency-specific returns on high-quality corporate bonds
\navailable at the end of the respective reporting period and takes into account the average duration of the
\nrespective underlying obligations.
\nThe discount, inflation, salary growth and pension growth rates, as well as mortality are the key
\nassumptions when calculating defined benefit obligations. Changes in the key actuarial assumptions
\nwould lead to the following changes in the present value of the defined benefit obligations:
\nSensitivity of defined benefit obligation to changes in assumptions
\nImpact to the
\npension
\nobligation
\nincrease(+)/
\ndecrease(-)
\nChange in the assumption
\n0.5% increase in discount rate
-5.9%
\n0.5% decrease in discount rate
6.6%
\n0.5% increase in benefit
5.9%
\n0.5% decrease in benefit
-5.4%
\n0.5% increase in salary growth rate
0.3%
\n0.5% decrease in salary growth rate
-0.3%
\n10% increase in mortality
-3.6%
\n10% decrease in mortality
3.6%
\nA 10% decrease in mortality would result in higher life expectancy of beneficiaries, depending of the age
\nof each individual beneficiary. At the end of 2022, the life expectancy of a 63-year-old male retiree would
\nincrease by approximately one year, if mortality were to decrease by 10%.
\nThe sensitivities indicated are computed based on the same methods and assumptions used to
\ndetermine the present value of the defined benefit obligations. If one of the actuarial assumptions is
\nchanged for the purpose of computing the sensitivity of results to changes in that assumption, all other
\nactuarial assumptions are included in the computation unchanged. Potential correlation effects between
\nthe individual actuarial assumptions are not taken into account when computing sensitivities. When
\nconsidering sensitivities, it must be noted that the change in the present value of the defined benefit
\nobligations resulting from changing multiple actuarial assumptions simultaneously is not necessarily
\nequivalent to the cumulative effect of the individual sensitivities.
103
\nMaturity profile of the undiscounted defined benefit obligation on 31 December 2022
\nEUR million
\nFuture benefit
\npayments
\nMaturity under 1 year
14
\nMaturity between 1 and 5 years
63
\nMaturity between 5 and 10 years
77
\nMaturity between 10 and 20 years
139
\nMaturity between 20 and 30 years
92
\nMaturity over 30 years
48
\nThe weighted average duration of defined benefit obligation at 31 December 2022 is 16 years.
\n32 Other non-current liabilities
\nEUR million
2022
2021
\nContract liabilities
-
95
\nConnection fees
70
70
\nOther
51
232
\nBS
Total
121
397
\nChange in other non-current liabilities from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nConnection fees include refundable fees paid by the customer when connected to district heating
\nnetwork in Finland. Connection fees were refundable until 2013.
\n33 Trade and other payables
\nEUR million
2022
2021
\nTrade payables
720
12,152
\nAccrued expenses and deferred income
\nAccrued personnel expenses
109
256
\nAccrued interest expenses
59
72
\nContract liabilities
24
754
\nOther accrued expenses and deferred income
201
144
\nOther liabilities
\nLiability to return emission rights
\n1)
\n99
1,938
\nCurrent tax liability
261
735
\nOther
185
425
\nBS
Total
1,657
16,477
\n1) For additional information see
\ue001
Note 22
Inventories.
\nChange in trade and other payables from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nContract liabilities comprise mainly of project and waste management services that are invoiced but not
\ndelivered at the reporting date.
\nThe management considers that the amount of trade and other payables approximates fair value.
104
\n34 Leases
\nACCOUNTING POLICIES
\nLESSEE ACCOUNTING
\nThe Group leases mainly office buildings and land areas. The 2021 comparative also included gas
\nstorage facilities related to Uniper. The Group recognises all leases, with the exception of short-term (i.e.
\nlease term less than 12 months) and low value leases as right-of-use assets with a corresponding lease
\nliability at the date at which the leased asset is available for use by the Group.
\nRight-of-use assets and lease liabilities are initially recognised on the consolidated balance sheet at
\nfuture fixed lease payments over the lease term. Lease payments are discounted to present value.
\nRight-of-use assets are depreciated on a straight-line basis over the lease term, or the useful life of the
\nleased asset if shorter; and reviewed periodically for indication of impairment.
\nWhen the future lease payments are revised due to changes in index-linked considerations or the
\nlease term changes, the right-of-use asset and the corresponding lease liability is remeasured. Any
\ndifferences arising on reassessments are recognised in the consolidated income statement.
\nInterest expense on lease liabilities is presented within Interest expense in the consolidated income
\nstatement. In the consolidated cash flow statement, the principal portion of the lease payment is
\npresented under Payments of long-term liabilities, and the interest portion as Interest paid under Funds
\nfrom operations. Variable lease payments, as well as costs for leases not capitalised due to exemptions
\nin the standard, are expensed to consolidated income statement.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nESTIMATES TO DETERMINE LEASE LIABILITY
\nCalculation of the lease liability requires certain assumption based input factors. The main estimates are
\nrelated to the lease term, the discount rate, as well as the determination whether a contract contains a
\nlease.
\nIn determining the lease term, management considers all facts and circumstances that create an
\neconomic incentive to exercise an extension option, or not to exercise a termination option. Extension
\noptions are only included in the lease term if the lease is reasonably certain to be extended. The lease
\nterm is reassessed if underlying circumstances are significantly changing.
\nLease payments are discounted to present value using an incremental borrowing rate. The
\nincremental borrowing rate is determined based on reasonable third party financing conditions
\nconsidering the length of the lease term and the currency of cash flows.
\nA contract is or contains a lease if the Group has the right to control the use of an identified asset for a
\nperiod of time in exchange for a consideration. A capacity portion of an asset is an identified asset if it is
\nphysically distinct, or if the Group has the right to use substantially all the capacity of the asset during
\nthe lease term.
\nLESSOR ACCOUNTING
\nLeases in which the Group acts as the lessor and substantially all the risks and rewards arising from the
\nuse of the leased asset are transferred to the lessee are classified as finance leases. Finance lease
\nreceivables mainly relate to Russia. The 2021 comparative also included finance lease receivables
\nconcerning certain electricity delivery contracts related to Uniper.
\nIn this type of lease, the present value of the minimum lease payments is recorded as a receivable.
\nInterest income from such arrangements is recognised over the lease term, using the effective interest
\nmethod.
\n34.1 Amounts recognised in consolidated financial statements
\nLessee
\nEUR million
2022
2021
\nIn consolidated income statement
\nDepreciation, of which
-21
-22
\nLand
-2
-1
\nBuildings and structures
-13
-14
\nMachinery and equipment
-7
-7
\nInterest expense on lease liabilities
-2
-3
\nExpense relating to variable lease payments within Other expenses
0
-1
\nExpense relating to low-value asset leases within Other expenses
-1
-2
\nIncome from subleasing right-of-use assets
0
1
\nOn consolidated balance sheet
\nAdditions to right-of-use assets, of which
47
173
\nLand
6
35
\nBuildings and structures
29
41
\nMachinery and equipment
12
97
\nAcquisition of subsidiary companies, of which
1
-
\nLand
1
-
\nDisposal of subsidiary companies, of which
\n1)
\n-508
-7
\nLand
-40
-6
\nBuildings and structures
-403
0
\nMachinery and equipment
-64
0
\nCarrying amount of right-of-use assets, of which
122
730
\nLand
55
93
\nBuildings and structures
55
536
\nMachinery and equipment
12
101
\nLease liabilities
119
1,075
\nIn consolidated cash flow statement
\nCash outflow for leases
-22
-25
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nMaturity of undiscounted lease liabilities
\nEUR million
2022
\nDue within one year
18
\nDue after one year and within five years
53
\nDue after five years
57
\nTotal
128
\nChange in leases from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30 September
\n2022. See
\ue001
Note 4
Financial risk management,
\ue001
Note 17
Property, plant and equipment and right-of-use
\nassets, and
\ue001
Note 27
Interest-bearing liabilities for more information.
105
\nLessor
\nEUR million
2022
2021
\nIn consolidated income statement
\nRental income from operating lease
19
17
\nOn consolidated balance sheet
\nLease receivables
3
136
\nCurrent
3
17
\nNon-current
0
119
\nMaturity analysis of undiscounted lease payments - Finance leases
\nDue within 1 year
3
26
\nDue in 1 to 2 years
-
23
\nDue in 2 to 3 years
-
23
\nDue in 3 to 4 years
-
23
\nDue in 4 to 5 years
-
22
\nDue in more than 5 years
-
92
\nTotal undiscounted lease payments
3
209
\nInterest component
0
73
\n35 Capital and other commitments
\nCapital and other commitments are contractual or regulatory obligations that are not recognised as
\nliabilities on the consolidated balance sheet, or disclosed as contingent liabilities. Change in capital and
\nother commitments from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30
\nSeptember 2022.
\n35.1 Capital commitments
\nEUR billion
2022
2021
\nProperty, plant and equipment and intangible assets
0.4
1.0
\nCapital commitments at 31 December 2021 included Uniper segment\u2019s commitments of EUR 0.5 billion.
\n35.2 Other commitments to associates and joint ventures
\nTeollisuuden Voima Oyj (TVO) is building Olkiluoto 3, the nuclear power plant funded through external
\nloans, share issues and shareholder loans according to shareholders' agreement between the owners of
\nTVO. At end of December 2022, Fortum had EUR 232 million (2021: 232) outstanding receivables
\nregarding Olkiluoto 3, and is additionally committed to providing at maximum EUR 100 million. TVO
\nshareholder loan is classified as participation in joint ventures. For more information, see
\ue001
Note 29
\nNuclear-related assets and liabilities.
\nFortum has formed a joint venture with Green Investment Group to build the South Clyde waste-to-
\nenergy plant in Glasgow, Scotland. At 31 December 2022, Fortum had an outstanding commitment of
\nEUR 54 million to the joint venture, which is funded by external loans, share issues and shareholder
\nloans.
\n35.3 Other commitments
\nIn June 2018, the Swedish Government approved the legislation regarding Sweden\u2019s national strategy for
\nimplementation of the EU\u2019s W
ater Framework Directive. The largest hydro industry companies will create
\na common hydro-power fund to finance large parts of the environmental actions needed. The fund will
\nhave a total financial cap of SEK 10 billion to be paid over a 20-year period, and the largest operators will
\ncontribute to the fund proportionately based on their respective market share of hydro-power production.
\nFortum's share is 31% of the funds' total financing.
\nOn 2 May 2022, Fennovoima announced that it had terminated the contract for the delivery of the
\nnuclear power plant with RAOS Project Oy. At 31 December 2021, Fortum Power and Heat Holding Oy
\nhad EUR 69 million commitment to providing financing to Voimaosakeyhti\u00f6 SF for its participation in the
\nFennovoima nuclear power project in Finland.
106
\n36 Pledged assets and contingent liabilities
\nACCOUNTING POLICIES
\nPLEDGED ASSETS
\nPledged assets are given to a lender as security for a loan, trading or other commitment. If the borrower
\nor trading party is unable to make the agreed payments, the lender can use the pledged assets to
\nmitigate its losses. Pledged assets at Fortum mostly consist of securities and real estate mortgages.
\nCONTINGENT LIABILITIES
\nA contingent liability is disclosed when there is a possible obligation that arises from past events and
\nwhose existence is only confirmed by one or more doubtful future events; or when there is an obligation
\nthat is not recognised as a liability or provision because it is not probable that an outflow of resources
\nwill be required, or the amount of the obligation cannot be reliably estimated.
\n36.1 Pledged assets
\nFor debt
\nFortum has pledged shares in Kemijoki as a security for the reborrowing from the Finnish State Nuclear
\nWaste Management Fund for the Loviisa nuclear power plant part, amounting to EUR 689 million (31 Dec
\n2021: 876).
\nReal estate mortgages total EUR 41 million (2021: 41).
\nFor other commitments
\nFortum has pledged real estate mortgages in Pyh\u00e4joki hydro plant as security to the Ministry of Economic
\nAffairs and Employment amounting to EUR 126 million (2021: 81). These are given as a security for the
\nuncovered part of the legal liability and unexpected events relating to future costs for decommissioning
\nand disposal of spent fuel in Loviisa nuclear power plant. According to the Nuclear Energy Act, Fortum is
\nobligated to contribute the funds in full to the State Nuclear Waste Management Fund to cover the legal
\nliability. Any uncovered legal liability relates to periodising of the payments to the fund. The size of the
\nsecurities given is updated yearly in the second quarter based on the decisions regarding the legal
\nliabilities and the funding target which are determined at the end of the previous year.
See
\ue001
Note 29
\nNuclear-related assets and liabilities.
\n36.2 Contingent liabilities
\nIn relation to divestment of shareholdings, Fortum has entered into indemnification agreements, which
\ncover the customary representations and warranties, as well as environmental damage and tax
\ncontingencies. Any obligations that may exist are covered in the first instance by provisions of the
\ncompanies sold before Fortum itself is required to make any payments. Moreover, the Fortum Group has
\ncommitments under which it assumes joint and several liability arising from its interests in non-corporate
\ncommercial partnerships and consortia in which it participates.
\nFortum's 100% owned subsidiary Fortum Heat and Gas Oy has a contingent liability, based on the
\nFinnish Companies Act's (734/1978) Chapter 14a Paragraph 6, with Neste Oyj following the demerger of
\nFortum Oil and Gas Oy in 2004.
\nIn 2021 Fortum signed an EUR 8 billion credit facility agreement with Uniper comprising tranches for
\nboth a shareholder loan and a parent company guarantee. The shareholder loan, EUR 4 billion, was
\nrepaid on 21 December 2022 on completion of the transaction to sell Uniper to the German State. Out of
\nthe EUR 4.0 billion parent company guarantee facility that Fortum had granted to Uniper, a total of EUR
\n3.0 billion was released by year-end 2022. The remaining, approximately EUR 1.0 billion, with a full
\nGerman State back-to-back guarantee (indemnity), will be released latest at the end of June 2023.
\n36.3 Guarantees relating to Nuclear operations
\nWith respect to the activities of the Swedish nuclear power plants, the companies of the Swedish nuclear
\nunits have issued guarantees for OKG and Forsmark to governmental authorities in accordance with the
\nSwedish law. There are two types of guarantees given. The Financing Amount is given to cover Fortum's
\nshare of the uncovered part in the Nuclear Waste Fund, assuming no further production and that no
\nfurther nuclear waste fees are paid in. The uncovered amount is calculated by the authorities and is based
\non the difference between the expected costs and the funds to cover these costs at the time of the
\ncalculation. The Supplementary Amount constitutes a guarantee for deficits that can arise as a result of
\nunplanned events. The amounts for the guarantees are normally updated every third year by
\ngovernmental decision. In addition, the licensees are responsible for all costs related to the disposal of
\nlow-level radioactive waste.
\nOwners of nuclear facilities in Finland and Sweden have statutory liabilities for damages resulting from
\naccidents occurring in those nuclear facilities and for accidents involving any radioactive substance
\nconnected to the operation of those facilities. Third-party liability relating to nuclear accidents is strictly
\nunder the plant operator\u2019s responsibility.
\nIn Finland, as the operator of the Loviisa power plant, Fortum has a statutory liability insurance policy of
\napproximately EUR 1.2 billion.
\nIn Sweden, the operator of a nuclear power plant in operation is required to have a liability insurance or
\nother financial cover in the amount equivalent to EUR 1.2 billion per site.
\nThe necessary insurances for the nuclear power plants have been purchased. Similar insurance
\npolicies are in place also for the operators where Fortum has minority interest.
\nThe guarantee given on behalf of Teollisuuden Voima Oyj to the Ministry of Economic Affairs and
\nEmployment increased following the fuel loading in Olkiluoto 3, and
amounts to EUR 136 million (2021:
\n122). The guarantee covers the unpaid legal liability due to periodisation as well as risks for unexpected
\nfuture costs.
\nFor information regarding nuclear-related assets and liabilities see
\ue001
Note 29
Nuclear-related assets
\nand liabilities.
107
\n37 Legal actions and official proceedings
\nVarious routine court actions, arbitration proceedings, tax and regulatory investigations and proceedings
\nare currently pending against entities of the Group, and further actions or proceedings may be instituted or
\nasserted in the future.
\nTax cases
\nOn 29 June 2022, the Antwerp Court of First Instance, Belgium, ruled in favour of Fortum on the
\ncompany\u2019s income tax assessments in Belgium for the years 2009
-2012. The decision concerned
\nFortum\u2019s Belgian financing company, Fortum EIF NV, which financed Fortum\u2019s Swedish subsidiary,
\nFortum 1 AB, in the acquisition of Russian operations in 2008, currently operating as PAO Fortum. The
\nBelgian tax authorities argued that Fortum EIF should not benefit from the notional interest deduction
\nregime in Belgium.
\nIn accordance with the court ruling, Belgian tax authorities have in 2022 refunded Fortum the paid taxes
\namounting to EUR 78 million. These taxes had been recognised on the balance sheet as income tax
\nreceivable. The Belgian tax authorities also refunded the related interest amounting to EUR 27 million,
\nwhich is recognised in the consolidated income statement in 2022.
\nConsidering Fortum\u2019s income tax assessment in Belgium for the year 2008, on 16 June 2020, the Court
\nof Appeal of Ghent ruled in favour of Fortum, and in September 2020 the Belgian tax authorities filed an
\nappeal to the Supreme Court. The additional taxes claimed for 2008 amount to EUR 36 million and have
\nbeen recognised as income tax receivable.
\nFor critical accounting estimates regarding uncertain tax positions,
\ue001
Note 28
Income taxes on the
\nbalance sheet. See also
\ue001
Note 12
Income tax expense.
\n38 Related party transactions
\n38.1 The Finnish State and companies owned by the Finnish State
\nAt the end of 2022, the Finnish State owned 51.26% of the company\u2019s shares (2021: 50.76%). On 6
\nSeptember 2022, Fortum announced that it had agreed with the Finnish State on a EUR 2.35 billion
\nbridge financing arrangement. On 26 September 2022, Fortum announced to draw the first tranche of the
\nliquidity facility, EUR 350 million. The bridge loan facility is linked to the six-month Euribor; the margin for
\nthe first six months is 10% and for the following six months 12%.
\nAs a condition in the agreement following the first draw down, the Finnish State-owned holding company,
\nSolidium Oy, was entitled to subscribe 8,970,000 new ordinary registered shares in Fortum in a directed
\nshare issue, without payment. The share issue to Solidium Oy was resolved in the Extraordinary General
\nMeeting on 23 November 2022 and the new shares were registered with the Finnish trade register on 25
\nNovember 2022. The new shares carry full shareholder rights, including the right to dividend, as of the
\nregistration date. As a consequence, the proportion of shares under the control of the State of Finland has
\nincreased to 51.26%.
\nThe Finnish Parliament has authorised the Government to reduce the Finnish State\u2019s holding in Fortum
\nCorporation to no less than 50.1% of the share capital and voting rights.
\nAll transactions between Fortum and other companies owned by the Finnish State are on arm\u2019s length
\nbasis.
\n38.2 Board of Directors and Fortum Executive Management
\nThe key management personnel of the Fortum Group are the members of Fortum Executive Management
\nand the Board of Directors.
\nFortum has not been involved in any material transactions with members of the Board of Directors or
\nFortum Executive Management. No loans exist to any member of the Board of Directors or Fortum
\nExecutive Management at 31 December 2022.
\nThe total compensation (including pension benefits and social costs) for the key management
\npersonnel for 2022 was EUR 10 million (2021: 13). See
\ue001
Note 10
Employee benefits and Board
\nremuneration for further information on the Board of Directors and Fortum Executive Management
\nremuneration and shareholdings.
\n38.3 Associated companies and joint ventures
\nIn the ordinary course of business, Fortum engages in transactions with associated companies, joint
\nventures, and other related parties. These transactions are on the same commercial terms as they would
\nbe with third parties, except for some associates and joint ventures, as noted below.
\nFortum owns shareholdings in associated companies and joint ventures which own hydro and nuclear
\npower plants. Under consortium agreements, each owner is entitled to electricity in proportion to its share
\nof ownership, or based on other agreement. In turn, each owner is liable for an equivalent portion of costs,
\nregardless of output. These associated companies and joint ventures are not profit making since the
\nowners purchase electricity at production cost, including interest costs and production taxes. See
\n\ue001
Note 18
Participations in associated companies and joint ventures.
108
\n38.4 Balances and transactions with related parties
\nTransactions with associates, joint ventures and other related parties
\nAssociated
\ncompanies
Joint ventures
\nOther related
\nparties
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
\nSales
2
2
72
18
-
-
74
20
\nPurchases
284
234
154
146
-
-
438
379
\nOther income
-
1
4
19
-
-
4
20
\nInterest income on loan receivables
10
10
2
3
-
-
12
13
\nBalances with associates, joint ventures and other related parties
\nAssociated
\ncompanies
Joint ventures
\nOther related
\nparties
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
\nReceivables
\nLong-term interest-bearing loan receivables
505
1,009
88
129
-
-
593
1,138
\nTrade and other receivables
12
4
75
70
-
36
87
110
\nLiabilities
\nLong-term loan payables
-
-
229
228
-
-
229
228
\nShort-term loan payables
-
-
-
62
-
69
-
131
\nTrade and other payables
3
4
50
32
-
78
53
114
\nUniper was classified as discontinued operations in 2022, and 2021 income statement comparatives have
\nbeen restated. This means that Uniper SE\u2019s transactions with its related parties are excluded from the
\nabove table but balances with its related parties are included in 2021. See also
\ue001
Note 1
Significant
\naccounting policies and
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued
\noperations.
\nOther related parties are entities that are not consolidated on materiality grounds. For more information
\nsee
\ue001
Note 1
Significant accounting policies.
\nSee also
\ue001
Note 29
Nuclear-related assets and liabilities and
\ue001
Note 36
Pledged assets and contingent
\nliabilities for details on commitments related to associates and joint ventures.
\nTransactions with Russian joint ventures
\nOn 18 January 2022, Fortum announced that 1.3 GW portfolio of wind projects is being transferred to a
\nnew joint venture. However, this wind portfolio is now part of the assets and operations that are subject to
\nthe ongoing divestment process following Fortum\u2019s decision for a controlled exit from Russia as a result of
\nthe Russia-Ukraine war
. Fortum\u2019s ownership interest in the 1.3 GW portf
olio is presented in other non-
\ncurrent assets and in interest-bearing liabilities.
\nIn June 2021, the Fortum-Rusnano wind investment fund sold the 200-MW Kalmykia wind parks to the
\nFortum-Russian Direct Investment Fund (RDIF) joint venture. Fortum recorded a gain of EUR 11 million
\nfrom the transfer in the share of profits from associates and joint ventures.
\nOn 2 March 2021, Fortum announced it had decided to construct the largest solar power plant in Russia
\nthrough a joint venture established with RDIF. The power plant is based on capacities won by Fortum in
\nCSA auctions in 2018 and 2019. In March 2021, Fortum sold the CSA-backed solar power project to the
\njoint venture with RDIF.
\n38.5 Pension funds
\nAt 31 December 2022, Fortum has a pension fund in Finland, which is a stand-alone legal entity
\nmanaging pension assets related to part of the pension coverage in Finland. Following the
\ndeconsolidation of Uniper at 30 September 2022, Fortum no longer has pension funds in Germany or the
\nUnited Kingdom. Fortum\u2019s Swedi
sh pension fund was terminated in 2022. In 2022, Fortum had a net
\nincome of EUR 11 million from pension funds, including a termination fee for the Swedish pension fund,
\npartly offset by direct contributions paid (2021: 64 expense). See
\ue001
Note 31
Pension obligations.
\nThe assets in the pension fund in Finland include Fortum shares representing 0.04% (2021: 0.04%) of
\nthe company\u2019s outstanding shares. The loan granted by Fortum\u2019s Finnish pension fund has been secured
\nby real estate mortgages of EUR 41 million (2021: 41). See
\ue001
Note 36
Pledged assets and contingent
\nliabilities.
109
\n39 Events after the balance sheet date
\nOn 16 February 2023, the Finnish Government granted a new operating license for both units at Fortum\u2019s
\nLoviisa nuclear power plant until the end of 2050. Over the course of the new licence period, the plant is
\nexpected to generate up to 170 terawatt hours of CO
2
-free electricity. Investments related to the
\ncontinuation of operations and lifetime extension will amount to an estimated EUR 1 billion until 2050.
\nOver the past five years, Fortum has already invested approximately EUR 300 million in refurbishing the
\nLoviisa power plant. The Loviisa power plant is the first nuclear power plant in Finland. The power plant
\nhas two units: unit 1 started operating in February 1977, and unit 2 in November 1980.
\nAt the beginning of March 2023, the Fortum Board of Directors resolved on Fortum\u2019s new strategy.
\nFortum\u2019s strategic priorities are to deliver reliable clean energy and drive decarbonisation in industr
ies in
\nthe Nordics. The strategy includes new financial and sustainability targets:
\n\u2022
Updated financial guidance to ensure credit rating of at least BBB and optimal financial flexibility for
\nfuture growth: long-term financial net debt-to-comparable EBITDA of 2.0
\u2013
2.5 times.
\n\u2022
Disciplined growth in clean energy with capital expenditure of up to EUR 1.5 billion during 2023
\u2013
2025.
\nInvestment hurdles of project WACC + 150
\u2013
400 basis points will be applied and evaluated against the
\ncompany\u2019s climate and biodiversity t
argets.
\n\u2022
Renewed dividend policy with payout ratio of 60
\u201390% of comparable EPS. Fortum\u2019s Board of Directors
\nproposes a dividend of EUR 0.91 per share for the year 2022 corresponding to a pay-out of 75% based
\non comparable EPS for continuing operations of EUR 1.21 (excluding Russian operations).
\n\u2022
Fortum has brought forward its target to reach carbon neutrality to 2030 (Scopes 1, 2, 3) and will exit all
\ncoal already by the end of 2027. To reach carbon neutrality, Fortum is committed to setting emission
\nreduction targets based on the climate science (SBTi 1.5\u00b0C), assuming Russia exit. To measure
\nprogress, mid-point targets have been set for specific emissions at below 20 g CO
2
/kWh for total energy
\nproduction and at below 10 g CO
2
/kWh for power generation by 2028.
\n\u2022
Fortum is also committing to an ambitious biodiversity target to have no net loss of biodiversity
\n(excluding any aquatic impacts) from existing and new operations (Scopes 1, 2) from 2030 onwards. In
\naddition, the company will reduce its negative dynamic terrestrial impacts in upstream Scope 3 by 50%
\nby 2030 (base-year 2021). Fortum will continue local initiatives, especially in hydropower production,
\nand is committed to develop a science-
based methodology to assess the company\u2019s aquatic impacts
\nduring 2023.
\n\u2022
Fortum is already taking steps to reach the environmental targets and examples of these include the
\nLoviisa nuclear plant lifetime extension, increasing the use on hydro power and the ongoing
\ndecarbonisation projects in district heating.
\nAt the beginning of March 2023, the Fortum Board of Directors resolved on revising the financial segment
\nreporting to match the new business structure and strategy. As of the beginning of 2023, Fortum will
\nreport its financial performance in the following reporting segments:
\n\u2022
The Generation segment will include the Hydro Generation, Nuclear Generation, Corporate Customers
\nand Markets and Renewables and Decarbonisation business units.
\n\u2022
The Consumer Solutions segment includes the Consumer Solutions business unit.
\n\u2022
The Other segment includes the Circular Solutions business unit, Innovation and Venturing activities,
\nenabling functions and corporate management.
\nFortum will continue to consolidate and report its Russian operations as a separate segment for the time
\nbeing; however, Fortum will continue to assess the basis for consolidation in the coming quarters. Fortum
\nis committed to exiting the Russian market and a divestment is being pursued.
\nFortum will publish restated quarterly segment financials for 2022 before publication of the first quarter
\n2023 results on 11 May 2023.
110
\n40 Group companies by segment
\nG = Generation
1) Shares held by the parent company
\nC = City Solutions
\nCS = Consumer Solutions
\nO = Other Operations
\nR = Russia
\nGroup holding % for companies owned via subsidiaries is based on the Fortum Corporation ownership %
\nin the direct subsidiary times the ownership % of the direct subsidiary in the indirect
\nsubsidiary/associate/joint venture as of 31 December 2022.
\nSubsidiaries by segment
\nEntity Name
Domicile
Segment
Group holding, %
\nBr\u00e4ndskogen Vindkraft Ab Oy
Finland
G
100.0
\nEkopartnerit Turku Oy
Finland
C
51.0
\nEX-KE Oy
Finland
CS
100.0
\nFortum Alku Oy
Finland
O
100.0
\nFortum Asiakaspalvelu Oy
Finland
CS
100.0
\nFortum Assets Oy
Finland
O
100.0
\nFortum Battery Recycling Oy
Finland
C
100.0
\nFortum Bio Oy
Finland
O
100.0
\nFortum Clean Oy
Finland
O
100.0
\n1)
\nFortum Heat and Gas Oy
Finland
C,O
100.0
\n1)
\nFortum Kasvu Oy
Finland
O
100.0
\nFortum Markets Oy
Finland
CS
100.0
\nFortum Norm Oy
Finland
O
100.0
\n1)
\nFortum Power and Heat Holding Oy
Finland
G
100.0
\nFortum Power and Heat Oy
Finland
C,CS,G,O,R
100.0
\n1)
\nFortum Real Estate Oy
Finland
O
100.0
\n1)
\nFortum Renewables Oy
Finland
G
100.0
\nFortum RES Oy
Finland
O
100.0
\nFortum TwoGether Oy
Finland
O
100.0
\n1)
\nFortum Waste Solutions Oy
Finland
C
100.0
\n1)
\nKatajam\u00e4en Tuulivoima Oy
Finland
G
100.0
\nKoillis-Pohjan Energiantuotanto Oy
Finland
G
100.0
\nLamminnevan Tuulivoima Oy
Finland
G
100.0
\nMolpe Vindkraft Ab/Oy
Finland
G
100.0
\nN\u00e4rpes Vindkraft Ab/Oy
Finland
G
100.0
\nOy Pauken Ab
Finland
O
100.0
\nOy Tersil Ab
Finland
O
100.0
\nOy Tertrade Ab
Finland
O
100.0
\nPenkkisuon Tuulivoima Oy
Finland
G
100.0
\nPjelax Vindkraft Ab/Oy
Finland
G
60.0
\nPoikel Vindkraft Ab/Oy
Finland
G
100.0
\nTecofe Oy
Finland
G
100.0
\nTGS Finland Oy
Finland
C
100.0
\nBarry Danmark ApS
Denmark
O
100.0
\nFortum Waste Solutions A/S
Denmark
C
100.0
\nEntity Name
Domicile
Segment
Group holding, %
\nFortum CFS Eesti OU
Estonia
O
100.0
\nBarry France SAS
France
O
100.0
\nFortum France S.A.S
France
G
100.0
\nFortum Batterie Recycling GmbH
Germany
C
100.0
\nFortum Deutschland SE
Germany
O
100.0
\nFortum Service Deutschland GmbH
Germany
C,G,O
100.0
\nMAWAL Energie GmbH
Germany
O
100.0
\nSALWAL Energie GmbH
Germany
O
100.0
\nTGS Germany GmbH
Germany
C
100.0
\nFortum Insurance Limited
Guernsey
O
100.0
\nFortum India Private Limited
India
C
100.0
\n1)
\nSolar One Energy Private Limited
India
C
100.0
\nSolarXL Alpha Energy Private Limited
India
C
100.0
\nSolarXL Beta Energy Private Limited
India
C
100.0
\nSolarXL Delta Energy Private Limited
India
C
100.0
\nSolarXL Gamma Energy Private Limited
India
C
100.0
\nSolarXL Zeta Energy Private Limited
India
C
100.0
\nPT Fortum Energy Solution
Indonesia
C
95.0
\nFortum eNext Ireland Ltd
Ireland
C
100.0
\nFortum Finance Ireland Designated Activity Company
Ireland
O,C,G
100.0
\n1)
\nFortum Global Finance Designated Activity Company
Ireland
O
100.0
\nFortum P&H Ireland Limited
Ireland
O
100.0
\nFortum Participation Limited
Ireland
O,C
100.0
\nFortum 2 B.V.
Netherlands
C
100.0
\nFortum 3 B.V.
Netherlands
C
100.0
\nFortum H&C B.V.
Netherlands
C
100.0
\nFortum Holding B.V.
Netherlands
C,CS,G,O,R
100.0
\n1)
\nFortum Hydro B.V.
Netherlands
O
100.0
\nFortum Power Holding B.V.
Netherlands
O
100.0
\nFortum Russia B.V.
Netherlands
R
100.0
\nFortum SAR B.V.
Netherlands
C
100.0
\nFortum Star B.V.
Netherlands
C
100.0
\nPolarSolar B.V.
Netherlands
C
100.0
\nFortum Consumer Solutions AS
Norway
CS
100.0
\nFortum Forvaltning AS
Norway
C,O,G
100.0
\nFortum Hedging AS
Norway
G
100.0
\nFortum Kundesenter AS
Norway
CS
100.0
\nFortum Plastics Recycling Norway AS
Norway
C
100.0
\nFortum Str\u00f8m AS
Norway
CS
100.0
\nFortum Waste Solutions Norway AS
Norway
C
100.0
\nNorgesEnergi AS
Norway
CS
100.0
\nTellier Service AS
Norway
CS
100.0
\nFortum Marketing and Sales Polska S.A.
Poland
CS
100.0
\nFortum Network Cz\u0119stochowa Sp. z o.o.
Poland
C
100.0
\nFortum Network P\u0142ock Sp. z o.o.
Poland
C
100.0
\nFortum Network Wroc\u0142aw Sp. z o.o.
Poland
C
100.0
\nFortum Power and Heat Polska Sp. z o.o.
Poland
C,CS
100.0
\nFortum Service Poland Sp. z o.o.
Poland
O
100.0
\nFortum Silesia SA
Poland
C
100.0
\nFortum Sprzeda\u017c Sp. z o.o.
Poland
CS
100.0
\nFortum Wind Energy Joint Stock Company, AO FEW
Russia
R
98.2
\nFortum-New Generation 3 Limited Liability Company
Russia
R
100.0
111
\nEntity Name
Domicile
Segment
Group holding, %
\nFortum-New Generation 5 Limited Liability Company
Russia
R
98.2
\nJoint Stock Company Chelyabenergoremont
Russia
R
100.0
\nLLC Bugulchanskaya Solar power station
Russia
R
98.2
\nPAO Fortum
Russia
R
98.2
\nUral Heat Networks Company Joint Stock Company
Russia
R
98.2
\nYlyanovsk Wind Farm LLC
Russia
R
98.2
\nHQ Services Limited
Rwanda
C
49.0
\nEscandinava de Electricidad S.L.U
Spain
CS
100.0
\nBlybergs Kraftaktiebolag
Sweden
G
66.7
\nBorgvik Vindkraft AB
Sweden
G
100.0
\nBr\u00e4nn\u00e4lven Kraft AB
Sweden
G
67.0
\nBullerforsens Kraft Aktiebolag
Sweden
G
88.0
\nEnergikundservice Sverige AB
Sweden
CS
100.0
\nFortum 1 AB
Sweden
R
100.0
\nFortum Energy AB
Sweden
CS
100.0
\nFortum Fastigheter AB
Sweden
O
100.0
\nFortum Gr\u00f6n AB
Sweden
O
100.0
\nFortum Markets AB
Sweden
CS
100.0
\nFortum Mockfors Kraft AB
Sweden
G
88.0
\nFortum Power AB
Sweden
O
100.0
\n1)
\nFortum Produktionsn\u00e4t AB
Sweden
G
100.0
\nFortum Sverige AB
Sweden
C,G,O
100.0
\nFortum Sweden AB
Sweden
C,O
100.0
\n1)
\nFortum Vindkraft Sverige 3 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 4 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 5 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 6 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 7 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 8 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 9 AB
Sweden
G
100.0
\nFortum Waste Solutions AB
Sweden
C
100.0
\nFortum Waste Solutions Holding AB
Sweden
C
100.0
\nG\u00f6ta Energi AB
Sweden
CS
100.0
\nMellansvensk Kraftgrupp Aktiebolag
Sweden
G
86.9
\nNya Bullerforsen Kraft AB
Sweden
G
88.0
\nOre\u00e4lvens Kraftaktiebolag
Sweden
G
65.0
\nSalviken Solpark AB
Sweden
G
100.0
\nS\u00e4var Vindkraft AB
Sweden
G
100.0
\nTGS Sweden AB
Sweden
C
100.0
\nUddeholm Kraft Aktiebolag
Sweden
G
100.0
\nV\u00e4rmlandskraft-OKG-del\u00e4garna Aktiebolag
Sweden
G
73.3
\nFortum Carlisle Limited
United Kingdom
C
100.0
\nFortum Energy Limited
United Kingdom
O
100.0
\nFortum O&M (UK) Limited
United Kingdom
C
100.0
\nFortum Ratcliffe Limited
United Kingdom
C
100.0
\nIVO Energy Limited
United Kingdom
G
100.0
\nValo Ventures I LP Fund
USA
O
99.0
\nAssociated companies and joint ventures by segment
\nEntity Name
Country
Segment
\nGroup
\nholding %
\nBattery Intelligence Oy
Finland
C
32.9
\nChempolis Oy
Finland
C
32.9
\nKemijoki Oy
Finland
G
28.2
\nPosiva Oy
Finland
G
40.0
\nPuro.earth Oy
Finland
O
16.6
\nSallila Energia Oy
Finland
O
46.0
\nTeollisuuden Voima Oyj
Finland
G
25.8
\nTurun Seudun Energiantuotanto Oy
Finland
C
53.5
\nTurun Seudun Kaukol\u00e4mp\u00f6 Oy
Finland
C
30.0
\nWello Oy
Finland
O
16.2
\n1)
\nAssam Bio Refinery Private Limited
India
C
40.3
\nFortum Charge & Drive India Private Limited
India
C
63.0
\nIndia Sun B.V.
Netherlands
C
43.8
\nNordic Wind B.V.
Netherlands
G
20.0
\nYustek Holding B.V.
Netherlands
R
50.0
\nFortum Nordkraft Vind DA
Norway
G
50.0
\nLinnvasselv Kraftlag SA
Norway
G
50.0
\nFortum-New Generation 4 Limited Liability Company
Russia
R
50.0
\nTGC1 Territorial Generating Company 1
Russia
R
29.99
\nUral energy retail LLC
Russia
R
50.0
\n\u00c5ngefallen Kraft AB
Sweden
G
50.0
\nBl\u00e5sj\u00f6n Kraft AB
Sweden
G
50.0
\nForsmarks Kraftgrupp Aktiebolag
Sweden
G
25.5
\nHorrmundsvalla Kraftaktiebolag
Sweden
G
50.0
\nOKG Aktiebolag
Sweden
G
45.5
\nStensj\u00f6n Kraft AB
Sweden
G
50.0
\nT\u00e5sans Kraftaktiebolag
Sweden
G
40.0
\nV\u00e4sa Kraftaktiebolag
Sweden
G
50.0
\nVattenkraftens Milj\u00f6fond Sverige AB
Sweden
G
22.7
\nSouth Clyde Energy Recovery Holdings Limited
United Kingdom
C
50.0",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7421": {
"value": "1.1 Basic information Fortum Corporation (the company) is a Finnish public limited liability company domiciled in Espoo,
\nFinland. For
tum\u2019s shares are traded on Nasdaq Helsinki. Fortum
is an energy company driving the
\nchange for a cleaner world. Our role is to ensure the security of supply and a fast and reliable transition to
\na carbon-neutral economy by providing customers and societies with clean energy and sustainable
\nsolutions. Fortum\u2019s core operation are located in the Nordics and consist of CO
2
-free power generation,
\nelectricity sales, district heating as well as recycling and waste solutions.
\nThese financial statements were approved by the Board of Directors on 1 March 2023. The Financial
\nStatements are also published in accordance with the European Single Electronic Format (ESEF)
\nreporting requirement. The audit firm, Deloitte Oy, has provided
an independent auditor\u2019s reasonable
\nassurance report on Fortum\u2019s ESEF Financial Statements in accordance with ISAE 3000 (Revised). The
\nESEF report is available at https://www.fortum.com/about-us/investors/reports-and-presentations.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7424": {
"value": "Fortum Corporation",
"dimensions": {
"concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7425": {
"value": "public limited liability company",
"dimensions": {
"concept": "ifrs-full:LegalFormOfEntity",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7426": {
"value": "Espoo,Finland",
"dimensions": {
"concept": "ifrs-full:PrincipalPlaceOfBusiness",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7427": {
"value": "Espoo,Finland",
"dimensions": {
"concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7429": {
"value": "Finland",
"dimensions": {
"concept": "ifrs-full:DomicileOfEntity",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7433": {
"value": "Fortum is an energy company driving the
\nchange for a cleaner world. Our role is to ensure the security of supply and a fast and reliable transition to
\na carbon-neutral economy by providing customers and societies with clean energy and sustainable
\nsolutions. Fortum\u2019s core operation are located in the Nordics and consist of CO
2
-free power generation,
\nelectricity sales, district heating as well as recycling and waste solutions.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7444": {
"value": "These financial statements were approved by the Board of Directors on 1 March 2023.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7452": {
"value": "1.2 Basis of preparation The consolidated financial statements of Fortum Group for the year ended 31 December 2022 have been
\nprepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC Interpretations
\nas adopted by the European Union. The notes to the consolidated financial statements also comply with
\nthe supplementing requirements of the Finnish accounting and company legislation.
\nThe consolidated financial statements have been prepared under the historical cost convention, except
\nfor financial assets and financial liabilities (including derivative instruments) that are valued at fair value
\nthrough profit and loss or other comprehensive income.
\nThe figures in the consolidated financial statements have been rounded and consequently the sum of
\nindividual figures may deviate from the sum presented. Key figures have been calculated using exact
\nfigures. Unless otherwise indicated, all amounts are presented in millions of euro (EUR million).
\nThe following symbols show which amounts in the notes reconcile to the items in the income statement,
\nbalance sheet and cash flow statement:
\nIS
= Income statement
\nBS
= Balance sheet
\nCF
= Cash flow
\nFortum\u2019s consolidated income statement was modified in 2022 to include discontinued operations
\ndisclosure as required by IFRS 5 Non-current assets held for sale and discontinued operations. See
\n\ue001
Note 1.7
Impact of Uniper deconsolidation on consolidated financial statements.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7455": {
"value": "The consolidated financial statements of Fortum Group for the year ended 31 December 2022 have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC Interpretations
\nas adopted by the European Union.",
"dimensions": {
"concept": "ifrs-full:StatementOfIFRSCompliance",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7482": {
"value": "1.3 Principles for consolidation These consolidated financial statements comprise of the parent company, subsidiaries, joint ventures and
\nassociated companies.
\nFortum Group was formed in 1998 by using the pooling-of-interests method for consolidating Fortum
\nPower and Heat Oy and Fortum Oil and Gas Oy (the latter demerged to Fortum Oil Oy and Fortum Heat
\nand Gas Oy 1 May 2004). In 2005 Fortum Oil Oy (current Neste Oyj) was separated from Fortum by
\ndistributing 85% of its shares to Fortum\u2019
s shareholders and by selling the remaining 15%. This means that
\nthe acquisition cost of Fortum Power and Heat Oy and Fortum Heat and Gas Oy has been eliminated
\nagainst the share capital of the companies. The difference has been entered as a decrease in
\nsh
areholders\u2019 equity.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7497": {
"value": "1.3.1 Subsidiaries Subsidiaries are defined as companies over which Fortum has control. Control exists when Fortum is
\nexposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
\naffect those returns through its power over the entity. See
\ue001
Note 3
Acquisitions, disposals, assets held for
\nsale and discontinued operations.
\nIntercompany transactions, balances and unrealised gains on transactions between Group companies
\nare eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
\nimpairment of the asset transferred.
\nWhere necessary, subsidiaries\u2019 accounting policies have been changed to ensure consistency with the
\npolicies the Group has adopted.
\nCertain subsidiaries and associated companies are not included in the consolidated financial
\nstatements on materiality grounds. These companies are accounted for outside the scope of IFRS 9 and
\nmeasured at cost, with adjustments for any loss allowance.
\nFortum Group subsidiaries are disclosed in
\ue001
Note 40
Group companies by segment. Group holding %
\nfor companies owned via subsidiaries is based on the Fortum Corporation ownership % in the direct
\nsubsidiary times the ownership % of the direct subsidiary in the indirect subsidiary / associate / joint
\nventure.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7522": {
"value": "1.3.2 Associates
\nAssociated companies are entities over which the Group has significant influence but not control,
\ngenerally accompanying a shareholding of between 20% and 50% of the voting rights. The Group\u2019s
\ninterests in associated companies are accounted for using the equity method of accounting. See
\n\ue001
Note 18
Participations in associated companies and joint ventures.
\n1.3.3 Joint ventures
\nJoint ventures are arrangements in which the Group has joint control. Joint ventures are accounted for
\nusing the equity method of accounting. See
\ue001
Note 18
Participations in associated companies and joint
\nventures.
ACCOUNTING POLICIES
\nThe Group\u2019s i
nterests in associated companies and jointly controlled entities are accounted for using the
\nequity method of accounting. Assets acquired and liabilities assumed in the investment in associates or
\njoint ventures are measured initially at their fair values at the acquisition date. The excess of the cost of
\nacquisition over the fair value of the Group\u2019s share of the identifiable net assets acquired is recorded as
\ngoodwill.
\nThe Group\u2019s share of its associates or joint ventures post
-acquisition profits or losses after tax, and
\nthe expenses related to the adjustments to the fair values of the assets and liabilities assumed are
\nrecognised in the income statement. The cumulative post-acquisition movements are adjusted against
\nthe carrying amount of the investment.
The Group\u2019s share of post
-acquisition adjustments to associates
\nor joint ventures equity that has not been recognised in the associate\u2019s or joint venture\u2019s income
\nstatement, is recognised directly in Group\u2019s shareholder\u2019s equity, and against the carrying a
mount of the
\ninvestment.
\nWhen the Group\u2019s share of losses in an associate or a joint venture equals or exceeds its interest in
\nthe associate or joint venture, including any other unsecured receivables, the Group does not recognise
\nfurther losses, unless it has incurred obligations or made payments on behalf of the associate or joint
\nventure.
\nMaterial unrealised gains on transactions between the Group and its associates or joint ventures are
\neliminated to the extent of the Group\u2019s interest in the associate o
r joint venture. Material unrealised
\nlosses are also eliminated, unless the transaction provides evidence of an impairment of the asset
\ntransferred. Accounting policies of associates or joint ventures have been changed where necessary to
\nensure consistency with the policies adopted by the Group.
\nIf more recent information is not available, the share of the profit of certain associated or joint venture
\ncompanies is included in the consolidated accounts based on the latest available information.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7523": {
"value": "1.3.2 Associates
\nAssociated companies are entities over which the Group has significant influence but not control,
\ngenerally accompanying a shareholding of between 20% and 50% of the voting rights. The Group\u2019s
\ninterests in associated companies are accounted for using the equity method of accounting. See
\n\ue001
Note 18
Participations in associated companies and joint ventures.
ACCOUNTING POLICIES
\nThe Group\u2019s i
nterests in associated companies and jointly controlled entities are accounted for using the
\nequity method of accounting. Assets acquired and liabilities assumed in the investment in associates or
\njoint ventures are measured initially at their fair values at the acquisition date. The excess of the cost of
\nacquisition over the fair value of the Group\u2019s share of the identifiable net assets acquired is recorded as
\ngoodwill.
\nThe Group\u2019s share of its associates or joint ventures post
-acquisition profits or losses after tax, and
\nthe expenses related to the adjustments to the fair values of the assets and liabilities assumed are
\nrecognised in the income statement. The cumulative post-acquisition movements are adjusted against
\nthe carrying amount of the investment.
The Group\u2019s share of post
-acquisition adjustments to associates
\nor joint ventures equity that has not been recognised in the associate\u2019s or joint venture\u2019s income
\nstatement, is recognised directly in Group\u2019s shareholder\u2019s equity, and against the carrying a
mount of the
\ninvestment.
\nWhen the Group\u2019s share of losses in an associate or a joint venture equals or exceeds its interest in
\nthe associate or joint venture, including any other unsecured receivables, the Group does not recognise
\nfurther losses, unless it has incurred obligations or made payments on behalf of the associate or joint
\nventure.
\nMaterial unrealised gains on transactions between the Group and its associates or joint ventures are
\neliminated to the extent of the Group\u2019s interest in the associate o
r joint venture. Material unrealised
\nlosses are also eliminated, unless the transaction provides evidence of an impairment of the asset
\ntransferred. Accounting policies of associates or joint ventures have been changed where necessary to
\nensure consistency with the policies adopted by the Group.
\nIf more recent information is not available, the share of the profit of certain associated or joint venture
\ncompanies is included in the consolidated accounts based on the latest available information.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7531": {
"value": "1.3.3 Joint ventures
\nJoint ventures are arrangements in which the Group has joint control. Joint ventures are accounted for
\nusing the equity method of accounting. See
\ue001
Note 18
Participations in associated companies and joint
\nventures.
ACCOUNTING POLICIES
\nThe Group\u2019s i
nterests in associated companies and jointly controlled entities are accounted for using the
\nequity method of accounting. Assets acquired and liabilities assumed in the investment in associates or
\njoint ventures are measured initially at their fair values at the acquisition date. The excess of the cost of
\nacquisition over the fair value of the Group\u2019s share of the identifiable net assets acquired is recorded as
\ngoodwill.
\nThe Group\u2019s share of its associates or joint ventures post
-acquisition profits or losses after tax, and
\nthe expenses related to the adjustments to the fair values of the assets and liabilities assumed are
\nrecognised in the income statement. The cumulative post-acquisition movements are adjusted against
\nthe carrying amount of the investment.
The Group\u2019s share of post
-acquisition adjustments to associates
\nor joint ventures equity that has not been recognised in the associate\u2019s or joint venture\u2019s income
\nstatement, is recognised directly in Group\u2019s shareholder\u2019s equity, and against the carrying a
mount of the
\ninvestment.
\nWhen the Group\u2019s share of losses in an associate or a joint venture equals or exceeds its interest in
\nthe associate or joint venture, including any other unsecured receivables, the Group does not recognise
\nfurther losses, unless it has incurred obligations or made payments on behalf of the associate or joint
\nventure.
\nMaterial unrealised gains on transactions between the Group and its associates or joint ventures are
\neliminated to the extent of the Group\u2019s interest in the associate o
r joint venture. Material unrealised
\nlosses are also eliminated, unless the transaction provides evidence of an impairment of the asset
\ntransferred. Accounting policies of associates or joint ventures have been changed where necessary to
\nensure consistency with the policies adopted by the Group.
\nIf more recent information is not available, the share of the profit of certain associated or joint venture
\ncompanies is included in the consolidated accounts based on the latest available information.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7540": {
"value": "1.3.4 Non-controlling interests Non-controlling interests in subsidiaries are identified separately from the equity of the owners of the
\nparent company. Non-controlling interests are generally initially measured at the non-
controlling interests\u2019
\nproportionate share of the fair value of the acquiree\u2019s identifiable net assets. Changes in non
-controlling
\ninterest due to changes in ownership interest of a subsidiary are accounted for as equity transactions.
\nSubsequent to acquisition, the carrying amount of non-controlling interests is the amount of those
\ninterests at initial recognition plus the non-
controlling interests\u2019 share
of subsequent changes in equity.
\nSee
\ue001
Note 26
Non-controlling interests.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7612": {
"value": "1.5 Foreign currency transactions and translation 1.5.1 Functional and presentation currency
\nItems inc
luded in the financial statements of each of the Group\u2019s entities are measured using the currency
\nof the primary economic environment in which the entity operates (the functional currency). The
\nconsolidated financial statements are presented in euros, whic
h is the company\u2019s functional and
\npresentation currency.
\n1.5.2 Transactions and balances
\nTransactions denominated in foreign currencies are translated using the exchange rate at the date of
\ntransaction. Receivables and liabilities denominated in foreign currencies outstanding on the balance
\nsheet date are translated using the balance sheet date exchange rate. Exchange rate differences are
\nrecognised in the consolidated income statement. Net exchange differences relating to financing
\ncomponents are recognised in the income consolidated statement, except when deferred to equity as
\nqualifying cash flow hedges. Translation differences on financial assets through other comprehensive
\nincome are included in Other equity components in equity.
\n1.5.3 Group companies
\nIncome statement and cash flow statement of subsidiaries, whose functional currencies are not euro, are
\ntranslated into euro using the average exchange rates; whereas the balance sheets of such subsidiaries
\nare translated into euro using the closing exchange rates on the balance sheet date. On consolidation,
\nexchange rate differences arising from the translation of net investment in foreign entities, as well as
\nborrowings and other currency instruments designated as hedges for such investments, are taken to
\nequity. When a foreign operation is sold, such exchange differences are recognised in the consolidated
\nincome statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the
\nacquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at
\nclosing rate.
\nThe balance sheet date rate is based on the exchange rate published by the European Central Bank for
\nthe closing date. The average exchange rate is calculated as an average of daily closing rates from the
\nEuropean Central Bank. The European Central Bank stopped publishing rouble (RUB) rates from 2 March
\n2022. From 2 March 2022, the daily spot rate at 17:15 EET from the market has been used.
\nKey exchange rates used in consolidated financial statements
\nAverage rate
Balance sheet date rate
\n2022
2021
31 Dec 2022
31 Dec 2021
\nUnited Kingdom (GBP)
0.8528
0.8596
0.8869
0.8403
\nNorway (NOK)
10.1026
10.1633
10.5138
9.9888
\nPoland (PLN)
4.6861
4.5652
4.6808
4.5969
\nRussia (RUB)
73.6173
87.1527
77.8998
85.3004
\nSweden (SEK)
10.6296
10.1465
11.1218
10.2503
\nUnited States (USD)
1.0530
1.1827
1.0666
1.1326
\n1.5.4 Associates and joint ventures
\nAssociates and joint ventures, whose measurement and reporting currencies are not euro, are translated
\ninto the Group reporting currency using the same principles as for subsidiaries.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7615": {
"value": "1.5.1 Functional and presentation currency Items inc
luded in the financial statements of each of the Group\u2019s entities are measured using the currency
\nof the primary economic environment in which the entity operates (the functional currency). The
\nconsolidated financial statements are presented in euros, whic
h is the company\u2019s functional and
\npresentation currency.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7808": {
"value": "1.7 Impact of Uniper deconsolidation on consolidated financial statements
\nUniper SE, a German listed company, was acquired in March 2020. Uniper is an international energy
\ncompany with activities in more than 40 countries. Its business is the secure provision of energy and
\nrelated services. Its main activities include power generation in Europe and Russia as well as global
\nenergy trading and optimisation.
\n1.7.1 Discontinued operations
\nFortum lost control of Uniper on the signing of the agreement in principle to sell the shares in Uniper SE to
\nthe German State on 21 September 2022. Thus, Uniper was deconsolidated at 30 September 2022.
\nUniper has been a s
eparate reportable segment in Fortum\u2019s consolidated financial statements, which
\nresults in Uniper being classified as discontinued operations. The transaction was completed on 21
\nDecember 2022. See also
\ue001
Note 2
Critical accounting estimates and judgements.
\nFortum\u2019s consolidated income statement consolidated cash flow statement were modified in 2022 to
\ninclude discontinued operations disclosure as required by IFRS 5 Non-current assets held for sale and
\ndiscontinued operations. Comparatives for 2021 were restated and a separate stock exchange release
\nwith restated comparatives was issued on 6 October 2022. Discontinued operations include Fortum\u2019s
\nformer subsidiary Uniper SE and its consolidated group companies.
\nIncome statement information in the following notes to the financial statements include only continuing
\noperations, unless otherwise specified. Uniper was deconsolidated at 30 September 2022, and thus
\nUniper\u2019s balance sheet items are not included on Fortum\u2019s 31 December 2022 consolidated balance
\nsheet. Consolidated balance sheet at 31 December 2021 included Uniper.
\n1.7.2 Joint ownership in the Swedish nuclear company OKG AB
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG Aktiebolag (OKG AB), with
\nFortum owning 45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March
\n2020 to 30 September 2022, with the results of the company being split between the Uniper segment and
\nthe Generation segment according to ownership. On deconsolidation of Uniper at 30 September 2022,
\nOKG AB was reclassified as an associated company. The reclassification resulted in the restatement of
\nthe Generation segment\u2019s 2021 financials.
\n1.7.3 Group impact from Uniper deconsolidation
\nOn deconsolidation of Uniper at 30 September 2022, Fortum recorded EUR 28.0 billion one-time, mainly
\nnon-
cash positive effect. The amount consists of the net effect from the deconsolidation of Uniper\u2019s
\nassets, liabilities and non-controlling interest, and the book value of Uniper-related goodwill and other fair
\nvalue adjustments made on acquisition; as well as certain items previously recognised in other
\ncomprehensive income, mainly foreign exchange differences, that are reclassified to profit and loss on
\ndisposal. See also
\ue001
Note 3.4
Discontinued operations.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7869": {
"value": "2 Critical accounting estimates and judgements
\nThe preparation of IFRS consolidated financial statements requires management to make estimates and
\nassumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
\nliabilities existing at the balance sheet date, as well as the reported amounts of revenues and expenses during
\nthe reporting period.
\nEstimates and judgements are continually evaluated and are based on historical experience and other
\nfactors, including expectations of future events that are believed to be reasonable under the circumstances
\nbased on, for instance, the analysis of energy policy and the regulatory environment. The Russia-Ukraine war
\nhas fundamentally changed the geopolitical situation; and given the uncertainty and risks arising from the
\ngeopolitical situation, there may be future effects on the consolidated financial statements arising from more
\nvolatile global economy and especially commodity markets. These factors can affect the carrying amounts of
\nassets and liabilities, the amount and timing of earnings recognition, as well as cash flows.
\nThe table below lists the areas where management\u2019s accounting estimates and judgements are most critical
\nto reported results and financial position; as well as where to find more information on the areas of critical
\naccounting estimate and judgement.
\nCritical accounting estimates and judgements
Note
\nJudgement used in determining the valuation of certain financial
\ninstruments
\n14. Financial assets and liabilities by categories
\n15. Financial assets and liabilities by fair value
\nhierarchy
\nAssumptions used when determining loss of control on disposal of
\nsubsidiaries
\n2. Critical accounting estimates and judgments
\n3. Acquisitions, disposals, assets held for sale and
\ndiscontinued operations
\nAssigned values and useful lives determined for intangible assets
\nand property, plant and equipment acquired in a business
\ncombination
\n16. Intangible assets
\n17. Property, plant and equipment and right-of-use
\nassets
\nAssumptions related to impairment testing of property, plant and
\nequipment and intangible assets as well as associated companies
\nand joint ventures
\n16. Intangible assets
\n17. Property, plant and equipment and right-of-use
\nassets
\n18. Participations in associated companies and joint
\nventures
\n19. Impairment testing
\nJudgement used when assessing the nature of Fortum's interest in
\nits investees, when considering the classification of Fortum's joint
\narrangements, as well as commitments arising from these
\narrangements
\n18. Participations in associated companies and joint
\nventures
\nEstimates used for the recognition and measurement of deferred tax
\nassets
\n28. Income taxes on the balance sheet
\n37. Legal actions and official proceedings
\nAssumptions made to determine long-term cash flow forecasts of
\nestimated costs for provision related to nuclear production
\n29. Nuclear related assets and liabilities
\nAssumptions made when estimating provisions
30. Other provisions
\nAssumptions used to determine future pension obligations
31. Pension obligations
\nAssumptions used to determine the lease liability
34. Leases
\n2.1 Russia\u2019s invasion of Ukraine and macroeconomic environment
\nRussia\u2019s attack on Ukraine in February 2022 has severely impacted Fortum\u2019s current and future businesses.
\nThe main imp
acts on Fortum\u2019s 2022 financials include the events that led to the divestment of Uniper to the
\nGerman State for EUR 0.5 billion; the severe liquidity constraints caused by significantly higher collaterals
\nrelated to power and gas on the commodities exchanges, which required additional financing measures; as well
\nas the overall impact of the war on Fortum\u2019s Russian operations.
\n2.1.1 Uniper divestment to the German State
\nFollowing the war in Ukraine, particularly the Uniper segment\u2019s business and financial risk profiles significantly
\ndeteriorated in 2022, mainly due to Russian gas curtailments and commodity price volatility, which significantly
\nincreased margining requirements and liquidity needs. In July 2022, Fortum and Uniper reached out to the
\nGerman Government to agree on a long-term solution for Uniper.
\nOn 21 September 2022, Fortum, the German Government and Uniper signed an agreement in principle
\nallowing the German State to take full control of Uniper. This final Uniper agreement in principle replaced the
\ninitial agreement between the same parties, signed in July 2022. After July, the European energy crisis
\nescalated further and the severity of the situation made it apparent that the previously agreed stabilisation
\nmeasures were insufficient and difficult to implement. By 21 September 2022, Uniper had accumulated
\nsignificant negative earnings amounting to billions of euros in gas-related losses, and it had become evident that
\nthe company, as privately-owned, was not able to fulfil its role as a critical energy provider of security of supply in
\nGermany.
\nThe transaction was completed on 21 December 2022.
Under the agreement, Uniper issued new ordinary
\nregistered shares, which the German State subscribed at a nominal value of EUR 1.70 per share. At completion
\nof the equity capital increase, the German State bought all of Fortum\u2018s approximately 293 million shares in
\nUniper SE for EUR 1.70 per share, i.e. for a total of EUR 0.5 billion; and Uniper repaid the EUR 4 billion
\nshareholder loan. Out of the EUR 4.0 billion parent company guarantee facility that Fortum had granted to
\nUniper, a total of EUR 3.0 billion was released by year-end 2022. The remaining, approximately EUR 1.0 billion,
\nwith a full German State back-to-back guarantee (indemnity), will be released latest at the end of June 2023.
\nThe signing of the agreement in principle with the German Government on 21 September 2022 triggered a
\ncontrol assessment as required by IFRS 10 Consolidated financial statements. Management concluded that
\nFortum\u2019s rights are no longer substantive as it does not have practical ability to use control over Uniper. The loss
\nof control was impacted by the signing of the agreement in principle and the significant financial support to
\nUniper through the KfW Bank\u2019s bridge financing.
In the judgement of the management, the overall effect of that
\nfinancing, combined with the agreement in principle, was such that the German Government was in practice
\nsubsequently able to approve or reject the most important decisions in relation to the business of Uniper.
\nConsequently, control was assessed to have been lost and Uniper was deconsolidated at 30 September 2022.
\nIn addition, Uniper was presented as discontinued operations in accordance with IFRS 5 Non-current assets
\nheld for sale and discontinued operations as management was committed to fully disposing of Uniper SE\u2019s
\nshares, and Uniper had been a separate reportable segment and a significant component of Fortum Group. See
\nalso
\ue001
Note 1
Significant accounting policies.
\nDeferred tax assets at 31 December 2022 include EUR 706 million recognised in 2022 relating to a one-time
\ntax impact realised in Ireland, which resulted in increased deferred tax assets on tax loss carry forward. The
\ndeferred tax asset mainly relates to impacts caused by the Uniper divestment, and the utilisation is subject to
\nfuture taxable income in Ireland. See
\ue001
Note 28
Income taxes on the balance sheet.
\n2.1.2 Liquidity
\nThe energy crisis in Europe has resulted in the very volatile commodity markets with unprecedentedly high
\nprices that have required significantly higher collaterals related to power and gas on the commodities
\nexchanges. In the latter part of 2022, the Nordic power prices declined from the record levels at the end of
\nAugust and the market was less volatile. However, Fortum remained prepared for continued market turbulence,
\nand has taken precautionary financing measures to secure its liquidity position and financial flexibility. On 6
\nSeptember 2022 Fortum signed a EUR 2,350 million bridge financing with Finnish State-owned company,
\nSolidium. According to loan terms, in order to keep the facility effective for the one year period, on 26 September
\n2022, Fortum announced to draw EUR 350 million under this facility. On 21 December 2022, Uniper repaid its
\nEUR 4 billion shareholder loan and Fortum received the sales proceeds of EUR 0.5 billion from the divestment
\nof Uniper shares. At the end of the year, Fortum\u2019s financial situation was solid,
Fortum Group had undrawn
\ncommitted credit facilities amounting to EUR 7,200 million, as well as EUR 100 million committed overdraft limits
\nthat are valid until further notice. See also
\ue001
Note 27
Interest-bearing liabilities.
2.1.3 Geopolitical uncertainties and impacts on Russian operations
\nDue to the sanctions imposed by the Russi
an Federation, Fortum\u2019s Russian subsidiaries are subject to foreign
\nexchange transfer restrictions, which currently limit the transfer of funds, such as potential dividend distributions,
\ninto the EU. The sanctions currently do not, however, restrict Fortum from exercising its voting rights at the
\ngeneral meetings of the Russian subsidiaries. Hence, Fortum\u2019s Russian subsidiaries continue to be consolidated
\nas subsidiaries at 31 December 2022. However, the cash and cash equivalents held by Fortum\u2019s Russia
\nsegment in Russia, a total of EUR 247 million, are not available to the other group companies.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, however there are no decisions and these processes might take some time
\nand are subject to regulatory approvals. See also Risk management section in the Operating and financial
\nreview.
\nTotal impairment charges in 2022 for the Russia cash-generating unit (CGU) amount to EUR 1,697 million
\n(pre-tax), including EUR 905 million impairment of intangible assets and property, plant and equipment, EUR
\n475 million impairment of participations in associates and joint ventures, EUR 145 million expected credit losses
\non Russian deposits and receivables, as well as EUR 171 million write down of other shares. The remaining
\nbook value of Russia segment\u2019s net assets is approximately EUR 1.7 billion at 31 December 2022 (31 Dec
\n2021: 2.5). The book value is based on the assumption that the controlled exit can be executed, and that other
\nassumptions made by management realise as expected. The carrying amount of the Russia CGU is equal to its
\nrecoverable amount, meaning that any detrimental future changes may cause further impairment. See
\n\ue001
Note 19
Impairment testing.
\n2.2 Climate-related matters
\nFortum\u2019s power generation in the Nordic countries is mainly based on CO
2
-free hydro and nuclear power. A
\nminor share of Fortum\u2019s power generation is currently based on solar and wind. Fortum has also generation of
\ndistrict heating and cooling in Finland and Poland. In Europe, heat is mainly produced at energy-efficient
\ncombined heat and power (CHP) plants. In addition, Fortum offers industrial and infrastructure solutions, e.g.,
\nwaste-to-energy, as well as energy sales. In Russia, Fortum has mainly natural gas-fired generation.
\nMain climate-related risks facing Fortum include transition risks, such as changes in legislation, changes in
\ntechnology, impact on supply or demand, and reputation; as well as physical risks, such as those arising from
\nextreme weather conditions or changes in long-term weather patterns. For instance, floods will impact the
\noptimal operation of hydro power plants. Fortum is systematically reducing risks related to dam safety through
\nlong-term investments to secure the discharge capacity in extreme flood situations.
\nThe impacts of climate change are reflected in the consolidated financial statements generally when specific
\nactions, such as new investments, to transition to CO
2
-free production or to tackle climate change have been
\napproved; or when climate-related risks have materialised. The impact from climate-related risks to 2022
\nfinancial statements has not been material.
\nThe following financial statement items are most relevant when considering the impact of climate-related
\nmatters:
\n\u2022
Impairment testing: approved actions towards Fortum\u2019s climate risks an
d targets are reflected in the
\nassumptions used in the impairment testing, as appropriate. See
\ue001
Note 19
Impairment testing.
\n\u2022
Property, plant and equipment: economic lives and book values of property, plant and equipment reflect
\napproved actions towards Fo
rtum\u2019s climate
-related risks and targets. See
\ue001
Note 17
Property, plant and
\nequipment.
\n\u2022
Nuclear provisions include future costs for decommissioning nuclear power plants, and the appropriate
\ntreatment of spent fuel. See
\ue001
Note 29
Nuclear-related assets and liabilities.
\nFor accounting treatment applied to emission allowances, see
\ue001
Note 22
Inventories.
\nFortum\u2019s new climate
-related targets are disclosed in
\ue001
Note 39
Events after the balance sheet date.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS
\nREGARDING LOSS OF CONTROL
\nFortum reassesses if it controls its subsidiaries if facts and circumstances indicate that there are
\nchanges to the three elements of control: power over the investee, exposure or rights to variable returns,
\nor the ability to use power over to affect the amount of returns. Therefore, the date on which control over
\na subsidiary is lost may require management judgment. With regards to Uniper deconsolidation,
\nmanagement has used judgment in concluding that the signing of the agreement with the German
\nGovernment on 21 September 2022 resulted in loss of control. See also
\ue001
Note 2
Critical accounting
\nestimates and judgements.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nASSIGNED VALUES AND USEFUL LIVES IN ACQUISITIONS
\nIn an acquisition acquired intangible and tangible assets are fair valued and their remaining useful lives
\nare determined. Management believes that the assigned values and useful lives, as well as the underlying
\nassumptions, are reasonable. Different assumptions and assigned lives could have a significant impact
\non the reported amounts.
\nThe Group has significant carrying values in property, plant and equipment, intangible assets and
\nparticipations in associated companies and joint ventures which are tested for impairment according to
\nthe accounting policy. See further information on the impairment testing in
\ue001
Note 19
Impairment testing.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
\nManagement is required to make significant judgements when assessing the nature of Fortum\u2019s interest
\nin its investees and when considering the classification of Fortum\u2019s joint arrangements. In the
\nclassification, emphasis has been put on decision making, legal structure, financing and risks of the
\narrangements.
\nManagement judgement is required when testing the carrying amounts for participations in associated
\ncompanies and joint ventures for impairment. See
\ue001
Note 19
Impairment testing for more information.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS
\nRELATED TO IMPAIRMENT TESTING
\nImpairment testing is forward-looking and requires management to make certain assumptions, as
\nexplained below.
\nThe recoverable amounts of cash-generating units are determined by value in use calculations. These
\ncalculations are based on estimated discounted future cash flows in local currency from most recent,
\nlong-term forecast, and / or long-term assumptions approved by management. Cash flows cover an
\nexplicit forecast period of three years for City Solutions CGU and six years for Consumer Solutions
\nCGU. Cash flow projections beyond the explicit forecast period are estimated by extrapolating
\nprojections using a steady or declining growth rate.
\nThe period covered by cash flows is related to the useful lives of the assets being reviewed for
\nimpairment. The growth rate used to extrapolate the cash flow projections until the end of assets' useful
\nlives is in line with the assumed inflation, taking into consideration market outlook forecast. Cash flows
\narising from future investments, such as new plants, are excluded; unless projects have been started, in
\nwhich case the cash outflow needed to complete the started projects is included.
\nThe discount rates reflect current assessments of the time value of money and relevant market risk
\npremiums specific to each cash generating unit, reflecting risks and uncertainties for which the future
\ncashflow estimates have not been adjusted.
\nPreparation of these cash flow estimates requires management to make assumptions relating to
\nfuture expectations. Assumptions vary depending on the business the tested assets are in. Approved
\nactions towards Fortum\u2019s climate targets are reflected in the assumptions used in the impairment testing.
\nKey assumptions used in impairment testing are presented below, as well as the basis for determining
\nthe value of each assumption. Assumptions are based on internal and external data that are consistent
\nwith observable market information, when applicable.
Key assumptions
Basis for determining the value for key assumptions
\nPower market development, recycling
\nand waste solutions market
\ndevelopment
\nHistorical analysis and prospective forecasting
\nRegulation framework
Current market setup and prospective forecasting
\nUtilisation of power plants and
\ntreatment facilities
\nPast experience, technical assessment and forecasted market development
\nForecasted maintenance investments
Past experience, technical assessment and planned maintenance work
\nDiscount rate
Mostly market based information
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS AND
\nESTIMATES REGARDING FUTURE TAX CONSEQUENCES
\nFortum has deferred tax assets and liabilities which are expected to be realised through the income
\nstatement over the extended periods of time in the future. In calculating the deferred tax items, Fortum is
\nrequired to make certain assumptions and estimates regarding the future tax consequences attributable
\nto differences between the carrying amounts of assets and liabilities as recorded in the financial
\nstatements and their tax basis.
\nAssumptions made include the expectation that future operating performance for subsidiaries will be
\nconsistent with historical levels of operating results, recoverability periods for tax loss carry-forwards will
\nnot change, and that existing tax laws and rates will remain unchanged into foreseeable future. Fortum
\nbelieves that it has prudent assumptions in developing its deferred tax balances.
\nFortum continually evaluates the probability of utilising deferred tax assets and considers various
\nfactors that, in addition to the actual and planned earnings of the past, take into account medium-term
\nand long-term planning. The basis for recognising deferred tax assets is an estimate by management of
\nthe extent to which it is probable that there will be sufficient taxable profit in the foreseeable future
\nagainst which the unused tax losses, tax credits and deductible temporary differences can be offset.
\nAssumptions and estimates regarding main uncertain tax positions are supported by external legal
\ncounsel or expert opinion.
\nIf the actual final outcome (regarding tax disputes) would differ negatively from management\u2019s
\nestimates with 10%, the Group would need to increase the income tax liability by EUR 4 million at 31
\nDecember 2022.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS MADE
\nWHEN ESTIMATING PROVISIONS RELATED TO NUCLEAR PRODUCTION
\nThe provision for future obligations for nuclear waste management including decommissioning of
\nFortum's nuclear power plants and related spent fuel is based on long-term cash flow forecasts of
\nestimated future costs. The main assumptions are technical plans, timing, cost estimates and discount
\nrate. The technical plans, timing and cost estimates are approved by governmental authorities.
\nAny changes in the assumed discount rate would affect the provision. If the discount rate used would
\nbe lowered, the provision would increase. For the power plants where the actual Share of the Nuclear
\nWaste Fund is higher than the provision an increase in provisions would be offset by an increase in the
\nrecorded share of Fortum's part of the Nuclear Waste Funds on the balance sheet. The total effect on
\nthe income statement would be positive since the decommissioning part of the provision is treated as an
\nasset retirement obligation. This situation will prevail as long as the actual Share of the Nuclear Waste
\nFund is higher than recognised in the balance sheet and IFRS is limiting the carrying value of the assets
\nto the amount of the provision since Fortum does not have control or joint control over the fund.
\nBoth in Finland and in Sweden nuclear operators are legally obligated for the decommissioning of the
\nplants and the disposal of spent fuel (nuclear waste management). In both countries the nuclear operators
\nare obligated to secure the funding of nuclear waste management by paying to government operated
\nnuclear waste funds. The nuclear operators also have to give securities to guarantee that sufficient funds
\nexist to cover future expenses of decommissioning of the power plant and the disposal of spent fuel.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS MADE
\nWHEN ESTIMATING PROVISIONS
\nProvisions for present obligations require management judgment in determining whether it is probable
\nthat an outflow of economic benefits will be required to settle the obligation. Estimation is required in
\ndetermining the value of the obligation as the amount recognised as a provision is based on the best
\nestimate of unavoidable costs required to settle the obligation at the end of the reporting period. When
\nestimating unavoidable costs, management may be required to consider a range of possible outcomes
\nand their associated probabilities, risks and uncertainties surrounding the events and circumstances, as
\nwell as making assumptions of the timing of payment. Estimation is also required in determining the rate
\nused to discount provisions to present value. Changes in estimates of timing or amounts of costs
\nrequired to settle the obligation may become necessary as time passes and/or more accurate
\ninformation becomes available.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nASSUMPTIONS USED TO DETERMINE FUTURE PENSION OBLIGATIONS
\nThe present value of the pension obligations is based on actuarial calculations that use several
\nassumptions. Any changes in these assumptions will impact the carrying amount of pension obligations.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nESTIMATES TO DETERMINE LEASE LIABILITY
\nCalculation of the lease liability requires certain assumption based input factors. The main estimates are
\nrelated to the lease term, the discount rate, as well as the determination whether a contract contains a
\nlease.
\nIn determining the lease term, management considers all facts and circumstances that create an
\neconomic incentive to exercise an extension option, or not to exercise a termination option. Extension
\noptions are only included in the lease term if the lease is reasonably certain to be extended. The lease
\nterm is reassessed if underlying circumstances are significantly changing.
\nLease payments are discounted to present value using an incremental borrowing rate. The
\nincremental borrowing rate is determined based on reasonable third party financing conditions
\nconsidering the length of the lease term and the currency of cash flows.
\nA contract is or contains a lease if the Group has the right to control the use of an identified asset for a
\nperiod of time in exchange for a consideration. A capacity portion of an asset is an identified asset if it is
\nphysically distinct, or if the Group has the right to use substantially all the capacity of the asset during
\nthe lease term.
\nLESSOR ACCOUNTING
\nLeases in which the Group acts as the lessor and substantially all the risks and rewards arising from the
\nuse of the leased asset are transferred to the lessee are classified as finance leases. Finance lease
\nreceivables mainly relate to Russia. The 2021 comparative also included finance lease receivables
\nconcerning certain electricity delivery contracts related to Uniper.
\nIn this type of lease, the present value of the minimum lease payments is recorded as a receivable.
\nInterest income from such arrangements is recognised over the lease term, using the effective interest
\nmethod.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f7870": {
"value": "2 Critical accounting estimates and judgements \nThe preparation of IFRS consolidated financial statements requires management to make estimates and \nassumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and \nliabilities existing at the balance sheet date, as well as the reported amounts of revenues and expenses during \nthe reporting period. \nEstimates and judgements are continually evaluated and are based on historical experience and other \nfactors, including expectations of future events that are believed to be reasonable under the circumstances \nbased on, for instance, the analysis of energy policy and the regulatory environment. The Russia-Ukraine war \nhas fundamentally changed the geopolitical situation; and given the uncertainty and risks arising from the \ngeopolitical situation, there may be future effects on the consolidated financial statements arising from more \nvolatile global economy and especially commodity markets. These factors can affect the carrying amounts of \nassets and liabilities, the amount and timing of earnings recognition, as well as cash flows. \nThe table below lists the areas where management\u2019s accounting estimates and judgements are most critical \nto reported results and financial position; as well as where to find more information on the areas of critical \naccounting estimate and judgement. \nCritical accounting estimates and judgements Note \nJudgement used in determining the valuation of certain financial \ninstruments \n14. Financial assets and liabilities by categories \n15. Financial assets and liabilities by fair value \nhierarchy \nAssumptions used when determining loss of control on disposal of \nsubsidiaries \n2. Critical accounting estimates and judgments \n3. Acquisitions, disposals, assets held for sale and \ndiscontinued operations \nAssigned values and useful lives determined for intangible assets \nand property, plant and equipment acquired in a business \ncombination \n16. Intangible assets \n17. Property, plant and equipment and right-of-use \nassets \nAssumptions related to impairment testing of property, plant and \nequipment and intangible assets as well as associated companies \nand joint ventures \n16. Intangible assets \n17. Property, plant and equipment and right-of-use \nassets \n18. Participations in associated companies and joint \nventures \n19. Impairment testing \nJudgement used when assessing the nature of Fortum's interest in \nits investees, when considering the classification of Fortum's joint \narrangements, as well as commitments arising from these \narrangements \n18. Participations in associated companies and joint \nventures \nEstimates used for the recognition and measurement of deferred tax \nassets \n28. Income taxes on the balance sheet \n37. Legal actions and official proceedings \nAssumptions made to determine long-term cash flow forecasts of \nestimated costs for provision related to nuclear production \n29. Nuclear related assets and liabilities \nAssumptions made when estimating provisions 30. Other provisions \nAssumptions used to determine future pension obligations 31. Pension obligations \nAssumptions used to determine the lease liability 34. Leases \n2.1 Russia\u2019s invasion of Ukraine and macroeconomic environment \nRussia\u2019s attack on Ukraine in February 2022 has severely impacted Fortum\u2019s current and future businesses. \nThe main impacts on Fortum\u2019s 2022 financials include the events that led to the divestment of Uniper to the \nGerman State for EUR 0.5 billion; the severe liquidity constraints caused by significantly higher collaterals \nrelated to power and gas on the commodities exchanges, which required additional financing measures; as well \nas the overall impact of the war on Fortum\u2019s Russian operations. \n2.1.1 Uniper divestment to the German State \nFollowing the war in Ukraine, particularly the Uniper segment\u2019s business and financial risk profiles significantly \ndeteriorated in 2022, mainly due to Russian gas curtailments and commodity price volatility, which significantly \nincreased margining requirements and liquidity needs. In July 2022, Fortum and Uniper reached out to the \nGerman Government to agree on a long-term solution for Uniper. \nOn 21 September 2022, Fortum, the German Government and Uniper signed an agreement in principle \nallowing the German State to take full control of Uniper. This final Uniper agreement in principle replaced the \ninitial agreement between the same parties, signed in July 2022. After July, the European energy crisis \nescalated further and the severity of the situation made it apparent that the previously agreed stabilisation \nmeasures were insufficient and difficult to implement. By 21 September 2022, Uniper had accumulated \nsignificant negative earnings amounting to billions of euros in gas-related losses, and it had become evident that \nthe company, as privately-owned, was not able to fulfil its role as a critical energy provider of security of supply in \nGermany. \nThe transaction was completed on 21 December 2022. Under the agreement, Uniper issued new ordinary \nregistered shares, which the German State subscribed at a nominal value of EUR 1.70 per share. At completion \nof the equity capital increase, the German State bought all of Fortum\u2018s approximately 293 million shares in \nUniper SE for EUR 1.70 per share, i.e. for a total of EUR 0.5 billion; and Uniper repaid the EUR 4 billion \nshareholder loan. Out of the EUR 4.0 billion parent company guarantee facility that Fortum had granted to \nUniper, a total of EUR 3.0 billion was released by year-end 2022. The remaining, approximately EUR 1.0 billion, \nwith a full German State back-to-back guarantee (indemnity), will be released latest at the end of June 2023. \nThe signing of the agreement in principle with the German Government on 21 September 2022 triggered a \ncontrol assessment as required by IFRS 10 Consolidated financial statements. Management concluded that \nFortum\u2019s rights are no longer substantive as it does not have practical ability to use control over Uniper. The loss \nof control was impacted by the signing of the agreement in principle and the significant financial support to \nUniper through the KfW Bank\u2019s bridge financing. In the judgement of the management, the overall effect of that \nfinancing, combined with the agreement in principle, was such that the German Government was in practice \nsubsequently able to approve or reject the most important decisions in relation to the business of Uniper. \nConsequently, control was assessed to have been lost and Uniper was deconsolidated at 30 September 2022. \nIn addition, Uniper was presented as discontinued operations in accordance with IFRS 5 Non-current assets \nheld for sale and discontinued operations as management was committed to fully disposing of Uniper SE\u2019s \nshares, and Uniper had been a separate reportable segment and a significant component of Fortum Group. See \nalso \ue001 Note 1 Significant accounting policies. \nDeferred tax assets at 31 December 2022 include EUR 706 million recognised in 2022 relating to a one-time \ntax impact realised in Ireland, which resulted in increased deferred tax assets on tax loss carry forward. The \ndeferred tax asset mainly relates to impacts caused by the Uniper divestment, and the utilisation is subject to \nfuture taxable income in Ireland. See \ue001 Note 28 Income taxes on the balance sheet. \n2.1.2 Liquidity \nThe energy crisis in Europe has resulted in the very volatile commodity markets with unprecedentedly high \nprices that have required significantly higher collaterals related to power and gas on the commodities \nexchanges. In the latter part of 2022, the Nordic power prices declined from the record levels at the end of \nAugust and the market was less volatile. However, Fortum remained prepared for continued market turbulence, \nand has taken precautionary financing measures to secure its liquidity position and financial flexibility. On 6 \nSeptember 2022 Fortum signed a EUR 2,350 million bridge financing with Finnish State-owned company, \nSolidium. According to loan terms, in order to keep the facility effective for the one year period, on 26 September \n2022, Fortum announced to draw EUR 350 million under this facility. On 21 December 2022, Uniper repaid its \nEUR 4 billion shareholder loan and Fortum received the sales proceeds of EUR 0.5 billion from the divestment \nof Uniper shares. At the end of the year, Fortum\u2019s financial situation was solid, Fortum Group had undrawn \ncommitted credit facilities amounting to EUR 7,200 million, as well as EUR 100 million committed overdraft limits \nthat are valid until further notice. See also \ue001 Note 27 Interest-bearing liabilities. 2.1.3 Geopolitical uncertainties and impacts on Russian operations \nDue to the sanctions imposed by the Russian Federation, Fortum\u2019s Russian subsidiaries are subject to foreign \nexchange transfer restrictions, which currently limit the transfer of funds, such as potential dividend distributions, \ninto the EU. The sanctions currently do not, however, restrict Fortum from exercising its voting rights at the \ngeneral meetings of the Russian subsidiaries. Hence, Fortum\u2019s Russian subsidiaries continue to be consolidated \nas subsidiaries at 31 December 2022. However, the cash and cash equivalents held by Fortum\u2019s Russia \nsegment in Russia, a total of EUR 247 million, are not available to the other group companies. \nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian \noperations as the preferred path, however there are no decisions and these processes might take some time \nand are subject to regulatory approvals. See also Risk management section in the Operating and financial \nreview. \nTotal impairment charges in 2022 for the Russia cash-generating unit (CGU) amount to EUR 1,697 million \n(pre-tax), including EUR 905 million impairment of intangible assets and property, plant and equipment, EUR \n475 million impairment of participations in associates and joint ventures, EUR 145 million expected credit losses \non Russian deposits and receivables, as well as EUR 171 million write down of other shares. The remaining \nbook value of Russia segment\u2019s net assets is approximately EUR 1.7 billion at 31 December 2022 (31 Dec \n2021: 2.5). The book value is based on the assumption that the controlled exit can be executed, and that other \nassumptions made by management realise as expected. The carrying amount of the Russia CGU is equal to its \nrecoverable amount, meaning that any detrimental future changes may cause further impairment. See \n\ue001 Note 19 Impairment testing. \n2.2 Climate-related matters \nFortum\u2019s power generation in the Nordic countries is mainly based on CO2-free hydro and nuclear power. A \nminor share of Fortum\u2019s power generation is currently based on solar and wind. Fortum has also generation of \ndistrict heating and cooling in Finland and Poland. In Europe, heat is mainly produced at energy-efficient \ncombined heat and power (CHP) plants. In addition, Fortum offers industrial and infrastructure solutions, e.g., \nwaste-to-energy, as well as energy sales. In Russia, Fortum has mainly natural gas-fired generation. \nMain climate-related risks facing Fortum include transition risks, such as changes in legislation, changes in \ntechnology, impact on supply or demand, and reputation; as well as physical risks, such as those arising from \nextreme weather conditions or changes in long-term weather patterns. For instance, floods will impact the \noptimal operation of hydro power plants. Fortum is systematically reducing risks related to dam safety through \nlong-term investments to secure the discharge capacity in extreme flood situations. \nThe impacts of climate change are reflected in the consolidated financial statements generally when specific \nactions, such as new investments, to transition to CO2-free production or to tackle climate change have been \napproved; or when climate-related risks have materialised. The impact from climate-related risks to 2022 \nfinancial statements has not been material. \nThe following financial statement items are most relevant when considering the impact of climate-related \nmatters: \n\u2022 Impairment testing: approved actions towards Fortum\u2019s climate risks and targets are reflected in the \nassumptions used in the impairment testing, as appropriate. See \ue001 Note 19 Impairment testing. \n\u2022 Property, plant and equipment: economic lives and book values of property, plant and equipment reflect \napproved actions towards Fortum\u2019s climate-related risks and targets. See \ue001 Note 17 Property, plant and \nequipment. \n\u2022 Nuclear provisions include future costs for decommissioning nuclear power plants, and the appropriate \ntreatment of spent fuel. See \ue001 Note 29 Nuclear-related assets and liabilities. \nFor accounting treatment applied to emission allowances, see \ue001 Note 22 Inventories. \nFortum\u2019s new climate-related targets are disclosed in \ue001 Note 39 Events after the balance sheet date. ",
"dimensions": {
"concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8092": {
"value": "SUBSIDIARIES Acquisition of subsidiaries are accounted for using the acquisition method. The consideration transferred
\nis measured as the aggregate of acquisition date fair values of assets transferred and liabilities
\nassumed. Identifiable assets acquired and liabilities assumed are measured initially at acquisition date
\nfair values, irrespective of the extent of any minority interest. The excess of the cost of acquisition over
\nthe fair value of the identifiable net assets acquired is recorded as goodwill.
\nSubsidiaries are fully consolidated from the date on which control is transferred to the Group and are
\nno longer consolidated from the date that control ceases. See
\ue001
Note 1.3
Principles for consolidation.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8093": {
"value": "SUBSIDIARIES Acquisition of subsidiaries are accounted for using the acquisition method. The consideration transferred
\nis measured as the aggregate of acquisition date fair values of assets transferred and liabilities
\nassumed. Identifiable assets acquired and liabilities assumed are measured initially at acquisition date
\nfair values, irrespective of the extent of any minority interest. The excess of the cost of acquisition over
\nthe fair value of the identifiable net assets acquired is recorded as goodwill.
\nSubsidiaries are fully consolidated from the date on which control is transferred to the Group and are
\nno longer consolidated from the date that control ceases. See
\ue001
Note 1.3
Principles for consolidation.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8109": {
"value": "ASSETS HELD FOR SALE Assets or disposal groups are classified as assets held for sale if their carrying amounts will be
\nrecovered principally through a sale transaction rather than through continuing use. For this to be the
\ncase, the asset, or the disposal group, must be available for immediate sale in its present condition
\nsubject only to terms that are usual and customary for sales of such assets or disposal groups, and the
\nsale must be highly probable. These assets, or in the case of disposal groups, assets and liabilities, are
\npresented separately on the consolidated balance sheet and measured at the lower of the carrying
\namount and fair value less costs to sell. Assets classified as held for sale, or included in a disposal
\ngroup classified as held for sale, are not depreciated.
\nDISCONTINUED OPERATIONS
\nA discontinued operation is a component of the Group that has been disposed of or is classified as held
\nfor sale, and that represents a separate major line of business or geographical area of operations or is
\npart of a single co-ordinated plan to dispose of such a line of business or area of operations. The results
\nof discontinued operations are presented separately in the consolidated income statement.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8110": {
"value": "ASSETS HELD FOR SALE Assets or disposal groups are classified as assets held for sale if their carrying amounts will be
\nrecovered principally through a sale transaction rather than through continuing use. For this to be the
\ncase, the asset, or the disposal group, must be available for immediate sale in its present condition
\nsubject only to terms that are usual and customary for sales of such assets or disposal groups, and the
\nsale must be highly probable. These assets, or in the case of disposal groups, assets and liabilities, are
\npresented separately on the consolidated balance sheet and measured at the lower of the carrying
\namount and fair value less costs to sell. Assets classified as held for sale, or included in a disposal
\ngroup classified as held for sale, are not depreciated.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8123": {
"value": "DISCONTINUED OPERATIONS A discontinued operation is a component of the Group that has been disposed of or is classified as held
\nfor sale, and that represents a separate major line of business or geographical area of operations or is
\npart of a single co-ordinated plan to dispose of such a line of business or area of operations. The results
of discontinued operations are presented separately in the consolidated income statement.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8155": {
"value": "3.1 Acquisitions EUR million
2022
2021
\nGross investments in shares in subsidiary companies
0
210
\nGross investments in shares in associated companies and joint ventures
14
39
\nGross investments in other shares
19
31
\nTotal
33
281
\nGross investments in shares during 2022 were EUR 33 million (2021: 281). Acquisition of subsidiary
\nshares in 2021 mainly relate to the acquisition of Uniper shares. From 2022, acquisition of additional
\nshares in Uniper are not included in gross investments in shares. This reflects the change in presentation
\nin the cash flow where the acquisition of additional shares in 2022 are presented in cash flow from
\nfinancing activities to better reflect the requirements of IAS 7 Statement of cash flows. Until 2021
\nacquisition of additional shares in Uniper were presented in cash flow from investing activities.
\nComparatives have not been restated.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8310": {
"value": "3.3 Assets held for sale Assets held
for sale at 31 December 2021 included EUR 108 million of Uniper SE\u2019s assets held for sale
\nrelating to an equity investment in Javelin, UK and the \u00d6resundverket power plant in Malm\u00f6, Sweden.
\n3.4 Discontinued operations
\nUniper segment has been classified as discontinued operations in 2022. See also
\ue001
Note 1
Significant
\naccounting policies and
\ue001
Note 2
Critical accounting estimates and judgments. Financial performance and
\ncash flow information for the discontinued operations is presented until 30 September 2022. The
\ntransaction was completed on 21 December 2022, and the consideration received for the shares of EUR
\n498 million is presented in cash flow from discontinued operations in 2022.
\n3.4.1 Financial performance
\nThe result from discontinued operations is disclosed on one line on the face of the consolidated income
\nstatement. The following table presents breakdown of income statement information for discontinued
\noperations. The effects of eliminations from internal sales and purchases have been included in the
\ndiscontinued operations. The net financial costs are based on the historical financial costs in the separate
\ncompanies.
\nEUR million
2022
2021
\nSales
128,102
106,127
\nOther income
22,508
12,289
\nMaterials and services
-132,287
-101,889
\nEmployee benefits
-709
-1,065
\nDepreciation and amortisation
-573
-694
\nOther expenses
-21,788
-13,661
\nComparable operating profit
-4,747
1,107
\nDeconsolidation effect
27,966
-
\nItems affecting comparability
-39,621
-6,021
\nOperating profit
-16,402
-4,913
\nShare of profit/loss of associates and joint ventures
71
23
\nFinance costs - net
-1,052
269
\nProfit before income tax
-17,383
-4,621
\nIncome tax expense
6,081
500
\nNet profit from discontinued operations
-11,302
-4,121
\nAttributable to:
\nOwners of the parent
-3,428
-3,246
\nNon-controlling interests
\n1)
\n-7,874
-875
\nEarnings per share, discontinued operations, EUR
-3.86
-3.65
\nComparable net profit from discontinued operations
-2,538
687
\nComparable earnings per share, discontinued operations, EUR
-2.86
0.77
\n1) Non-controlling interest is not calculated on the Deconsolidation effect
as the deconsolidation effect is calculated based on Fortum\u2019s share
\nof Uniper\u2019s net assets
.
\n3.4.2 Cash flow information
\nIn the cash flow statement, the net cash flows attributable to the operating, investing and financing activities
\nof the discontinued operations are disclosed separately. The consideration received for the shares of Uniper,
\nEUR 498 million, is presented in net cash from/used in investing activities of the discontinued operations. Net
\ncash from/used in investing activities in 2022 is presented net of liquid funds due to the deconsolidation of
\nUniper. Liquid funds of Uniper were EUR 2,248 million at 30 September 2022.
\nEUR million
2022
2021
\nNet cash from/used in operating activities
-10,870
3,851
\nNet cash from/used in investing activities
-2,450
-5,215
\nNet cash from/used in financing activities
10,757
4,409
\nTotal net decrease/increase in liquid funds
-2,563
3,045
\n3.4.3 Deconsolidation effect
\nOn deconsolidation of Uniper at 30 September 2022, Fortum recorded EUR 28.0 billion one-time, mainly
\nnon-cash positive effect that is included in 2022 in net profit from discontinued operations in the
\nconsolidated income statement. The amount consists of the net effect from the consideration received for
\nthe shares, EUR 498 million; Uniper\u2019s negative net assets divested resultin
g in a positive impact to the
\ndeconsolidation effect of EUR 26 658 million; as well as certain items previously recognised in other
\ncomprehensive income, EUR 810 million, mainly foreign exchange differences, that are reclassified to
\nIncome statement on disposal.
\nEUR million
30 Sep 2022
\nIntangible assets
1,224
\nProperty, plant and equipment and right-of-use assets
9,638
\nParticipations in associates and joint ventures
671
\nDerivative financial instruments, net
-18,017
\nDeferred taxes, net
7,595
\nMargin receivables, net
8,763
\nInterest-bearing receivables
860
\nOther non-current and current assets
21,070
\nLiquid funds
2,248
\nNon-controlling interests
6,237
\nInterest-bearing liabilities
-20,391
\nProvisions
-30,281
\nPension obligations, net
-516
\nNuclear provisions
-2,696
\nOther liabilities
-13,063
\nNet assets divested
-26,658
\nConsideration received for the shares
498
\nItems recycled to Income statement
810
\nDeconsolidation effect
27,966
\nFortum\u2019s total
pre-tax loss from the Uniper investment was slightly below EUR 6 billion which is the net
\neffect from the investments in Uniper shares during 2018-2022 of approximately EUR 7.2 billion, the sales
\nproceeds of EUR 0.5 billion received and dividends of approximately EUR 0.9 billion received during the
\nUniper ownership.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8311": {
"value": "3.3 Assets held for sale Assets held
for sale at 31 December 2021 included EUR 108 million of Uniper SE\u2019s assets held for sale
\nrelating to an equity investment in Javelin, UK and the \u00d6resundverket power plant in Malm\u00f6, Sweden.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8319": {
"value": "3.4 Discontinued operations Uniper segment has been classified as discontinued operations in 2022. See also
\ue001
Note 1
Significant
\naccounting policies and
\ue001
Note 2
Critical accounting estimates and judgments. Financial performance and
\ncash flow information for the discontinued operations is presented until 30 September 2022. The
\ntransaction was completed on 21 December 2022, and the consideration received for the shares of EUR
\n498 million is presented in cash flow from discontinued operations in 2022.
\n3.4.1 Financial performance
\nThe result from discontinued operations is disclosed on one line on the face of the consolidated income
\nstatement. The following table presents breakdown of income statement information for discontinued
\noperations. The effects of eliminations from internal sales and purchases have been included in the
\ndiscontinued operations. The net financial costs are based on the historical financial costs in the separate
\ncompanies.
\nEUR million
2022
2021
\nSales
128,102
106,127
\nOther income
22,508
12,289
\nMaterials and services
-132,287
-101,889
\nEmployee benefits
-709
-1,065
\nDepreciation and amortisation
-573
-694
\nOther expenses
-21,788
-13,661
\nComparable operating profit
-4,747
1,107
\nDeconsolidation effect
27,966
-
\nItems affecting comparability
-39,621
-6,021
\nOperating profit
-16,402
-4,913
\nShare of profit/loss of associates and joint ventures
71
23
\nFinance costs - net
-1,052
269
\nProfit before income tax
-17,383
-4,621
\nIncome tax expense
6,081
500
\nNet profit from discontinued operations
-11,302
-4,121
\nAttributable to:
\nOwners of the parent
-3,428
-3,246
\nNon-controlling interests
\n1)
\n-7,874
-875
\nEarnings per share, discontinued operations, EUR
-3.86
-3.65
\nComparable net profit from discontinued operations
-2,538
687
\nComparable earnings per share, discontinued operations, EUR
-2.86
0.77
\n1) Non-controlling interest is not calculated on the Deconsolidation effect
as the deconsolidation effect is calculated based on Fortum\u2019s share
\nof Uniper\u2019s net assets
.
\n3.4.2 Cash flow information
\nIn the cash flow statement, the net cash flows attributable to the operating, investing and financing activities
\nof the discontinued operations are disclosed separately. The consideration received for the shares of Uniper,
\nEUR 498 million, is presented in net cash from/used in investing activities of the discontinued operations. Net
\ncash from/used in investing activities in 2022 is presented net of liquid funds due to the deconsolidation of
\nUniper. Liquid funds of Uniper were EUR 2,248 million at 30 September 2022.
\nEUR million
2022
2021
\nNet cash from/used in operating activities
-10,870
3,851
\nNet cash from/used in investing activities
-2,450
-5,215
\nNet cash from/used in financing activities
10,757
4,409
\nTotal net decrease/increase in liquid funds
-2,563
3,045
\n3.4.3 Deconsolidation effect
\nOn deconsolidation of Uniper at 30 September 2022, Fortum recorded EUR 28.0 billion one-time, mainly
\nnon-cash positive effect that is included in 2022 in net profit from discontinued operations in the
\nconsolidated income statement. The amount consists of the net effect from the consideration received for
\nthe shares, EUR 498 million; Uniper\u2019s negative net assets divested resultin
g in a positive impact to the
\ndeconsolidation effect of EUR 26 658 million; as well as certain items previously recognised in other
\ncomprehensive income, EUR 810 million, mainly foreign exchange differences, that are reclassified to
\nIncome statement on disposal.
\nEUR million
30 Sep 2022
\nIntangible assets
1,224
\nProperty, plant and equipment and right-of-use assets
9,638
\nParticipations in associates and joint ventures
671
\nDerivative financial instruments, net
-18,017
\nDeferred taxes, net
7,595
\nMargin receivables, net
8,763
\nInterest-bearing receivables
860
\nOther non-current and current assets
21,070
\nLiquid funds
2,248
\nNon-controlling interests
6,237
\nInterest-bearing liabilities
-20,391
\nProvisions
-30,281
\nPension obligations, net
-516
\nNuclear provisions
-2,696
\nOther liabilities
-13,063
\nNet assets divested
-26,658
\nConsideration received for the shares
498
\nItems recycled to Income statement
810
\nDeconsolidation effect
27,966
\nFortum\u2019s total
pre-tax loss from the Uniper investment was slightly below EUR 6 billion which is the net
\neffect from the investments in Uniper shares during 2018-2022 of approximately EUR 7.2 billion, the sales
\nproceeds of EUR 0.5 billion received and dividends of approximately EUR 0.9 billion received during the
Uniper ownership.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8494": {
"value": "4 Financial risk management
\nFortum's risk management framework, objectives, organisation and processes as well as a description of
\nstrategic, sustainability, financial and operational risks can be found in the Risk management section of
\nthe Operating and financial review (OFR).
\n4.1 Commodity market and fuel risks
\nFortum\u2019s business is exposed to fluctuations in prices and availability of commodities used in the
\nproduction, transmission and sales of energy products. The main exposure is toward electricity prices and
\nvolumes, prices of emissions, and price and availability of fuels. Fortum hedges its exposure to
\ncommodity market risks in order to improve the predictability of the future result by reducing volatility in
\nearnings while ensuring cash flow risk is at an acceptable level.
\nRisk management for commodity hedging activities is based on general standards in the industry and
\ninvolves the segregation of duties, as well as daily calculation, monitoring and reporting of results,
\npositions and risks. Controls are in place to ensure exposures are kept within approved limits and
\nmandates. Hedging involves the use of derivative financial instruments, as well as fixed-price physical
\ndelivery contracts.
\n4.1.1. Sensitivity arising from commodity derivatives according to IFRS 7
\nSensitivity analysis shows the sensitivity arising from financial commodity derivatives as defined in
\nIFRS 7.
\nThese derivatives are used for hedging purposes with hedge accounting applied to most hedging
\nstrategies. Sensitivities in the table below are calculated based on the electricity position as of 31
\nDecember. Positions are actively managed in the day-to-day business operations and therefore the
\nsensitivities vary from time to time. Sensitivity analysis includes only the market risks arising from
\nderivatives i.e. the underlying physical electricity sales and purchases are not included. Sensitivity is
\ncalculated with the assumption that electricity forward and futures quotations would change 1 EUR/MWh
\nfor the period Fortum has derivatives.
\nSensitivity according to IFRS 7
\n+/- 1 EUR/MWh change in electricity forward and futures quotations, EUR million
Effect
2022
2021
\nEffect on profit before income tax
-/+
2
1
\nEffect on equity
-/+
47
57
\n4.1.2. Electricity price and volume risk
\nThe exposure to Nordic electricity prices and normal volume fluctuations (e.g. due to weather-driven demand
\nand supply changes) is the largest commodity market risk exposure for Fortum in terms of impact to
\nearnings. The exposure arising from outright power production (hydro and nuclear production assets) is
\nmainly hedged by entering into electricity derivatives contracts on exchanges such as Nasdaq Commodities
\nor the European Energy Exchange, as well as directly with counterparties active in the energy and financial
\nmarkets. The main objective of hedging is to reduce the effect of electricity price volatility in earnings while
\nensuring the cash flow risk is at an acceptable level, and to increase the predictability of future results. The
\nGeneration segment\u2019
s hedging strategies cover several years in the short- to medium-term. These hedging
\nstrategies are executed within approved mandates and are continuously evaluated as electricity and other
\ncommodity market prices, the hydrological balance and other relevant parameters change.
\nThe Generation segment\u2019s hedging for power sales is performed in EUR on a Nordic level covering both
\nFinland and Sweden. The currency component of these hedges in the Swedish entity is currently not hedged.
\nGeneration segment\u2019s sens
itivity to the Nordic electricity market price is dependent on the hedge level for a
\ngiven time period. As per 31 December 2022, approximately 75% of the Generation segment's estimated
\nNordic power sales volume was hedged for the calendar year 2023 with a price of 58 EUR/MWh and
\napproximately 45% for the calendar year 2024 with a price of 42 EUR/MWh.
\nIn the Russia segment, electricity prices are the main sources of market risk. The electricity price is
\nhighly correlated with the gas price. Exposure is partly mitigated through regulated fixed-price bilateral
\nagreements, but the majority of electricity sales is exposed to spot price risk. There are no derivative
\ncontracts in the Russia segment.
\n4.1.3 Commodity derivatives
\nThe table below discloses Fortum Group's commodity derivatives for which hedge accounting according
\nto IFRS 9 is applied. The fair values represent the values disclosed on the balance sheet. See also
\n\ue001
Note 14
Financial assets and liabilities by categories for accounting principles and
\ue001
Note 15
Financial
\nassets and liabilities by fair value hierarchy for basis of fair value estimations.
\nCommodity derivatives subject to hedge accounting 2022
\nVolume, TWh
Fair value, EUR million
\nUnder
\n1 year
\n1
\u2013
5
\nyears
\nOver
\n5 years
Total
Positive
Negative
Net
\nElectricity derivatives
18
27
1
47
1,376
4,302
-2,926
\nNetting against commodity
\nexchanges
\n1)
\n-546
-546
-
\nTotal
18
27
1
47
830
3,756
-2,926
\n1) Receivables and liabilities against commodity exchanges arising from standard derivative contracts with same delivery period are netted.
\nCommodity derivatives subject to hedge accounting 2021
\nVolume, TWh
Fair value, EUR million
\nUnder
\n1 year
\n1
\u2013
5
\nyears
\nOver 5
\nyears
Total
Positive
Negative
Net
\nElectricity derivatives
25
31
1
57
349
1,648
-1,298
\nGas derivatives
30
-
-
30
335
1,750
-1,415
\nNetting against commodity
\nexchanges
\n1)
\n-215
-215
-
\nTotal
55
31
1
87
469
3,183
-2,713
\n1) Receivables and liabilities against commodity exchanges arising from standard derivative contracts with same delivery period are netted.
Maturity analysis of commodity derivatives
\nAmounts in the table are fair values.
\n2022
2021
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nCommodity derivatives, assets
1,370
194
30
1,594
65,165
16,965
44
82,174
\nCommodity derivatives, liabilities
3,919
601
35
4,554
71,839
16,495
126
88,460
\nChange in maturity analysis of commodity
derivatives\u2019 total assets and total liabilities from 31 December
\n2021 is mainly due to the deconsolidation of Uniper at 30 September 2022.
\n4.2 Liquidity and refinancing risk
\nFortum's business is exposed to liquidity and refinancing risks primarily through the need to finance the
\nGroup\u2019s business operations including margining and collaterals issued for hedging activities. Trading
\nderivative financial instruments exposes the Group to a liquidity risk associated with having to provide
\nfinancial collaterals li
ke cash or bank guarantees. A downgrade in rating could trigger counterparties\u2019 right
\nto demand additional collateral, which would need to be provided via cash or bank guarantees.
\nThe derivative instruments used by the Group are traded via exchanges and over-the-counter with
\nselected counterparties based on bilateral agreements. Trading through exchanges requires the
\nexchange of cash to cover credit risks (margining payments). Since the second half of 2021, the very
\nvolatile commodity markets with unprecedently high prices have required significantly high net margining
\npayments. During the third quarter 2022, as Nordic power prices followed the very high Continental
\nEuropean power and gas prices, Fortum\u2019s standalone (excl. Uniper) collateral requirements inc
reased to a
\nrecord-high level peaking at around EUR 5 billion. Fortum has arranged new financing to meet the
\ndemands, for further information see
\ue001
Note 24
Liquid funds and
\ue001
Note 27
Interest-bearing liabilities.
\nMargin receivables from commodity hedging activities at balance sheet date were EUR 2,607 million
\n(2021: 9,163) and margin liabilities EUR 352 million (2021: 985).
\nThe exposure to margining requirements is continuously assessed and monitored so that adequate
\nliquidity is available to cover expected future cash collateral required for margining.
\nLiquidity and refinancing risks are managed through a combination of cash positions and committed
\ncredit and other guarantee facility agreements with the core banks. The maturity profile of loans is
\nmonitored to ensure that there is at all times access to adequate liquidity for investments, loan maturities
\nand margining required for commodity trading and hedging activities.
\nFortum\u2019s business is capital intensive and it has a diversified loan portfolio. Long
-term financing is
\nprimarily raised by issuing bonds under Fortum Corporation\u2019s Euro Medium Term Note programme
\n(EMTN), as well as through bilateral and syndicated loan facilities from a variety of different financial
\ninstitutions.
\nIn Fortum, financing is primarily raised on parent company level and funds are distributed internally
\nthrough various internal financing arrangements.
\nOn 31 December 2022, 89% (2021: 66%) of th
e Group\u2019s total external loans was raised by the parent
\ncompany Fortum Corporation, and remaining 11% by other subsidiaries (2021: 29% by the Uniper
\nsegment and 5% by other subsidiaries).
\nAt the end of 2022, financial net debt was EUR 1,084 million (2021: 789) and adjusted net debt EUR
\n1,117 million (2021: 3,227).
\nOn 31 December 2022, loan maturities for the coming twelve-month period amounted to EUR 4,108
\nmillion (2021: 8,389) which include EUR 1,090 million maturing bonds, EUR 475 million commercial
\npapers, EUR 1,100 million revolving credit facility (6+6 months extension options by Fortum), EUR 350
\nmillion Solidium bridge financing and EUR 500 million bilateral loan (8 months extension option by
\nFortum). Maturities in 2023 also include EUR 592 million loans with no contractual due date.
\nAt the end of the reporting period, the Group\u2019s liquid funds totalled EUR 3,919 million (2021: 7,592).
\nLiquid funds include EUR 247 million (2021: 300) relating to Fortum\u2019s Russian operations.
\nMaturity of loans
\nEUR million
2022
\n2023
4,108
\n2024
717
\n2025
7
\n2026
730
\n2027
17
\n2028 and later
2,087
\nTotal
7,666
\nFor more information on loans, see
\ue001
Note 27
Interest-bearing liabilities.
\nLiquid funds, major credit lines and debt programmes 2022
\nEUR million
2022
\nLiquid funds
3,919
\nof which in Russia
247
\nCommitted credit lines
Total facility
\nAvailable
\namount
\nDrawn
\namount
\nFortum Corporation, EUR 5,500 million syndicated credit facility
5,500
4,400
1,100
\nFortum Corporation, EUR 800 million bilateral credit facility
800
800
-
\nFortum Corporation, EUR 2,350 million Finnish State bridge financing
2,350
2,000
350
\nFortum Corporation, bilateral overdraft facilities
100
100
-
\nTotal
\n1)
\n8,750
7,300
1,450
\n1) Additionally, Fortum has uncommitted commercial paper programmes in Finland and Sweden and uncommitted EMTN programme. From
\nthe commercial paper programmes, EUR 475 million (2021: 3,129) was drawn, and from the EMTN programme EUR 2,690 million (2021:
\n3,698) bonds were outstanding at the end of the reporting period.
\nLiquid funds, major credit lines and debt programmes 2021
\nEUR million
2021
\nLiquid funds
\nFortum
4,626
\nUniper segment
2,966
\nTotal
7,592
\nof which in Russia
300
\nCommitted credit lines
Total facility
\nAvailable
\namount
\nDrawn
\namount
\nFortum Corporation, EUR 1,750 million syndicated credit facility
1,750
-
1,750
\nFortum Corporation, EUR 800 million bilateral credit facility
800
300
500
\nUniper, EUR 1,800 million syndicated credit facility
1,800
-
1,800
\nFortum Corporation, bilateral overdraft facilities
100
100
-
\nTotal
4,450
400
4,050
Maturity analysis of interest-bearing loans and derivatives
\nInterest-bearing loans are non-discounted expected cash flows including future interest payments and
\namortisations. Interest rate and currency derivatives represent the fair value of the derivatives on the
\nbalance sheet. Maturity analysis of commodity derivatives is disclosed separately in the
\ue001
Note 4.1.3
\nCommodity derivatives.
\n2022
2021
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nInterest-bearing loans
4,290
1,831
2,254
8,374
8,490
5,728
2,450
16,669
\nInterest rate and currency derivative liabilities
54
46
75
175
107
17
19
143
\nInterest rate and currency derivative receivables
-116
-28
-92
-235
-227
-87
-1
-315
\nTotal
4,228
1,849
2,237
8,314
8,371
5,659
2,468
16,498
\n4.3 Interest rate risk and currency risk
\n4.3.1 Interest rate risk
\nFortum is exposed to cash flow risk from changes in interest rates mainly from interest-bearing liabilities
\nand derivatives on a fixed- and floating rate basis.
\nFortum manages the interest rate exposure through a duration target of the loan portfolio (excluding
\nlease liabilities and provisions), and cash flow at risk limit. Fortum uses different types of financing
\ncontracts and interest rate derivative contracts to manage the interest rate exposure, and evaluates and
\ndevelops the strategies in order to find an optimal balance between risk and financing cost.
\nOn 31 December 2022, the duration of Fortum\u2019s loan portfolio (including derivatives) was 1.2 years
\n(2021: 1.7). Approximately 77% (2021: 82%) of the loan portfolio was on a floating rate basis, or fixed rate
\nloans maturing within the next 12-month period. The flow risk, measured as the difference between the
\nbase case interest cost estimate and the worst-case s
cenario estimate for Fortum\u2019s loan portfolio for the
\ncoming 12 months, was EUR 93 million (2021: 63). The increase of flow risk is mainly driven by increase
\nof new loans, especially floating loans as a response to high collateral demand, and a significant increase
\nin interest rate volatilities at the end of 2022 in several currencies.
\nThe average interest rate for the total loan portfolio, including derivatives in finance costs, was 3.9% at
\nthe balance sheet date (2021: 1.3%). The average interest rate of EUR loans was 3.1% (2021: 0.6%).
\nFortum uses interest rate derivatives and to large extend applies hedge accounting when hedging the
\nloan portfolio of the Group. There is an ongoing reform of certain floating interest benchmark rates to
\nalternative risk free rates (ARR) due to the IBOR (Interbank Offered Rates) transition. Since EURIBOR
\n(Euro Interbank Offered Rate) is expected to continue as the benchmark rate, as it has been already fully
\nreformed, all hedges are expected to continue to be 100% effective with no impact on finance costs
\u2013
net.
\nIn addition to significant EURIBOR exposure, the Group has interest rate derivatives in SEK and sees that
\nthe IBOR transition will not have significant impact on the value and effectiveness of these derivatives.
\nFortum Group will continue to monitor the development of the IBOR transition.
\n4.3.2 Currency risk
\nFortum\u2019s policy is to hedge major transaction exposures on a local level in the reporting currency of each
\nlegal entity in order to avoid exchange differences in the income statement. An exception is Generation
\nsegment\u2019s hedging of power sales in Sweden where the currency component is not hedged. Derivatives
\nare used to hedge existing foreign exchange risks, not for proprietary trading. As a result of sanctions
\nagainst the Russian Federation followed by low liquidity in RUB and crossborder payment restrictions,
\nhedging of RUB position was stopped during first part of 2022 and existing hedges were unwinded.
\nFortum\u2019s transaction exposure
\n2022
2021
\nEUR million
\nNet
\nPosition
Hedge
Open
\nNet
\nPosition
Hedge
Open
\nRUB
869
-
869
744
-744
0
\nSEK
-669
679
10
-898
901
3
\nPLN
531
-529
2
499
-498
1
\nNOK
751
-745
5
748
-746
2
\nUSD
-993
993
0
-36
37
1
\nOther
4
-
4
5
-2
3
\nTotal
492
398
890
1,062
-1,052
11
\nFortum has cash flows, assets and liabilities in currencies other than EUR and is therefore exposed to
\nfluctuations in exchange rates. Currency exposures are divided into transaction exposures (foreign
\nexchange exposures relating to contracted or estimated cash flows and balance sheet items where
\nchanges in exchange rates will have an impact on earnings and cash flows) and translation exposure
\n(foreign exchange exposure that arises when profits and balance sheets in foreign entities are
\nconsolidated).
\nTransaction exposures arise mainly from physical and financial trading of commodities, existing and
\nnew investments, external and internal financing and shareholder loans. Contracted cash flow exposures
\nare hedged to reduce volatility in future cash flows. These hedges normally consist of currency derivative
\ncontracts, which are matched against the underlying future cash flow according to maturity. Fortum has
\ncurrency cash flow hedges both with and without hedge accounting treatment under IFRS. Those
\ncurrency cash flow hedges for which hedge accounting is not applied are mainly hedging commodity
\nderivatives and create volatility in operating profit. There was no significant ineffectiveness arising from
\ncash flow hedges in 2022.
\nAs of 31 December 2022, the one-day value-at-risk (VAR) with 99% confidence from loans, receivables
\nand derivatives was EUR 28.8 million (2021: 2.4 excluding Uniper) in the income statement and EUR 3.2
\nmillion (2021: 1.4 excluding Uniper) in equity. Income statement sensitivity resulted mainly from cash
\nflows in RUB, SEK and NOK, and equity sensitivity mainly from cash flows in CNY, USD and SEK.
\nTranslation exposure position includes net investments in foreign subsidiaries and associated
\ncompanies. Translation exposures in Fortum are generally not hedged as the majority of these assets are
\nconsidered to be long-term strategic holdings. In Fortum, this means mainly entities operating in Sweden
\nand Russia, whose base currency is not euro.
\nExchange differences arising from the translation of the net investment in foreign entities are taken to
\nequity. The net effect of exchange differences on equity attributable to equity holders mainly from RUB
\nand SEK was EUR -75 million in 2022 (2021: 184). Part of this translation exposure has been hedged and
\nthe notional amount of foreign currency hedges were EUR 2,813 million in 2022 (2021: 263). The foreign
\ncurrency hedge result amounted to EUR 41 million in 2022 (2021: -12). There was no significant
\nineffectiveness arising from net investment hedges in 2022.
Interest rate and currency derivatives by instrument 2022
\nNotional amount
Fair value
\nRemaining lifetimes
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nPosi-
\ntive
\nNega-
\ntive
Net
\nHedge accounting
\nForeign exchange derivatives
3,056
108
-
3,163
25
3
22
\nInterest rate swaps
740
825
1,350
2,915
112
120
-9
\nCross currency swaps
-
76
-
76
3
-
3
\nNon-hedge accounting
\nForeign exchange derivatives
8,445
36
-
8,481
93
51
42
\nInterest rate swaps
18
13
-
31
2
-
2
\nCross currency swaps
-
24
-
24
1
-
1
\nTotal
12,259
1,081
1,350
14,690
235
175
61
\nOf which long-term
119
121
-1
\nShort-term
116
54
62
\nInterest rate and currency derivatives by instrument 2021
\nNotional amount
Fair value
\nRemaining lifetimes
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver 5
\nyears
Total
\nPosi-
\ntive
\nNega-
\ntive
Net
\nHedge accounting
\nForeign exchange derivatives
282
136
-
417
9
2
7
\nInterest rate swaps
1,300
1,323
1,175
3,798
71
27
44
\nCross currency swaps
214
47
-
261
30
2
28
\nNon-hedge accounting
\nForeign exchange derivatives
15,404
1,050
-
16,455
204
111
93
\nInterest rate swaps
-
34
-
34
0
0
0
\nCross currency swaps
-
24
-
24
-
1
-1
\nTotal
17,200
2,613
1,175
20,989
315
143
172
\nOf which long-term
88
36
52
\nShort-term
227
107
120
\n4.4 Credit risk
\nFortum is exposed to counterparty risk whenever there is a contractual arrangement with an external
\ncounterparty.
\nCredit risk exposures relating to financial derivative instruments are often volatile and include both the
\nreplacement risk and the settlement risk. Exchange-traded derivatives are cleared through central clearing
\nparties (CCPs) or through clearing banks while over-the-counter (OTC) derivative contracts are concluded
\ndirectly with a number of different counterparties, including energy wholesalers and retailers, utilities,
\ntrading companies, energy companies, industrial end-users and financial institutions active in the financial
\nand energy markets. In order to mitigate the liquidity risk from increased margining requirements toward
\nCCPs, the share of hedges with OTC counterparties without margining requirements has increased.
\nConsequently, credit exposure from hedges with OTC counterparties has increased. In general, due to
\nFortum\u2019s net short position in Nordic power hedges credit exposure tends
to increase with the value of
\nhedges if Nordic power prices decrease. Currency and interest rate derivative counterparties are limited to
\ninvestment grade banks and financial institutions. International Swaps and Derivatives Association (ISDA)
\nMaster agreements, which include netting clauses and in some cases Credit Support Annex agreements,
\nare in place with most of these counterparties. The majority of commodity derivative counterparties have
\ninvestment-grade or comparable ratings. Master agreements, such as those published by ISDA and
\nEuropean Federation of Energy Traders (EFET), which include netting clauses, are in place with the
\nmajority of the counterparties.
\nDue to the financing needs and management of liquidity, Fortum has counterparty credit exposure
\ntowards a number of banks and financial institutions in the form of deposits and towards corporate issuers
\nof commercial papers, mainly in the Nordic market. The majority of the exposure is towards Fortum\u2019s key
\nrelationship banks, which are highly creditworthy institutions. Investments in commercial papers were all
\nwith investment grade issuers at 31 December 2022. Fortum also has exposure to the Russian financial
\nsector in terms of deposits by Fortum\u2019s Russian subsidiary with financial institutions, as
well as to banks
\nthat provide guarantees for suppliers and contracting parties. There are challenges in assessing the
\ncreditworthiness of Russian banks as credit ratings have been removed and in many cases there are no
\npublicly available financial information. The creditworthiness of banks and financial institutions is
\nmonitored so that mitigating actions can be taken as ratings or the financial situation changes. In Russia,
\nthis means using available information provided by government authorities and credit ratings issued by
\nlocal credit information agencies.
\nCredit risk relating to customers, suppliers and trading partners is spread across a wide range of
\nindustrial counterparties, energy companies, government and municipal entities, utilities, small
\nbusinesses, housing associations and private individuals over a range of geographic regions. The majority
\nof exposure is in the form of trade receivables from the sale of electricity, gas and heat in the Nordic
\nmarket, Poland and Russia. The credit risk in the electricity and heat sales business in Russia is deemed
\nto be higher than in the Nordic and Polish market.
\n4.4.1 Credit quality of major financial assets
\nFortum recognises loss allowance for expected credit losses (ECL) on financial assets classified to
\namortised cost category at each reporting date. The impairment model is applied to financial assets such
\nas trade receivables, deposits, commercial papers, and loan and other interest-bearing receivables. See
\n\ue001
Note 23
Trade and other receivables for details on expected credit losses recognised for trade
\nreceivables.
\nExpected credit loss is calculated on an individual counterparty basis for deposits, commercial papers
\nand loan and other interest-bearing receivables. No impairment loss is recognised on cash in bank
\naccounts since expected credit loss is immaterial due to low risk of default. The risk of default is evaluated
\nat each reporting date based on credit ratings to determine if credit risk has increased significantly. The
\nvalue of collateral and other measures taken to reduce credit risk (e.g. credit default insurance) is included
\nin the calculation of expected credit losses in the \u201closs given default\u201d ratio
.
\nA financial asset with an investment-grade rating is assumed to have low credit risk. A change of credit
\nrating from investment to non-investment grade constitutes a significant increase in credit risk. If the credit
\nrisk on the financial asset has not increased significantly since the initial recognition, loss allowance
\nequals to 12 month ECL. If the credit risk on the financial asset has increased significantly since initial
\nrecognition, loss allowance equals to the lifetime expected credit losses.
\nDeposits in Russian banks with a total cross carrying amount of EUR 356 million at 31 December 2022
\nwere considered as being exposed to significant increase in credit risk since initial recognition. For these
\ndeposits, ECL of EUR 109 million was recognised at 31 December 2022. Significant increase in credit risk
\nin Russian deposits resulted from deterior
ation of the counterparties\u2019 credit worthiness and the
\nconsequent increase in probability of default following from geopolitical and economic uncertainty in
\nRussia during 2022. During the first half of the year 2022, the rating agencies first downgraded the
\nRussian banks to the lowest rating categories and then withdrew the ratings. Consequently, the probability
\nof default for the Russian counterparties has been assumed to be the equivalent of the lowest rating
\ncategory for the purposes of calculating ECL.
The loss allowance for interest-bearing receivables totalled EUR 117 million on 31 December 2022
\n(2021: 16). Amounts for interest-bearing receivables including bank deposits and derivative financial
\ninstruments recognised as assets are presented by counterparties in the following table.
\nFor derivative financial instruments the counterparty credit risk has been taken into account when
\ndetermining fair value. The impact of credit risk is measured on a counterparty basis through credit value
\nadjustment (CVA) method applying similar inputs and assumptions to which are used in the measurement
\nof ECL. See also
\ue001
Note 15
Financial assets and liabilities by fair value hierarchy for basis of fair value
\nestimations.
\nAll counterparties for currency and interest rate derivatives and the majority of counterparties for bank
\ndeposits have an external rating from S&P Global Ratings, Fitch and/or Moody\u2019s credit agencies, except
\nfor Russia. For counterparties rated by more than one rating agency, the lowest rating is used to
\ndetermine if it is investment grade.
\nIn the commodity derivatives and commercial paper market, there are a number of counterparties not
\nrated by S&P Global Ratings, Fitch or Moody\u2019s. For these counterparties, Fortum assigns an internal
\nrating. The internal rating categories that are considered to be comparable to investment grade have
\nsimilar financial metrics or display historical default rates which correspond to investment grade
\ncompanies rated by S&P Global Ratings, Fitch or Moody\u2019s.
\nCredit quality of major financial assets
\n2022
2021
\nEUR million
\nCarrying
\namount
\nof which
\npast due
\nCarrying
\namount
\nof which
\npast due
\nReceivables with investment grade or comparable rating
\nDeposits, commercial papers and cash in bank accounts
3,602
-
7,342
-
\nFair values of interest rate and currency derivatives
235
-
315
-
\nFair values of commodity derivatives on exchanges
394
-
27,856
-
\nFair values of OTC commodity derivatives
879
-
49,886
-
\nLoan and other interest bearing receivables
-
-
1,036
-
\nLease receivables
-
-
136
-
\nTotal receivables with investment grade or comparable rating
5,110
-
86,571
-
\nReceivables with non-investment grade or comparable rating
\nDeposits, commercial papers and cash in bank accounts
247
-
164
-
\nFair values of OTC commodity derivatives
321
-
4,433
-
\nLoan and other interest bearing receivables
39
-
59
-
\nTotal receivables with non-investment grade or comparable rating
607
-
4,656
-
\nOther receivables
\n1)
\nLoan receivables from associates and joint ventures
592
-
1,158
-
\nRestricted cash mainly given as collateral for commodity exchanges
27
-
59
-
\nCash in other bank accounts
70
-
87
-
\nOther receivables
3
-
-
-
\nTotal other receivables
692
-
1,304
-
\nTotal
6,409
-
92,531
-
\n1) Other receivables include financial assets which have not been divided to investment-grade and non-investment grade or comparable
\nratings.
\nChange in credit quality of major financial assets\u2019 total assets from 31 December 2022 is mainly due to
\nthe deconsolidation of Uniper at 30 September 2022
\n4.4.2 Financial instruments subject to master netting agreements
\nThe following tables present the recognised financial instruments that are offset, or subject to enforceable
\nmaster netting arrangements and other similar agreements but not offset. The column 'net amount' shows
\nthe impact on the Group's balance sheet if all netting rights were exercised.
\nNetting agreements for financial assets and liabilities 2022
\nEUR million
\nGross
\namount
\nGross
\namount
\nnetted on
\nthe balance
\nsheet
\n1)
\nNet amounts
\npresented
\non the
\nbalance
\nsheet
\nConditional
\nnetting
\namount
\n(netting
\nagreements)
\nFinancial
\ncollateral
\nreceived
\n/pledged
Net amount
\nFinancial assets
\nInterest-rate and currency derivatives
235
-
235
124
64
48
\nCommodity derivatives
3,349
1,755
1,594
957
5
632
\nTrade receivables
1,625
-
1,625
-
-
1,625
\nTotal
5,209
1,755
3,455
1,080
69
2,305
\nEUR million
\nFinancial liabilities
\nInterest-rate and currency derivatives
175
-
175
124
40
11
\nCommodity derivatives
6,309
1,755
4,554
957
-
3,598
\nTrade payables
720
-
720
-
-
720
\nTotal
7,203
1,755
5,449
1,080
40
4,329
\n1) Receivables and liabilities from electricity and other commodity exchanges arising against standard derivative contracts with same delivery
\nperiod are netted.
\nNetting agreements for financial assets and liabilities 2021
\nEUR million
\nGross
\namount
\nGross
\namount
\nnetted on
\nthe balance
\nsheet
\n1)
\nNet amounts
\npresented
\non the
\nbalance
\nsheet
\nConditional
\nnetting
\namount
\n(netting
\nagreements)
\nFinancial
\ncollateral
\nreceived
\n/pledged
Net amount
\nFinancial assets
\nInterest-rate and currency derivatives
315
-
315
129
153
33
\nCommodity derivatives
87,019
4,845
82,174
56,383
-1,576
27,368
\nTrade receivables
12,916
-
12,916
5,651
-
7,265
\nTotal
100,250
4,845
95,405
62,162
-1,423
34,666
\nEUR million
\nFinancial liabilities
\nInterest-rate and currency derivatives
143
-
143
129
5
9
\nCommodity derivatives
93,306
4,845
88,460
56,383
4,293
27,785
\nTrade payables
12,152
-
12,152
5,651
-
6,501
\nTotal
105,600
4,845
100,755
62,162
4,298
34,295
\n1) Receivables and liabilities from electricity and other commodity exchanges arising against standard derivative contracts with same delivery
\nperiod are netted.
\nChange in netting agreements for financial assets and liabilities\u2019 total assets and total liabili
ties from 31
\nDecember 2021 is mainly due to the deconsolidation of Uniper at 30 September 2022.
14 Financial assets and liabilities by categories
\nACCOUNTING POLICIES
\nFINANCIAL ASSETS
\nFortum classifies its financial assets in the following categories according to IFRS 9: financial assets at
\namortised cost, financial assets at fair value through profit or loss and financial assets at fair value
\nthrough other comprehensive income. The classification is made at initial recognition and depends on
\nthe financial asset's contractual cash flow characteristics and the Group's business model for managing
\nthem.
\nIn order for the financial asset to be classified and measured at amortised cost or fair value through
\nother comprehensive income, it needs to give rise to cash flows that are solely payments of the principal
\nand interest on the principal amount outstanding (SPPI). This assessment is referred to as the SPPI test
\nand is performed at an instrument level. When the SPPI criteria is not met, financial assets are classified
\nto fair value through profit or loss category.
\nFinancial assets are presented as non-current assets unless they are held for trading, expected to be
\nrealised within 12 months at the closing date or they have a maturity of under 12 months at closing date.
\nThese are classified as current assets.
\nFINANCIAL ASSETS AT AMORTISED COST
\nFortum measures financial assets at amortised cost when the financial asset is included in the held-to-
\ncollect business model with fixed or determinable payments that are payments of amount outstanding or
\ninterest on it. They arise when the Group provides money, goods or services directly to a debtor.
\nFinancial assets at amortised cost include non-derivative financial assets with fixed or determinable
\npayments that are not quoted in an active market.
\nFinancial assets at amortised cost are subject to impairment using expected credit loss (ECL) model.
\nGains and losses from derecognition of the asset are recognised in profit and loss.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
\nFinancial assets at fair value through profit or loss include financial assets held for trading in the short
\nterm, financial assets designated upon initial recognition irrevocably as fair value through profit or loss
\nand financial assets mandatorily recognised at fair value through profit or loss according to IFRS 9.
\nDerivatives are classified as held for trading unless they are designated as effective hedging
\ninstruments.
\nGains and losses arising from changes in the fair value are included in the income statement in the
\nperiod in which they arise.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
\nOther equity investments designated at fair value through other comprehensive income are not subject
\nto impairment assessment and accumulated reserves are not recycled to profit or loss upon
\nderecognition. Dividends received are recognised in profit and loss.
\nDERECOGNITION
\nFortum derecognises financial assets when the rights to receive cash flows from the assets have expired
\nor when it has substantially transferred the risks and rewards of the assets outside of the Group.
\nIMPAIRMENT
\nFortum recognises an allowance for expected credit losses (ECL) according to IFRS 9 for financial
\nassets measured at amortised cost. See further information on ECL in
\ue001
Note 4.4.1
Credit quality of
\nmajor financial assets and in
\ue001
Note 23
Trade and other receivables.
\nFinancial assets measured at fair value through profit or loss are not included in ECL assessment as
\nthey are already measured at fair value. A financial asset is written-off when there is no reasonable
\nexpectation of recovering the contractual cash flows.
\nFINANCIAL LIABILITIES
\nAll financial liabilities are recognised initially at fair value. In the case of loans and borrowings and
\npayables, incurred transaction costs are deducted. In subsequent periods, all financial liabilities, except
\nderivatives and financial liabilities which the Group has at initial recognition irrevocably designated at fair
\nvalue through profit or loss, are stated at amortised cost; any difference between proceeds (net of
\ntransaction costs) and the redemption value is recognised as interest cost over the period of the
\nborrowing using the effective interest rate method.
\nDerivative financial instruments entered into by the Group, that are not designated as hedging
\ninstruments are classified as liabilities at fair value through profit and loss. Amortisation of the effective
\ninterest rate and gains and losses of liabilities are recognised in the income statement.
\nGroup\u2019s financial liabilities include trade and other payables, loans and borrowings and derivative
\nfinancial instruments. Borrowings or portion of borrowings being hedged with a fair value hedge are
\nrecognised at fair value through profit or loss. Derecognition of financial liabilities takes place when the
\nGroup has fulfilled the contractual obligations.
\nACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
\nWithin the ordinary course of business, the Group routinely enters into sale and purchase transactions
\nfor commodities. Contracts that were entered into and continue to be held for the purpose of receipt or
\ndelivery of the commodity in accordance with the Group's expected sale, purchase or usage
\nrequirements are not within the scope of IFRS 9 (\"own use exemption\"). Physical contracts to buy or sell
\na non-financial item, which are fair valued using the fair value option to off-set accounting mismatch, or
\nwhere own use exemption or hedge accounting cannot be applied are fair valued through the income
\nstatement.
\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and
\nare subsequently remeasured at their fair value. Gains and losses resulting from the initial fair value
\nmeasurement of a
derivative (\u201cday one\u201d gains and losses) are eliminated against the corresponding
\nderivative asset or liability, if the initial fair value is determined based on valuation model with input
\nparameters that are unobservable from active markets. For derivatives whose initial fair value is
\nevidenced by a quoted price in an active market for an identical contract or based on a valuation
\ntechnique that uses only data from observable markets, gains and losses from the initial measurement
\nare accounted for similarly to gains or losses on the subsequent measurement.
\nThe method of recognising the resulting gain or loss on the subsequent measurement depends on
\nwhether the derivative is designated as a hedging instrument eligible for hedge accounting, and if so, the
\nnature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of
\nhighly probable forecast transactions (cash flow hedges); (2) hedges of the fair value of recognised
\nassets or liabilities, or unrecognised firm commitments (fair value hedge); or (3) hedges of net
\ninvestments in foreign operations.
\nThe Group documents at the inception of the transaction the relationship between hedging
\ninstruments and hedged items, whether the hedged item is one or several risk components separately or
\nin aggregation, as well as its risk management objective and strategy for undertaking various hedge
\ntransactions. When applying hedge accounting the Group also documents its assessment, of whether
\nthe derivatives that are used in hedging transactions are meeting the hedge accounting effectiveness
\ncriteria: (1) there is an economic relationship between the hedged item and the hedging instrument, (2)
\nthe effect of credit risk does not dominate the value changes that result from that economic relationship;
\nand (3) the hedge ratio of the hedging relationship is the same as applied in the risk management. The
\nGroup also documents its assessment, both at hedge inception and on an ongoing basis, of whether the
\nderivatives that are used in hedging transactions are highly effective by assessing the prospective
\ncapacity of the derivatives in offsetting changes in fair values or cash flows of hedged items. Hedge
\naccounting is discontinued only when the hedging relationship ceases to meet the hedge effectiveness
\ncriteria.
CASH FLOW HEDGE
\nThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash
\nflow hedges are recognised in equity. Gain or loss relating to the ineffective portion is recognised
\nimmediately in the income statement. Amounts accumulated in equity are recycled in the income
\nstatement in the periods when the hedged item will affect profit and loss (e.g. when the forecasted sale
\nthat is hedged takes place). However, when the forecast transaction that is hedged results in the
\nrecognition of a non-financial asset (e.g. inventory) or a liability, the gains and losses previously deferred
\nin equity are transferred from equity and included in the initial measurement of the cost of the asset or
\nliability. When a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
\nexisting in equity is recognised in the income statement when the forecast transaction is ultimately also
\nrecognised in the income statement. When a forecasted transaction is no longer expected to occur, the
\ncumulative gain or loss that was reported in equity is immediately recognised in the income statement.
\nFortum hedges its exposure to commodity market risks and applies hedge accounting by risk
\ncomponents. Hedge accounting is applied to Nordic electricity price risk, where the Nordic area priced
\nphysical electricity delivery is commonly divided into three risk components: (1) system price risk, (2)
\nelectricity price area difference risk (EPAD) and (3) currency risk. For each of these separate risk
\ncomponents there are specific derivative contracts available, which each are being effective hedges for
\nthe associated risk components.
\nIn addition, hedge accounting is applied to certain derivative contracts hedging gas price risk. These
\nare physically settled fixed-price forward and futures contracts, for which the own-use exemption cannot
\nbe applied (failed own-use contracts), where the contract constitutes an effective hedge of cash flows of
\nthe gas volumes to be delivered (\u201call
-
in one\u201d hedge).
\nFAIR VALUE HEDGE
\nChanges in the fair value of derivatives that are designated and qualify as fair value hedges are
\nrecorded in the income statement, together with any changes in the fair value of the hedged asset or
\nliability that are attributable to the hedged risk.
\nIf the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount
\nof a hedged item for which the effective interest method is used is amortised to profit or loss for the
\nperiods until maturity of the hedged item.
\nNET INVESTMENT HEDGING IN FOREIGN OPERATIONS
\nHedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any
\ngain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in
\nequity; the gain or loss relating to the ineffective portion is recognised immediately in the income
\nstatement. Gains and losses accumulated in equity are included in the income statement when the
\nforeign operation is disposed of.
\nDERIVATIVES THAT DO NOT QUALIFY FOR HEDGE ACCOUNTING
\nCertain derivative instruments representing economic hedging relationship do not qualify for hedge
\naccounting. Unrealised fair value changes of non-hedge accounted commodity derivatives hedging
\nfuture cash flow and physical contracts that are accounted for as derivatives within the scope of IFRS 9
\nare recognised in items affecting comparability in the income statement. Gains and losses on interest
\nrate and currency derivative instruments are recognised in finance costs
\u2013
net with corresponding hedge
\nitems.
\nFinancial assets and liabilities in the tables below are split into categories in accordance with IFRS 9.
\nThe categories are further divided into classes which are the basis for valuing a respective asset or
\nliability. Further information can be found in the Notes mentioned in the table.
Financial assets by category 2022
\nAmortised cost
Fair value through profit or loss
\nFair value through other
\ncomprehensive income
\nEUR million
Note
\nHedge accounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther
\nfinancial assets
\nNet investment
\nand Cash flow
\nhedges
\nOther equity
\ninvestments
\nLease
\nreceivables
\nTotal
\nfinancial assets
\nFinancial instruments in non-current assets
\nOther non-current assets
20
85
543
628
\nDerivative financial instruments
4
\nCommodity derivatives
170
54
224
\nInterest rate and currency derivatives
84
3
33
119
\nLong-term interest-bearing receivables
21
593
31
624
\nTotal financial instruments in non-current assets
677
84
174
574
86
-
-
1,595
\nFinancial instruments in current assets
\nDerivative financial instruments
4
\nCommodity derivatives
594
776
1,370
\nInterest rate and currency derivatives
1
92
23
116
\nTrade receivables
23
1,625
1,625
\nOther receivables
23
142
142
\nShort-term interest-bearing receivables
21
122
535
3
660
\nLiquid funds
24
3,919
3,919
\nTotal financial instruments in current assets
5,808
1
687
535
799
-
3
7,832
\nTotal
6,486
84
860
1,109
885
-
3
9,427
\nFinancial assets by category 2021
\nAmortised cost
Fair value through profit or loss
\nFair value through other
\ncomprehensive income
\nEUR million
Note
\nHedge accounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther
\nfinancial assets
\nNet investment
\nand Cash flow
\nhedges
\nOther equity
\ninvestments
\nLease
\nreceivables
\nTotal
\nfinancial assets
\nFinancial instruments in non-current assets
\nOther non-current assets
20
316
136
118
570
\nDerivative financial instruments
4
\nCommodity derivatives
16,955
53
17,009
\nInterest rate and currency derivatives
49
34
5
88
\nLong-term interest-bearing receivables
21
2,125
147
119
2,392
\nTotal financial instruments in non-current assets
2,441
49
16,989
284
58
118
119
20,058
\nFinancial instruments in current assets
\nDerivative financial instruments
4
\nCommodity derivatives
64,750
416
65,165
\nInterest rate and currency derivatives
22
170
34
226
\nTrade receivables
23
12,916
12,916
\nOther receivables
23
1,927
13
1,940
\nShort-term interest-bearing receivables
21
145
553
17
715
\nLiquid funds
24
7,545
47
7,592
\nTotal financial instruments in current assets
22,533
22
64,920
613
450
-
17
88,555
\nTotal
24,974
71
81,909
897
507
118
136
108,613
Financial liabilities by category 2022
\nAmortised cost
Fair value through profit or loss
\nFair value
\nthrough other
\ncomprehensive
\nincome
\nEUR million
Note
\nHedge
\naccounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther financial
\nliabilities
\nNet investment
\nand Cash flow
\nhedges
Lease liabilities
\nTotal financial
\nliabilities
\nFinancial instruments in non-current liabilities
\nInterest-bearing liabilities
27
2,978
580
\n1)
\n100
3,658
\nDerivative financial instruments
4
\nCommodity derivatives
245
390
635
\nInterest rate and currency derivatives
119
-
2
121
\nTotal financial instruments in non-current liabilities
2,978
699
245
392
100
4,413
\nFinancial instruments in current liabilities
\nInterest-bearing liabilities
27
3,581
527
19
4,127
\nDerivative financial instruments
4
\nCommodity derivatives
553
3,366
3,919
\nInterest rate and currency derivatives
2
51
1
54
\nTrade payables
33
720
720
\nOther liabilities
33
185
185
\nTotal financial instruments in current liabilities
4,486
2
604
527
3,367
19
9,005
\nTotal
7,463
701
849
527
3,759
119
13,419
\n1) Fair valued part of bond in fair value hedge relationship.
\nFinancial liabilities by category 2021
\nAmortised cost
Fair value through profit or loss
\nFair value
\nthrough other
\ncomprehensive
\nincome
\nEUR million
Note
\nHedge
\naccounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther financial
\nliabilities
\nNet investment
\nand Cash flow
\nhedges
Lease liabilities
\nTotal financial
\nliabilities
\nFinancial instruments in non-current liabilities
\nInterest-bearing liabilities
27
6,087
1,669
\n1)
\n945
8,701
\nDerivative financial instruments
4
\nCommodity derivatives
16,373
248
16,621
\nInterest rate and currency derivatives
9
8
18
36
\nTotal financial instruments in non-current liabilities
6,087
1,678
16,381
-
267
945
25,358
\nFinancial instruments in current liabilities
\nInterest-bearing liabilities
27
7,840
549
130
8,519
\nDerivative financial instruments
4
\nCommodity derivatives
68,905
2,934
71,839
\nInterest rate and currency derivatives
2
103
2
107
\nTrade payables
33
12,152
12,152
\nOther liabilities
33
425
425
\nTotal financial instruments in current liabilities
20,417
2
69,008
549
2,936
130
93,043
\nTotal
26,503
1,680
85,390
549
3,202
1,075
118,400
\n1) Fair valued part of bond in fair value hedge relationship.
15 Financial assets and liabilities by fair value hierarchy
\nACCOUNTING POLICIES
\nFair value measurements are classified using a fair value hierarchy i.e. Level 1, Level 2 and Level 3 that
\nreflects the significance of the inputs used in making the measurements.
\nFAIR VALUES UNDER LEVEL 1 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 1 is based on unadjusted quoted
\nprices in active markets at the closing date. Level 1 consist e.g. commodity derivatives traded in active
\nmarkets.
\nFAIR VALUES UNDER LEVEL 2 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 2 is based on observable input
\nparameters, which are other than quoted prices.
\nThe fair value of financial instruments traded in active markets in Level 2 is calculated using prices
\nderived from quoted market prices at the closing date. Known calculation techniques, such as estimated
\ndiscounted cash flows, are used to determine fair value of interest rate and currency financial
\ninstruments. The fair value of interest-rate swaps is calculated as the present value of the estimated
\nfuture cash flows. The fair value of forward foreign exchange contracts is determined using forward
\nexchange market rates at the closing date. Fair values of options are determined by using option
\nvaluation models. The fair value of financial liabilities is estimated by discounting the future contractual
\ncash flows at the current market interest rate that is available to the Group for similar financial
\ninstruments. The counterparty credit risk has been taken into account when determining fair value. The
\ncredit risk is determined based on a portfolio valuation in a bilateral approach.
\nThe Group bases the calculation on existing market conditions at each closing date. Financial
\ninstruments used in Fortum are standardised products that are either cleared via exchanges or widely
\ntraded in the market. Credit risk from trading commodity derivatives is mitigated by clearing trades
\nthrough exchanges or by limiting trades to OTC counterparties considered to be creditworthy, or secured
\nby credit worthy guarantees. Financial derivatives are traded with credit worthy financial institutions with
\ninvestment grade ratings.
\nFAIR VALUES UNDER LEVEL 3 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 3 is based on unobservable input
\nparameters.
\nLevel 3 consist mainly investments in unlisted shares classified as other investments for which the fair
\nvalue can't be reliably measured and derivative financial instrument for which the fair value has been
\ndetermined using valuation techniques with unobservable inputs. The input parameters of Level 3 of the
\nfair value hierarchy for equity investments are specified taking into account economic developments and
\navailable industry and corporate data. The counterparty credit risk has been adjusted when determining
\nthe fair value.
Financial assets
\nLevel 1
Level 2
Level 3
Netting
\n2)
\nTotal
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nIn non-current assets
\nOther investments
\n1)
\n20
-
71
-
46
543
99
543
216
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
54
62
-9
54
53
\nNon-hedge accounting
85
5,136
58
11,708
57
207
-30
-96
170
16,955
\nInterest rate and currency derivatives
4
\nHedge accounting
116
54
116
54
\nNon-hedge accounting
3
34
3
34
\nInterest-bearing receivables
-
111
31
36
31
147
\nTotal in non-current assets
85
5,318
231
11,904
631
342
-30
-105
917
17,459
\nIn current assets
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
781
50
542
572
-546
-207
777
416
\nNon-hedge accounting
1,129
22,876
252
45,575
9
326
-796
-4,028
594
64,750
\nInterest rate and currency derivatives
4
\nHedge accounting
23
57
23
57
\nNon-hedge accounting
92
170
92
170
\nOther receivables
-
13
-
13
\nInterest-bearing receivables
527
596
7
4
535
600
\nTotal in current assets
2,437
23,522
909
46,387
16
330
-1,342
-4,235
2,021
66,006
\nTotal
2,522
28,840
1,140
58,291
648
672
-1,372
-4,340
2,938
83,465
\n1) Other investments mainly include shares in unlisted companies.
\n2) Receivables and liabilities from standard electricity and other commodity derivative contracts against exchanges with same delivery period are netted in Fortum, except Uniper segment included in 31 Dec 2021 balances.
Financial liabilities
\nLevel 1
Level 2
Level 3
Netting
\n2)
\nTotal
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nIn non-current liabilities
\nInterest-bearing liabilities
\n1)
\n27
580
1,669
580
1,669
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
390
257
-9
390
248
\nNon-hedge accounting
38
4,874
234
11,336
4
259
-30
-96
246
16,373
\nInterest rate and currency derivatives
4
\nHedge accounting
121
27
121
27
\nNon-hedge accounting
-
8
-
8
\nTotal in non-current liabilities
38
4,874
1,324
13,298
4
259
-30
-105
1,336
18,326
\nIn current liabilities
\nInterest-bearing liabilities
27
527
549
527
549
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
2,672
420
1,240
2,721
-546
-207
3,366
2,934
\nNon-hedge accounting
883
20,316
465
52,531
1
86
-796
-4,028
553
68,905
\nInterest rate and currency derivatives
4
\nHedge accounting
3
4
3
4
\nNon-hedge accounting
51
103
51
103
\nTotal in current liabilities
3,555
20,736
2,286
55,908
1
86
-1,342
-4,235
4,500
72,496
\nTotal
3,593
25,610
3,610
69,205
5
345
-1,372
-4,340
5,836
90,822
\n1) Fair valued part of bonds when hedge accounting is applied (fair value hedge).
\n2) Receivables and liabilities from standard electricity and other commodity derivative contracts against exchanges with same delivery period are netted in Fortum, except Uniper segment included in 31 Dec 2021 balances.
\nAt the end of December 2022, the net fair value of commodity derivatives was EUR -2,960 million, including assets of EUR 1,594 million and liabilities of EUR 4,554 million (EUR -6,225 million in December 2021,
\nincluding assets of EUR 82 billion and liabilities of EUR 88 billion). The change from December 2021 mainly relates to deconsolidation of Uniper at 30 September 2022 which was dampened by impacts from increased
\ncommodity market prices affecting the continuing operations.
\nNet fair value amount of interest rate and currency derivatives was EUR 61 million, including assets EUR 235 million and liabilities EUR 175 million. Fortum has cash collateral agreements with some counterparties. At
\nthe end of December 2022 Fortum had received EUR 64 million from collateral agreements. The received cash has been booked as short-term liability.
\nThe increase in other investments in fair value hierarchy level 3 mainly relate to the 1.3 GW portfolio of wind projects in R
ussia. Uniper\u2019s fair valued l
ong-term gas supply contracts accounted for as derivatives, EUR
\n3,529 million, were transferred from level 2 to level 3 during the reporting period due to changed market situation affecting the inputs used to determine the credit value adjustment. Uniper deconsolidation decreased total
\nlevel 3 fair values by EUR 1,416 million. There were no other transfers out of level 3. Gains and losses of level 3 items in consolidated income statement are presented mainly in items affecting comparability. See
\n\ue001
Not
e
7
Comparable operating profit and comparable net profit.
\nChanges in fair value hierarchy Level 3
\nEUR million
1 Jan 2022
Purchases
Sales
Settlements
\nGains / losses in
\nincome
\nstatement
\nTransfers and
\nadditions into
\nlevel 3
\nGains / losses
\nin OCI
\nDisposal of
\nsubsidiary
\ncompanies
31 Dec 2022
\nOn balance sheet, net
\nOther investments
99
19
-17
-126
572
-2
-2
543
\nCommodity derivatives, fair values
765
135
-104
-1,903
3,529
-1
-2,360
61
\nCommodity derivatives, day-1 gains and losses
-575
2
24
-397
946
-
\nInterest bearing receivables
40
-4
3
39
\nTotal on balance sheet, net
329
21
118
-84
-2,423
4,101
-3
-1,416
643
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8496": {
"value": "4 Financial risk management Fortum's risk management framework, objectives, organisation and processes as well as a description of
\nstrategic, sustainability, financial and operational risks can be found in the Risk management section of
\nthe Operating and financial review (OFR).
\n4.1 Commodity market and fuel risks
\nFortum\u2019s business is exposed to fluctuations in prices and availability of commodities used in the
\nproduction, transmission and sales of energy products. The main exposure is toward electricity prices and
\nvolumes, prices of emissions, and price and availability of fuels. Fortum hedges its exposure to
\ncommodity market risks in order to improve the predictability of the future result by reducing volatility in
\nearnings while ensuring cash flow risk is at an acceptable level.
\nRisk management for commodity hedging activities is based on general standards in the industry and
\ninvolves the segregation of duties, as well as daily calculation, monitoring and reporting of results,
\npositions and risks. Controls are in place to ensure exposures are kept within approved limits and
\nmandates. Hedging involves the use of derivative financial instruments, as well as fixed-price physical
\ndelivery contracts.
\n4.1.1. Sensitivity arising from commodity derivatives according to IFRS 7
\nSensitivity analysis shows the sensitivity arising from financial commodity derivatives as defined in
\nIFRS 7.
\nThese derivatives are used for hedging purposes with hedge accounting applied to most hedging
\nstrategies. Sensitivities in the table below are calculated based on the electricity position as of 31
\nDecember. Positions are actively managed in the day-to-day business operations and therefore the
\nsensitivities vary from time to time. Sensitivity analysis includes only the market risks arising from
\nderivatives i.e. the underlying physical electricity sales and purchases are not included. Sensitivity is
\ncalculated with the assumption that electricity forward and futures quotations would change 1 EUR/MWh
\nfor the period Fortum has derivatives.
\nSensitivity according to IFRS 7
\n+/- 1 EUR/MWh change in electricity forward and futures quotations, EUR million
Effect
2022
2021
\nEffect on profit before income tax
-/+
2
1
\nEffect on equity
-/+
47
57
\n4.1.2. Electricity price and volume risk
\nThe exposure to Nordic electricity prices and normal volume fluctuations (e.g. due to weather-driven demand
\nand supply changes) is the largest commodity market risk exposure for Fortum in terms of impact to
\nearnings. The exposure arising from outright power production (hydro and nuclear production assets) is
\nmainly hedged by entering into electricity derivatives contracts on exchanges such as Nasdaq Commodities
\nor the European Energy Exchange, as well as directly with counterparties active in the energy and financial
\nmarkets. The main objective of hedging is to reduce the effect of electricity price volatility in earnings while
\nensuring the cash flow risk is at an acceptable level, and to increase the predictability of future results. The
\nGeneration segment\u2019
s hedging strategies cover several years in the short- to medium-term. These hedging
\nstrategies are executed within approved mandates and are continuously evaluated as electricity and other
\ncommodity market prices, the hydrological balance and other relevant parameters change.
\nThe Generation segment\u2019s hedging for power sales is performed in EUR on a Nordic level covering both
\nFinland and Sweden. The currency component of these hedges in the Swedish entity is currently not hedged.
\nGeneration segment\u2019s sens
itivity to the Nordic electricity market price is dependent on the hedge level for a
\ngiven time period. As per 31 December 2022, approximately 75% of the Generation segment's estimated
\nNordic power sales volume was hedged for the calendar year 2023 with a price of 58 EUR/MWh and
\napproximately 45% for the calendar year 2024 with a price of 42 EUR/MWh.
\nIn the Russia segment, electricity prices are the main sources of market risk. The electricity price is
\nhighly correlated with the gas price. Exposure is partly mitigated through regulated fixed-price bilateral
\nagreements, but the majority of electricity sales is exposed to spot price risk. There are no derivative
\ncontracts in the Russia segment.
\n4.1.3 Commodity derivatives
\nThe table below discloses Fortum Group's commodity derivatives for which hedge accounting according
\nto IFRS 9 is applied. The fair values represent the values disclosed on the balance sheet. See also
\n\ue001
Note 14
Financial assets and liabilities by categories for accounting principles and
\ue001
Note 15
Financial
\nassets and liabilities by fair value hierarchy for basis of fair value estimations.
\nCommodity derivatives subject to hedge accounting 2022
\nVolume, TWh
Fair value, EUR million
\nUnder
\n1 year
\n1
\u2013
5
\nyears
\nOver
\n5 years
Total
Positive
Negative
Net
\nElectricity derivatives
18
27
1
47
1,376
4,302
-2,926
\nNetting against commodity
\nexchanges
\n1)
\n-546
-546
-
\nTotal
18
27
1
47
830
3,756
-2,926
\n1) Receivables and liabilities against commodity exchanges arising from standard derivative contracts with same delivery period are netted.
\nCommodity derivatives subject to hedge accounting 2021
\nVolume, TWh
Fair value, EUR million
\nUnder
\n1 year
\n1
\u2013
5
\nyears
\nOver 5
\nyears
Total
Positive
Negative
Net
\nElectricity derivatives
25
31
1
57
349
1,648
-1,298
\nGas derivatives
30
-
-
30
335
1,750
-1,415
\nNetting against commodity
\nexchanges
\n1)
\n-215
-215
-
\nTotal
55
31
1
87
469
3,183
-2,713
\n1) Receivables and liabilities against commodity exchanges arising from standard derivative contracts with same delivery period are netted.
54
\nMaturity analysis of commodity derivatives
\nAmounts in the table are fair values.
\n2022
2021
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nCommodity derivatives, assets
1,370
194
30
1,594
65,165
16,965
44
82,174
\nCommodity derivatives, liabilities
3,919
601
35
4,554
71,839
16,495
126
88,460
\nChange in maturity analysis of commodity
derivatives\u2019 total assets and total liabilities from 31 December
\n2021 is mainly due to the deconsolidation of Uniper at 30 September 2022.
\n4.2 Liquidity and refinancing risk
\nFortum's business is exposed to liquidity and refinancing risks primarily through the need to finance the
\nGroup\u2019s business operations including margining and collaterals issued for hedging activities. Trading
\nderivative financial instruments exposes the Group to a liquidity risk associated with having to provide
\nfinancial collaterals li
ke cash or bank guarantees. A downgrade in rating could trigger counterparties\u2019 right
\nto demand additional collateral, which would need to be provided via cash or bank guarantees.
\nThe derivative instruments used by the Group are traded via exchanges and over-the-counter with
\nselected counterparties based on bilateral agreements. Trading through exchanges requires the
\nexchange of cash to cover credit risks (margining payments). Since the second half of 2021, the very
\nvolatile commodity markets with unprecedently high prices have required significantly high net margining
\npayments. During the third quarter 2022, as Nordic power prices followed the very high Continental
\nEuropean power and gas prices, Fortum\u2019s standalone (excl. Uniper) collateral requirements inc
reased to a
\nrecord-high level peaking at around EUR 5 billion. Fortum has arranged new financing to meet the
\ndemands, for further information see
\ue001
Note 24
Liquid funds and
\ue001
Note 27
Interest-bearing liabilities.
\nMargin receivables from commodity hedging activities at balance sheet date were EUR 2,607 million
\n(2021: 9,163) and margin liabilities EUR 352 million (2021: 985).
\nThe exposure to margining requirements is continuously assessed and monitored so that adequate
\nliquidity is available to cover expected future cash collateral required for margining.
\nLiquidity and refinancing risks are managed through a combination of cash positions and committed
\ncredit and other guarantee facility agreements with the core banks. The maturity profile of loans is
\nmonitored to ensure that there is at all times access to adequate liquidity for investments, loan maturities
\nand margining required for commodity trading and hedging activities.
\nFortum\u2019s business is capital intensive and it has a diversified loan portfolio. Long
-term financing is
\nprimarily raised by issuing bonds under Fortum Corporation\u2019s Euro Medium Term Note programme
\n(EMTN), as well as through bilateral and syndicated loan facilities from a variety of different financial
\ninstitutions.
\nIn Fortum, financing is primarily raised on parent company level and funds are distributed internally
\nthrough various internal financing arrangements.
\nOn 31 December 2022, 89% (2021: 66%) of th
e Group\u2019s total external loans was raised by the parent
\ncompany Fortum Corporation, and remaining 11% by other subsidiaries (2021: 29% by the Uniper
\nsegment and 5% by other subsidiaries).
\nAt the end of 2022, financial net debt was EUR 1,084 million (2021: 789) and adjusted net debt EUR
\n1,117 million (2021: 3,227).
\nOn 31 December 2022, loan maturities for the coming twelve-month period amounted to EUR 4,108
\nmillion (2021: 8,389) which include EUR 1,090 million maturing bonds, EUR 475 million commercial
\npapers, EUR 1,100 million revolving credit facility (6+6 months extension options by Fortum), EUR 350
\nmillion Solidium bridge financing and EUR 500 million bilateral loan (8 months extension option by
\nFortum). Maturities in 2023 also include EUR 592 million loans with no contractual due date.
\nAt the end of the reporting period, the Group\u2019s liquid funds totalled EUR 3,919 million (2021: 7,592).
\nLiquid funds include EUR 247 million (2021: 300) relating to Fortum\u2019s Russian operations.
\nMaturity of loans
\nEUR million
2022
\n2023
4,108
\n2024
717
\n2025
7
\n2026
730
\n2027
17
\n2028 and later
2,087
\nTotal
7,666
\nFor more information on loans, see
\ue001
Note 27
Interest-bearing liabilities.
\nLiquid funds, major credit lines and debt programmes 2022
\nEUR million
2022
\nLiquid funds
3,919
\nof which in Russia
247
\nCommitted credit lines
Total facility
\nAvailable
\namount
\nDrawn
\namount
\nFortum Corporation, EUR 5,500 million syndicated credit facility
5,500
4,400
1,100
\nFortum Corporation, EUR 800 million bilateral credit facility
800
800
-
\nFortum Corporation, EUR 2,350 million Finnish State bridge financing
2,350
2,000
350
\nFortum Corporation, bilateral overdraft facilities
100
100
-
\nTotal
\n1)
\n8,750
7,300
1,450
\n1) Additionally, Fortum has uncommitted commercial paper programmes in Finland and Sweden and uncommitted EMTN programme. From
\nthe commercial paper programmes, EUR 475 million (2021: 3,129) was drawn, and from the EMTN programme EUR 2,690 million (2021:
\n3,698) bonds were outstanding at the end of the reporting period.
\nLiquid funds, major credit lines and debt programmes 2021
\nEUR million
2021
\nLiquid funds
\nFortum
4,626
\nUniper segment
2,966
\nTotal
7,592
\nof which in Russia
300
\nCommitted credit lines
Total facility
\nAvailable
\namount
\nDrawn
\namount
\nFortum Corporation, EUR 1,750 million syndicated credit facility
1,750
-
1,750
\nFortum Corporation, EUR 800 million bilateral credit facility
800
300
500
\nUniper, EUR 1,800 million syndicated credit facility
1,800
-
1,800
\nFortum Corporation, bilateral overdraft facilities
100
100
-
\nTotal
4,450
400
4,050
55
\nMaturity analysis of interest-bearing loans and derivatives
\nInterest-bearing loans are non-discounted expected cash flows including future interest payments and
\namortisations. Interest rate and currency derivatives represent the fair value of the derivatives on the
\nbalance sheet. Maturity analysis of commodity derivatives is disclosed separately in the
\ue001
Note 4.1.3
\nCommodity derivatives.
\n2022
2021
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nInterest-bearing loans
4,290
1,831
2,254
8,374
8,490
5,728
2,450
16,669
\nInterest rate and currency derivative liabilities
54
46
75
175
107
17
19
143
\nInterest rate and currency derivative receivables
-116
-28
-92
-235
-227
-87
-1
-315
\nTotal
4,228
1,849
2,237
8,314
8,371
5,659
2,468
16,498
\n4.3 Interest rate risk and currency risk
\n4.3.1 Interest rate risk
\nFortum is exposed to cash flow risk from changes in interest rates mainly from interest-bearing liabilities
\nand derivatives on a fixed- and floating rate basis.
\nFortum manages the interest rate exposure through a duration target of the loan portfolio (excluding
\nlease liabilities and provisions), and cash flow at risk limit. Fortum uses different types of financing
\ncontracts and interest rate derivative contracts to manage the interest rate exposure, and evaluates and
\ndevelops the strategies in order to find an optimal balance between risk and financing cost.
\nOn 31 December 2022, the duration of Fortum\u2019s loan portfolio (including derivatives) was 1.2 years
\n(2021: 1.7). Approximately 77% (2021: 82%) of the loan portfolio was on a floating rate basis, or fixed rate
\nloans maturing within the next 12-month period. The flow risk, measured as the difference between the
\nbase case interest cost estimate and the worst-case s
cenario estimate for Fortum\u2019s loan portfolio for the
\ncoming 12 months, was EUR 93 million (2021: 63). The increase of flow risk is mainly driven by increase
\nof new loans, especially floating loans as a response to high collateral demand, and a significant increase
\nin interest rate volatilities at the end of 2022 in several currencies.
\nThe average interest rate for the total loan portfolio, including derivatives in finance costs, was 3.9% at
\nthe balance sheet date (2021: 1.3%). The average interest rate of EUR loans was 3.1% (2021: 0.6%).
\nFortum uses interest rate derivatives and to large extend applies hedge accounting when hedging the
\nloan portfolio of the Group. There is an ongoing reform of certain floating interest benchmark rates to
\nalternative risk free rates (ARR) due to the IBOR (Interbank Offered Rates) transition. Since EURIBOR
\n(Euro Interbank Offered Rate) is expected to continue as the benchmark rate, as it has been already fully
\nreformed, all hedges are expected to continue to be 100% effective with no impact on finance costs
\u2013
net.
\nIn addition to significant EURIBOR exposure, the Group has interest rate derivatives in SEK and sees that
\nthe IBOR transition will not have significant impact on the value and effectiveness of these derivatives.
\nFortum Group will continue to monitor the development of the IBOR transition.
\n4.3.2 Currency risk
\nFortum\u2019s policy is to hedge major transaction exposures on a local level in the reporting currency of each
\nlegal entity in order to avoid exchange differences in the income statement. An exception is Generation
\nsegment\u2019s hedging of power sales in Sweden where the currency component is not hedged. Derivatives
\nare used to hedge existing foreign exchange risks, not for proprietary trading. As a result of sanctions
\nagainst the Russian Federation followed by low liquidity in RUB and crossborder payment restrictions,
\nhedging of RUB position was stopped during first part of 2022 and existing hedges were unwinded.
\nFortum\u2019s transaction exposure
\n2022
2021
\nEUR million
\nNet
\nPosition
Hedge
Open
\nNet
\nPosition
Hedge
Open
\nRUB
869
-
869
744
-744
0
\nSEK
-669
679
10
-898
901
3
\nPLN
531
-529
2
499
-498
1
\nNOK
751
-745
5
748
-746
2
\nUSD
-993
993
0
-36
37
1
\nOther
4
-
4
5
-2
3
\nTotal
492
398
890
1,062
-1,052
11
\nFortum has cash flows, assets and liabilities in currencies other than EUR and is therefore exposed to
\nfluctuations in exchange rates. Currency exposures are divided into transaction exposures (foreign
\nexchange exposures relating to contracted or estimated cash flows and balance sheet items where
\nchanges in exchange rates will have an impact on earnings and cash flows) and translation exposure
\n(foreign exchange exposure that arises when profits and balance sheets in foreign entities are
\nconsolidated).
\nTransaction exposures arise mainly from physical and financial trading of commodities, existing and
\nnew investments, external and internal financing and shareholder loans. Contracted cash flow exposures
\nare hedged to reduce volatility in future cash flows. These hedges normally consist of currency derivative
\ncontracts, which are matched against the underlying future cash flow according to maturity. Fortum has
\ncurrency cash flow hedges both with and without hedge accounting treatment under IFRS. Those
\ncurrency cash flow hedges for which hedge accounting is not applied are mainly hedging commodity
\nderivatives and create volatility in operating profit. There was no significant ineffectiveness arising from
\ncash flow hedges in 2022.
\nAs of 31 December 2022, the one-day value-at-risk (VAR) with 99% confidence from loans, receivables
\nand derivatives was EUR 28.8 million (2021: 2.4 excluding Uniper) in the income statement and EUR 3.2
\nmillion (2021: 1.4 excluding Uniper) in equity. Income statement sensitivity resulted mainly from cash
\nflows in RUB, SEK and NOK, and equity sensitivity mainly from cash flows in CNY, USD and SEK.
\nTranslation exposure position includes net investments in foreign subsidiaries and associated
\ncompanies. Translation exposures in Fortum are generally not hedged as the majority of these assets are
\nconsidered to be long-term strategic holdings. In Fortum, this means mainly entities operating in Sweden
\nand Russia, whose base currency is not euro.
\nExchange differences arising from the translation of the net investment in foreign entities are taken to
\nequity. The net effect of exchange differences on equity attributable to equity holders mainly from RUB
\nand SEK was EUR -75 million in 2022 (2021: 184). Part of this translation exposure has been hedged and
\nthe notional amount of foreign currency hedges were EUR 2,813 million in 2022 (2021: 263). The foreign
\ncurrency hedge result amounted to EUR 41 million in 2022 (2021: -12). There was no significant
\nineffectiveness arising from net investment hedges in 2022.
56
\nInterest rate and currency derivatives by instrument 2022
\nNotional amount
Fair value
\nRemaining lifetimes
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nPosi-
\ntive
\nNega-
\ntive
Net
\nHedge accounting
\nForeign exchange derivatives
3,056
108
-
3,163
25
3
22
\nInterest rate swaps
740
825
1,350
2,915
112
120
-9
\nCross currency swaps
-
76
-
76
3
-
3
\nNon-hedge accounting
\nForeign exchange derivatives
8,445
36
-
8,481
93
51
42
\nInterest rate swaps
18
13
-
31
2
-
2
\nCross currency swaps
-
24
-
24
1
-
1
\nTotal
12,259
1,081
1,350
14,690
235
175
61
\nOf which long-term
119
121
-1
\nShort-term
116
54
62
\nInterest rate and currency derivatives by instrument 2021
\nNotional amount
Fair value
\nRemaining lifetimes
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver 5
\nyears
Total
\nPosi-
\ntive
\nNega-
\ntive
Net
\nHedge accounting
\nForeign exchange derivatives
282
136
-
417
9
2
7
\nInterest rate swaps
1,300
1,323
1,175
3,798
71
27
44
\nCross currency swaps
214
47
-
261
30
2
28
\nNon-hedge accounting
\nForeign exchange derivatives
15,404
1,050
-
16,455
204
111
93
\nInterest rate swaps
-
34
-
34
0
0
0
\nCross currency swaps
-
24
-
24
-
1
-1
\nTotal
17,200
2,613
1,175
20,989
315
143
172
\nOf which long-term
88
36
52
\nShort-term
227
107
120
\n4.4 Credit risk
\nFortum is exposed to counterparty risk whenever there is a contractual arrangement with an external
\ncounterparty.
\nCredit risk exposures relating to financial derivative instruments are often volatile and include both the
\nreplacement risk and the settlement risk. Exchange-traded derivatives are cleared through central clearing
\nparties (CCPs) or through clearing banks while over-the-counter (OTC) derivative contracts are concluded
\ndirectly with a number of different counterparties, including energy wholesalers and retailers, utilities,
\ntrading companies, energy companies, industrial end-users and financial institutions active in the financial
\nand energy markets. In order to mitigate the liquidity risk from increased margining requirements toward
\nCCPs, the share of hedges with OTC counterparties without margining requirements has increased.
\nConsequently, credit exposure from hedges with OTC counterparties has increased. In general, due to
\nFortum\u2019s net short position in Nordic power hedges credit exposure tends
to increase with the value of
\nhedges if Nordic power prices decrease. Currency and interest rate derivative counterparties are limited to
\ninvestment grade banks and financial institutions. International Swaps and Derivatives Association (ISDA)
\nMaster agreements, which include netting clauses and in some cases Credit Support Annex agreements,
\nare in place with most of these counterparties. The majority of commodity derivative counterparties have
\ninvestment-grade or comparable ratings. Master agreements, such as those published by ISDA and
\nEuropean Federation of Energy Traders (EFET), which include netting clauses, are in place with the
\nmajority of the counterparties.
\nDue to the financing needs and management of liquidity, Fortum has counterparty credit exposure
\ntowards a number of banks and financial institutions in the form of deposits and towards corporate issuers
\nof commercial papers, mainly in the Nordic market. The majority of the exposure is towards Fortum\u2019s key
\nrelationship banks, which are highly creditworthy institutions. Investments in commercial papers were all
\nwith investment grade issuers at 31 December 2022. Fortum also has exposure to the Russian financial
\nsector in terms of deposits by Fortum\u2019s Russian subsidiary with financial institutions, as
well as to banks
\nthat provide guarantees for suppliers and contracting parties. There are challenges in assessing the
\ncreditworthiness of Russian banks as credit ratings have been removed and in many cases there are no
\npublicly available financial information. The creditworthiness of banks and financial institutions is
\nmonitored so that mitigating actions can be taken as ratings or the financial situation changes. In Russia,
\nthis means using available information provided by government authorities and credit ratings issued by
\nlocal credit information agencies.
\nCredit risk relating to customers, suppliers and trading partners is spread across a wide range of
\nindustrial counterparties, energy companies, government and municipal entities, utilities, small
\nbusinesses, housing associations and private individuals over a range of geographic regions. The majority
\nof exposure is in the form of trade receivables from the sale of electricity, gas and heat in the Nordic
\nmarket, Poland and Russia. The credit risk in the electricity and heat sales business in Russia is deemed
\nto be higher than in the Nordic and Polish market.
\n4.4.1 Credit quality of major financial assets
\nFortum recognises loss allowance for expected credit losses (ECL) on financial assets classified to
\namortised cost category at each reporting date. The impairment model is applied to financial assets such
\nas trade receivables, deposits, commercial papers, and loan and other interest-bearing receivables. See
\n\ue001
Note 23
Trade and other receivables for details on expected credit losses recognised for trade
\nreceivables.
\nExpected credit loss is calculated on an individual counterparty basis for deposits, commercial papers
\nand loan and other interest-bearing receivables. No impairment loss is recognised on cash in bank
\naccounts since expected credit loss is immaterial due to low risk of default. The risk of default is evaluated
\nat each reporting date based on credit ratings to determine if credit risk has increased significantly. The
\nvalue of collateral and other measures taken to reduce credit risk (e.g. credit default insurance) is included
\nin the calculation of expected credit losses in the \u201closs given default\u201d ratio
.
\nA financial asset with an investment-grade rating is assumed to have low credit risk. A change of credit
\nrating from investment to non-investment grade constitutes a significant increase in credit risk. If the credit
\nrisk on the financial asset has not increased significantly since the initial recognition, loss allowance
\nequals to 12 month ECL. If the credit risk on the financial asset has increased significantly since initial
\nrecognition, loss allowance equals to the lifetime expected credit losses.
\nDeposits in Russian banks with a total cross carrying amount of EUR 356 million at 31 December 2022
\nwere considered as being exposed to significant increase in credit risk since initial recognition. For these
\ndeposits, ECL of EUR 109 million was recognised at 31 December 2022. Significant increase in credit risk
\nin Russian deposits resulted from deterior
ation of the counterparties\u2019 credit worthiness and the
\nconsequent increase in probability of default following from geopolitical and economic uncertainty in
\nRussia during 2022. During the first half of the year 2022, the rating agencies first downgraded the
\nRussian banks to the lowest rating categories and then withdrew the ratings. Consequently, the probability
\nof default for the Russian counterparties has been assumed to be the equivalent of the lowest rating
\ncategory for the purposes of calculating ECL.
57
\nThe loss allowance for interest-bearing receivables totalled EUR 117 million on 31 December 2022
\n(2021: 16). Amounts for interest-bearing receivables including bank deposits and derivative financial
\ninstruments recognised as assets are presented by counterparties in the following table.
\nFor derivative financial instruments the counterparty credit risk has been taken into account when
\ndetermining fair value. The impact of credit risk is measured on a counterparty basis through credit value
\nadjustment (CVA) method applying similar inputs and assumptions to which are used in the measurement
\nof ECL. See also
\ue001
Note 15
Financial assets and liabilities by fair value hierarchy for basis of fair value
\nestimations.
\nAll counterparties for currency and interest rate derivatives and the majority of counterparties for bank
\ndeposits have an external rating from S&P Global Ratings, Fitch and/or Moody\u2019s credit agencies, except
\nfor Russia. For counterparties rated by more than one rating agency, the lowest rating is used to
\ndetermine if it is investment grade.
\nIn the commodity derivatives and commercial paper market, there are a number of counterparties not
\nrated by S&P Global Ratings, Fitch or Moody\u2019s. For these counterparties, Fortum assigns an internal
\nrating. The internal rating categories that are considered to be comparable to investment grade have
\nsimilar financial metrics or display historical default rates which correspond to investment grade
\ncompanies rated by S&P Global Ratings, Fitch or Moody\u2019s.
\nCredit quality of major financial assets
\n2022
2021
\nEUR million
\nCarrying
\namount
\nof which
\npast due
\nCarrying
\namount
\nof which
\npast due
\nReceivables with investment grade or comparable rating
\nDeposits, commercial papers and cash in bank accounts
3,602
-
7,342
-
\nFair values of interest rate and currency derivatives
235
-
315
-
\nFair values of commodity derivatives on exchanges
394
-
27,856
-
\nFair values of OTC commodity derivatives
879
-
49,886
-
\nLoan and other interest bearing receivables
-
-
1,036
-
\nLease receivables
-
-
136
-
\nTotal receivables with investment grade or comparable rating
5,110
-
86,571
-
\nReceivables with non-investment grade or comparable rating
\nDeposits, commercial papers and cash in bank accounts
247
-
164
-
\nFair values of OTC commodity derivatives
321
-
4,433
-
\nLoan and other interest bearing receivables
39
-
59
-
\nTotal receivables with non-investment grade or comparable rating
607
-
4,656
-
\nOther receivables
\n1)
\nLoan receivables from associates and joint ventures
592
-
1,158
-
\nRestricted cash mainly given as collateral for commodity exchanges
27
-
59
-
\nCash in other bank accounts
70
-
87
-
\nOther receivables
3
-
-
-
\nTotal other receivables
692
-
1,304
-
\nTotal
6,409
-
92,531
-
\n1) Other receivables include financial assets which have not been divided to investment-grade and non-investment grade or comparable
\nratings.
\nChange in credit quality of major financial assets\u2019 total assets from 31 December 2022 is mainly due to
\nthe deconsolidation of Uniper at 30 September 2022
\n4.4.2 Financial instruments subject to master netting agreements
\nThe following tables present the recognised financial instruments that are offset, or subject to enforceable
\nmaster netting arrangements and other similar agreements but not offset. The column 'net amount' shows
\nthe impact on the Group's balance sheet if all netting rights were exercised.
\nNetting agreements for financial assets and liabilities 2022
\nEUR million
\nGross
\namount
\nGross
\namount
\nnetted on
\nthe balance
\nsheet
\n1)
\nNet amounts
\npresented
\non the
\nbalance
\nsheet
\nConditional
\nnetting
\namount
\n(netting
\nagreements)
\nFinancial
\ncollateral
\nreceived
\n/pledged
Net amount
\nFinancial assets
\nInterest-rate and currency derivatives
235
-
235
124
64
48
\nCommodity derivatives
3,349
1,755
1,594
957
5
632
\nTrade receivables
1,625
-
1,625
-
-
1,625
\nTotal
5,209
1,755
3,455
1,080
69
2,305
\nEUR million
\nFinancial liabilities
\nInterest-rate and currency derivatives
175
-
175
124
40
11
\nCommodity derivatives
6,309
1,755
4,554
957
-
3,598
\nTrade payables
720
-
720
-
-
720
\nTotal
7,203
1,755
5,449
1,080
40
4,329
\n1) Receivables and liabilities from electricity and other commodity exchanges arising against standard derivative contracts with same delivery
\nperiod are netted.
\nNetting agreements for financial assets and liabilities 2021
\nEUR million
\nGross
\namount
\nGross
\namount
\nnetted on
\nthe balance
\nsheet
\n1)
\nNet amounts
\npresented
\non the
\nbalance
\nsheet
\nConditional
\nnetting
\namount
\n(netting
\nagreements)
\nFinancial
\ncollateral
\nreceived
\n/pledged
Net amount
\nFinancial assets
\nInterest-rate and currency derivatives
315
-
315
129
153
33
\nCommodity derivatives
87,019
4,845
82,174
56,383
-1,576
27,368
\nTrade receivables
12,916
-
12,916
5,651
-
7,265
\nTotal
100,250
4,845
95,405
62,162
-1,423
34,666
\nEUR million
\nFinancial liabilities
\nInterest-rate and currency derivatives
143
-
143
129
5
9
\nCommodity derivatives
93,306
4,845
88,460
56,383
4,293
27,785
\nTrade payables
12,152
-
12,152
5,651
-
6,501
\nTotal
105,600
4,845
100,755
62,162
4,298
34,295
\n1) Receivables and liabilities from electricity and other commodity exchanges arising against standard derivative contracts with same delivery
\nperiod are netted.
\nChange in netting agreements for financial assets and liabilities\u2019 total assets and total liabili
ties from 31
\nDecember 2021 is mainly due to the deconsolidation of Uniper at 30 September 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8502": {
"value": "4.1 Commodity market and fuel risks Fortum\u2019s business is exposed to fluctuations in prices and availability of commodities used in the
\nproduction, transmission and sales of energy products. The main exposure is toward electricity prices and
\nvolumes, prices of emissions, and price and availability of fuels. Fortum hedges its exposure to
\ncommodity market risks in order to improve the predictability of the future result by reducing volatility in
\nearnings while ensuring cash flow risk is at an acceptable level.
\nRisk management for commodity hedging activities is based on general standards in the industry and
\ninvolves the segregation of duties, as well as daily calculation, monitoring and reporting of results,
\npositions and risks. Controls are in place to ensure exposures are kept within approved limits and
\nmandates. Hedging involves the use of derivative financial instruments, as well as fixed-price physical
\ndelivery contracts.
\n4.1.1. Sensitivity arising from commodity derivatives according to IFRS 7
\nSensitivity analysis shows the sensitivity arising from financial commodity derivatives as defined in
\nIFRS 7.
\nThese derivatives are used for hedging purposes with hedge accounting applied to most hedging
\nstrategies. Sensitivities in the table below are calculated based on the electricity position as of 31
\nDecember. Positions are actively managed in the day-to-day business operations and therefore the
\nsensitivities vary from time to time. Sensitivity analysis includes only the market risks arising from
\nderivatives i.e. the underlying physical electricity sales and purchases are not included. Sensitivity is
\ncalculated with the assumption that electricity forward and futures quotations would change 1 EUR/MWh
\nfor the period Fortum has derivatives.
\nSensitivity according to IFRS 7
\n+/- 1 EUR/MWh change in electricity forward and futures quotations, EUR million
Effect
2022
2021
\nEffect on profit before income tax
-/+
2
1
\nEffect on equity
-/+
47
57
\n4.1.2. Electricity price and volume risk
\nThe exposure to Nordic electricity prices and normal volume fluctuations (e.g. due to weather-driven demand
\nand supply changes) is the largest commodity market risk exposure for Fortum in terms of impact to
\nearnings. The exposure arising from outright power production (hydro and nuclear production assets) is
\nmainly hedged by entering into electricity derivatives contracts on exchanges such as Nasdaq Commodities
\nor the European Energy Exchange, as well as directly with counterparties active in the energy and financial
\nmarkets. The main objective of hedging is to reduce the effect of electricity price volatility in earnings while
\nensuring the cash flow risk is at an acceptable level, and to increase the predictability of future results. The
\nGeneration segment\u2019
s hedging strategies cover several years in the short- to medium-term. These hedging
\nstrategies are executed within approved mandates and are continuously evaluated as electricity and other
\ncommodity market prices, the hydrological balance and other relevant parameters change.
\nThe Generation segment\u2019s hedging for power sales is performed in EUR on a Nordic level covering both
\nFinland and Sweden. The currency component of these hedges in the Swedish entity is currently not hedged.
\nGeneration segment\u2019s sens
itivity to the Nordic electricity market price is dependent on the hedge level for a
\ngiven time period. As per 31 December 2022, approximately 75% of the Generation segment's estimated
\nNordic power sales volume was hedged for the calendar year 2023 with a price of 58 EUR/MWh and
\napproximately 45% for the calendar year 2024 with a price of 42 EUR/MWh.
\nIn the Russia segment, electricity prices are the main sources of market risk. The electricity price is
\nhighly correlated with the gas price. Exposure is partly mitigated through regulated fixed-price bilateral
\nagreements, but the majority of electricity sales is exposed to spot price risk. There are no derivative
\ncontracts in the Russia segment.
\n4.1.3 Commodity derivatives
\nThe table below discloses Fortum Group's commodity derivatives for which hedge accounting according
\nto IFRS 9 is applied. The fair values represent the values disclosed on the balance sheet. See also
\n\ue001
Note 14
Financial assets and liabilities by categories for accounting principles and
\ue001
Note 15
Financial
\nassets and liabilities by fair value hierarchy for basis of fair value estimations.
\nCommodity derivatives subject to hedge accounting 2022
\nVolume, TWh
Fair value, EUR million
\nUnder
\n1 year
\n1
\u2013
5
\nyears
\nOver
\n5 years
Total
Positive
Negative
Net
\nElectricity derivatives
18
27
1
47
1,376
4,302
-2,926
\nNetting against commodity
\nexchanges
\n1)
\n-546
-546
-
\nTotal
18
27
1
47
830
3,756
-2,926
\n1) Receivables and liabilities against commodity exchanges arising from standard derivative contracts with same delivery period are netted.
\nCommodity derivatives subject to hedge accounting 2021
\nVolume, TWh
Fair value, EUR million
\nUnder
\n1 year
\n1
\u2013
5
\nyears
\nOver 5
\nyears
Total
Positive
Negative
Net
\nElectricity derivatives
25
31
1
57
349
1,648
-1,298
\nGas derivatives
30
-
-
30
335
1,750
-1,415
\nNetting against commodity
\nexchanges
\n1)
\n-215
-215
-
\nTotal
55
31
1
87
469
3,183
-2,713
\n1) Receivables and liabilities against commodity exchanges arising from standard derivative contracts with same delivery period are netted.
54
\nMaturity analysis of commodity derivatives
\nAmounts in the table are fair values.
\n2022
2021
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nCommodity derivatives, assets
1,370
194
30
1,594
65,165
16,965
44
82,174
\nCommodity derivatives, liabilities
3,919
601
35
4,554
71,839
16,495
126
88,460
\nChange in maturity analysis of commodity
derivatives\u2019 total assets and total liabilities from 31 December
\n2021 is mainly due to the deconsolidation of Uniper at 30 September 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfMarketRiskExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f8712": {
"value": "4.2 Liquidity and refinancing risk Fortum's business is exposed to liquidity and refinancing risks primarily through the need to finance the
\nGroup\u2019s business operations including margining and collaterals issued for hedging activities. Trading
\nderivative financial instruments exposes the Group to a liquidity risk associated with having to provide
\nfinancial collaterals li
ke cash or bank guarantees. A downgrade in rating could trigger counterparties\u2019 right
\nto demand additional collateral, which would need to be provided via cash or bank guarantees.
\nThe derivative instruments used by the Group are traded via exchanges and over-the-counter with
\nselected counterparties based on bilateral agreements. Trading through exchanges requires the
\nexchange of cash to cover credit risks (margining payments). Since the second half of 2021, the very
\nvolatile commodity markets with unprecedently high prices have required significantly high net margining
\npayments. During the third quarter 2022, as Nordic power prices followed the very high Continental
\nEuropean power and gas prices, Fortum\u2019s standalone (excl. Uniper) collateral requirements inc
reased to a
\nrecord-high level peaking at around EUR 5 billion. Fortum has arranged new financing to meet the
\ndemands, for further information see
\ue001
Note 24
Liquid funds and
\ue001
Note 27
Interest-bearing liabilities.
\nMargin receivables from commodity hedging activities at balance sheet date were EUR 2,607 million
\n(2021: 9,163) and margin liabilities EUR 352 million (2021: 985).
\nThe exposure to margining requirements is continuously assessed and monitored so that adequate
\nliquidity is available to cover expected future cash collateral required for margining.
\nLiquidity and refinancing risks are managed through a combination of cash positions and committed
\ncredit and other guarantee facility agreements with the core banks. The maturity profile of loans is
\nmonitored to ensure that there is at all times access to adequate liquidity for investments, loan maturities
\nand margining required for commodity trading and hedging activities.
\nFortum\u2019s business is capital intensive and it has a diversified loan portfolio. Long
-term financing is
\nprimarily raised by issuing bonds under Fortum Corporation\u2019s Euro Medium Term Note programme
\n(EMTN), as well as through bilateral and syndicated loan facilities from a variety of different financial
\ninstitutions.
\nIn Fortum, financing is primarily raised on parent company level and funds are distributed internally
\nthrough various internal financing arrangements.
\nOn 31 December 2022, 89% (2021: 66%) of th
e Group\u2019s total external loans was raised by the parent
\ncompany Fortum Corporation, and remaining 11% by other subsidiaries (2021: 29% by the Uniper
\nsegment and 5% by other subsidiaries).
\nAt the end of 2022, financial net debt was EUR 1,084 million (2021: 789) and adjusted net debt EUR
\n1,117 million (2021: 3,227).
\nOn 31 December 2022, loan maturities for the coming twelve-month period amounted to EUR 4,108
\nmillion (2021: 8,389) which include EUR 1,090 million maturing bonds, EUR 475 million commercial
\npapers, EUR 1,100 million revolving credit facility (6+6 months extension options by Fortum), EUR 350
\nmillion Solidium bridge financing and EUR 500 million bilateral loan (8 months extension option by
\nFortum). Maturities in 2023 also include EUR 592 million loans with no contractual due date.
\nAt the end of the reporting period, the Group\u2019s liquid funds totalled EUR 3,919 million (2021: 7,592).
\nLiquid funds include EUR 247 million (2021: 300) relating to Fortum\u2019s Russian operations.
\nMaturity of loans
\nEUR million
2022
\n2023
4,108
\n2024
717
\n2025
7
\n2026
730
\n2027
17
\n2028 and later
2,087
\nTotal
7,666
\nFor more information on loans, see
\ue001
Note 27
Interest-bearing liabilities.
\nLiquid funds, major credit lines and debt programmes 2022
\nEUR million
2022
\nLiquid funds
3,919
\nof which in Russia
247
\nCommitted credit lines
Total facility
\nAvailable
\namount
\nDrawn
\namount
\nFortum Corporation, EUR 5,500 million syndicated credit facility
5,500
4,400
1,100
\nFortum Corporation, EUR 800 million bilateral credit facility
800
800
-
\nFortum Corporation, EUR 2,350 million Finnish State bridge financing
2,350
2,000
350
\nFortum Corporation, bilateral overdraft facilities
100
100
-
\nTotal
\n1)
\n8,750
7,300
1,450
\n1) Additionally, Fortum has uncommitted commercial paper programmes in Finland and Sweden and uncommitted EMTN programme. From
\nthe commercial paper programmes, EUR 475 million (2021: 3,129) was drawn, and from the EMTN programme EUR 2,690 million (2021:
\n3,698) bonds were outstanding at the end of the reporting period.
\nLiquid funds, major credit lines and debt programmes 2021
\nEUR million
2021
\nLiquid funds
\nFortum
4,626
\nUniper segment
2,966
\nTotal
7,592
\nof which in Russia
300
\nCommitted credit lines
Total facility
\nAvailable
\namount
\nDrawn
\namount
\nFortum Corporation, EUR 1,750 million syndicated credit facility
1,750
-
1,750
\nFortum Corporation, EUR 800 million bilateral credit facility
800
300
500
\nUniper, EUR 1,800 million syndicated credit facility
1,800
-
1,800
\nFortum Corporation, bilateral overdraft facilities
100
100
-
\nTotal
4,450
400
4,050
55
\nMaturity analysis of interest-bearing loans and derivatives
\nInterest-bearing loans are non-discounted expected cash flows including future interest payments and
\namortisations. Interest rate and currency derivatives represent the fair value of the derivatives on the
\nbalance sheet. Maturity analysis of commodity derivatives is disclosed separately in the
\ue001
Note 4.1.3
\nCommodity derivatives.
\n2022
2021
\nEUR million
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
Total
\nInterest-bearing loans
4,290
1,831
2,254
8,374
8,490
5,728
2,450
16,669
\nInterest rate and currency derivative liabilities
54
46
75
175
107
17
19
143
\nInterest rate and currency derivative receivables
-116
-28
-92
-235
-227
-87
-1
-315
\nTotal
4,228
1,849
2,237
8,314
8,371
5,659
2,468
16,498",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f9055": {
"value": "Exchange differences arising from the translation of the net investment in foreign entities are taken to equity. The net effect of exchange differences on equity attributable to equity holders mainly from RUB
\nand SEK was EUR -75 million in 2022 (2021: 184). Part of this translation exposure has been hedged and
\nthe notional amount of foreign currency hedges were EUR 2,813 million in 2022 (2021: 263). The foreign
\ncurrency hedge result amounted to EUR 41 million in 2022 (2021: -12). There was no significant
\nineffectiveness arising from net investment hedges in 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f9242": {
"value": "4.4 Credit risk
\nFortum is exposed to counterparty risk whenever there is a contractual arrangement with an external
\ncounterparty.
\nCredit risk exposures relating to financial derivative instruments are often volatile and include both the
\nreplacement risk and the settlement risk. Exchange-traded derivatives are cleared through central clearing
\nparties (CCPs) or through clearing banks while over-the-counter (OTC) derivative contracts are concluded
\ndirectly with a number of different counterparties, including energy wholesalers and retailers, utilities,
\ntrading companies, energy companies, industrial end-users and financial institutions active in the financial
\nand energy markets. In order to mitigate the liquidity risk from increased margining requirements toward
\nCCPs, the share of hedges with OTC counterparties without margining requirements has increased.
\nConsequently, credit exposure from hedges with OTC counterparties has increased. In general, due to
\nFortum\u2019s net short position in Nordic power hedges credit exposure tends
to increase with the value of
\nhedges if Nordic power prices decrease. Currency and interest rate derivative counterparties are limited to
\ninvestment grade banks and financial institutions. International Swaps and Derivatives Association (ISDA)
\nMaster agreements, which include netting clauses and in some cases Credit Support Annex agreements,
\nare in place with most of these counterparties. The majority of commodity derivative counterparties have
\ninvestment-grade or comparable ratings. Master agreements, such as those published by ISDA and
\nEuropean Federation of Energy Traders (EFET), which include netting clauses, are in place with the
\nmajority of the counterparties.
\nDue to the financing needs and management of liquidity, Fortum has counterparty credit exposure
\ntowards a number of banks and financial institutions in the form of deposits and towards corporate issuers
\nof commercial papers, mainly in the Nordic market. The majority of the exposure is towards Fortum\u2019s key
\nrelationship banks, which are highly creditworthy institutions. Investments in commercial papers were all
\nwith investment grade issuers at 31 December 2022. Fortum also has exposure to the Russian financial
\nsector in terms of deposits by Fortum\u2019s Russian subsidiary with financial institutions, as
well as to banks
\nthat provide guarantees for suppliers and contracting parties. There are challenges in assessing the
\ncreditworthiness of Russian banks as credit ratings have been removed and in many cases there are no
\npublicly available financial information. The creditworthiness of banks and financial institutions is
\nmonitored so that mitigating actions can be taken as ratings or the financial situation changes. In Russia,
\nthis means using available information provided by government authorities and credit ratings issued by
\nlocal credit information agencies.
\nCredit risk relating to customers, suppliers and trading partners is spread across a wide range of
\nindustrial counterparties, energy companies, government and municipal entities, utilities, small
\nbusinesses, housing associations and private individuals over a range of geographic regions. The majority
\nof exposure is in the form of trade receivables from the sale of electricity, gas and heat in the Nordic
\nmarket, Poland and Russia. The credit risk in the electricity and heat sales business in Russia is deemed
\nto be higher than in the Nordic and Polish market.
\n4.4.1 Credit quality of major financial assets
\nFortum recognises loss allowance for expected credit losses (ECL) on financial assets classified to
\namortised cost category at each reporting date. The impairment model is applied to financial assets such
\nas trade receivables, deposits, commercial papers, and loan and other interest-bearing receivables. See
\n\ue001
Note 23
Trade and other receivables for details on expected credit losses recognised for trade
\nreceivables.
\nExpected credit loss is calculated on an individual counterparty basis for deposits, commercial papers
\nand loan and other interest-bearing receivables. No impairment loss is recognised on cash in bank
\naccounts since expected credit loss is immaterial due to low risk of default. The risk of default is evaluated
\nat each reporting date based on credit ratings to determine if credit risk has increased significantly. The
\nvalue of collateral and other measures taken to reduce credit risk (e.g. credit default insurance) is included
\nin the calculation of expected credit losses in the \u201closs given default\u201d ratio
.
\nA financial asset with an investment-grade rating is assumed to have low credit risk. A change of credit
\nrating from investment to non-investment grade constitutes a significant increase in credit risk. If the credit
\nrisk on the financial asset has not increased significantly since the initial recognition, loss allowance
\nequals to 12 month ECL. If the credit risk on the financial asset has increased significantly since initial
\nrecognition, loss allowance equals to the lifetime expected credit losses.
\nDeposits in Russian banks with a total cross carrying amount of EUR 356 million at 31 December 2022
\nwere considered as being exposed to significant increase in credit risk since initial recognition. For these
\ndeposits, ECL of EUR 109 million was recognised at 31 December 2022. Significant increase in credit risk
\nin Russian deposits resulted from deterior
ation of the counterparties\u2019 credit worthiness and the
\nconsequent increase in probability of default following from geopolitical and economic uncertainty in
\nRussia during 2022. During the first half of the year 2022, the rating agencies first downgraded the
\nRussian banks to the lowest rating categories and then withdrew the ratings. Consequently, the probability
\nof default for the Russian counterparties has been assumed to be the equivalent of the lowest rating
\ncategory for the purposes of calculating ECL.
The loss allowance for interest-bearing receivables totalled EUR 117 million on 31 December 2022
\n(2021: 16). Amounts for interest-bearing receivables including bank deposits and derivative financial
\ninstruments recognised as assets are presented by counterparties in the following table.
\nFor derivative financial instruments the counterparty credit risk has been taken into account when
\ndetermining fair value. The impact of credit risk is measured on a counterparty basis through credit value
\nadjustment (CVA) method applying similar inputs and assumptions to which are used in the measurement
\nof ECL. See also
\ue001
Note 15
Financial assets and liabilities by fair value hierarchy for basis of fair value
\nestimations.
\nAll counterparties for currency and interest rate derivatives and the majority of counterparties for bank
\ndeposits have an external rating from S&P Global Ratings, Fitch and/or Moody\u2019s credit agencies, except
\nfor Russia. For counterparties rated by more than one rating agency, the lowest rating is used to
\ndetermine if it is investment grade.
\nIn the commodity derivatives and commercial paper market, there are a number of counterparties not
\nrated by S&P Global Ratings, Fitch or Moody\u2019s. For these counterparties, Fortum assigns an internal
\nrating. The internal rating categories that are considered to be comparable to investment grade have
\nsimilar financial metrics or display historical default rates which correspond to investment grade
\ncompanies rated by S&P Global Ratings, Fitch or Moody\u2019s.
\nCredit quality of major financial assets
\n2022
2021
\nEUR million
\nCarrying
\namount
\nof which
\npast due
\nCarrying
\namount
\nof which
\npast due
\nReceivables with investment grade or comparable rating
\nDeposits, commercial papers and cash in bank accounts
3,602
-
7,342
-
\nFair values of interest rate and currency derivatives
235
-
315
-
\nFair values of commodity derivatives on exchanges
394
-
27,856
-
\nFair values of OTC commodity derivatives
879
-
49,886
-
\nLoan and other interest bearing receivables
-
-
1,036
-
\nLease receivables
-
-
136
-
\nTotal receivables with investment grade or comparable rating
5,110
-
86,571
-
\nReceivables with non-investment grade or comparable rating
\nDeposits, commercial papers and cash in bank accounts
247
-
164
-
\nFair values of OTC commodity derivatives
321
-
4,433
-
\nLoan and other interest bearing receivables
39
-
59
-
\nTotal receivables with non-investment grade or comparable rating
607
-
4,656
-
\nOther receivables
\n1)
\nLoan receivables from associates and joint ventures
592
-
1,158
-
\nRestricted cash mainly given as collateral for commodity exchanges
27
-
59
-
\nCash in other bank accounts
70
-
87
-
\nOther receivables
3
-
-
-
\nTotal other receivables
692
-
1,304
-
\nTotal
6,409
-
92,531
-
\n1) Other receivables include financial assets which have not been divided to investment-grade and non-investment grade or comparable
\nratings.
\nChange in credit quality of major financial assets\u2019 total assets from 31 December 2022 is mainly due to
\nthe deconsolidation of Uniper at 30 September 2022
\n4.4.2 Financial instruments subject to master netting agreements
\nThe following tables present the recognised financial instruments that are offset, or subject to enforceable
\nmaster netting arrangements and other similar agreements but not offset. The column 'net amount' shows
\nthe impact on the Group's balance sheet if all netting rights were exercised.
\nNetting agreements for financial assets and liabilities 2022
\nEUR million
\nGross
\namount
\nGross
\namount
\nnetted on
\nthe balance
\nsheet
\n1)
\nNet amounts
\npresented
\non the
\nbalance
\nsheet
\nConditional
\nnetting
\namount
\n(netting
\nagreements)
\nFinancial
\ncollateral
\nreceived
\n/pledged
Net amount
\nFinancial assets
\nInterest-rate and currency derivatives
235
-
235
124
64
48
\nCommodity derivatives
3,349
1,755
1,594
957
5
632
\nTrade receivables
1,625
-
1,625
-
-
1,625
\nTotal
5,209
1,755
3,455
1,080
69
2,305
\nEUR million
\nFinancial liabilities
\nInterest-rate and currency derivatives
175
-
175
124
40
11
\nCommodity derivatives
6,309
1,755
4,554
957
-
3,598
\nTrade payables
720
-
720
-
-
720
\nTotal
7,203
1,755
5,449
1,080
40
4,329
\n1) Receivables and liabilities from electricity and other commodity exchanges arising against standard derivative contracts with same delivery
\nperiod are netted.
\nNetting agreements for financial assets and liabilities 2021
\nEUR million
\nGross
\namount
\nGross
\namount
\nnetted on
\nthe balance
\nsheet
\n1)
\nNet amounts
\npresented
\non the
\nbalance
\nsheet
\nConditional
\nnetting
\namount
\n(netting
\nagreements)
\nFinancial
\ncollateral
\nreceived
\n/pledged
Net amount
\nFinancial assets
\nInterest-rate and currency derivatives
315
-
315
129
153
33
\nCommodity derivatives
87,019
4,845
82,174
56,383
-1,576
27,368
\nTrade receivables
12,916
-
12,916
5,651
-
7,265
\nTotal
100,250
4,845
95,405
62,162
-1,423
34,666
\nEUR million
\nFinancial liabilities
\nInterest-rate and currency derivatives
143
-
143
129
5
9
\nCommodity derivatives
93,306
4,845
88,460
56,383
4,293
27,785
\nTrade payables
12,152
-
12,152
5,651
-
6,501
\nTotal
105,600
4,845
100,755
62,162
4,298
34,295
\n1) Receivables and liabilities from electricity and other commodity exchanges arising against standard derivative contracts with same delivery
\nperiod are netted.
\nChange in netting agreements for financial assets and liabilities\u2019 total assets and total liabili
ties from 31
\nDecember 2021 is mainly due to the deconsolidation of Uniper at 30 September 2022.
Trade receivables
\nAgeing analysis of trade receivables
\n2022
2021
\nEUR million
Gross
\nExpected
\ncredit
\nloss
\nallowance
\nExpected
\ncredit
\nloss rate,
\n%
Gross
\nExpected
\ncredit
\nloss
\nallowance
\nExpected
\ncredit
\nloss rate,
\n%
\nNot past due
1,541
3
0
12,662
14
0
\nPast due 1-30 days
70
3
4
192
5
2
\nPast due 31-90 days
9
2
22
22
9
42
\nPast due 91-180 days
6
3
50
34
16
48
\nPast due more than 181 days
77
67
87
204
154
75
\nTotal
1,703
78
5
13,114
198
2
\nChanges in expected credit loss allowance
\nEUR million
2022
2021
\n1 January
198
178
\nExpected credit loss allowance recognised during the year
78
43
\nDisposal of subsidiary companies
-168
-
\nWrite-offs
-39
-25
\nTranslation differences and other changes
9
3
\n31 December
78
198
\nChanges during the year include Uniper until 30 September 2022.
\nTrade receivables by currency (Gross)
\nEUR million
2022
2021
\nEUR
461
9,966
\nNOK
456
353
\nSEK
406
346
\nPLN
207
143
\nRUB
163
295
\nUSD
3
1,196
\nGBP
-
795
\nOther
7
20
\nTotal
1,703
13,114
\nTrade receivables are arising from a large number of customers mainly in EUR, NOK and SEK mitigating
\nthe concentration of risk.
\nFor further information regarding credit risk management and credit risks, see
\ue001
Counterparty and
\ncredit risks
in the Operating and financial review and
\ue001
Note 4.4
Credit risk.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCreditRiskExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f9643": {
"value": "5 Capital risk management At the beginning of March 2023, the Fortum Board of Directors resolved on Fortum\u2019s new strategy
\nincluding new financial and sustainability targets as well as dividend policy. The renewed dividend policy
\u2013
\na payout ratio of 60-90% of comparable EPS
\u2013
reflec
ts the potential earnings fluctuations of Fortum\u2019s
\npower generation portfolio. For additional information, see
\ue001
Note 39
Events after the balance sheet date.
\nFor the year 2022, Fortum\u2019s Board of Directors proposes a dividend of EUR
0.91 per share which
\ncorresponds to 75% of the Group
\u2019
s comparable EPS of EUR 1.21 from continuing operations excluding
\nimpact from the Russian operations. The Board proposes that the dividend is paid in two instalments, in
\nthe second and fourth quarter of 2023.
\nThe long-term financial targets until 31 December 2022 were:
\n\u2022
Financial net debt/comparable EBITDA below 2x, defined as Alternative Performance Measure.
\n\u2022
Hurdle rates for new investments based on weighted average cost of capital (\u201cWACC\u201d)
\n\u2022
+100 basis points for green investments
\n\u2022
+200 basis points for other investments
\nOn 14 March 2022, S&P placed Fortum\u2019s and Uniper\u2019s BBB ratings on CreditWatch Negative. On 16 May
\n2022, S&P resolved the CreditWatch and affirmed Fortum\u2019s BBB rating with negative outlook. However,
\nUniper
\u2019s long
-term credit rating was downgraded by one notch from BBB to BBB-, also with negative
\noutlook.
\nOn 17 March 2022, Fitch Ratings affirmed its long-term credit rating for Fortum to BBB with stable outlook.
\nOn 5 July 2022, due to the Russian gas curtail
ment, S&P again placed Fortum\u2019s and Uniper\u2019s credit
\nratings on CreditWatch Negative. On 29 July 2022, following the announcements of the agreement with
\nthe German G
overnment on Uniper\u2019s stabilisation package, S&P resolved Uniper\u2019s CreditWatch Negative
\nby affirming the BBB- rating with negative outlook. Due to the strong governmental support, S&P now
\nconsiders Uniper a \u201cgovernment
-
related entity\u201d, which enabled Uniper to retain its investment grade
\nrating, despite an overall weaker stand-alone credit quality
. The negative outlook of Uniper\u2019s rating
\nreflects prevailing uncertainty around gas flows, which in S&P\u2019s view may necessitate an increase of the
\ngovernment package and the fact that details of the stabilisation package are still to be approved.
\nOn 3 Augu
st 2022, S&P affirmed Fortum\u2019s current BBB long
-term credit rating with negative outlook.
\nS&P assesses that the support package for Uniper will prevent further incremental costs for Fortum and
\nconsiders Fortum's financial exposure as capped. According to S&P, the negative outlook reflects
\nFortum's exposure to Uniper until the European Commission has approved the support package and the
\nlonger-term uncertainties about the company's strategy.
\nOn 5 August 2022, Fitch Ratings affirmed Fortum\u2019s current long
-term credit rating at BBB with negative
\noutlook. According to Fitch, the affirmation mainly reflects the rating agency\u2019s view that Fortum is well
-
\nshielded from the losses incurred by Fortum\u2019s German subsidiary Uniper, following Uniper\u2019s stabilisation
\npackage that was agreed with the German State.
\nFollowing the September announcement that Fortum will fully divest Uniper to the German State, the
\nrating agencies commented that the divestment of the Uniper stake was regarded as credit positive for
\nFortum, as it wi
ll improve the company\u2019s financial and risk profile. However, the rating agencies concluded
\nthat it was premature to determine the full effect of the Uniper divestment on Fortum\u2019s rating. Now that the
\nUniper divestment has been completed, the rating agencies are expected to update their ratings as
\nFortum also has published its new strategy.
\nFortum\u2019s objective is to have a solid investment grade rating of at least BBB to preserve financial
\nflexibility and good access to capital markets.
\nFinancial net debt/comparable EBITDA ratio
\nEUR million
Note
\nContinuing
\noperations
\n2022
\nFortum
\ntotal
\n1)
\n2021
\n+Interest-bearing liabilities
7,785
17,220
\n-
BS
Liquid funds
3,919
7,592
\n- Non-current securities
-
111
\n- Collateral arrangement securities
527
549
\n- Securities in interest-bearing receivables
527
660
\n-
BS
Margin receivables
2,607
9,163
\n+
BS
Margin liabilities
352
985
\n+ Net margin liabilities
-2,255
-8,179
\nFinancial net debt
27
1,084
789
\nIS
Operating profit
1,277
-588
\n+
IS
Depreciation and amortisation
566
1,281
\nEBITDA
1,842
693
\n-
IS
Items affecting comparability
593
3,124
\nComparable EBITDA
2,436
3,817
\nFinancial net debt/comparable EBITDA
0.4
0.2
\n1) 2021 figures based on continuing and discontinued operations (total).
\nFinancial net debt/comparable EBITDA excl. Russia
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, and in 2022 Fortum introduced new APMs to provide additional financial
\ninformation excluding Fortum\u2019s Russian operations. See also
\ue001
Note 1
Significant accounting policies.
\nEUR million
2022
\nFinancial net debt
1,084
\n- Interest-bearing liabilities, Russia
204
\n+ Liquid funds, Russia
247
\nFinancial net debt excl. Russia
1,127
\nComparable EBITDA from continuing operations excl. Russia
2,025
\nFinancial net debt/comparable EBITDA excl. Russia
0.6
\nSee
\ue001
Note 7
Comparable operating profit and comparable net profit for details on items affecting
\ncomparability, and
\ue001
Note 27
Interest-bearing liabilities, including further details of the financing and
\nliquidity status and see
\ue001
Definitions and reconciliations of key figures
.
\nComparable EBITDA is defined as an alternative performance measure and used as a component in
\nthe capital structure target 'Financial net debt-to-Comparable EBITDA'.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f9829": {
"value": "6 Segment reporting SIGNIFICANT ACCOUNTING POLICIES
\nREVENUE RECOGNITION
\nFortum's operations comprise the provision of electricity, heating and cooling, gas and waste
\nmanagement services. Revenue streams can be divided into five groups: power sales to wholesale
\nmarkets, power sales to retail customers, heating sales, gas sales and waste treatment sales.
\nRevenue is recognised when goods are transferred or services are performed, i.e. when a
\nperformance obligation is satisfied and control of the good or service underlying the particular
\nperformance obligations is transferred to the customer. Revenue is shown at the price that Fortum
\nexpects to be entitled to and it is presented net of rebates, discounts, value-added tax and selective
\ntaxes, such as electricity tax. Revenues include effects from physically settled contracts for which own
\nuse exemption cannot be used according to IFRS 9, see
\ue001
Note 7
Comparable operating profit and
\ncomparable net profit. Accounting policies for the different revenue streams are described below.
\nPOWER SALES TO WHOLESALE MARKETS AND THROUGH BILATERAL CONTRACTS
\nPhysical electricity trades to wholesale markets are made at a spot price and thus there are no variable
\nelements. Electricity sales are recognised on delivery at the price defined in wholesale market. Fortum is
\nalso selling power to industrial customers and municipalities through bilateral contracts. These contracts
\ncan include fixed price components that are recognised in line with the customer\u2019s actual consumption
\nprofile, when the nature of the performance obligation is to deliver power instead of standing-ready to
\ndeliver power. When Fortum is acting as an agent in electricity trade by granting access to Nord Pool
\npower trading system, Fortum presents the bilateral trades between Fortum and the customer on a net
\nbasis and only the service fee is recorded as revenue.
\nPOWER SALES TO RETAIL CUSTOMERS
\nFortum\u2019s contracts with consumer and business customers cover electricity sales, while the distribution
\nservice is delivered by the transmission company operating the local network. There is only one
\nperformance obligation, which is to stand-ready to supply electricity to the customer. The transaction
\nprice generally includes both a fixed monthly charge and a variable fee based on the volume of
\nelectr
icity supplied. As Fortum\u2019s promise is to stand ready to deliver electricity, the fixed and variable
\ncomponents are recognised based on the fees chargeable from the customer. If automated meter
\nreading is not available, electricity consumption between the last meter reading and the end of
\nthe month is estimated.
\nHEAT SALES
\nIn many areas the district heating service covers both the distribution and sale of heat. Fortum is usually
\nresponsible for delivering the whole service, even when heat is being produced by a third party, and is
\nacting as a principal for heat sales as well. There is only one performance obligation, which is to stand-
\nready to supply heat to the customer. The fees charged from the customer generally comprise a
\nfixed monthly charge a
nd a variable fee based on the volume of heat supplied. As Fortum\u2019s promise is to
\nstand ready to deliver heat, the fixed and variable components are recognised based on the fees
\nchargeable from the customer. In Russia and Poland there are also areas where Fortum operates only
\nthe heat production facilities while some third party is responsible for the distribution of heat. In these
\nareas the performance obligation is to supply heat and revenue is recognised based on the volume of
\nheat that Fortum is entitled to charge from the customer.
\nGAS SALES
\nRevenues are generated from sales of gas via traded markets, as well as to retail and industrial
\ncustomers, and include hedges settled through physical delivery, which are recognised when delivery
\ntakes place and control is transferred to the customer. Gas sales include also revenues earned from the
\ntransportation of gas. Contracts generally contain one performance obligation for which the entire
\ntransaction price is recognised.
\nFor physically settled transactions that are in the scope of IFRS 15 (own-use transactions), revenue is
\nrecognised based on contract prices, as these reflect the economic character of the transactions and the
\ncontractually agreed consideration amounts. If IFRS 15 provides for a different method, for example
\nwhen constraint on variable considerations is applicable, contract prices are adjusted accordingly.
\nGas contracts can also include fixed price components that are recognised in line with the customer\u2019s
\nactual consumption profile, when the nature of the performance obligation is to deliver gas instead of
\nstanding-ready to deliver gas.
\nWASTE TREATMENT SALES
\nMajority of revenue from waste management services arises from fees charged for receiving waste from
\ncustomers (i.e. gate fees). The fee is usually determined based on the volume of waste received, there
\nare no variable elements in pricing. Fortum is required to treat the waste and this performance obligation
\nis satisfied when treatment has been performed. Transportation of the waste forms another performance
\nobligation. Fees for waste treatment and transportation services are separately agreed in the contract
\nand correspond to the price that would be charged for these services separately. Revenue for
\ntransportation service is recognised when the service has been provided.
\nWaste treatment sales include also various types of soil and landfill site projects, which mostly take
\nplace at customer sites. Fees charged are invoiced based on payment schedules agreed with the
\ncustomer. The customer obtains the benefit of the construction work simultaneously when the
\nconstruction work proceeds, and therefore project revenues are recognised over time. Progress of the
\nconstruction is best measured either through costs incurred, or the completed area of the construction
\nsite.
\nNETTING AND INTER-SEGMENT TRANSACTIONS
\nGeneration and City Solution segments sell their electricity production to Nord Pool and Consumer
\nSolutions segment buys its electricity from Nord Pool. For these segments eliminations of sales include
\neliminations of sales and purchases with Nord Pool that are netted at Group level on an hourly basis and
\nposted either as revenue or cost depending on if Fortum is a net seller or net buyer during any particular
\nhour. Intersegment sales, expenses and results for the different business segments are affected by
\nintragroup deliveries, which are eliminated on consolidation. Inter-segment transactions are based on
\ncommercial terms.
60
\n6.1 Business structure
\nFortum\u2019s reportable segments under IFRS are Generation, City Solutions, Consumer Solutions and
\nRussia. Other Operations includes corporate functions, R&D and technology development projects.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, and in 2022 Fortum introduced new APMs to provide additional financial
\ninformation excluding the Russia segment. Hence, a new subtotal for continuing operations excluding
\nRussia was introduced in segment information tables. The Uniper segment was classified as discontinued
\noperations in 2022. See also
\ue001
Note 1
Significant accounting policies,
\ue001
Note 3
Acquisitions, disposals,
\nassets held for sale and discontinued operations, and
\ue001
Definitions and reconciliations of key figures
.
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG Aktiebolag (OKG AB), with
\nFortum owning 45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March
\n2020 to 30 September 2022, with the results of the company being split between the Uniper segment and
\nthe Generation segment according to ownership. On deconsolidation of Uniper at 30 September 2022,
\nOKG AB was reclassified as an associated company. The reclassification resulted in the restatement of
\nthe Generation segment\u2019s 2021 financials.
\nDescription of reportable segments:
\n6.2 Segment structure
\nFortum discloses segment information in a manner consistent with internal reporting to Fortum\u2019s Board of
\nDirectors and Fortum Executive Management, led by the President and CEO. Fortum segments are
\nbased on the type of business operation, combined with one segment based on geographical area.
\nFortum\u2019s reportable segments are the business divisions Generation, City Solutions
, Consumer Solutions
\nand Russia.
\n6.3 Definitions for segment information
\nFortum\u2019s segment information discloses the financial measurements used in financial target setting and
\nforecasting, management\u2019s follow up of financial performance and allocation of resources in the Group\u2019s
\nperformance management process. See
\ue001
Note 1.4
Measures for performance.
\nSegment reporting is based on the same accounting policies as Fortum Group.
61
\n6.4 Segment information
\nConsolidated income statement
\nGeneration
\n1)
\nCity Solutions
\n1)
\nConsumer Solutions
Other Operations
\nTotal continuing
\noperations
\nexcl. Russia
Russia
\nTotal continuing
\noperations
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nPower sales
\n1)
\n3,600
2,660
252
205
4,026
2,253
0
0
7,878
5,118
856
761
8,734
5,879
\nHeat sales
0
0
505
612
0
0
0
0
505
612
156
137
661
749
\nGas sales
0
167
0
1
392
225
0
0
392
393
0
0
392
393
\nWaste treatment sales
0
0
237
250
0
0
0
0
237
250
0
0
237
250
\nOther sales
55
42
288
235
161
144
136
138
639
559
19
8
659
567
\nSales
3,655
2,869
1,282
1,302
4,578
2,622
136
138
9,651
6,931
1,031
906
10,682
7,837
\nInternal eliminations
645
-140
-75
-29
-30
-14
-106
-102
435
-285
0
0
434
-286
\nNetting of Nord Pool transactions
\n2)
\n-2,312
-1,128
-2,312
-1,128
\nIS
External sales
4,299
2,729
1,207
1,273
4,549
2,608
30
36
7,774
5,519
1,031
906
8,804
6,422
\nComparable EBITDA
1,765
1,287
177
317
173
123
-90
-114
2,025
1,612
411
404
2,436
2,016
\nIS
Depreciation and amortisation
-165
-164
-148
-182
-75
-71
-25
-28
-415
-445
-151
-142
-566
-587
\nIS
Comparable operating profit
1,600
1,123
28
135
97
52
-115
-142
1,611
1,167
260
261
1,871
1,429
\nImpairment charges and reversals
0
0
0
0
0
0
0
0
0
0
-905
-35
-905
-35
\nCapital gains and other related items
0
50
643
2,608
0
0
142
14
785
2,672
0
1
785
2,673
\nChanges in fair values of derivatives
\nhedging future cash flow
-177
-107
47
-72
-246
443
0
0
-376
264
-17
0
-393
264
\nOther
-20
0
1
0
0
0
-33
-6
-52
-6
-28
0
-80
-6
\nIS
Items affecting comparability
6, 7
-197
-57
690
2,536
-246
443
109
8
356
2,931
-949
-34
-593
2,897
\nIS
Operating profit
1,403
1,066
719
2,671
-149
495
-6
-134
1,967
4,098
-690
227
1,277
4,325
\nComparable share of profit/loss of
\nassociates and joint ventures
-49
0
14
42
0
0
-6
0
-40
42
30
62
-11
104
\nIS
Share of profit/loss of associates
\nand joint ventures
18
-194
64
14
42
0
0
-6
0
-185
106
-443
62
-629
168
\n1) Sales, both internal and external, include effects from realised hedging contracts. Effect on sales can be negative or positive depending on the average contract price and the realised spot price. Power sales in Fortum contains realised result from commodity derivatives, which have not had
\nhedge accounting status under IFRS 9, but have been considered operatively as hedges.
\n2) Sales and purchases with Nord Pool Spot are netted on Group level on an hourly basis and posted either as revenue or cost depending on whether Fortum is a net seller or net buyer during any particular hour.
\nGross investments / divestments
\nGeneration
City Solutions
Consumer Solutions
Other Operations
\nTotal continuing
\noperations
\nexcl. Russia
Russia
\nTotal continuing
\noperations
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nGross investments in shares
\n1)
\n3
3
7
4
2
0
-
21
237
29
245
4
36
33
281
\nCapital expenditure
16, 17
231
168
155
161
71
68
10
15
467
396
58
47
525
443
\nGross divestments of shares
3
-
129
1,213
3,870
0
0
150
19
1,363
4,017
1
18
1,365
4,034
\n1) From I/2022, acquisition of additional shares in Uniper are not included in gross investments in shares. For additional information, see
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
62
\nSegment assets and liabilities
\nGeneration
City Solutions
Consumer Solutions
Other Operations
Russia
Uniper
\n1)
\nTotal
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2021
2022
2021
\nNon-interest-bearing assets
5,347
5,545
2,128
2,874
1,801
1,496
238
283
1,614
1,923
27,137
11,128
39,258
\nBS
Participations in associates and joint
\nventures
18
937
1,032
77
74
-
-
25
32
211
678
644
1,249
2,461
\nEliminations
-373
-386
\nTotal segment assets
6,283
6,577
2,204
2,949
1,801
1,496
263
315
1,825
2,601
27,781
12,004
41,333
\nInterest-bearing receivables
21
1,284
3,107
\nBS
Deferred tax assets
28
933
2,149
\nOther assets
5,502
95,481
\nBS
Liquid funds
24
3,919
7,592
\nBS
Total assets
23,642
149,661
\nSegment liabilities
734
616
445
492
436
371
199
190
135
93
22,435
1,949
24,196
\nEliminations
-373
-386
\nTotal segment liabilities
1,576
23,810
\nBS
Deferred tax liabilities
28
152
827
\nOther liabilities
6,392
94,140
\nTotal liabilities included in capital
\nemployed
8,120
118,777
\nInterest-bearing liabilities
27
7,785
17,220
\nBS
Total equity
7,737
13,665
\nBS
Total equity and liabilities
23,642
149,661
\n1) As Uniper was deconsolidated at 30 September 2022
Uniper\u2019s balance sheet items are not included on Fortum\u2019s 31 December 2022 consolidated balance sheet. Consolidated balance s
heet at 31 December 2021 included Uniper.
\nComparable operating profit including comparable share of profit of associates and joint ventures and Comparable return on net assets
\nGeneration
City Solutions
Consumer Solutions
Russia
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
\nComparable operating profit
1,600
1,123
28
135
97
52
260
261
\nComparable share of profit/loss of associates and joint ventures
7, 18
-49
0
14
42
-
-
30
62
\nComparable operating profit including comparable share of profit of associates and joint ventures
1,551
1,123
42
177
97
52
290
323
\nSegment assets at the end of the year
6,283
6,577
2,204
2,949
1,801
1,496
1,825
2,601
\nSegment liabilities at the end of the year
734
616
445
492
436
371
135
93
\nComparable net assets
5,549
5,961
1,760
2,456
1,365
1,125
1,690
2,508
\nComparable net assets average
\n1)
\n5,739
5,925
1,833
2,915
1,068
746
2,570
2,516
\nComparable return on net assets, %
27.0
19.0
2.3
6.1
9.1
6.9
11.3
12.9
\n1) Average net assets are calculated using the opening balance of the financial
year and each quarter\u2019s closing value.
\nEmployees
\nGeneration
City Solutions
Consumer Solutions
Other Operations
\nTotal continuing
\noperations
\nexcl. Russia
Russia
\nTotal continuing
\noperations
\nDiscontinued
\noperations
\n(Uniper)
Total
\n2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nNumber of employees 31 December
1,155
1,116
1,691
1,766
1,179
1,176
963
961
4,988
5,019
2,724
2,627
7,712
7,646
N/A
11,494
7,712
19,140
\nAverage number of employees
1,278
1,153
1,676
1,964
1,177
1,091
989
976
5,120
5,183
2,706
2,862
7,826
8,045
8,723
11,751
16,549
19,796
63
\n6.5 Group-wide disclosures
\nThe Group\u2019s operating segments operate mainly in the Nordic countries and Russia. The Group\u2019s domicile
\nis Finland.
\nThe table below presents sales by geographical area based on customer location. Capital expenditure,
\nassets and personnel are reported where assets and personnel are located. Participations in associates
\nand joint ventures are not presented by location since these companies may have business in several
\ngeographical areas.
\nDue to the large number of customers and the variety of business activities, there is no individual
\ncustomer whose business volume is material to Fortum\u2019s tota
l business volume.
\nSales by geographical area based on customer location
\nEUR million
2022
2021
\nNordics
6,426
4,628
\nPoland
1,101
649
\nRussia
1,031
906
\nOther
246
239
\nIS
Total
8,804
6,422
\nNordic power production is not presented by country since Nordic power production is mainly sold through
\nNord Pool.
\nCapital expenditure by country
\nEUR million
2022
2021
\nFinland
258
160
\nSweden
116
103
\nNorway
38
58
\nPoland
44
34
\nRussia
58
47
\nOther
12
42
\nTotal
525
443
\nNon-current assets by country
\nEUR million
2022
2021
\nFinland
3,079
3,058
\nSweden
3,815
6,988
\nNorway
407
1,198
\nPoland
518
517
\nRussia
1,189
4,542
\nOther and eliminations
163
7,373
\nTotal
9,173
23,677
\nNon-current assets include intangible assets, property, plant and equipment and right-of-use assets as
\nwell as participations in associates and joint ventures.
\nNumber of employees on 31 December by country
\n2022
2021
\nFinland
2,529
2,377
\nSweden
914
1,755
\nNorway
395
606
\nPoland
635
594
\nRussia
2,724
6,902
\nOther
515
6,906
\nTotal
7,712
19,140
\n6.6 Other revenue-related disclosures
\nFortum anticipates revenues of EUR 29 million (2021: 1,340) from unsatisfied performance obligations. Of
\nthis total, EUR 26 million is attributable to 2023 (2021: EUR 453 million to 2022) and EUR 3 million to
\nyears after 2023 (2021: EUR 887 million to years after 2022). Change in anticipated revenues from
\nunsatisfied performance obligations from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f9833": {
"value": "SIGNIFICANT ACCOUNTING POLICIES REVENUE RECOGNITION
\nFortum's operations comprise the provision of electricity, heating and cooling, gas and waste
\nmanagement services. Revenue streams can be divided into five groups: power sales to wholesale
\nmarkets, power sales to retail customers, heating sales, gas sales and waste treatment sales.
\nRevenue is recognised when goods are transferred or services are performed, i.e. when a
\nperformance obligation is satisfied and control of the good or service underlying the particular
\nperformance obligations is transferred to the customer. Revenue is shown at the price that Fortum
\nexpects to be entitled to and it is presented net of rebates, discounts, value-added tax and selective
\ntaxes, such as electricity tax. Revenues include effects from physically settled contracts for which own
\nuse exemption cannot be used according to IFRS 9, see
\ue001
Note 7
Comparable operating profit and
\ncomparable net profit. Accounting policies for the different revenue streams are described below.
\nPOWER SALES TO WHOLESALE MARKETS AND THROUGH BILATERAL CONTRACTS
\nPhysical electricity trades to wholesale markets are made at a spot price and thus there are no variable
\nelements. Electricity sales are recognised on delivery at the price defined in wholesale market. Fortum is
\nalso selling power to industrial customers and municipalities through bilateral contracts. These contracts
\ncan include fixed price components that are recognised in line with the customer\u2019s actual consumption
\nprofile, when the nature of the performance obligation is to deliver power instead of standing-ready to
\ndeliver power. When Fortum is acting as an agent in electricity trade by granting access to Nord Pool
\npower trading system, Fortum presents the bilateral trades between Fortum and the customer on a net
\nbasis and only the service fee is recorded as revenue.
\nPOWER SALES TO RETAIL CUSTOMERS
\nFortum\u2019s contracts with consumer and business customers cover electricity sales, while the distribution
\nservice is delivered by the transmission company operating the local network. There is only one
\nperformance obligation, which is to stand-ready to supply electricity to the customer. The transaction
\nprice generally includes both a fixed monthly charge and a variable fee based on the volume of
\nelectr
icity supplied. As Fortum\u2019s promise is to stand ready to deliver electricity, the fixed and variable
\ncomponents are recognised based on the fees chargeable from the customer. If automated meter
\nreading is not available, electricity consumption between the last meter reading and the end of
\nthe month is estimated.
\nHEAT SALES
\nIn many areas the district heating service covers both the distribution and sale of heat. Fortum is usually
\nresponsible for delivering the whole service, even when heat is being produced by a third party, and is
\nacting as a principal for heat sales as well. There is only one performance obligation, which is to stand-
\nready to supply heat to the customer. The fees charged from the customer generally comprise a
\nfixed monthly charge a
nd a variable fee based on the volume of heat supplied. As Fortum\u2019s promise is to
\nstand ready to deliver heat, the fixed and variable components are recognised based on the fees
\nchargeable from the customer. In Russia and Poland there are also areas where Fortum operates only
\nthe heat production facilities while some third party is responsible for the distribution of heat. In these
\nareas the performance obligation is to supply heat and revenue is recognised based on the volume of
\nheat that Fortum is entitled to charge from the customer.
\nGAS SALES
\nRevenues are generated from sales of gas via traded markets, as well as to retail and industrial
\ncustomers, and include hedges settled through physical delivery, which are recognised when delivery
\ntakes place and control is transferred to the customer. Gas sales include also revenues earned from the
\ntransportation of gas. Contracts generally contain one performance obligation for which the entire
\ntransaction price is recognised.
\nFor physically settled transactions that are in the scope of IFRS 15 (own-use transactions), revenue is
\nrecognised based on contract prices, as these reflect the economic character of the transactions and the
\ncontractually agreed consideration amounts. If IFRS 15 provides for a different method, for example
\nwhen constraint on variable considerations is applicable, contract prices are adjusted accordingly.
\nGas contracts can also include fixed price components that are recognised in line with the customer\u2019s
\nactual consumption profile, when the nature of the performance obligation is to deliver gas instead of
\nstanding-ready to deliver gas.
\nWASTE TREATMENT SALES
\nMajority of revenue from waste management services arises from fees charged for receiving waste from
\ncustomers (i.e. gate fees). The fee is usually determined based on the volume of waste received, there
\nare no variable elements in pricing. Fortum is required to treat the waste and this performance obligation
\nis satisfied when treatment has been performed. Transportation of the waste forms another performance
\nobligation. Fees for waste treatment and transportation services are separately agreed in the contract
\nand correspond to the price that would be charged for these services separately. Revenue for
\ntransportation service is recognised when the service has been provided.
\nWaste treatment sales include also various types of soil and landfill site projects, which mostly take
\nplace at customer sites. Fees charged are invoiced based on payment schedules agreed with the
\ncustomer. The customer obtains the benefit of the construction work simultaneously when the
\nconstruction work proceeds, and therefore project revenues are recognised over time. Progress of the
\nconstruction is best measured either through costs incurred, or the completed area of the construction
\nsite.
\nNETTING AND INTER-SEGMENT TRANSACTIONS
\nGeneration and City Solution segments sell their electricity production to Nord Pool and Consumer
\nSolutions segment buys its electricity from Nord Pool. For these segments eliminations of sales include
\neliminations of sales and purchases with Nord Pool that are netted at Group level on an hourly basis and
\nposted either as revenue or cost depending on if Fortum is a net seller or net buyer during any particular
\nhour. Intersegment sales, expenses and results for the different business segments are affected by
\nintragroup deliveries, which are eliminated on consolidation. Inter-segment transactions are based on
\ncommercial terms.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f9834": {
"value": "SIGNIFICANT ACCOUNTING POLICIES REVENUE RECOGNITION
\nFortum's operations comprise the provision of electricity, heating and cooling, gas and waste
\nmanagement services. Revenue streams can be divided into five groups: power sales to wholesale
\nmarkets, power sales to retail customers, heating sales, gas sales and waste treatment sales.
\nRevenue is recognised when goods are transferred or services are performed, i.e. when a
\nperformance obligation is satisfied and control of the good or service underlying the particular
\nperformance obligations is transferred to the customer. Revenue is shown at the price that Fortum
\nexpects to be entitled to and it is presented net of rebates, discounts, value-added tax and selective
\ntaxes, such as electricity tax. Revenues include effects from physically settled contracts for which own
\nuse exemption cannot be used according to IFRS 9, see
\ue001
Note 7
Comparable operating profit and
\ncomparable net profit. Accounting policies for the different revenue streams are described below.
\nPOWER SALES TO WHOLESALE MARKETS AND THROUGH BILATERAL CONTRACTS
\nPhysical electricity trades to wholesale markets are made at a spot price and thus there are no variable
\nelements. Electricity sales are recognised on delivery at the price defined in wholesale market. Fortum is
\nalso selling power to industrial customers and municipalities through bilateral contracts. These contracts
\ncan include fixed price components that are recognised in line with the customer\u2019s actual consumption
\nprofile, when the nature of the performance obligation is to deliver power instead of standing-ready to
\ndeliver power. When Fortum is acting as an agent in electricity trade by granting access to Nord Pool
\npower trading system, Fortum presents the bilateral trades between Fortum and the customer on a net
\nbasis and only the service fee is recorded as revenue.
\nPOWER SALES TO RETAIL CUSTOMERS
\nFortum\u2019s contracts with consumer and business customers cover electricity sales, while the distribution
\nservice is delivered by the transmission company operating the local network. There is only one
\nperformance obligation, which is to stand-ready to supply electricity to the customer. The transaction
\nprice generally includes both a fixed monthly charge and a variable fee based on the volume of
\nelectr
icity supplied. As Fortum\u2019s promise is to stand ready to deliver electricity, the fixed and variable
\ncomponents are recognised based on the fees chargeable from the customer. If automated meter
\nreading is not available, electricity consumption between the last meter reading and the end of
\nthe month is estimated.
\nHEAT SALES
\nIn many areas the district heating service covers both the distribution and sale of heat. Fortum is usually
\nresponsible for delivering the whole service, even when heat is being produced by a third party, and is
\nacting as a principal for heat sales as well. There is only one performance obligation, which is to stand-
\nready to supply heat to the customer. The fees charged from the customer generally comprise a
\nfixed monthly charge a
nd a variable fee based on the volume of heat supplied. As Fortum\u2019s promise is to
\nstand ready to deliver heat, the fixed and variable components are recognised based on the fees
\nchargeable from the customer. In Russia and Poland there are also areas where Fortum operates only
\nthe heat production facilities while some third party is responsible for the distribution of heat. In these
\nareas the performance obligation is to supply heat and revenue is recognised based on the volume of
\nheat that Fortum is entitled to charge from the customer.
\nGAS SALES
\nRevenues are generated from sales of gas via traded markets, as well as to retail and industrial
\ncustomers, and include hedges settled through physical delivery, which are recognised when delivery
\ntakes place and control is transferred to the customer. Gas sales include also revenues earned from the
\ntransportation of gas. Contracts generally contain one performance obligation for which the entire
\ntransaction price is recognised.
\nFor physically settled transactions that are in the scope of IFRS 15 (own-use transactions), revenue is
\nrecognised based on contract prices, as these reflect the economic character of the transactions and the
\ncontractually agreed consideration amounts. If IFRS 15 provides for a different method, for example
\nwhen constraint on variable considerations is applicable, contract prices are adjusted accordingly.
\nGas contracts can also include fixed price components that are recognised in line with the customer\u2019s
\nactual consumption profile, when the nature of the performance obligation is to deliver gas instead of
\nstanding-ready to deliver gas.
\nWASTE TREATMENT SALES
\nMajority of revenue from waste management services arises from fees charged for receiving waste from
\ncustomers (i.e. gate fees). The fee is usually determined based on the volume of waste received, there
\nare no variable elements in pricing. Fortum is required to treat the waste and this performance obligation
\nis satisfied when treatment has been performed. Transportation of the waste forms another performance
\nobligation. Fees for waste treatment and transportation services are separately agreed in the contract
\nand correspond to the price that would be charged for these services separately. Revenue for
\ntransportation service is recognised when the service has been provided.
\nWaste treatment sales include also various types of soil and landfill site projects, which mostly take
\nplace at customer sites. Fees charged are invoiced based on payment schedules agreed with the
\ncustomer. The customer obtains the benefit of the construction work simultaneously when the
\nconstruction work proceeds, and therefore project revenues are recognised over time. Progress of the
\nconstruction is best measured either through costs incurred, or the completed area of the construction
\nsite.
\nNETTING AND INTER-SEGMENT TRANSACTIONS
\nGeneration and City Solution segments sell their electricity production to Nord Pool and Consumer
\nSolutions segment buys its electricity from Nord Pool. For these segments eliminations of sales include
\neliminations of sales and purchases with Nord Pool that are netted at Group level on an hourly basis and
\nposted either as revenue or cost depending on if Fortum is a net seller or net buyer during any particular
\nhour. Intersegment sales, expenses and results for the different business segments are affected by
\nintragroup deliveries, which are eliminated on consolidation. Inter-segment transactions are based on
\ncommercial terms.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f10642": {
"value": "Employees
\nGeneration
City Solutions
Consumer Solutions
Other Operations
\nTotal continuing
\noperations
\nexcl. Russia
Russia
\nTotal continuing
\noperations
\nDiscontinued
\noperations
\n(Uniper)
Total
\n2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nNumber of employees 31 December
1,155
1,116
1,691
1,766
1,179
1,176
963
961
4,988
5,019
2,724
2,627
7,712
7,646
N/A
11,494
7,712
19,140
\nAverage number of employees
1,278
1,153
1,676
1,964
1,177
1,091
989
976
5,120
5,183
2,706
2,862
7,826
8,045
8,723
11,751
16,549
19,796
Number of employees on 31 December by country
\n2022
2021
\nFinland
2,529
2,377
\nSweden
914
1,755
\nNorway
395
606
\nPoland
635
594
\nRussia
2,724
6,902
\nOther
515
6,906
\nTotal
7,712
19,140
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f10729": {
"value": "Finland",
"dimensions": {
"concept": "ifrs-full:CountryOfIncorporation",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f10730": {
"value": "The table below presents sales by geographical area based on customer location. Capital expenditure,
\nassets and personnel are reported where assets and personnel are located. Participations in associates
\nand joint ventures are not presented by location since these companies may have business in several
\ngeographical areas.
\nDue to the large number of customers and the variety of business activities, there is no individual
\ncustomer whose business volume is material to Fortum\u2019s tota
l business volume.
\nSales by geographical area based on customer location
\nEUR million
2022
2021
\nNordics
6,426
4,628
\nPoland
1,101
649
\nRussia
1,031
906
\nOther
246
239
\nIS
Total
8,804
6,422
\nNordic power production is not presented by country since Nordic power production is mainly sold through
\nNord Pool.
6.6 Other revenue-related disclosures
\nFortum anticipates revenues of EUR 29 million (2021: 1,340) from unsatisfied performance obligations. Of
\nthis total, EUR 26 million is attributable to 2023 (2021: EUR 453 million to 2022) and EUR 3 million to
\nyears after 2023 (2021: EUR 887 million to years after 2022). Change in anticipated revenues from
\nunsatisfied performance obligations from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f10732": {
"value": "The table below presents sales by geographical area based on customer location. Capital expenditure, assets and personnel are reported where assets and personnel are located. Participations in associates
\nand joint ventures are not presented by location since these companies may have business in several
\ngeographical areas.
\nDue to the large number of customers and the variety of business activities, there is no individual
\ncustomer whose business volume is material to Fortum\u2019s tota
l business volume.
\nSales by geographical area based on customer location
\nEUR million
2022
2021
\nNordics
6,426
4,628
\nPoland
1,101
649
\nRussia
1,031
906
\nOther
246
239
\nIS
Total
8,804
6,422
\nNordic power production is not presented by country since Nordic power production is mainly sold through
\nNord Pool. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11243": {
"value": "8 Other income and other expenses ACCOUNTING POLICIES
\nGOVERNMENT GRANTS
\nGovernment grants are recognised at their fair value when there is a reasonable assurance that the
\ngrant will be received and the Group will comply with all attached conditions. Government grants are
\ndeferred and recognised in the income statement to match with the related costs.
\n8.1 Other income
\nEUR million
2022
2021
\nRental income
25
21
\nOther
76
70
\nIS
Total
101
91
\n8.2 Other expenses
\nEUR million
2022
2021
\nOperation and maintenance costs
123
128
\nIT and telecommunication costs
112
108
\nProperty taxes
54
51
\nOther
326
294
\nIS
Total
615
582
\nThe major components recorded in other expenses are the external operation and maintenance costs of
\npower and heat plants. Other includes expenses relating to properties and other operative expenses.
\nAuditors\u2019 fees
\nEUR million
2022
2021
\nAudit fees
2.7
2.9
\nAudit-related assignments
0.3
0.5
\nOther assignments
-
0.7
\nTotal
3.0
4.1
\nDeloitte Oy is the appointed auditor until the next Annual General Meeting in 2023.
\nAudit fees include fees for the audit of the consolidated financial statements, review of interim reports,
\nas well as fees for the audit of Fortum Corporation and its subsidiaries. Audit-related assignments include
\nfees for assurance of sustainability reporting, and other assurance and associated services related to the
\naudit. Other assignments consist of advisory services.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11248": {
"value": "GOVERNMENT GRANTS Government grants are recognised at their fair value when there is a reasonable assurance that the
\ngrant will be received and the Group will comply with all attached conditions. Government grants are
\ndeferred and recognised in the income statement to match with the related costs.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11255": {
"value": "8.1 Other income EUR million
2022
2021
\nRental income
25
21
\nOther
76
70
\nIS
Total
101
91",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11272": {
"value": "8.2 Other expenses EUR million
2022
2021
\nOperation and maintenance costs
123
128
\nIT and telecommunication costs
112
108
\nProperty taxes
54
51
\nOther
326
294
\nIS
Total
615
582
\nThe major components recorded in other expenses are the external operation and maintenance costs of
\npower and heat plants. Other includes expenses relating to properties and other operative expenses.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11297": {
"value": "Auditors\u2019 fees EUR million
2022
2021
\nAudit fees
2.7
2.9
\nAudit-related assignments
0.3
0.5
\nOther assignments
-
0.7
\nTotal
3.0
4.1
\nDeloitte Oy is the appointed auditor until the next Annual General Meeting in 2023.
\nAudit fees include fees for the audit of the consolidated financial statements, review of interim reports,
\nas well as fees for the audit of Fortum Corporation and its subsidiaries. Audit-related assignments include
\nfees for assurance of sustainability reporting, and other assurance and associated services related to the
audit. Other assignments consist of advisory services.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11322": {
"value": "9 Materials and services EUR million
2022
2021
\nMaterials
4,748
2,861
\nMaterials purchased from associated and joint ventures
421
368
\nExternal services
127
132
\nTransmission costs
53
57
\nIS
Total
5,350
3,419
\nMaterials consists mainly of coal, gas and nuclear fuels.
\nMaterials purchased from associates and joint ventures consist of nuclear and hydropower purchased
\nat production cost (including interest costs and production taxes) and purchased steam. Total materials
\nand services include production taxes of EUR 39 million (2021: 35), including hydro power related
\nproperty taxes of EUR 13 million (2021: 12). Taxes related to nuclear and hydro production are included in
\ntaxes paid through purchases from associates and joint ventures. See
\ue001
Note 38
Related party
\ntransactions.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11323": {
"value": "9 Materials and services EUR million
2022
2021
\nMaterials
4,748
2,861
\nMaterials purchased from associated and joint ventures
421
368
\nExternal services
127
132
\nTransmission costs
53
57
\nIS
Total
5,350
3,419
\nMaterials consists mainly of coal, gas and nuclear fuels.
\nMaterials purchased from associates and joint ventures consist of nuclear and hydropower purchased
\nat production cost (including interest costs and production taxes) and purchased steam. Total materials
\nand services include production taxes of EUR 39 million (2021: 35), including hydro power related
\nproperty taxes of EUR 13 million (2021: 12). Taxes related to nuclear and hydro production are included in
\ntaxes paid through purchases from associates and joint ventures. See
\ue001
Note 38
Related party
\ntransactions.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCostOfSalesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11367": {
"value": "10 Employee benefits and Board remuneration
\nEUR million
2022
2021
\nWages and salaries
386
370
\nPensions
\nDefined contribution plans
14
42
\nDefined benefit plans
10
7
\nSocial security costs
64
51
\nShare-based incentives
7
7
\nOther employee costs
22
20
\nIS
Total
504
496
\nThe compensation package for Fortum\u2019s employees consists of salaries, fringe benefits, short
-term
\nincentives, profit sharing paid to the Personnel Fund (in Finland) and long-term incentives.
\nFor further information on pensions see
\ue001
Note 31
Pension obligations.
\n10.1 Short-term incentives
\nAs a main principle, all employees are covered by the programme or alternatively by a business specific
\nor a comparable local variable pay arrangement. Short-term incentive (STI) programmes are designed to
\nsupport the achievement of the Group\u2019s financial and other relevant targets on an annual basis.
\nThe Board of Directors determines the performance criteria and award levels for the Fortum Executive
\nManagement. The awards are based on the achievement of Group financial performance, divisional
\ntargets and individual targets. The target incentive opportunity is 20% and the maximum incentive
\nopportunity is 40% of the annual base salary. The Board of Directors assesses the performance of the
\nPresident and CEO and the members of the Fortum Executive Management on a regular basis.
\nAwards for other employees are based on a combination of Group, divisional, functional and personal
\nor team targets. The targets are set in annual performance discussions held at the beginning of
\neach year. Awards under the STI programme are paid solely in cash.
\n10.2 Long-term incentives
\nThe purpose of long-term incentive programmes is to support the delivery of sustainable long-term
\nperformance, align the interests of management with those of shareholders, and support in committing
\nand retaining key individuals.
\nLTI programme provides participants with the opportunity to earn company shares. Under the LTI
\nprogramme, and subject to the decision of the Board of Directors, a new LTI plan commences annually.
\nThe Board of Directors approves participation of the Fortum Executive Management members in each
\nannually commencing LTI plan. Subject to a decision by the Board of Directors, the President and CEO is
\nauthorised to decide on individual participants and potential maximum awards for other participants than
\nthe Fortum Executive Management in accordance with the nomination guidelines approved by the Board
\nof Directors. Participation in the LTI plan precludes the individual from being a member in the Fortum
\nPersonnel Fund.
\nEach LTI plan begins with a three-year earnings period, during which participants may earn share rights
\nif the performance criteria set by the Board of Directors are fulfilled. If the minimum performance criteria
\nare not met, no shares will be awarded. If performance is exceptionally good and the targets approved by
\nthe Board of Directors are achieved, the combined gross value of all variable compensation cannot
\nexceed 120% of the person\u2019s annual salary in any calendar
year. After the earnings period has ended and
\nthe relevant taxes and other employment-related expenses have been deducted, participants are paid the
\nnet balance in the form of shares.
\nThe share awards are not subject to a lock-up period. However, Fortum Executive Management
\nmembers aggregate ownership of Fortum shares has to be greater than or equal to their annual salary.
\nThose members, whose aggregate ownership of Fortum shares does not yet fulfil the shareholding
\nrequirement are required to retain at least 50% of the shares received until the required level of
\nshareholding is met.
\nThe Restricted share programme is supplementing the current LTI programme. The Restricted share
\nprogramme is following the main terms and conditions of the general LTI programme with the exception
\nthat the allocated shares will be delivered after the three-year plan period independent of performance
\nmeasures, subject to continued employment. The Restricted share programme is designated for special
\npurposes defined by the Board of Directors, such as retention.
\nThe Board of Directors has the right to revise the targets set in the incentive plans, deviate from the
\npayment based on achievement of the set earnings criteria, or to discontinue any ongoing incentive plan.
\nThe share plans under the LTI arrangement are accounted for as partly equity- and partly cash-settled
\narrangements. The earned reward that the participants receive in shares is accounted for as an equity-
\nsettled transaction. For participants receiving cash only, the total arrangement is accounted for as cash-
\nsettled transaction. The reward is recognised as an expense during the earnings period with a
\ncorresponding increase in the liabilities for transactions settled in cash, and a corresponding increase in
\nequity for the transactions settled in shares. The social charges related to the arrangement payable by the
\nemployer are accrued as a liability. The liabilities for share-based plans including social charges at the
\nend of the year 2022 was EUR 12 million (2021: 12), including EUR 10 million (2021: 9) recorded in
\nequity.
\nAt year end 2022, approximately 140 key employees are participants in at least one of the ongoing LTI
\nplans.
\nShares granted
\nThe following table presents changes in the number of share rewards:
\nNumber of shares
2022
2021
\n1 January
1,818,093
1,603,146
\nGranted
594,400
920,517
\nSettled
-240,867
-410,830
\nExpired or forfeited
-775,437
-294,740
\nOutstanding 31 December
1,396,189
1,818,093
\nExpired or forfeited shares in 2022 include also the impact from the remuneration restrictions of Fortum
\nExecutive Management members according the terms of Solidium bridge financing with the Finnish state.
\n10.3 Employee share savings programme
\nThe purpose of Fortum's employee share savings programme is to motivate Fortum employees to invest
\nand retain ownership in the company.
\nThe programme includes annually commencing savings periods during which employees can save a
\nproportion of their salaries and purchase Fortum shares with the accrued savings.
\nFor each savings period participants will, as a gross reward, be granted one matching share for each
\ntwo purchased savings shares after approximately three years from the beginning of the savings period.
\nThe prerequisites for receiving matching shares are that the participant holds the purchased savings
\nshares until the end of the holding period, and that his or her employment has not ended before the end of
\nthe holding period.
Each plan consists of one-year savings period followed by two-year holding period. Shares are
\npurchased with the accumulated savings at the market price quarterly after the release of Fortum\u2019s interim
\nreports. The programme is accounted for as an equity-settled transaction, and the cost related to
\nmatching shares is recognised as expense during the vesting period.
\n10.4 Fortum Personnel Fund
\nThe Fortum Personnel Fund (for employees in Finland only) has been in operation since 2000. The Board
\nof Directors determines the criteria for the fund\u2019s annual profit
-sharing bonus. Members of the personnel
\nfund are the permanent and fixed-term employees of the Group.
\nThe profit-sharing received by the fund is
distributed equally between the members. Each employee\u2019s
\nshare is divided into a tied amount and an amount available for withdrawal. It is possible to transfer a
\nmaximum of 15% of capital from the tied amount to the amount available for withdrawal each year.
\nThe fund\u2019s latest financial
year ended at 30 April 2022 and the fund then had a total of 2,553 members
\n(2021: 2,508). At the end of April 2022 Fortum contributed EUR 4.3 million (2021: 0.4) to the personnel
\nfund as an annual profit-sharing bonus based on the financial results of 2021. The combined amount of
\nmembers\u2019 shares in the fund was EUR 20 million (2021: 20).
\n10.5 The President and CEO and the Fortum Executive Management
\n(FEM) remuneration
\nIn the end of 2022 Fortum Executive Management (FEM) consists of eight members, including the
\nPresident and CEO. The following table presents the total remuneration of the President and CEO and the
\nFEM and takes into account the changes in FEM during the year. The expenses are shown on accrual
\nbasis.
\nOn 6 September 2022, Fortum announced that it had agreed with the Finnish State on a bridge
\nfinancing arrangement. In accordance with the Solidium bridge financing facility with the Finnish State,
\nFortum Executive Management members will not be paid any short- or long-term incentives that are
\naccumulated in 2022 and 2023.
\nManagement remuneration
\n2022
2021
\nEUR thousand
\nMarkus
\nRauramo,
\nPresident
\nand CEO
\n3)
\nOther FEM
\nmembers
\n3)
\nMarkus
\nRauramo,
\nPresident
\nand CEO
\n3)
\nOther FEM
\nmembers
\n3)
\nSalaries and fringe benefits
1,549
3,447
1,559
3,727
\nShort-term incentives
\n1)
\n-
100
423
896
\nLong-term incentives
\n2)
\n816
756
1,334
2,276
\nPensions (statutory)
271
591
311
829
\nPensions (voluntary)
315
717
315
536
\nSocial security expenses
53
221
69
405
\nTotal
3,004
5,831
4,011
8,670
\n1) Including separate project awards paid to certain FEM members in August 2022.
\n2) LTI costs for 2022 relate to LTI plans decided before 2022. Costs are accrued over the vesting period.
President and CEO\u2019s costs for 2021
\nare updated for the share plan 2019-2021.
\n3) In addition to the information provided in the above table, compensation for the membership in the Supervisory Board of Uniper SE for the
\nPresident and CEO Markus Rauramo was EUR 157 thousand (2021:305), and for other FEM members, EUR 157 thousand (2021: 255). In
\n2022 this compensation is for the period that Uniper has been consolidated as subsidiary.
\nThe annual contribution for the President and CEO Markus Rauramo's pension arrangement is 20% of the
\nannual fixed compensation. The annual fixed compensation consists of base salary and fringe benefits.
\nThe President and CEO's retirement age is determined in accordance with the Finnish Employees\u2019
\nPension Act. In case his assignment is terminated before the retirement age, the President and CEO is
\nentitled to retain the benefits accrued in the arrangement up to that time.
\nFor the other members of the FEM, the retirement age varies between 63 and 65, or is determined in
\naccordance wi
th the Finnish Employees\u2019 Pension Act. According to Group policy, all new supplementary
\npension arrangements are defined contribution plans. The pension premium for FEM members is 20% of
\nthe annual base salary. In the end of 2022, the additional pension arrangements for the President and
\nCEO and other FEM members are defined contribution pension plans and thus no liability has been
\nrecognised on the balance sheet.
\nIn the event that Fortum decides to give notice of termination to the President and CEO, he is entitled to
\nthe salary for the notice period (6 months) and a severance pay equal to 6
months\u2019 salary. For other FEM
\nmembers, the notice period for both parties is six months, and in case the company terminates the
\ncontract, members are usually entitled to the salary for the notice period and a severance pay equal to 6
\nmonths\u2019 salary.
\nNumber of shares delivered to the management
\nThe table below shows the number of shares delivered to the President and CEO and other FEM
\nmembers under the LTI arrangements. FEM members whose aggregate ownership of Fortum shares
\ndoes not yet fulfil the shareholding requirement are required to retain at least 50% of the shares received
\nuntil the required level of shareholding is met.
\n2022
\n2
)
\n2021
\n3)
\nFEM members at 31 December 2022
\nMarkus Rauramo, CEO
12,661
25,921
\nNebahat Albayrak, member of FEM from 1 June 2021
-
-
\nEveliina Dahl, member of FEM from 1 May 2021
1,127
N/A
\nBernhard G\u00fcnther, member of FEM from 1 February 2021
-
-
\nPer Langer
3,102
4,555
\nSimon-Erik Ollus, member of FEM from 29 March 2021
1,847
3,046
\nMikael R\u00f6nnblad
4,112
5,985
\nNora Steiner-Forsberg, member of FEM from 1 May 2021
716
N/A
\nFormer FEM members
\nArun Aggarwal, member of FEM until 17 November 2021
-
5,304
\nAlexander Chuvaev, member of FEM until 1 September 2022
\n1)
\n16,034
20,013
\nRisto Penttinen, member of FEM until 30 April 2021
-
4,906
\nArto R\u00e4ty, member of FEM until 31 May 2021
-
4,476
\nSirpa-Helena Sormunen, member of FEM until 30 April 2021
-
4,992
\nTotal
39,599
79,198
\n1) Estimated number of shares after local tax and tax-related deductions. Due to local legislation, share rights were paid in cash instead of
\nshares.
\n2) Share delivery based on share plan 2019-2021.
\n3) Share delivery based on share plan 2018-2020.
10.6 Board of Directors and management shareholding
\nOn 31 December 2022, the members of the Board of Directors owned a total of 15,370 shares (2021:
\n5,000), which corresponds to 0.00% (2021:
0.00%) of the company\u2019s shares and voting rights.
\nNumber of shares held by members of the Board of Directors
\n2022
2021
\nBoard members at 31 December 2022
\nVeli-Matti Reinikkala, Chair
7,029
5,000
\nAnja McAlister, Deputy Chair
1,446
-
\nRalf Christian
985
-
\nLuisa Delgado
985
-
\nEssimari Kairisto
985
-
\nTeppo Paavola
985
-
\nPhilipp R\u00f6sler
985
-
\nAnnette Stube
985
-
\nKimmo Viertola
985
-
\nTotal
15,370
5,000
\nThe President and CEO and other members of the FEM owned a total of 197,210 shares (2021: 224,369),
\nwhich corresponds to approximately 0.02% (2021: 0.03%) of the company\u2019s shares and voting rights.
\nNumber of shares held by members of the Fortum Executive Management
\n2022
2021
\nFEM members at 31 December 2022
\nMarkus Rauramo
112,739
99,308
\nNebahat Albayrak
555
-
\nEveliina Dahl
2,554
806
\nBernhard G\u00fcnther
555
-
\nPer Langer
52,265
48,971
\nSimon-Erik Ollus
6,462
3,854
\nMikael R\u00f6nnblad
20,619
16,454
\nNora Steiner-Forsberg
1,461
374
\nFormer FEM members
\nAlexander Chuvaev
N/A
54,602
\nTotal
197,210
224,369
\n10.7 Board remuneration
\nThe Board of Directors comprises five to ten members who are elected at the Annual General Meeting for
\na one-year term of office, which expires at the end of the first Annual General Meeting following the
\nelection. The Board of Directors consists of nine members at the end of 2022.
\nThe Annual General meeting confirms the yearly compensation for the Board of Directors. Board
\nmembers are not offered any long-term incentive benefits or participation in other incentive schemes.
\nThere are no pension arrangements for the Board members. Social security costs were not paid in 2022
\n(2021: 2).
\nFees for the Board of Directors
\nEUR thousand
2022
2021
\nAnnual fee for the Board work
\nChair
88.8
77.2
\nDeputy Chair
63.3
57.5
\nChair of the Audit and Risk Committee
\n1)
\n63.3
57.5
\nMembers
43.1
40.4
\nFixed fee for the Committee work
\nMember of the Audit and Risk Committee
3.0
N/A
\nChair of the Nomination and Remuneration Committee
5.0
N/A
\nMember of the Nomination and Remuneration Committee
2.0
N/A
\nChair of any additional Committee established by a Board decision
5.0
N/A
\nMember of any additional Committee established by a Board
\ndecision
2.0
N/A
\n1) If not simultaneously Chair or Deputy Chair of the Board.
\nEvery member of the Board of Directors receives a fixed annual fee for the Board work and a meeting fee
\nfor each meeting attended. The annual fee for the Board work is paid in company shares and in cash in
\nsuch a way that approximately 40% of the amount of the annual fee is payable in shares acquired on
\nbehalf and in the name of the Board members, and the remainder in cash. The company pays the costs
\nand the transfer tax related to the purchase of the company shares.
\nA new fixed fee for the Committee work was introduced in 2022. A meeting fee of EUR 800 is paid for
\nBoard and Committee meetings, or EUR 1,600 in case the member travels to the meeting outside his/her
\ncountry of residence. When a member participates in the meeting via remote connection, or for the
\ndecisions that are confirmed without convening a meeting, the meeting fee will be EUR 800. Fees for the
\nCommittee work and the meeting fees are paid fully in cash.
\nThe travel expenses of Board members are compensated in accordance with the company
\u2019s travel
\npolicy.
\nCompensation for the Board of Directors
\nEUR thousand
2022
2021
\nBoard members at 31 December 2022
\nVeli-Matti Reinikkala, Chair from 28 April 2021
181
92
\nAnja McAlister, Deputy Chair from 28 April 2021
122
65
\nRalf Christian, member of the board from 28 March 2022
90
N/A
\nLuisa Delgado, member of the board from 28 April 2021
102
34
\nEssimari Kairisto, Chair of the Audit and Risk Committee
135
76
\nTeppo Paavola
117
58
\nPhilipp R\u00f6sler
101
55
\nAnnette Stube
105
57
\nKimmo Viertola, member of the board from 28 March 2022
86
N/A
\nFormer Board members
\nEva Hamilton, member of the board until 28 April 2021
-
19
\nMatti Lievonen, Chair until 28 April 2021
-
32
\nKlaus-Dieter Maubach, member of the board until 28 April 2021
\n1)
\n-
15
\nTotal
1,039
504
\n1) In 2021 in addition to the information provided in the above table, the estimated compensation for the membership in the Supervisory
\nBoard of Uniper SE for Klaus-Dieter Maubach was EUR 51 thousand.
31 Pension obligations
\nACCOUNTING POLICIES
\nThe Group companies have various pension schemes in accordance with the local conditions and
\npractices in the countries in which they operate. The schemes are generally funded through various
\npension vehicles including payments to insurance companies, Group\u2019s pension funds and other
\nseparate arrangements. The Group has both defined benefit and defined contribution plans.
\nFor defined benefit plans, pension costs are assessed using the projected unit credit method. The
\ncost of providing pensions is charged to the income statement as to spread the service cost over the
\nservice lives of employees. Current and past service cost, as well as gains or losses from settlements
\nare reported under personnel costs. The net interest is reported in financial items.
\nThe defined benefit obligation is calculated annually on the balance sheet date and is measured as
\nthe present value of the estimated future cash flows using interest rates of high-quality corporate bonds,
\nor similar, that have terms to maturity approximating to the terms of the related pension liability. The plan
\nassets for pensions are valued at market value. The net liability recognised on the balance sheet is the
\ndefined benefit obligation at the closing date less the fair value of plan assets.
\nAny net asset position that might arise from offsetting the present value of the defined benefit obliga-
\ntions against the corresponding fair value of plan assets is recognised taking into account the applicable
\nasset restrictions. Such an asset position is reported in Other non-current assets on the balance sheet.
\nIn the case of a plan amendment, curtailment or settlement (each a \"plan event\") occurring in a
\ndefined benefit plan during an annual reporting period, the current service cost and the net interest on
\nthe net liability or asset are remeasured for the remainder of the reporting period after the plan event.
\nThe actuarial assumptions applicable as of the date of the plan event are to be used as the basis for
\nsuch remeasurement. When the benefits of a plan are changed, or when a plan is curtailed, the resulting
\nchange in the present value of the defined benefit obligation that relates to past service, or the gain or
\nloss related to a curtailment is recognised immediately in profit or loss. Gains or losses on settlements of
\ndefined benefit plans are recognised when the settlement occurs.
\nRemeasurements of the net defined benefit liability or asset include actuarial gains and losses that
\nmay arise especially from differences between estimated and actual variations in underlying
\nassumptions about demographic and financial variables; and, additionally, from developments in these
\nassumptions as of each reporting date. Additionally included is the difference between the actual return
\non plan assets and the interest income on plan assets contained in the net interest result, as well as any
\nchange in the effect of the asset ceiling, excluding amounts already included in net interest.
\nRemeasurement results and related deferred taxes are recognised in full in the period in which they
\noccur and are reported in other comprehensive income.
\nThe Group's contributions to defined contribution plans are charged to the income statement in the
\nperiod to which the contributions relate.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nASSUMPTIONS USED TO DETERMINE FUTURE PENSION OBLIGATIONS
\nThe present value of the pension obligations is based on actuarial calculations that use several
\nassumptions. Any changes in these assumptions will impact the carrying amount of pension obligations.
\nFortum\u2019s pension arrangements
\nFinland
\nThe statutory pension benefits (as determined in Emp
loyee\u2019s Pension Act /TyEL) in Finland provide the
\nemployees\u2019 pension coverage for old age, disability and death of a family provider. The benefits are
\ninsured with an insurance company, and determined to be defined contribution plans.
\nIn addition, the Group has historical old-age and survivor pension benefits with the Fortum Pension
\nFund covering a limited number of people. The Fortum Pension Fund is a closed fund managed by a
\nBoard, consisting of both employers' and employees' representatives. The promised benefit is defined in
\nthe rules of the Fund, mostly at a maximum of 66% of the salary basis. The salary basis is an average of
\nthe ten last years' salaries, which are indexed by a common salary index to the accounting year. After
\nretirement the benefits payable are indexed yearly with the TyEL-index.
\nThe Fund is operating under the regulation from the Financial Supervisory Authority (FSA). The liability
\nhas to be fully covered according to the regulations. The national benefit obligation related to the defined
\nbenefit plans is calculated so that the promised benefit is fully funded until retirement.
\nPension arrangements related to disposed operations (Uniper)
\nThe comparative period includes Uniper\u2019s defined benefit pension arrangements, mostly in Germany an
d
\nUnited Kingdom. As Uniper was deconsolidated on 30 September 2022, Fortum does not have any
\nmaterial arrangements in these countries as of 31 December 2022.
\nGermany
\nThe majority of active and former employees are covered by occupational benefit plans in addition to the
\nstate retirement benefits. The benefits offered under these plans primarily include retirement, disability
\nand survivor benefits. The majority of the reported pension obligation for the active employees arises from
\nthe \u201dBAS Plan\u201d and from the \u201dZukunftssicherung\u201d plan, that have been closed to the new hires since 2008.
\nThe only plan open to new hires is a defined contribution-
oriented benefit plan, which is based on \u201cunits of
\ncapital\u201d.
\nPension plans are funded through designated pension vehicles that are legally distinct from the
\ncompany. Plan assets are funded in form of \u201cPensionskassen\u201d and a Group
-wide pension fund as well as
\nin the form of a Contractual Trust Arrangement (CTA). Only the \u201cPensionskassen\u201d vehicles and the
\npension fund are subject to regulatory provisions in relation to the investment of capital and funding
\nrequirements. For the CTA, there are only funding rules stipulated in a corporate agreement.
\nUnited Kingdom
\nThere are three pension plans in the United Kingdom, one defined contribution plan and two defined
\nbenefit plans. The defined benefit plans were closed for new hires since 2005 and 2008, respectively.
\nSince the closure of these plans, new hires have been joining the open defined contribution plan.
\nPlan assets are administered by a trustee which is independent from the group and wholly responsible
\nfor the investment of the plan assets.
\nOther countries
\nAs of December 2022, there were no material defined benefit pension arrangements in Fortum\u2019s other
\noperating countries.
Main risks relating to defined benefit plans
\nTypical risk factors for defined benefit plans are changes in discount rates, risks related to other actuarial
\nassumptions, as well as investment and volatility risks.
\nChange in discount rate
\nThe discount rate used to calculate the defined benefit obligation (according to IFRS) depends on the
\nvalue of corporate bond yields as at the reporting date. A decrease in yields increases the benefit
\nobligation that is often only partially offset by an increase in the value of fixed income holdings.
\nRisk related to other actuarial assumptions
\nAssumptions for future inflation, salary levels and mortality are used for actuarial calculations. Should the
\nactual outcome differ from these assumptions, the liability may increase.
\nInvestment and volatility risk
\nPension plan assets are allocated to different asset classes based on the statutory legislation or
\ninvestment strategy of the corresponding pension plan. Depending on the pension plan, underlying
\ninvestment man
agement plans are updated on a regular basis. If the return of the fund\u2019s assets is not
\nenough to cover the raise in liability and benefit payments over the financial year, then, in certain
\nlegislations, the employer has to fund the deficit with contributions, unless the fund has sufficient covering.
\nMovement in the net defined benefit liability
\nDefined benefit
\nobligation
\nFair value
\nof plan assets
\nNet defined benefit
\nasset(-)/liability(+)
\nEUR million
2022
2021
2022
2021
2022
2021
\n1 January
4,437
4,636
-3,290
-3,117
1,146
1,519
\nIncluded in consolidated income statement
\n1)
\nCurrent service cost
49
73
-
-
50
73
\nPast service cost
1
30
-
-
1
30
\nSettlements
-138
-4
2
1
-136
-3
\nNet interest
44
43
-34
-31
10
12
\n-44
142
-32
-28
-76
113
\nIncluded in OCI
\nRemeasurement gains(-)/losses(+)
-1,513
-297
905
-121
-608
-418
\nActuarial gains/losses arising from changes in
\nfinancial assumptions
-1,517
-279
-
-
-1,517
-279
\nActuarial gains/losses arising from experience
\nadjustments
4
-18
-
-
4
-18
\nReturn on plan assets (excluding amounts
\nincluded in net interest expense)
-
-
905
-122
905
-122
\nExchange rate differences and other changes
-22
52
35
-50
12
2
\n-1,536
-245
940
-171
-596
-416
\nOther
\nContributions paid by/to the employer
-
-
11
-64
11
-64
\nBenefits paid
-81
-95
78
90
-2
-5
\nAcquisitions of subsidiary companies
1
-
0
-
1
-
\nDisposals of subsidiary companies
\n2)
\n-2,511
-
2,012
-
-499
-
\nTransfer to assets held for sale
-
0
-
0
-
0
\n31 December
267
4,437
-280
-3,290
-13
1,146
\nPresent value of funded defined obligation
263
4,405
\nFair value of plan assets
-280
-3,290
\nFunded status
-17
1,115
\nPresent value of unfunded obligation
\n3)
\n4
32
\nNet liability arising from defined benefit obligation
-13
1,146
\nPension assets included in other non-current
\nassets on the balance sheet
27
44
\nBS
Pension obligations on the balance sheet
13
1,190
\n1) Net interest is presented in financial items in the income statement. The rest of costs related to defined benefit plans are included in staff
\ncosts (row defined benefits plans in the staff cost specification in
\ue001
Note 10
Employee benefits and Board remuneration) and in 2021 also
\nItems affecting comparability. In 2022 part of settlements are netted with defined contribution plans costs in income statement.
\n2) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\n3) The unfunded obligation in 2022 relates to arrangements in Russia and Poland. In 2021 it relates mainly to Germany.
\nChanges during the year include Uniper until 30 September 2022.
\nContributions expected to be paid during 2023 total EUR 5 million.
Fair value of plan assets
\n2022
2021
\nEUR million
Quoted
Unquoted
Total
Quoted
Unquoted
Total
\nEquity instruments
88
7
94
1,327
8
1,335
\nDebt instruments
105
40
145
1,025
183
1,208
\nCash and cash equivalents
-
18
18
-
104
104
\nReal estate
-
12
12
-
234
234
\nInvestment funds
-
-
-
396
-
396
\nOther assets
-
11
11
0
14
14
\nTotal
193
88
280
2,748
543
3,290
\nA specification of plan assets has not been available for pension plans financed through an insurance
\ncompany. In these cases, the fair value of plan assets has been included in other assets.
\nDerivatives used to hedge the risks have been allocated to the respective asset classes.
\nThe actual return on plan assets totalled EUR -12 million (2021: 145).
\nAmounts recognised on the balance sheet by country 2022
\nEUR million
Finland
Germany
\nUnited
\nKingdom
\nOther
\ncountries
Total
\nPresent value of funded obligations
205
-
-
58
263
\nFair value of plan assets
-225
-
-
-56
-280
\nDeficit(+)/surplus(-)
-19
-
-
2
-17
\nPresent value of unfunded obligations
-
-
-
4
4
\nNet asset(-)/liability(+) on the balance sheet
-19
-
-
6
-13
\nPension asset included in non-current assets
21
-
-
6
27
\nBS
Pension obligations on the balance sheet
1
-
-
12
13
\nAmounts recognised on the balance sheet by country 2021
\nEUR million
Finland
Germany
\nUnited
\nKingdom
\nOther
\ncountries
Total
\nPresent value of funded obligations
283
3,147
719
256
4,405
\nFair value of plan assets
-251
-2,122
-756
-161
-3,290
\nDeficit(+)/surplus(-)
32
1,025
-36
93
1,115
\nPresent value of unfunded obligations
-
26
-
6
32
\nNet asset(-)/liability(+) on the balance sheet
32
1,051
-36
99
1,146
\nPension asset included in non-current assets
-
7
36
1
44
\nBS
Pension obligations on the balance sheet
32
1,058
-
100
1,190
\nThe principal actuarial assumptions used
\n2022
2021
\n%
Finland
Germany
\nUnited
\nKingdom
Finland
Germany
\nUnited
\nKingdom
\nDiscount rate
3.80
-
-
1.00
1.20
2.00
\nFuture salary increases
2.70
-
-
2.30
2.30
3.00
\nFuture pension increases
2.80
-
-
2.40
1.80
3.10
\nRate of inflation
2.60
-
-
2.10
1.80
3.20
\nThe discount rate in Finland is based on high quality European corporate bonds with maturity that best
\nreflects the estimated term of the defined benefit pension plans. The discount rate in Germany is based
\non the returns on high-quality EURO corporate bonds available at the end of the respective reporting
\nperiod, and take into account the average duration of the respective underlying benefit obligations. The
\nUnited Kingdom discount rate is based on currency-specific returns on high-quality corporate bonds
\navailable at the end of the respective reporting period and takes into account the average duration of the
\nrespective underlying obligations.
\nThe discount, inflation, salary growth and pension growth rates, as well as mortality are the key
\nassumptions when calculating defined benefit obligations. Changes in the key actuarial assumptions
\nwould lead to the following changes in the present value of the defined benefit obligations:
\nSensitivity of defined benefit obligation to changes in assumptions
\nImpact to the
\npension
\nobligation
\nincrease(+)/
\ndecrease(-)
\nChange in the assumption
\n0.5% increase in discount rate
-5.9%
\n0.5% decrease in discount rate
6.6%
\n0.5% increase in benefit
5.9%
\n0.5% decrease in benefit
-5.4%
\n0.5% increase in salary growth rate
0.3%
\n0.5% decrease in salary growth rate
-0.3%
\n10% increase in mortality
-3.6%
\n10% decrease in mortality
3.6%
\nA 10% decrease in mortality would result in higher life expectancy of beneficiaries, depending of the age
\nof each individual beneficiary. At the end of 2022, the life expectancy of a 63-year-old male retiree would
\nincrease by approximately one year, if mortality were to decrease by 10%.
\nThe sensitivities indicated are computed based on the same methods and assumptions used to
\ndetermine the present value of the defined benefit obligations. If one of the actuarial assumptions is
\nchanged for the purpose of computing the sensitivity of results to changes in that assumption, all other
\nactuarial assumptions are included in the computation unchanged. Potential correlation effects between
\nthe individual actuarial assumptions are not taken into account when computing sensitivities. When
\nconsidering sensitivities, it must be noted that the change in the present value of the defined benefit
\nobligations resulting from changing multiple actuarial assumptions simultaneously is not necessarily
\nequivalent to the cumulative effect of the individual sensitivities.
Maturity profile of the undiscounted defined benefit obligation on 31 December 2022
\nEUR million
\nFuture benefit
\npayments
\nMaturity under 1 year
14
\nMaturity between 1 and 5 years
63
\nMaturity between 5 and 10 years
77
\nMaturity between 10 and 20 years
139
\nMaturity between 20 and 30 years
92
\nMaturity over 30 years
48
\nThe weighted average duration of defined benefit obligation at 31 December 2022 is 16 years.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11415": {
"value": "10.2 Long-term incentives The purpose of long-term incentive programmes is to support the delivery of sustainable long-term
\nperformance, align the interests of management with those of shareholders, and support in committing
\nand retaining key individuals.
\nLTI programme provides participants with the opportunity to earn company shares. Under the LTI
\nprogramme, and subject to the decision of the Board of Directors, a new LTI plan commences annually.
\nThe Board of Directors approves participation of the Fortum Executive Management members in each
\nannually commencing LTI plan. Subject to a decision by the Board of Directors, the President and CEO is
\nauthorised to decide on individual participants and potential maximum awards for other participants than
\nthe Fortum Executive Management in accordance with the nomination guidelines approved by the Board
\nof Directors. Participation in the LTI plan precludes the individual from being a member in the Fortum
\nPersonnel Fund.
\nEach LTI plan begins with a three-year earnings period, during which participants may earn share rights
\nif the performance criteria set by the Board of Directors are fulfilled. If the minimum performance criteria
\nare not met, no shares will be awarded. If performance is exceptionally good and the targets approved by
\nthe Board of Directors are achieved, the combined gross value of all variable compensation cannot
\nexceed 120% of the person\u2019s annual salary in any calendar
year. After the earnings period has ended and
\nthe relevant taxes and other employment-related expenses have been deducted, participants are paid the
\nnet balance in the form of shares.
\nThe share awards are not subject to a lock-up period. However, Fortum Executive Management
\nmembers aggregate ownership of Fortum shares has to be greater than or equal to their annual salary.
\nThose members, whose aggregate ownership of Fortum shares does not yet fulfil the shareholding
\nrequirement are required to retain at least 50% of the shares received until the required level of
\nshareholding is met.
\nThe Restricted share programme is supplementing the current LTI programme. The Restricted share
\nprogramme is following the main terms and conditions of the general LTI programme with the exception
\nthat the allocated shares will be delivered after the three-year plan period independent of performance
\nmeasures, subject to continued employment. The Restricted share programme is designated for special
\npurposes defined by the Board of Directors, such as retention.
\nThe Board of Directors has the right to revise the targets set in the incentive plans, deviate from the
\npayment based on achievement of the set earnings criteria, or to discontinue any ongoing incentive plan.
\nThe share plans under the LTI arrangement are accounted for as partly equity- and partly cash-settled
\narrangements. The earned reward that the participants receive in shares is accounted for as an equity-
\nsettled transaction. For participants receiving cash only, the total arrangement is accounted for as cash-
\nsettled transaction. The reward is recognised as an expense during the earnings period with a
\ncorresponding increase in the liabilities for transactions settled in cash, and a corresponding increase in
\nequity for the transactions settled in shares. The social charges related to the arrangement payable by the
\nemployer are accrued as a liability. The liabilities for share-based plans including social charges at the
\nend of the year 2022 was EUR 12 million (2021: 12), including EUR 10 million (2021: 9) recorded in
\nequity.
\nAt year end 2022, approximately 140 key employees are participants in at least one of the ongoing LTI
\nplans.
\nShares granted
\nThe following table presents changes in the number of share rewards:
\nNumber of shares
2022
2021
\n1 January
1,818,093
1,603,146
\nGranted
594,400
920,517
\nSettled
-240,867
-410,830
\nExpired or forfeited
-775,437
-294,740
\nOutstanding 31 December
1,396,189
1,818,093
\nExpired or forfeited shares in 2022 include also the impact from the remuneration restrictions of Fortum
\nExecutive Management members according the terms of Solidium bridge financing with the Finnish state.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11522": {
"value": "10.5 The President and CEO and the Fortum Executive Management (FEM) remuneration
\nIn the end of 2022 Fortum Executive Management (FEM) consists of eight members, including the
\nPresident and CEO. The following table presents the total remuneration of the President and CEO and the
\nFEM and takes into account the changes in FEM during the year. The expenses are shown on accrual
\nbasis.
\nOn 6 September 2022, Fortum announced that it had agreed with the Finnish State on a bridge
\nfinancing arrangement. In accordance with the Solidium bridge financing facility with the Finnish State,
\nFortum Executive Management members will not be paid any short- or long-term incentives that are
\naccumulated in 2022 and 2023.
\nManagement remuneration
\n2022
2021
\nEUR thousand
\nMarkus
\nRauramo,
\nPresident
\nand CEO
\n3)
\nOther FEM
\nmembers
\n3)
\nMarkus
\nRauramo,
\nPresident
\nand CEO
\n3)
\nOther FEM
\nmembers
\n3)
\nSalaries and fringe benefits
1,549
3,447
1,559
3,727
\nShort-term incentives
\n1)
\n-
100
423
896
\nLong-term incentives
\n2)
\n816
756
1,334
2,276
\nPensions (statutory)
271
591
311
829
\nPensions (voluntary)
315
717
315
536
\nSocial security expenses
53
221
69
405
\nTotal
3,004
5,831
4,011
8,670
\n1) Including separate project awards paid to certain FEM members in August 2022.
\n2) LTI costs for 2022 relate to LTI plans decided before 2022. Costs are accrued over the vesting period.
President and CEO\u2019s costs for 2021
\nare updated for the share plan 2019-2021.
\n3) In addition to the information provided in the above table, compensation for the membership in the Supervisory Board of Uniper SE for the
\nPresident and CEO Markus Rauramo was EUR 157 thousand (2021:305), and for other FEM members, EUR 157 thousand (2021: 255). In
\n2022 this compensation is for the period that Uniper has been consolidated as subsidiary.
\nThe annual contribution for the President and CEO Markus Rauramo's pension arrangement is 20% of the
\nannual fixed compensation. The annual fixed compensation consists of base salary and fringe benefits.
\nThe President and CEO's retirement age is determined in accordance with the Finnish Employees\u2019
\nPension Act. In case his assignment is terminated before the retirement age, the President and CEO is
\nentitled to retain the benefits accrued in the arrangement up to that time.
\nFor the other members of the FEM, the retirement age varies between 63 and 65, or is determined in
\naccordance wi
th the Finnish Employees\u2019 Pension Act. According to Group policy, all new supplementary
\npension arrangements are defined contribution plans. The pension premium for FEM members is 20% of
\nthe annual base salary. In the end of 2022, the additional pension arrangements for the President and
\nCEO and other FEM members are defined contribution pension plans and thus no liability has been
\nrecognised on the balance sheet.
\nIn the event that Fortum decides to give notice of termination to the President and CEO, he is entitled to
\nthe salary for the notice period (6 months) and a severance pay equal to 6
months\u2019 salary. For other FEM
\nmembers, the notice period for both parties is six months, and in case the company terminates the
\ncontract, members are usually entitled to the salary for the notice period and a severance pay equal to 6
\nmonths\u2019 salary.
\nNumber of shares delivered to the management
\nThe table below shows the number of shares delivered to the President and CEO and other FEM
\nmembers under the LTI arrangements. FEM members whose aggregate ownership of Fortum shares
\ndoes not yet fulfil the shareholding requirement are required to retain at least 50% of the shares received
\nuntil the required level of shareholding is met.
\n2022
\n2
)
\n2021
\n3)
\nFEM members at 31 December 2022
\nMarkus Rauramo, CEO
12,661
25,921
\nNebahat Albayrak, member of FEM from 1 June 2021
-
-
\nEveliina Dahl, member of FEM from 1 May 2021
1,127
N/A
\nBernhard G\u00fcnther, member of FEM from 1 February 2021
-
-
\nPer Langer
3,102
4,555
\nSimon-Erik Ollus, member of FEM from 29 March 2021
1,847
3,046
\nMikael R\u00f6nnblad
4,112
5,985
\nNora Steiner-Forsberg, member of FEM from 1 May 2021
716
N/A
\nFormer FEM members
\nArun Aggarwal, member of FEM until 17 November 2021
-
5,304
\nAlexander Chuvaev, member of FEM until 1 September 2022
\n1)
\n16,034
20,013
\nRisto Penttinen, member of FEM until 30 April 2021
-
4,906
\nArto R\u00e4ty, member of FEM until 31 May 2021
-
4,476
\nSirpa-Helena Sormunen, member of FEM until 30 April 2021
-
4,992
\nTotal
39,599
79,198
\n1) Estimated number of shares after local tax and tax-related deductions. Due to local legislation, share rights were paid in cash instead of
\nshares.
\n2) Share delivery based on share plan 2019-2021.
\n3) Share delivery based on share plan 2018-2020.
69
\n10.6 Board of Directors and management shareholding
\nOn 31 December 2022, the members of the Board of Directors owned a total of 15,370 shares (2021:
\n5,000), which corresponds to 0.00% (2021:
0.00%) of the company\u2019s shares and voting rights.
\nNumber of shares held by members of the Board of Directors
\n2022
2021
\nBoard members at 31 December 2022
\nVeli-Matti Reinikkala, Chair
7,029
5,000
\nAnja McAlister, Deputy Chair
1,446
-
\nRalf Christian
985
-
\nLuisa Delgado
985
-
\nEssimari Kairisto
985
-
\nTeppo Paavola
985
-
\nPhilipp R\u00f6sler
985
-
\nAnnette Stube
985
-
\nKimmo Viertola
985
-
\nTotal
15,370
5,000
\nThe President and CEO and other members of the FEM owned a total of 197,210 shares (2021: 224,369),
\nwhich corresponds to approximately 0.02% (2021: 0.03%) of the company\u2019s shares and voting rights.
\nNumber of shares held by members of the Fortum Executive Management
\n2022
2021
\nFEM members at 31 December 2022
\nMarkus Rauramo
112,739
99,308
\nNebahat Albayrak
555
-
\nEveliina Dahl
2,554
806
\nBernhard G\u00fcnther
555
-
\nPer Langer
52,265
48,971
\nSimon-Erik Ollus
6,462
3,854
\nMikael R\u00f6nnblad
20,619
16,454
\nNora Steiner-Forsberg
1,461
374
\nFormer FEM members
\nAlexander Chuvaev
N/A
54,602
\nTotal
197,210
224,369
\n10.7 Board remuneration
\nThe Board of Directors comprises five to ten members who are elected at the Annual General Meeting for
\na one-year term of office, which expires at the end of the first Annual General Meeting following the
\nelection. The Board of Directors consists of nine members at the end of 2022.
\nThe Annual General meeting confirms the yearly compensation for the Board of Directors. Board
\nmembers are not offered any long-term incentive benefits or participation in other incentive schemes.
\nThere are no pension arrangements for the Board members. Social security costs were not paid in 2022
\n(2021: 2).
\nFees for the Board of Directors
\nEUR thousand
2022
2021
\nAnnual fee for the Board work
\nChair
88.8
77.2
\nDeputy Chair
63.3
57.5
\nChair of the Audit and Risk Committee
\n1)
\n63.3
57.5
\nMembers
43.1
40.4
\nFixed fee for the Committee work
\nMember of the Audit and Risk Committee
3.0
N/A
\nChair of the Nomination and Remuneration Committee
5.0
N/A
\nMember of the Nomination and Remuneration Committee
2.0
N/A
\nChair of any additional Committee established by a Board decision
5.0
N/A
\nMember of any additional Committee established by a Board
\ndecision
2.0
N/A
\n1) If not simultaneously Chair or Deputy Chair of the Board.
\nEvery member of the Board of Directors receives a fixed annual fee for the Board work and a meeting fee
\nfor each meeting attended. The annual fee for the Board work is paid in company shares and in cash in
\nsuch a way that approximately 40% of the amount of the annual fee is payable in shares acquired on
\nbehalf and in the name of the Board members, and the remainder in cash. The company pays the costs
\nand the transfer tax related to the purchase of the company shares.
\nA new fixed fee for the Committee work was introduced in 2022. A meeting fee of EUR 800 is paid for
\nBoard and Committee meetings, or EUR 1,600 in case the member travels to the meeting outside his/her
\ncountry of residence. When a member participates in the meeting via remote connection, or for the
\ndecisions that are confirmed without convening a meeting, the meeting fee will be EUR 800. Fees for the
\nCommittee work and the meeting fees are paid fully in cash.
\nThe travel expenses of Board members are compensated in accordance with the company
\u2019s travel
\npolicy.
\nCompensation for the Board of Directors
\nEUR thousand
2022
2021
\nBoard members at 31 December 2022
\nVeli-Matti Reinikkala, Chair from 28 April 2021
181
92
\nAnja McAlister, Deputy Chair from 28 April 2021
122
65
\nRalf Christian, member of the board from 28 March 2022
90
N/A
\nLuisa Delgado, member of the board from 28 April 2021
102
34
\nEssimari Kairisto, Chair of the Audit and Risk Committee
135
76
\nTeppo Paavola
117
58
\nPhilipp R\u00f6sler
101
55
\nAnnette Stube
105
57
\nKimmo Viertola, member of the board from 28 March 2022
86
N/A
\nFormer Board members
\nEva Hamilton, member of the board until 28 April 2021
-
19
\nMatti Lievonen, Chair until 28 April 2021
-
32
\nKlaus-Dieter Maubach, member of the board until 28 April 2021
\n1)
\n-
15
\nTotal
1,039
504
\n1) In 2021 in addition to the information provided in the above table, the estimated compensation for the membership in the Supervisory
\nBoard of Uniper SE for Klaus-Dieter Maubach was EUR 51 thousand.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11880": {
"value": "11 Finance costs \u2013
net
\nEUR million
Note
2022
2021
\nInterest expense
\nBorrowings
-181
-154
\nLeasing and other interest expenses
-3
-4
\nCapitalised borrowing costs
17
5
3
\nIS
Total
-179
-154
\nInterest income
\nLoan receivables and deposits
58
23
\nLeasing and other interest income
29
2
\nIS
Total
87
25
\nOther financial items - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
29
-71
-35
\nFair value changes, impairments and reversals
-303
1
\nUnwinding of discounts on other provisions and pension obligations
30, 31
7
0
\nOther financial expenses and income
266
2
\nIS
Total
-101
-32
\nIS
Finance costs - net
-193
-161
\nEUR million
Note
2022
2021
\nIS
Finance costs - net
-193
-161
\nAdjustments to finance costs - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
71
35
\nFair value changes, impairments, reversals and other adjustments
\n1)
\n276
-1
\nComparable finance costs - net
155
-127
\n1) Other adjustments in 2022 include EUR 27 million interest income from tax authorities on refunded tax payment.
\nSee
\ue001
Definitions and reconciliations of key figures
.
\nInterest expenses on borrowings totalled EUR 181 million (2021: 154) including interest expenses on
\nloans of EUR 194 million (2021: 130), and EUR -12 million (2021: 24) interest cost
\u2013
net from derivatives
\nhedging the loan portfolio.
\nInterest income, EUR 87 million (2021: 25), includes EUR 44 million (2021: 13) interest income from
\nshareholder loan receivables and other loan receivables, and EUR 14 million (2021: 10) from deposits.
\nInterest income from leases and other interest income EUR 29 million (2021: 2) include EUR 27 million
\ninterest income from tax authorities on refunded tax payment. See more information in
\ue001
Note 37
Legal
\nactions and official proceedings.
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear provisions relate to Loviisa
\nnuclear plant. For additional information see
\ue001
Note 29
Nuclear-related assets and liabilities.
\nFair value changes, impairments and reversals EUR -303 million in 2022 include expected credit losses
\nof EUR -117 million on Russian deposits and receivables, as well as EUR -171 million write down of other
\nshares.
\nOther financial expenses and income EUR 266 million in 2022 include mainly foreign exchange gains
\nfrom Russian rouble receivables and closing of Russian rouble hedges.
\nInterest rate and currency derivatives in finance costs
\u2013
net
\nEUR million
2022
2021
\nInterest rate and cross currency swaps
\nInterest expenses on borrowings
16
16
\nExchange rate difference from derivatives
-16
-12
\nRate difference in fair value gains and losses on financial instruments
\n1)
\n-65
-55
\nTotal fair value change of interest rate derivatives in finance costs - net
-65
-51
\nForeign exchange derivatives
\nInterest expenses on borrowings
-4
-40
\nExchange rate difference from derivatives
217
-15
\nRate difference in fair value gains and losses on financial instruments
-8
4
\nTotal fair value change of currency derivatives in finance costs - net
205
-51
\nTotal
140
-102
\n1) Fair value gains and losses on financial instruments include fair value change of hedging derivatives in fair value hedge relationship to
\nEUR -66 million (2021: -55). ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11881": {
"value": "11 Finance costs \u2013
net
\nEUR million
Note
2022
2021
\nInterest expense
\nBorrowings
-181
-154
\nLeasing and other interest expenses
-3
-4
\nCapitalised borrowing costs
17
5
3
\nIS
Total
-179
-154
\nInterest income
\nLoan receivables and deposits
58
23
\nLeasing and other interest income
29
2
\nIS
Total
87
25
\nOther financial items - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
29
-71
-35
\nFair value changes, impairments and reversals
-303
1
\nUnwinding of discounts on other provisions and pension obligations
30, 31
7
0
\nOther financial expenses and income
266
2
\nIS
Total
-101
-32
\nIS
Finance costs - net
-193
-161
\nEUR million
Note
2022
2021
\nIS
Finance costs - net
-193
-161
\nAdjustments to finance costs - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
71
35
\nFair value changes, impairments, reversals and other adjustments
\n1)
\n276
-1
\nComparable finance costs - net
155
-127
\n1) Other adjustments in 2022 include EUR 27 million interest income from tax authorities on refunded tax payment.
\nSee
\ue001
Definitions and reconciliations of key figures
.
\nInterest expenses on borrowings totalled EUR 181 million (2021: 154) including interest expenses on
\nloans of EUR 194 million (2021: 130), and EUR -12 million (2021: 24) interest cost
\u2013
net from derivatives
\nhedging the loan portfolio.
\nInterest income, EUR 87 million (2021: 25), includes EUR 44 million (2021: 13) interest income from
\nshareholder loan receivables and other loan receivables, and EUR 14 million (2021: 10) from deposits.
\nInterest income from leases and other interest income EUR 29 million (2021: 2) include EUR 27 million
\ninterest income from tax authorities on refunded tax payment. See more information in
\ue001
Note 37
Legal
\nactions and official proceedings.
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear provisions relate to Loviisa
\nnuclear plant. For additional information see
\ue001
Note 29
Nuclear-related assets and liabilities.
\nFair value changes, impairments and reversals EUR -303 million in 2022 include expected credit losses
\nof EUR -117 million on Russian deposits and receivables, as well as EUR -171 million write down of other
\nshares.
\nOther financial expenses and income EUR 266 million in 2022 include mainly foreign exchange gains
\nfrom Russian rouble receivables and closing of Russian rouble hedges.
\nInterest rate and currency derivatives in finance costs
\u2013
net
\nEUR million
2022
2021
\nInterest rate and cross currency swaps
\nInterest expenses on borrowings
16
16
\nExchange rate difference from derivatives
-16
-12
\nRate difference in fair value gains and losses on financial instruments
\n1)
\n-65
-55
\nTotal fair value change of interest rate derivatives in finance costs - net
-65
-51
\nForeign exchange derivatives
\nInterest expenses on borrowings
-4
-40
\nExchange rate difference from derivatives
217
-15
\nRate difference in fair value gains and losses on financial instruments
-8
4
\nTotal fair value change of currency derivatives in finance costs - net
205
-51
\nTotal
140
-102
\n1) Fair value gains and losses on financial instruments include fair value change of hedging derivatives in fair value hedge relationship to
\nEUR -66 million (2021: -55).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11882": {
"value": "11 Finance costs \u2013
net
\nEUR million
Note
2022
2021
\nInterest expense
\nBorrowings
-181
-154
\nLeasing and other interest expenses
-3
-4
\nCapitalised borrowing costs
17
5
3
\nIS
Total
-179
-154
\nInterest income
\nLoan receivables and deposits
58
23
\nLeasing and other interest income
29
2
\nIS
Total
87
25
\nOther financial items - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
29
-71
-35
\nFair value changes, impairments and reversals
-303
1
\nUnwinding of discounts on other provisions and pension obligations
30, 31
7
0
\nOther financial expenses and income
266
2
\nIS
Total
-101
-32
\nIS
Finance costs - net
-193
-161
\nEUR million
Note
2022
2021
\nIS
Finance costs - net
-193
-161
\nAdjustments to finance costs - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
71
35
\nFair value changes, impairments, reversals and other adjustments
\n1)
\n276
-1
\nComparable finance costs - net
155
-127
\n1) Other adjustments in 2022 include EUR 27 million interest income from tax authorities on refunded tax payment.
\nSee
\ue001
Definitions and reconciliations of key figures
.
\nInterest expenses on borrowings totalled EUR 181 million (2021: 154) including interest expenses on
\nloans of EUR 194 million (2021: 130), and EUR -12 million (2021: 24) interest cost
\u2013
net from derivatives
\nhedging the loan portfolio.
\nInterest income, EUR 87 million (2021: 25), includes EUR 44 million (2021: 13) interest income from
\nshareholder loan receivables and other loan receivables, and EUR 14 million (2021: 10) from deposits.
\nInterest income from leases and other interest income EUR 29 million (2021: 2) include EUR 27 million
\ninterest income from tax authorities on refunded tax payment. See more information in
\ue001
Note 37
Legal
\nactions and official proceedings.
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear provisions relate to Loviisa
\nnuclear plant. For additional information see
\ue001
Note 29
Nuclear-related assets and liabilities.
\nFair value changes, impairments and reversals EUR -303 million in 2022 include expected credit losses
\nof EUR -117 million on Russian deposits and receivables, as well as EUR -171 million write down of other
\nshares.
\nOther financial expenses and income EUR 266 million in 2022 include mainly foreign exchange gains
\nfrom Russian rouble receivables and closing of Russian rouble hedges.
\nInterest rate and currency derivatives in finance costs
\u2013
net
\nEUR million
2022
2021
\nInterest rate and cross currency swaps
\nInterest expenses on borrowings
16
16
\nExchange rate difference from derivatives
-16
-12
\nRate difference in fair value gains and losses on financial instruments
\n1)
\n-65
-55
\nTotal fair value change of interest rate derivatives in finance costs - net
-65
-51
\nForeign exchange derivatives
\nInterest expenses on borrowings
-4
-40
\nExchange rate difference from derivatives
217
-15
\nRate difference in fair value gains and losses on financial instruments
-8
4
\nTotal fair value change of currency derivatives in finance costs - net
205
-51
\nTotal
140
-102
\n1) Fair value gains and losses on financial instruments include fair value change of hedging derivatives in fair value hedge relationship to
\nEUR -66 million (2021: -55).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11883": {
"value": "11 Finance costs \u2013
net
\nEUR million
Note
2022
2021
\nInterest expense
\nBorrowings
-181
-154
\nLeasing and other interest expenses
-3
-4
\nCapitalised borrowing costs
17
5
3
\nIS
Total
-179
-154
\nInterest income
\nLoan receivables and deposits
58
23
\nLeasing and other interest income
29
2
\nIS
Total
87
25
\nOther financial items - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
29
-71
-35
\nFair value changes, impairments and reversals
-303
1
\nUnwinding of discounts on other provisions and pension obligations
30, 31
7
0
\nOther financial expenses and income
266
2
\nIS
Total
-101
-32
\nIS
Finance costs - net
-193
-161
\nEUR million
Note
2022
2021
\nIS
Finance costs - net
-193
-161
\nAdjustments to finance costs - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
71
35
\nFair value changes, impairments, reversals and other adjustments
\n1)
\n276
-1
\nComparable finance costs - net
155
-127
\n1) Other adjustments in 2022 include EUR 27 million interest income from tax authorities on refunded tax payment.
\nSee
\ue001
Definitions and reconciliations of key figures
.
\nInterest expenses on borrowings totalled EUR 181 million (2021: 154) including interest expenses on
\nloans of EUR 194 million (2021: 130), and EUR -12 million (2021: 24) interest cost
\u2013
net from derivatives
\nhedging the loan portfolio.
\nInterest income, EUR 87 million (2021: 25), includes EUR 44 million (2021: 13) interest income from
\nshareholder loan receivables and other loan receivables, and EUR 14 million (2021: 10) from deposits.
\nInterest income from leases and other interest income EUR 29 million (2021: 2) include EUR 27 million
\ninterest income from tax authorities on refunded tax payment. See more information in
\ue001
Note 37
Legal
\nactions and official proceedings.
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear provisions relate to Loviisa
\nnuclear plant. For additional information see
\ue001
Note 29
Nuclear-related assets and liabilities.
\nFair value changes, impairments and reversals EUR -303 million in 2022 include expected credit losses
\nof EUR -117 million on Russian deposits and receivables, as well as EUR -171 million write down of other
\nshares.
\nOther financial expenses and income EUR 266 million in 2022 include mainly foreign exchange gains
\nfrom Russian rouble receivables and closing of Russian rouble hedges.
\nInterest rate and currency derivatives in finance costs
\u2013
net
\nEUR million
2022
2021
\nInterest rate and cross currency swaps
\nInterest expenses on borrowings
16
16
\nExchange rate difference from derivatives
-16
-12
\nRate difference in fair value gains and losses on financial instruments
\n1)
\n-65
-55
\nTotal fair value change of interest rate derivatives in finance costs - net
-65
-51
\nForeign exchange derivatives
\nInterest expenses on borrowings
-4
-40
\nExchange rate difference from derivatives
217
-15
\nRate difference in fair value gains and losses on financial instruments
-8
4
\nTotal fair value change of currency derivatives in finance costs - net
205
-51
\nTotal
140
-102
\n1) Fair value gains and losses on financial instruments include fair value change of hedging derivatives in fair value hedge relationship to
\nEUR -66 million (2021: -55).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11884": {
"value": "11 Finance costs \u2013
net
\nEUR million
Note
2022
2021
\nInterest expense
\nBorrowings
-181
-154
\nLeasing and other interest expenses
-3
-4
\nCapitalised borrowing costs
17
5
3
\nIS
Total
-179
-154
\nInterest income
\nLoan receivables and deposits
58
23
\nLeasing and other interest income
29
2
\nIS
Total
87
25
\nOther financial items - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
29
-71
-35
\nFair value changes, impairments and reversals
-303
1
\nUnwinding of discounts on other provisions and pension obligations
30, 31
7
0
\nOther financial expenses and income
266
2
\nIS
Total
-101
-32
\nIS
Finance costs - net
-193
-161
\nEUR million
Note
2022
2021
\nIS
Finance costs - net
-193
-161
\nAdjustments to finance costs - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
71
35
\nFair value changes, impairments, reversals and other adjustments
\n1)
\n276
-1
\nComparable finance costs - net
155
-127
\n1) Other adjustments in 2022 include EUR 27 million interest income from tax authorities on refunded tax payment.
\nSee
\ue001
Definitions and reconciliations of key figures
.
\nInterest expenses on borrowings totalled EUR 181 million (2021: 154) including interest expenses on
\nloans of EUR 194 million (2021: 130), and EUR -12 million (2021: 24) interest cost
\u2013
net from derivatives
\nhedging the loan portfolio.
\nInterest income, EUR 87 million (2021: 25), includes EUR 44 million (2021: 13) interest income from
\nshareholder loan receivables and other loan receivables, and EUR 14 million (2021: 10) from deposits.
\nInterest income from leases and other interest income EUR 29 million (2021: 2) include EUR 27 million
\ninterest income from tax authorities on refunded tax payment. See more information in
\ue001
Note 37
Legal
\nactions and official proceedings.
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear provisions relate to Loviisa
\nnuclear plant. For additional information see
\ue001
Note 29
Nuclear-related assets and liabilities.
\nFair value changes, impairments and reversals EUR -303 million in 2022 include expected credit losses
\nof EUR -117 million on Russian deposits and receivables, as well as EUR -171 million write down of other
\nshares.
\nOther financial expenses and income EUR 266 million in 2022 include mainly foreign exchange gains
\nfrom Russian rouble receivables and closing of Russian rouble hedges.
\nInterest rate and currency derivatives in finance costs
\u2013
net
\nEUR million
2022
2021
\nInterest rate and cross currency swaps
\nInterest expenses on borrowings
16
16
\nExchange rate difference from derivatives
-16
-12
\nRate difference in fair value gains and losses on financial instruments
\n1)
\n-65
-55
\nTotal fair value change of interest rate derivatives in finance costs - net
-65
-51
\nForeign exchange derivatives
\nInterest expenses on borrowings
-4
-40
\nExchange rate difference from derivatives
217
-15
\nRate difference in fair value gains and losses on financial instruments
-8
4
\nTotal fair value change of currency derivatives in finance costs - net
205
-51
\nTotal
140
-102
\n1) Fair value gains and losses on financial instruments include fair value change of hedging derivatives in fair value hedge relationship to
\nEUR -66 million (2021: -55).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11885": {
"value": "11 Finance costs \u2013
net
\nEUR million
Note
2022
2021
\nInterest expense
\nBorrowings
-181
-154
\nLeasing and other interest expenses
-3
-4
\nCapitalised borrowing costs
17
5
3
\nIS
Total
-179
-154
\nInterest income
\nLoan receivables and deposits
58
23
\nLeasing and other interest income
29
2
\nIS
Total
87
25
\nOther financial items - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
29
-71
-35
\nFair value changes, impairments and reversals
-303
1
\nUnwinding of discounts on other provisions and pension obligations
30, 31
7
0
\nOther financial expenses and income
266
2
\nIS
Total
-101
-32
\nIS
Finance costs - net
-193
-161
\nEUR million
Note
2022
2021
\nIS
Finance costs - net
-193
-161
\nAdjustments to finance costs - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
71
35
\nFair value changes, impairments, reversals and other adjustments
\n1)
\n276
-1
\nComparable finance costs - net
155
-127
\n1) Other adjustments in 2022 include EUR 27 million interest income from tax authorities on refunded tax payment.
\nSee
\ue001
Definitions and reconciliations of key figures
.
\nInterest expenses on borrowings totalled EUR 181 million (2021: 154) including interest expenses on
\nloans of EUR 194 million (2021: 130), and EUR -12 million (2021: 24) interest cost
\u2013
net from derivatives
\nhedging the loan portfolio.
\nInterest income, EUR 87 million (2021: 25), includes EUR 44 million (2021: 13) interest income from
\nshareholder loan receivables and other loan receivables, and EUR 14 million (2021: 10) from deposits.
\nInterest income from leases and other interest income EUR 29 million (2021: 2) include EUR 27 million
\ninterest income from tax authorities on refunded tax payment. See more information in
\ue001
Note 37
Legal
\nactions and official proceedings.
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear provisions relate to Loviisa
\nnuclear plant. For additional information see
\ue001
Note 29
Nuclear-related assets and liabilities.
\nFair value changes, impairments and reversals EUR -303 million in 2022 include expected credit losses
\nof EUR -117 million on Russian deposits and receivables, as well as EUR -171 million write down of other
\nshares.
\nOther financial expenses and income EUR 266 million in 2022 include mainly foreign exchange gains
\nfrom Russian rouble receivables and closing of Russian rouble hedges.
\nInterest rate and currency derivatives in finance costs
\u2013
net
\nEUR million
2022
2021
\nInterest rate and cross currency swaps
\nInterest expenses on borrowings
16
16
\nExchange rate difference from derivatives
-16
-12
\nRate difference in fair value gains and losses on financial instruments
\n1)
\n-65
-55
\nTotal fair value change of interest rate derivatives in finance costs - net
-65
-51
\nForeign exchange derivatives
\nInterest expenses on borrowings
-4
-40
\nExchange rate difference from derivatives
217
-15
\nRate difference in fair value gains and losses on financial instruments
-8
4
\nTotal fair value change of currency derivatives in finance costs - net
205
-51
\nTotal
140
-102
\n1) Fair value gains and losses on financial instruments include fair value change of hedging derivatives in fair value hedge relationship to
\nEUR -66 million (2021: -55).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceCostExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f11886": {
"value": "11 Finance costs \u2013
net
\nEUR million
Note
2022
2021
\nInterest expense
\nBorrowings
-181
-154
\nLeasing and other interest expenses
-3
-4
\nCapitalised borrowing costs
17
5
3
\nIS
Total
-179
-154
\nInterest income
\nLoan receivables and deposits
58
23
\nLeasing and other interest income
29
2
\nIS
Total
87
25
\nOther financial items - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
29
-71
-35
\nFair value changes, impairments and reversals
-303
1
\nUnwinding of discounts on other provisions and pension obligations
30, 31
7
0
\nOther financial expenses and income
266
2
\nIS
Total
-101
-32
\nIS
Finance costs - net
-193
-161
\nEUR million
Note
2022
2021
\nIS
Finance costs - net
-193
-161
\nAdjustments to finance costs - net
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear
\nprovisions
71
35
\nFair value changes, impairments, reversals and other adjustments
\n1)
\n276
-1
\nComparable finance costs - net
155
-127
\n1) Other adjustments in 2022 include EUR 27 million interest income from tax authorities on refunded tax payment.
\nSee
\ue001
Definitions and reconciliations of key figures
.
\nInterest expenses on borrowings totalled EUR 181 million (2021: 154) including interest expenses on
\nloans of EUR 194 million (2021: 130), and EUR -12 million (2021: 24) interest cost
\u2013
net from derivatives
\nhedging the loan portfolio.
\nInterest income, EUR 87 million (2021: 25), includes EUR 44 million (2021: 13) interest income from
\nshareholder loan receivables and other loan receivables, and EUR 14 million (2021: 10) from deposits.
\nInterest income from leases and other interest income EUR 29 million (2021: 2) include EUR 27 million
\ninterest income from tax authorities on refunded tax payment. See more information in
\ue001
Note 37
Legal
\nactions and official proceedings.
\nReturn from nuclear fund, nuclear fund adjustment and unwinding of nuclear provisions relate to Loviisa
\nnuclear plant. For additional information see
\ue001
Note 29
Nuclear-related assets and liabilities.
\nFair value changes, impairments and reversals EUR -303 million in 2022 include expected credit losses
\nof EUR -117 million on Russian deposits and receivables, as well as EUR -171 million write down of other
\nshares.
\nOther financial expenses and income EUR 266 million in 2022 include mainly foreign exchange gains
\nfrom Russian rouble receivables and closing of Russian rouble hedges.
\nInterest rate and currency derivatives in finance costs
\u2013
net
\nEUR million
2022
2021
\nInterest rate and cross currency swaps
\nInterest expenses on borrowings
16
16
\nExchange rate difference from derivatives
-16
-12
\nRate difference in fair value gains and losses on financial instruments
\n1)
\n-65
-55
\nTotal fair value change of interest rate derivatives in finance costs - net
-65
-51
\nForeign exchange derivatives
\nInterest expenses on borrowings
-4
-40
\nExchange rate difference from derivatives
217
-15
\nRate difference in fair value gains and losses on financial instruments
-8
4
\nTotal fair value change of currency derivatives in finance costs - net
205
-51
\nTotal
140
-102
\n1) Fair value gains and losses on financial instruments include fair value change of hedging derivatives in fair value hedge relationship to
\nEUR -66 million (2021: -55).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingCostsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12053": {
"value": "12 Income tax expense
\n12.1 Profit before tax by country
\nEUR million
2022
2021
\nFinland
592
561
\nSweden
583
2,798
\nIreland
754
216
\nGermany
-110
95
\nRussia
-1,437
-89
\nOther
72
751
\nIS
Total
455
4,332
\nProfit before tax by country represents the respective
countries\u2019 part of total profit before tax for Fortum
\nGroup according to IFRS, based on the same accounting principles as consolidated financial statements.
\nThis means that the respective country profits include such items as for example share of profits from
\nassociates and joint ventures, effects of accounting for derivatives under IFRS standards and other group
\nlevel consolidation adjustments, which are not included in taxable profits in the local subsidiaries.
\n12.2 Major components of income tax expense by country
\nEUR million
2022
2021
\nCurrent taxes
\nFinland
-206
-107
\nSweden
-120
-98
\nIreland
11
-85
\nGermany
0
-11
\nRussia
-42
-4
\nOther
-36
-48
\nTotal
-392
-353
\nDeferred taxes
\nFinland
90
-1
\nSweden
-53
37
\nIreland
704
45
\nGermany
0
-1
\nRussia
148
-
\nOther
44
-55
\nTotal
934
26
\nAdjustments recognised for current tax of prior periods
\nFinland
0
0
\nSweden
8
0
\nIreland
0
0
\nGermany
0
0
\nRussia
7
0
\nOther
-1
3
\nTotal
15
2
\nIS
Income tax expense
556
-325
\n12.3 Income tax rate reconciliation
\nThe table below explains the difference between the theoretical enacted tax rate in Finland compared to
\nthe tax rate in the consolidated income statement.
\nEUR million
2022
%
2021
%
\nProfit before tax
455
4,332
\nTax calculated at nominal Finnish tax rate
-91
20.0
-866
20.0
\nDifferences in tax rates in other jurisdictions
48
-10.6
-9
0.2
\nTax rate changes
-
-
1
0.0
\nTax exempt capital gains
117
-25.7
562
-13.0
\nOther items impacting comparable tax expense
668
-146.7
-
-
\nTax exempt income and other non-deductible expenses
-5
1.2
-6
0.1
\nShare of profit of associates and joint ventures
-126
27.7
31
-0.7
\nTaxes related to dividend distributions
-
-
-12
0.3
\nTax effects of changes in value and non-recognition of deferred
\ntaxes
-41
8.9
-30
0.7
\nOther items
-17
3.6
1
0.0
\nAdjustments recognised for taxes of prior periods
3
-0.6
3
-0.1
\nIS
Income tax expense
556
-122.1
-325
7.5
\nKey tax indicators:
\n\u2022
The weighted average applicable income tax rate for 2022 is 9.4% (2021: 20.2%).
\n\u2022
The effective income tax rate in the income statement for 2022 is -122.1% (2021: 7.5%).
\n\u2022
The comparable effective income tax rate for 2022 is 22.4% (2021: 22.2%).
\nSee
\ue001
Note 7
Comparable operating profit and comparable net profit and
\ue001
Definitions and
\nreconciliations of key figures
.
\nThe major items affecting the effective income tax rate are as follows:
\n\u2022
Tax exempt capital gains decreased the rate by 25.7% (2021: 13.0%). Gains mainly relate to the sale of
\nFortum Oslo Varme AS in Norway.
\n\u2022
Other items impacting comparable tax expense include other tax exempt or non-deductible items and
\ntax impacts from group internal items. These items decreased the rate by 146.7% (2021: 0.0%). Impact
\nis realised in Ireland leading to creation of deferred tax asset of tax loss carry forward. This tax loss
\ncarry forward is a consequence of the disposal of Uniper SE and write down of Russian assets.
\n\u2022
Tax effects of changes in value and non-recognition of deferred taxes during 2022 increased the
\neffective tax rate by 8.9% (2021: 0.7%), mainly due to derecognition of deferred tax assets on tax losses
\ncarry forwards in Ireland.
28 Income taxes on the balance sheet
\nACCOUNTING POLICIES
\nThe tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as
\nreported in the consolidated income statement, because of items of income or expense that are taxable
\nor deductible in other years and items that are never tax
able or deductible. The Group\u2019s liability for
\ncurrent tax is calculated using tax rates that have been enacted or substantively enacted by the end of
\nthe reporting period.
\nDeferred tax is provided in full, using the balance sheet approach on temporary differences arising
\nbetween the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
\nstatements. However, if the deferred tax arises from initial recognition of an asset or liability in a
\ntransaction other than a business combination that at the time of the transaction affects neither
\naccounting nor taxable profit or loss, it is not accounted for. Deferred tax is determined using tax rates
\n(and laws) that have been enacted or substantially enacted by the closing date and are expected to
\napply when the related deferred tax asset is realised or the deferred tax liability is settled.
\nDeferred tax assets are recognised to the extent that it is probable that future taxable profit will be
\navailable against which the temporary differences can be utilised. Deferred tax assets are set off against
\ndeferred tax liabilities if they relate to income taxes levied by the same taxation authority.
\nDeferred tax is provided on temporary differences arising from investments in subsidiaries, associates
\nand joint ventures, except where the timing of the reversal of the temporary difference is controlled by
\nthe Group, and it is probable that the temporary difference will not be reversed in the foreseeable future.
\nThe Group recognises liabilities for anticipated tax dispute issues based on estimates of whether
\nadditional taxes will be due. No provision will be recognised in the financial statements if Fortum
\nconsiders the claims unjustifiable. Therefore, if taxes regarding ongoing tax disputes have to be paid
\nbefore final court decisions, they are booked as a receivable. Where the final outcome of these matters
\nis different from the amounts that were initially recorded, such differences will impact the income tax and
\ndeferred tax provisions in the period in which such determination is made.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS AND
\nESTIMATES REGARDING FUTURE TAX CONSEQUENCES
\nFortum has deferred tax assets and liabilities which are expected to be realised through the income
\nstatement over the extended periods of time in the future. In calculating the deferred tax items, Fortum is
\nrequired to make certain assumptions and estimates regarding the future tax consequences attributable
\nto differences between the carrying amounts of assets and liabilities as recorded in the financial
\nstatements and their tax basis.
\nAssumptions made include the expectation that future operating performance for subsidiaries will be
\nconsistent with historical levels of operating results, recoverability periods for tax loss carry-forwards will
\nnot change, and that existing tax laws and rates will remain unchanged into foreseeable future. Fortum
\nbelieves that it has prudent assumptions in developing its deferred tax balances.
\nFortum continually evaluates the probability of utilising deferred tax assets and considers various
\nfactors that, in addition to the actual and planned earnings of the past, take into account medium-term
\nand long-term planning. The basis for recognising deferred tax assets is an estimate by management of
\nthe extent to which it is probable that there will be sufficient taxable profit in the foreseeable future
\nagainst which the unused tax losses, tax credits and deductible temporary differences can be offset.
\nAssumptions and estimates regarding main uncertain tax positions are supported by external legal
\ncounsel or expert opinion.
\nIf the actual final outcome (regarding tax disputes) would differ negatively from management\u2019s
\nestimates with 10%, the Group would need to increase the income tax liability by EUR 4 million at 31
\nDecember 2022.
\n28.1 Deferred taxes on the balance sheet
\n2022
2021
\nEUR million
1 Jan
Change
31 Dec
1 Jan
Change
31 Dec
\nBS
Deferred tax assets
2,149
-1,215
933
1,089
1,060
2,149
\nBS
Deferred tax liabilities
-827
676
-152
-952
125
-827
\nNet deferred taxes
1,321
-539
782
138
1,184
1,321
\nDeferred tax assets are recognised to the extent it is probable that future taxable profit will be available
\nagainst which the unused tax losses, unused tax credits and deductible temporary differences can be
\nutilised in the relevant jurisdictions. As of 31 December 2022, Fortum has recognised deferred tax assets
\nof EUR 933 million (2021: EUR 2,149 million).
\nDeferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
\ncurrent tax assets against current tax liabilities and when the deferred income taxes relate to the same
\nfiscal authority.
Movement in deferred tax assets and liabilities 2022
\nEUR million
Intangible assets
\nProperty, plant and
\nequipment and
\nright-of-use assets
Pension obligations
Provisions
\nDerivative financial
\ninstruments
\nTax losses and tax
\ncredits carry-
\nforward
Other
Net deferred taxes
\n1 January 2022
-200
-1,551
268
1,658
1,476
146
-476
1,321
\nCharged to income statement
-15
275
-16
5,869
29
702
215
7,061
\nCharged to other comprehensive income
-
-
-33
-
248
-
-
215
\nExchange rate differences, reclassifications and other changes
5
-85
-144
-38
-39
-9
40
-269
\nDisposals of subsidiary companies
\n1)
\n156
830
-77
-7,509
-1,126
-89
269
-7,546
\n31 December 2022
-54
-530
-3
-19
589
751
48
782
\nMovement in deferred tax assets and liabilities 2021
\nEUR million
Intangible assets
\nProperty, plant and
\nequipment and
\nright-of-use assets
Pension obligations
Provisions
\nDerivative financial
\ninstruments
\nTax losses and tax
\ncredits carry-
\nforward
Other
Net deferred taxes
\n1 January 2021
-241
-1,228
542
1,273
-63
168
-312
138
\nCharged to income statement
44
-282
-156
395
1,258
-23
-161
1,076
\nCharged to other comprehensive income
-
-
-98
-
269
-
0
171
\nExchange rate differences, reclassifications and other changes
-2
-44
-20
-10
11
1
0
-63
\nAcquisitions and disposals
0
2
-
0
0
0
-3
-1
\n31 December 2021
-200
-1,551
268
1,658
1,476
146
-476
1,321
\n1) Disposals of subsidiary companies in 2022 included EUR 7 595 million from the deconsolidation of Uniper as of 30 September 2022. See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022. Charges to income statement regarding Uniper is presented in the results from discontinued operations. See
\ue001
Note 3.4
Discontinued operations.
\nNet change in deferred taxes from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30 September 2022. The decrease was partly offset by an increase in deferred tax assets related to derivatives
\ncaused by high commodity market prices. The increase in deferred tax assets on tax loss carry forward is mainly in Ireland and caused by the Uniper divestment and Russia related impairments. Fortum has prepared a
\ncomprehensive forecast to assess the future profitability of the Irish legal entity holding the loss carried forward, and has relied on this estimate to support the value of the deferred tax asset of EUR 706 million at 31
\nDecember 2022.
Expiry of tax losses carried forward and recognised deferred tax assets
\n2022
2021
\nEUR million
\nTax
\nlosses
\nDeferred
\ntax
\nasset
\nTax
\nlosses
\nDeferred
\ntax
\nasset
\nTax losses carried forward without expiration date
\n1)
\n5,836
749
675
132
\nTax losses carried forward with expiration date
9
2
58
8
\nTotal
5,844
751
733
139
\n1) Majority relates to Ireland.
\nDeferred tax assets are recognised for tax losses carried forward to the extent that realisation of the
\nrelated tax benefit through future profits is probable. The increase is mainly in Ireland related to impacts
\ncaused by Uniper divestment.
\nUnrecognised deferred tax
\nThe amount of temporary differences, tax losses carried forward and tax credits for which no deferred tax
\nasset was recognised due to uncertainty of utilisation:
\nEUR million
2022
2021
\nTemporary differences
280
4,910
\nTax losses carried forward
108
463
\nTax credits
5
3
\nTotal
393
5,376
\nThe decrease of unrecognised amounts of temporary differences and losses carry forwards is mainly due
\nto the deconsolidation of Uniper at 30 September 2022. The unrecognised temporary differences in 2022
\nmainly relate to Germany.
\nDeferred tax liabilities were not recognised on temporary differences of EUR 476 million (2021: 164)
\nrelating to investments in subsidiaries as Fortum can control the reversal effect, and it is probable that
\ntemporary differences will not be reversed in the foreseeable future. Such temporary differences are
\nmainly related to undistributed taxable profits from Russia.
\n28.2 Income tax receivables
\nEUR million
2022
2021
\nBelgium
36
113
\nOther
35
48
\nBS
Total
71
161
\nIncome tax receivable in Belgium relates to ongoing tax disputes on income tax assessments for
\nthe years 2008
\u2013
2012. Total amount of these taxes was EUR 113 million, which was booked as a
\nreceivable on the consolidated balance sheet on 31 December 2021. On 29 June 2022, the Antwerp court
\nof First Instance, Belgium, ruled in favour of Fortum on the company\u2019s income tax assessments in
\nBelgium for the years 2009-2012, and in September 2022, the Belgian tax authorities refunded Fortum the
\npaid taxes amounting to EUR 78 million. The amount for the year 2008, EUR 36 million, continues to be
\nrecognised on the balance sheet. See
\ue001
Note 37
Legal actions and official proceedings.
\nOther income tax receivables reflect corporate income taxes paid mainly in relation to the financial year,
\nas well as payments according to received tax audit assessments in relation to previous years.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12276": {
"value": "EARNINGS PER SHARE Basic earnings per share is calculated by dividing the net profit attributable to the owners of the parent
\ncompany by the weighted average number of ordinary shares in issue during the year, excluding
\nordinary shares purchased by the Group and held as treasury shares.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12283": {
"value": "DIVIDENDS Dividends proposed by the Board of Directors are not recognised in the financial statements until they
\nhave been approved by the company's shareholders at the Annual General Meeting.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12289": {
"value": "13.1 Earnings per share Earnings per share, basic
\n2022
2021
\nIS
Profit attributable to owners of the parent, continuing operations (EUR million)
1,011
3,985
\nIS
Profit attributable to owners of the parent, total Fortum (EUR million)
-2,416
739
\nWeighted average number of shares (thousand)
889,204
888,294
\nBasic earnings per share, continuing operations (EUR )
1.14
4.49
\nBasic earnings per share, total Fortum (EUR )
-2.72
0.83
\nAs Fortum currently has no dilutive instruments outstanding, diluted earnings per share is the same as
\nbasic earnings per share.
\nComparable earnings per share
\n2022
2021
\nComparable net profit, continuing operations (EUR million)
1,550
1,091
\nComparable net profit, total Fortum (EUR million)
-988
1,778
\nWeighted average number of shares (thousand)
889,204
888,294
\nComparable earnings per share, continuing operations (EUR )
1.74
1.23
\nComparable earnings per share, total Fortum (EUR )
-1.11
2.00
\nComparable earnings per share, continuing operations excl. Russia
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, and in 2022 Fortum introduced new APMs to provide additional financial
\ninformation excluding Fortum\u2019s Russian operation
s. See also
\ue001
Note 1
Significant accounting policies.
\n2022
2021
\nComparable net profit from continuing operations excl. Russia (EUR million)
1,076
851
\nWeighted average number of shares (thousand)
889,204
888,294
\nComparable earnings per share, continuing operations excl. Russia (EUR )
1.21
0.96
\nSee
\ue001
Definitions and reconciliations of key figures
. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12356": {
"value": "13.2 Dividend per share The Board of Directors proposes that a dividend of EUR 0.91 per share be paid for the financial year
\n2022. The dividend will be paid in two instalments. Based on the number of shares registered as at 1
\nMarch 2023, the total amount of dividend would be EUR 817 million. These Financial statements do not
\nreflect this dividend.
\nA dividend for 2021 of EUR 1.14 per share, amounting to a total of EUR 1,013 million, was decided in
\nthe Annual General Meeting on 28 March 2022. The dividend was paid on 6 April 2022
\nA dividend for 2020 of EUR 1.12 per share, amounting to a total of EUR 995 million, was decided in the
\nAnnual General Meeting on 28 April 2021. The dividend was paid on 7 May 2021.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDividendsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12359": {
"value": "0.91",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR/xbrli:shares"
}
},
"f12362": {
"value": "817000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:EUR"
}
},
"f12365": {
"value": "1.14",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:EUR/xbrli:shares"
}
},
"f12368": {
"value": "1.12",
"decimals": 2,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2020-01-01T00:00:00/2021-01-01T00:00:00",
"unit": "iso4217:EUR/xbrli:shares"
}
},
"f12383": {
"value": "14 Financial assets and liabilities by categories ACCOUNTING POLICIES
\nFINANCIAL ASSETS
\nFortum classifies its financial assets in the following categories according to IFRS 9: financial assets at
\namortised cost, financial assets at fair value through profit or loss and financial assets at fair value
\nthrough other comprehensive income. The classification is made at initial recognition and depends on
\nthe financial asset's contractual cash flow characteristics and the Group's business model for managing
\nthem.
\nIn order for the financial asset to be classified and measured at amortised cost or fair value through
\nother comprehensive income, it needs to give rise to cash flows that are solely payments of the principal
\nand interest on the principal amount outstanding (SPPI). This assessment is referred to as the SPPI test
\nand is performed at an instrument level. When the SPPI criteria is not met, financial assets are classified
\nto fair value through profit or loss category.
\nFinancial assets are presented as non-current assets unless they are held for trading, expected to be
\nrealised within 12 months at the closing date or they have a maturity of under 12 months at closing date.
\nThese are classified as current assets.
\nFINANCIAL ASSETS AT AMORTISED COST
\nFortum measures financial assets at amortised cost when the financial asset is included in the held-to-
\ncollect business model with fixed or determinable payments that are payments of amount outstanding or
\ninterest on it. They arise when the Group provides money, goods or services directly to a debtor.
\nFinancial assets at amortised cost include non-derivative financial assets with fixed or determinable
\npayments that are not quoted in an active market.
\nFinancial assets at amortised cost are subject to impairment using expected credit loss (ECL) model.
\nGains and losses from derecognition of the asset are recognised in profit and loss.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
\nFinancial assets at fair value through profit or loss include financial assets held for trading in the short
\nterm, financial assets designated upon initial recognition irrevocably as fair value through profit or loss
\nand financial assets mandatorily recognised at fair value through profit or loss according to IFRS 9.
\nDerivatives are classified as held for trading unless they are designated as effective hedging
\ninstruments.
\nGains and losses arising from changes in the fair value are included in the income statement in the
\nperiod in which they arise.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
\nOther equity investments designated at fair value through other comprehensive income are not subject
\nto impairment assessment and accumulated reserves are not recycled to profit or loss upon
\nderecognition. Dividends received are recognised in profit and loss.
\nDERECOGNITION
\nFortum derecognises financial assets when the rights to receive cash flows from the assets have expired
\nor when it has substantially transferred the risks and rewards of the assets outside of the Group.
\nIMPAIRMENT
\nFortum recognises an allowance for expected credit losses (ECL) according to IFRS 9 for financial
\nassets measured at amortised cost. See further information on ECL in
\ue001
Note 4.4.1
Credit quality of
\nmajor financial assets and in
\ue001
Note 23
Trade and other receivables.
\nFinancial assets measured at fair value through profit or loss are not included in ECL assessment as
\nthey are already measured at fair value. A financial asset is written-off when there is no reasonable
\nexpectation of recovering the contractual cash flows.
\nFINANCIAL LIABILITIES
\nAll financial liabilities are recognised initially at fair value. In the case of loans and borrowings and
\npayables, incurred transaction costs are deducted. In subsequent periods, all financial liabilities, except
\nderivatives and financial liabilities which the Group has at initial recognition irrevocably designated at fair
\nvalue through profit or loss, are stated at amortised cost; any difference between proceeds (net of
\ntransaction costs) and the redemption value is recognised as interest cost over the period of the
\nborrowing using the effective interest rate method.
\nDerivative financial instruments entered into by the Group, that are not designated as hedging
\ninstruments are classified as liabilities at fair value through profit and loss. Amortisation of the effective
\ninterest rate and gains and losses of liabilities are recognised in the income statement.
\nGroup\u2019s financial liabilities include trade and other payables, loans and borrowings and derivative
\nfinancial instruments. Borrowings or portion of borrowings being hedged with a fair value hedge are
\nrecognised at fair value through profit or loss. Derecognition of financial liabilities takes place when the
\nGroup has fulfilled the contractual obligations.
\nACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
\nWithin the ordinary course of business, the Group routinely enters into sale and purchase transactions
\nfor commodities. Contracts that were entered into and continue to be held for the purpose of receipt or
\ndelivery of the commodity in accordance with the Group's expected sale, purchase or usage
\nrequirements are not within the scope of IFRS 9 (\"own use exemption\"). Physical contracts to buy or sell
\na non-financial item, which are fair valued using the fair value option to off-set accounting mismatch, or
\nwhere own use exemption or hedge accounting cannot be applied are fair valued through the income
\nstatement.
\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and
\nare subsequently remeasured at their fair value. Gains and losses resulting from the initial fair value
\nmeasurement of a
derivative (\u201cday one\u201d gains and losses) are eliminated against the corresponding
\nderivative asset or liability, if the initial fair value is determined based on valuation model with input
\nparameters that are unobservable from active markets. For derivatives whose initial fair value is
\nevidenced by a quoted price in an active market for an identical contract or based on a valuation
\ntechnique that uses only data from observable markets, gains and losses from the initial measurement
\nare accounted for similarly to gains or losses on the subsequent measurement.
\nThe method of recognising the resulting gain or loss on the subsequent measurement depends on
\nwhether the derivative is designated as a hedging instrument eligible for hedge accounting, and if so, the
\nnature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of
\nhighly probable forecast transactions (cash flow hedges); (2) hedges of the fair value of recognised
\nassets or liabilities, or unrecognised firm commitments (fair value hedge); or (3) hedges of net
\ninvestments in foreign operations.
\nThe Group documents at the inception of the transaction the relationship between hedging
\ninstruments and hedged items, whether the hedged item is one or several risk components separately or
\nin aggregation, as well as its risk management objective and strategy for undertaking various hedge
\ntransactions. When applying hedge accounting the Group also documents its assessment, of whether
\nthe derivatives that are used in hedging transactions are meeting the hedge accounting effectiveness
\ncriteria: (1) there is an economic relationship between the hedged item and the hedging instrument, (2)
\nthe effect of credit risk does not dominate the value changes that result from that economic relationship;
\nand (3) the hedge ratio of the hedging relationship is the same as applied in the risk management. The
\nGroup also documents its assessment, both at hedge inception and on an ongoing basis, of whether the
\nderivatives that are used in hedging transactions are highly effective by assessing the prospective
\ncapacity of the derivatives in offsetting changes in fair values or cash flows of hedged items. Hedge
\naccounting is discontinued only when the hedging relationship ceases to meet the hedge effectiveness
\ncriteria.
74
\nCASH FLOW HEDGE
\nThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash
\nflow hedges are recognised in equity. Gain or loss relating to the ineffective portion is recognised
\nimmediately in the income statement. Amounts accumulated in equity are recycled in the income
\nstatement in the periods when the hedged item will affect profit and loss (e.g. when the forecasted sale
\nthat is hedged takes place). However, when the forecast transaction that is hedged results in the
\nrecognition of a non-financial asset (e.g. inventory) or a liability, the gains and losses previously deferred
\nin equity are transferred from equity and included in the initial measurement of the cost of the asset or
\nliability. When a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
\nexisting in equity is recognised in the income statement when the forecast transaction is ultimately also
\nrecognised in the income statement. When a forecasted transaction is no longer expected to occur, the
\ncumulative gain or loss that was reported in equity is immediately recognised in the income statement.
\nFortum hedges its exposure to commodity market risks and applies hedge accounting by risk
\ncomponents. Hedge accounting is applied to Nordic electricity price risk, where the Nordic area priced
\nphysical electricity delivery is commonly divided into three risk components: (1) system price risk, (2)
\nelectricity price area difference risk (EPAD) and (3) currency risk. For each of these separate risk
\ncomponents there are specific derivative contracts available, which each are being effective hedges for
\nthe associated risk components.
\nIn addition, hedge accounting is applied to certain derivative contracts hedging gas price risk. These
\nare physically settled fixed-price forward and futures contracts, for which the own-use exemption cannot
\nbe applied (failed own-use contracts), where the contract constitutes an effective hedge of cash flows of
\nthe gas volumes to be delivered (\u201call
-
in one\u201d hedge).
\nFAIR VALUE HEDGE
\nChanges in the fair value of derivatives that are designated and qualify as fair value hedges are
\nrecorded in the income statement, together with any changes in the fair value of the hedged asset or
\nliability that are attributable to the hedged risk.
\nIf the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount
\nof a hedged item for which the effective interest method is used is amortised to profit or loss for the
\nperiods until maturity of the hedged item.
\nNET INVESTMENT HEDGING IN FOREIGN OPERATIONS
\nHedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any
\ngain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in
\nequity; the gain or loss relating to the ineffective portion is recognised immediately in the income
\nstatement. Gains and losses accumulated in equity are included in the income statement when the
\nforeign operation is disposed of.
\nDERIVATIVES THAT DO NOT QUALIFY FOR HEDGE ACCOUNTING
\nCertain derivative instruments representing economic hedging relationship do not qualify for hedge
\naccounting. Unrealised fair value changes of non-hedge accounted commodity derivatives hedging
\nfuture cash flow and physical contracts that are accounted for as derivatives within the scope of IFRS 9
\nare recognised in items affecting comparability in the income statement. Gains and losses on interest
\nrate and currency derivative instruments are recognised in finance costs
\u2013
net with corresponding hedge
\nitems.
\nFinancial assets and liabilities in the tables below are split into categories in accordance with IFRS 9.
\nThe categories are further divided into classes which are the basis for valuing a respective asset or
\nliability. Further information can be found in the Notes mentioned in the table.
75
\nFinancial assets by category 2022
\nAmortised cost
Fair value through profit or loss
\nFair value through other
\ncomprehensive income
\nEUR million
Note
\nHedge accounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther
\nfinancial assets
\nNet investment
\nand Cash flow
\nhedges
\nOther equity
\ninvestments
\nLease
\nreceivables
\nTotal
\nfinancial assets
\nFinancial instruments in non-current assets
\nOther non-current assets
20
85
543
628
\nDerivative financial instruments
4
\nCommodity derivatives
170
54
224
\nInterest rate and currency derivatives
84
3
33
119
\nLong-term interest-bearing receivables
21
593
31
624
\nTotal financial instruments in non-current assets
677
84
174
574
86
-
-
1,595
\nFinancial instruments in current assets
\nDerivative financial instruments
4
\nCommodity derivatives
594
776
1,370
\nInterest rate and currency derivatives
1
92
23
116
\nTrade receivables
23
1,625
1,625
\nOther receivables
23
142
142
\nShort-term interest-bearing receivables
21
122
535
3
660
\nLiquid funds
24
3,919
3,919
\nTotal financial instruments in current assets
5,808
1
687
535
799
-
3
7,832
\nTotal
6,486
84
860
1,109
885
-
3
9,427
\nFinancial assets by category 2021
\nAmortised cost
Fair value through profit or loss
\nFair value through other
\ncomprehensive income
\nEUR million
Note
\nHedge accounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther
\nfinancial assets
\nNet investment
\nand Cash flow
\nhedges
\nOther equity
\ninvestments
\nLease
\nreceivables
\nTotal
\nfinancial assets
\nFinancial instruments in non-current assets
\nOther non-current assets
20
316
136
118
570
\nDerivative financial instruments
4
\nCommodity derivatives
16,955
53
17,009
\nInterest rate and currency derivatives
49
34
5
88
\nLong-term interest-bearing receivables
21
2,125
147
119
2,392
\nTotal financial instruments in non-current assets
2,441
49
16,989
284
58
118
119
20,058
\nFinancial instruments in current assets
\nDerivative financial instruments
4
\nCommodity derivatives
64,750
416
65,165
\nInterest rate and currency derivatives
22
170
34
226
\nTrade receivables
23
12,916
12,916
\nOther receivables
23
1,927
13
1,940
\nShort-term interest-bearing receivables
21
145
553
17
715
\nLiquid funds
24
7,545
47
7,592
\nTotal financial instruments in current assets
22,533
22
64,920
613
450
-
17
88,555
\nTotal
24,974
71
81,909
897
507
118
136
108,613
76
\nFinancial liabilities by category 2022
\nAmortised cost
Fair value through profit or loss
\nFair value
\nthrough other
\ncomprehensive
\nincome
\nEUR million
Note
\nHedge
\naccounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther financial
\nliabilities
\nNet investment
\nand Cash flow
\nhedges
Lease liabilities
\nTotal financial
\nliabilities
\nFinancial instruments in non-current liabilities
\nInterest-bearing liabilities
27
2,978
580
\n1)
\n100
3,658
\nDerivative financial instruments
4
\nCommodity derivatives
245
390
635
\nInterest rate and currency derivatives
119
-
2
121
\nTotal financial instruments in non-current liabilities
2,978
699
245
392
100
4,413
\nFinancial instruments in current liabilities
\nInterest-bearing liabilities
27
3,581
527
19
4,127
\nDerivative financial instruments
4
\nCommodity derivatives
553
3,366
3,919
\nInterest rate and currency derivatives
2
51
1
54
\nTrade payables
33
720
720
\nOther liabilities
33
185
185
\nTotal financial instruments in current liabilities
4,486
2
604
527
3,367
19
9,005
\nTotal
7,463
701
849
527
3,759
119
13,419
\n1) Fair valued part of bond in fair value hedge relationship.
\nFinancial liabilities by category 2021
\nAmortised cost
Fair value through profit or loss
\nFair value
\nthrough other
\ncomprehensive
\nincome
\nEUR million
Note
\nHedge
\naccounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther financial
\nliabilities
\nNet investment
\nand Cash flow
\nhedges
Lease liabilities
\nTotal financial
\nliabilities
\nFinancial instruments in non-current liabilities
\nInterest-bearing liabilities
27
6,087
1,669
\n1)
\n945
8,701
\nDerivative financial instruments
4
\nCommodity derivatives
16,373
248
16,621
\nInterest rate and currency derivatives
9
8
18
36
\nTotal financial instruments in non-current liabilities
6,087
1,678
16,381
-
267
945
25,358
\nFinancial instruments in current liabilities
\nInterest-bearing liabilities
27
7,840
549
130
8,519
\nDerivative financial instruments
4
\nCommodity derivatives
68,905
2,934
71,839
\nInterest rate and currency derivatives
2
103
2
107
\nTrade payables
33
12,152
12,152
\nOther liabilities
33
425
425
\nTotal financial instruments in current liabilities
20,417
2
69,008
549
2,936
130
93,043
\nTotal
26,503
1,680
85,390
549
3,202
1,075
118,400
\n1) Fair valued part of bond in fair value hedge relationship. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12384": {
"value": "14 Financial assets and liabilities by categories ACCOUNTING POLICIES
\nFINANCIAL ASSETS
\nFortum classifies its financial assets in the following categories according to IFRS 9: financial assets at
\namortised cost, financial assets at fair value through profit or loss and financial assets at fair value
\nthrough other comprehensive income. The classification is made at initial recognition and depends on
\nthe financial asset's contractual cash flow characteristics and the Group's business model for managing
\nthem.
\nIn order for the financial asset to be classified and measured at amortised cost or fair value through
\nother comprehensive income, it needs to give rise to cash flows that are solely payments of the principal
\nand interest on the principal amount outstanding (SPPI). This assessment is referred to as the SPPI test
\nand is performed at an instrument level. When the SPPI criteria is not met, financial assets are classified
\nto fair value through profit or loss category.
\nFinancial assets are presented as non-current assets unless they are held for trading, expected to be
\nrealised within 12 months at the closing date or they have a maturity of under 12 months at closing date.
\nThese are classified as current assets.
\nFINANCIAL ASSETS AT AMORTISED COST
\nFortum measures financial assets at amortised cost when the financial asset is included in the held-to-
\ncollect business model with fixed or determinable payments that are payments of amount outstanding or
\ninterest on it. They arise when the Group provides money, goods or services directly to a debtor.
\nFinancial assets at amortised cost include non-derivative financial assets with fixed or determinable
\npayments that are not quoted in an active market.
\nFinancial assets at amortised cost are subject to impairment using expected credit loss (ECL) model.
\nGains and losses from derecognition of the asset are recognised in profit and loss.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
\nFinancial assets at fair value through profit or loss include financial assets held for trading in the short
\nterm, financial assets designated upon initial recognition irrevocably as fair value through profit or loss
\nand financial assets mandatorily recognised at fair value through profit or loss according to IFRS 9.
\nDerivatives are classified as held for trading unless they are designated as effective hedging
\ninstruments.
\nGains and losses arising from changes in the fair value are included in the income statement in the
\nperiod in which they arise.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
\nOther equity investments designated at fair value through other comprehensive income are not subject
\nto impairment assessment and accumulated reserves are not recycled to profit or loss upon
\nderecognition. Dividends received are recognised in profit and loss.
\nDERECOGNITION
\nFortum derecognises financial assets when the rights to receive cash flows from the assets have expired
\nor when it has substantially transferred the risks and rewards of the assets outside of the Group.
\nIMPAIRMENT
\nFortum recognises an allowance for expected credit losses (ECL) according to IFRS 9 for financial
\nassets measured at amortised cost. See further information on ECL in
\ue001
Note 4.4.1
Credit quality of
\nmajor financial assets and in
\ue001
Note 23
Trade and other receivables.
\nFinancial assets measured at fair value through profit or loss are not included in ECL assessment as
\nthey are already measured at fair value. A financial asset is written-off when there is no reasonable
\nexpectation of recovering the contractual cash flows.
\nFINANCIAL LIABILITIES
\nAll financial liabilities are recognised initially at fair value. In the case of loans and borrowings and
\npayables, incurred transaction costs are deducted. In subsequent periods, all financial liabilities, except
\nderivatives and financial liabilities which the Group has at initial recognition irrevocably designated at fair
\nvalue through profit or loss, are stated at amortised cost; any difference between proceeds (net of
\ntransaction costs) and the redemption value is recognised as interest cost over the period of the
\nborrowing using the effective interest rate method.
\nDerivative financial instruments entered into by the Group, that are not designated as hedging
\ninstruments are classified as liabilities at fair value through profit and loss. Amortisation of the effective
\ninterest rate and gains and losses of liabilities are recognised in the income statement.
\nGroup\u2019s financial liabilities include trade and other payables, loans and borrowings and derivative
\nfinancial instruments. Borrowings or portion of borrowings being hedged with a fair value hedge are
\nrecognised at fair value through profit or loss. Derecognition of financial liabilities takes place when the
\nGroup has fulfilled the contractual obligations.
\nACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
\nWithin the ordinary course of business, the Group routinely enters into sale and purchase transactions
\nfor commodities. Contracts that were entered into and continue to be held for the purpose of receipt or
\ndelivery of the commodity in accordance with the Group's expected sale, purchase or usage
\nrequirements are not within the scope of IFRS 9 (\"own use exemption\"). Physical contracts to buy or sell
\na non-financial item, which are fair valued using the fair value option to off-set accounting mismatch, or
\nwhere own use exemption or hedge accounting cannot be applied are fair valued through the income
\nstatement.
\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and
\nare subsequently remeasured at their fair value. Gains and losses resulting from the initial fair value
\nmeasurement of a
derivative (\u201cday one\u201d gains and losses) are eliminated against the corresponding
\nderivative asset or liability, if the initial fair value is determined based on valuation model with input
\nparameters that are unobservable from active markets. For derivatives whose initial fair value is
\nevidenced by a quoted price in an active market for an identical contract or based on a valuation
\ntechnique that uses only data from observable markets, gains and losses from the initial measurement
\nare accounted for similarly to gains or losses on the subsequent measurement.
\nThe method of recognising the resulting gain or loss on the subsequent measurement depends on
\nwhether the derivative is designated as a hedging instrument eligible for hedge accounting, and if so, the
\nnature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of
\nhighly probable forecast transactions (cash flow hedges); (2) hedges of the fair value of recognised
\nassets or liabilities, or unrecognised firm commitments (fair value hedge); or (3) hedges of net
\ninvestments in foreign operations.
\nThe Group documents at the inception of the transaction the relationship between hedging
\ninstruments and hedged items, whether the hedged item is one or several risk components separately or
\nin aggregation, as well as its risk management objective and strategy for undertaking various hedge
\ntransactions. When applying hedge accounting the Group also documents its assessment, of whether
\nthe derivatives that are used in hedging transactions are meeting the hedge accounting effectiveness
\ncriteria: (1) there is an economic relationship between the hedged item and the hedging instrument, (2)
\nthe effect of credit risk does not dominate the value changes that result from that economic relationship;
\nand (3) the hedge ratio of the hedging relationship is the same as applied in the risk management. The
\nGroup also documents its assessment, both at hedge inception and on an ongoing basis, of whether the
\nderivatives that are used in hedging transactions are highly effective by assessing the prospective
\ncapacity of the derivatives in offsetting changes in fair values or cash flows of hedged items. Hedge
\naccounting is discontinued only when the hedging relationship ceases to meet the hedge effectiveness
\ncriteria.
74
\nCASH FLOW HEDGE
\nThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash
\nflow hedges are recognised in equity. Gain or loss relating to the ineffective portion is recognised
\nimmediately in the income statement. Amounts accumulated in equity are recycled in the income
\nstatement in the periods when the hedged item will affect profit and loss (e.g. when the forecasted sale
\nthat is hedged takes place). However, when the forecast transaction that is hedged results in the
\nrecognition of a non-financial asset (e.g. inventory) or a liability, the gains and losses previously deferred
\nin equity are transferred from equity and included in the initial measurement of the cost of the asset or
\nliability. When a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
\nexisting in equity is recognised in the income statement when the forecast transaction is ultimately also
\nrecognised in the income statement. When a forecasted transaction is no longer expected to occur, the
\ncumulative gain or loss that was reported in equity is immediately recognised in the income statement.
\nFortum hedges its exposure to commodity market risks and applies hedge accounting by risk
\ncomponents. Hedge accounting is applied to Nordic electricity price risk, where the Nordic area priced
\nphysical electricity delivery is commonly divided into three risk components: (1) system price risk, (2)
\nelectricity price area difference risk (EPAD) and (3) currency risk. For each of these separate risk
\ncomponents there are specific derivative contracts available, which each are being effective hedges for
\nthe associated risk components.
\nIn addition, hedge accounting is applied to certain derivative contracts hedging gas price risk. These
\nare physically settled fixed-price forward and futures contracts, for which the own-use exemption cannot
\nbe applied (failed own-use contracts), where the contract constitutes an effective hedge of cash flows of
\nthe gas volumes to be delivered (\u201call
-
in one\u201d hedge).
\nFAIR VALUE HEDGE
\nChanges in the fair value of derivatives that are designated and qualify as fair value hedges are
\nrecorded in the income statement, together with any changes in the fair value of the hedged asset or
\nliability that are attributable to the hedged risk.
\nIf the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount
\nof a hedged item for which the effective interest method is used is amortised to profit or loss for the
\nperiods until maturity of the hedged item.
\nNET INVESTMENT HEDGING IN FOREIGN OPERATIONS
\nHedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any
\ngain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in
\nequity; the gain or loss relating to the ineffective portion is recognised immediately in the income
\nstatement. Gains and losses accumulated in equity are included in the income statement when the
\nforeign operation is disposed of.
\nDERIVATIVES THAT DO NOT QUALIFY FOR HEDGE ACCOUNTING
\nCertain derivative instruments representing economic hedging relationship do not qualify for hedge
\naccounting. Unrealised fair value changes of non-hedge accounted commodity derivatives hedging
\nfuture cash flow and physical contracts that are accounted for as derivatives within the scope of IFRS 9
\nare recognised in items affecting comparability in the income statement. Gains and losses on interest
\nrate and currency derivative instruments are recognised in finance costs
\u2013
net with corresponding hedge
\nitems.
\nFinancial assets and liabilities in the tables below are split into categories in accordance with IFRS 9.
\nThe categories are further divided into classes which are the basis for valuing a respective asset or
\nliability. Further information can be found in the Notes mentioned in the table.
75
\nFinancial assets by category 2022
\nAmortised cost
Fair value through profit or loss
\nFair value through other
\ncomprehensive income
\nEUR million
Note
\nHedge accounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther
\nfinancial assets
\nNet investment
\nand Cash flow
\nhedges
\nOther equity
\ninvestments
\nLease
\nreceivables
\nTotal
\nfinancial assets
\nFinancial instruments in non-current assets
\nOther non-current assets
20
85
543
628
\nDerivative financial instruments
4
\nCommodity derivatives
170
54
224
\nInterest rate and currency derivatives
84
3
33
119
\nLong-term interest-bearing receivables
21
593
31
624
\nTotal financial instruments in non-current assets
677
84
174
574
86
-
-
1,595
\nFinancial instruments in current assets
\nDerivative financial instruments
4
\nCommodity derivatives
594
776
1,370
\nInterest rate and currency derivatives
1
92
23
116
\nTrade receivables
23
1,625
1,625
\nOther receivables
23
142
142
\nShort-term interest-bearing receivables
21
122
535
3
660
\nLiquid funds
24
3,919
3,919
\nTotal financial instruments in current assets
5,808
1
687
535
799
-
3
7,832
\nTotal
6,486
84
860
1,109
885
-
3
9,427
\nFinancial assets by category 2021
\nAmortised cost
Fair value through profit or loss
\nFair value through other
\ncomprehensive income
\nEUR million
Note
\nHedge accounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther
\nfinancial assets
\nNet investment
\nand Cash flow
\nhedges
\nOther equity
\ninvestments
\nLease
\nreceivables
\nTotal
\nfinancial assets
\nFinancial instruments in non-current assets
\nOther non-current assets
20
316
136
118
570
\nDerivative financial instruments
4
\nCommodity derivatives
16,955
53
17,009
\nInterest rate and currency derivatives
49
34
5
88
\nLong-term interest-bearing receivables
21
2,125
147
119
2,392
\nTotal financial instruments in non-current assets
2,441
49
16,989
284
58
118
119
20,058
\nFinancial instruments in current assets
\nDerivative financial instruments
4
\nCommodity derivatives
64,750
416
65,165
\nInterest rate and currency derivatives
22
170
34
226
\nTrade receivables
23
12,916
12,916
\nOther receivables
23
1,927
13
1,940
\nShort-term interest-bearing receivables
21
145
553
17
715
\nLiquid funds
24
7,545
47
7,592
\nTotal financial instruments in current assets
22,533
22
64,920
613
450
-
17
88,555
\nTotal
24,974
71
81,909
897
507
118
136
108,613
76
\nFinancial liabilities by category 2022
\nAmortised cost
Fair value through profit or loss
\nFair value
\nthrough other
\ncomprehensive
\nincome
\nEUR million
Note
\nHedge
\naccounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther financial
\nliabilities
\nNet investment
\nand Cash flow
\nhedges
Lease liabilities
\nTotal financial
\nliabilities
\nFinancial instruments in non-current liabilities
\nInterest-bearing liabilities
27
2,978
580
\n1)
\n100
3,658
\nDerivative financial instruments
4
\nCommodity derivatives
245
390
635
\nInterest rate and currency derivatives
119
-
2
121
\nTotal financial instruments in non-current liabilities
2,978
699
245
392
100
4,413
\nFinancial instruments in current liabilities
\nInterest-bearing liabilities
27
3,581
527
19
4,127
\nDerivative financial instruments
4
\nCommodity derivatives
553
3,366
3,919
\nInterest rate and currency derivatives
2
51
1
54
\nTrade payables
33
720
720
\nOther liabilities
33
185
185
\nTotal financial instruments in current liabilities
4,486
2
604
527
3,367
19
9,005
\nTotal
7,463
701
849
527
3,759
119
13,419
\n1) Fair valued part of bond in fair value hedge relationship.
\nFinancial liabilities by category 2021
\nAmortised cost
Fair value through profit or loss
\nFair value
\nthrough other
\ncomprehensive
\nincome
\nEUR million
Note
\nHedge
\naccounting,
\nfair value hedges
\nNon-hedge
\naccounting
\nOther financial
\nliabilities
\nNet investment
\nand Cash flow
\nhedges
Lease liabilities
\nTotal financial
\nliabilities
\nFinancial instruments in non-current liabilities
\nInterest-bearing liabilities
27
6,087
1,669
\n1)
\n945
8,701
\nDerivative financial instruments
4
\nCommodity derivatives
16,373
248
16,621
\nInterest rate and currency derivatives
9
8
18
36
\nTotal financial instruments in non-current liabilities
6,087
1,678
16,381
-
267
945
25,358
\nFinancial instruments in current liabilities
\nInterest-bearing liabilities
27
7,840
549
130
8,519
\nDerivative financial instruments
4
\nCommodity derivatives
68,905
2,934
71,839
\nInterest rate and currency derivatives
2
103
2
107
\nTrade payables
33
12,152
12,152
\nOther liabilities
33
425
425
\nTotal financial instruments in current liabilities
20,417
2
69,008
549
2,936
130
93,043
\nTotal
26,503
1,680
85,390
549
3,202
1,075
118,400
\n1) Fair valued part of bond in fair value hedge relationship.
77
\n15 Financial assets and liabilities by fair value hierarchy
\nACCOUNTING POLICIES
\nFair value measurements are classified using a fair value hierarchy i.e. Level 1, Level 2 and Level 3 that
\nreflects the significance of the inputs used in making the measurements.
\nFAIR VALUES UNDER LEVEL 1 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 1 is based on unadjusted quoted
\nprices in active markets at the closing date. Level 1 consist e.g. commodity derivatives traded in active
\nmarkets.
\nFAIR VALUES UNDER LEVEL 2 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 2 is based on observable input
\nparameters, which are other than quoted prices.
\nThe fair value of financial instruments traded in active markets in Level 2 is calculated using prices
\nderived from quoted market prices at the closing date. Known calculation techniques, such as estimated
\ndiscounted cash flows, are used to determine fair value of interest rate and currency financial
\ninstruments. The fair value of interest-rate swaps is calculated as the present value of the estimated
\nfuture cash flows. The fair value of forward foreign exchange contracts is determined using forward
\nexchange market rates at the closing date. Fair values of options are determined by using option
\nvaluation models. The fair value of financial liabilities is estimated by discounting the future contractual
\ncash flows at the current market interest rate that is available to the Group for similar financial
\ninstruments. The counterparty credit risk has been taken into account when determining fair value. The
\ncredit risk is determined based on a portfolio valuation in a bilateral approach.
\nThe Group bases the calculation on existing market conditions at each closing date. Financial
\ninstruments used in Fortum are standardised products that are either cleared via exchanges or widely
\ntraded in the market. Credit risk from trading commodity derivatives is mitigated by clearing trades
\nthrough exchanges or by limiting trades to OTC counterparties considered to be creditworthy, or secured
\nby credit worthy guarantees. Financial derivatives are traded with credit worthy financial institutions with
\ninvestment grade ratings.
\nFAIR VALUES UNDER LEVEL 3 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 3 is based on unobservable input
\nparameters.
\nLevel 3 consist mainly investments in unlisted shares classified as other investments for which the fair
\nvalue can't be reliably measured and derivative financial instrument for which the fair value has been
\ndetermined using valuation techniques with unobservable inputs. The input parameters of Level 3 of the
\nfair value hierarchy for equity investments are specified taking into account economic developments and
\navailable industry and corporate data. The counterparty credit risk has been adjusted when determining
\nthe fair value.
78
\nFinancial assets
\nLevel 1
Level 2
Level 3
Netting
\n2)
\nTotal
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nIn non-current assets
\nOther investments
\n1)
\n20
-
71
-
46
543
99
543
216
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
54
62
-9
54
53
\nNon-hedge accounting
85
5,136
58
11,708
57
207
-30
-96
170
16,955
\nInterest rate and currency derivatives
4
\nHedge accounting
116
54
116
54
\nNon-hedge accounting
3
34
3
34
\nInterest-bearing receivables
-
111
31
36
31
147
\nTotal in non-current assets
85
5,318
231
11,904
631
342
-30
-105
917
17,459
\nIn current assets
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
781
50
542
572
-546
-207
777
416
\nNon-hedge accounting
1,129
22,876
252
45,575
9
326
-796
-4,028
594
64,750
\nInterest rate and currency derivatives
4
\nHedge accounting
23
57
23
57
\nNon-hedge accounting
92
170
92
170
\nOther receivables
-
13
-
13
\nInterest-bearing receivables
527
596
7
4
535
600
\nTotal in current assets
2,437
23,522
909
46,387
16
330
-1,342
-4,235
2,021
66,006
\nTotal
2,522
28,840
1,140
58,291
648
672
-1,372
-4,340
2,938
83,465
\n1) Other investments mainly include shares in unlisted companies.
\n2) Receivables and liabilities from standard electricity and other commodity derivative contracts against exchanges with same delivery period are netted in Fortum, except Uniper segment included in 31 Dec 2021 balances.
79
\nFinancial liabilities
\nLevel 1
Level 2
Level 3
Netting
\n2)
\nTotal
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nIn non-current liabilities
\nInterest-bearing liabilities
\n1)
\n27
580
1,669
580
1,669
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
390
257
-9
390
248
\nNon-hedge accounting
38
4,874
234
11,336
4
259
-30
-96
246
16,373
\nInterest rate and currency derivatives
4
\nHedge accounting
121
27
121
27
\nNon-hedge accounting
-
8
-
8
\nTotal in non-current liabilities
38
4,874
1,324
13,298
4
259
-30
-105
1,336
18,326
\nIn current liabilities
\nInterest-bearing liabilities
27
527
549
527
549
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
2,672
420
1,240
2,721
-546
-207
3,366
2,934
\nNon-hedge accounting
883
20,316
465
52,531
1
86
-796
-4,028
553
68,905
\nInterest rate and currency derivatives
4
\nHedge accounting
3
4
3
4
\nNon-hedge accounting
51
103
51
103
\nTotal in current liabilities
3,555
20,736
2,286
55,908
1
86
-1,342
-4,235
4,500
72,496
\nTotal
3,593
25,610
3,610
69,205
5
345
-1,372
-4,340
5,836
90,822
\n1) Fair valued part of bonds when hedge accounting is applied (fair value hedge).
\n2) Receivables and liabilities from standard electricity and other commodity derivative contracts against exchanges with same delivery period are netted in Fortum, except Uniper segment included in 31 Dec 2021 balances.
\nAt the end of December 2022, the net fair value of commodity derivatives was EUR -2,960 million, including assets of EUR 1,594 million and liabilities of EUR 4,554 million (EUR -6,225 million in December 2021,
\nincluding assets of EUR 82 billion and liabilities of EUR 88 billion). The change from December 2021 mainly relates to deconsolidation of Uniper at 30 September 2022 which was dampened by impacts from increased
\ncommodity market prices affecting the continuing operations.
\nNet fair value amount of interest rate and currency derivatives was EUR 61 million, including assets EUR 235 million and liabilities EUR 175 million. Fortum has cash collateral agreements with some counterparties. At
\nthe end of December 2022 Fortum had received EUR 64 million from collateral agreements. The received cash has been booked as short-term liability.
\nThe increase in other investments in fair value hierarchy level 3 mainly relate to the 1.3 GW portfolio of wind projects in R
ussia. Uniper\u2019s fair valued l
ong-term gas supply contracts accounted for as derivatives, EUR
\n3,529 million, were transferred from level 2 to level 3 during the reporting period due to changed market situation affecting the inputs used to determine the credit value adjustment. Uniper deconsolidation decreased total
\nlevel 3 fair values by EUR 1,416 million. There were no other transfers out of level 3. Gains and losses of level 3 items in consolidated income statement are presented mainly in items affecting comparability. See
\n\ue001
Not
e
7
Comparable operating profit and comparable net profit.
\nChanges in fair value hierarchy Level 3
\nEUR million
1 Jan 2022
Purchases
Sales
Settlements
\nGains / losses in
\nincome
\nstatement
\nTransfers and
\nadditions into
\nlevel 3
\nGains / losses
\nin OCI
\nDisposal of
\nsubsidiary
\ncompanies
31 Dec 2022
\nOn balance sheet, net
\nOther investments
99
19
-17
-126
572
-2
-2
543
\nCommodity derivatives, fair values
765
135
-104
-1,903
3,529
-1
-2,360
61
\nCommodity derivatives, day-1 gains and losses
-575
2
24
-397
946
-
\nInterest bearing receivables
40
-4
3
39
\nTotal on balance sheet, net
329
21
118
-84
-2,423
4,101
-3
-1,416
643",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12389": {
"value": "ACCOUNTING POLICIES FINANCIAL ASSETS
\nFortum classifies its financial assets in the following categories according to IFRS 9: financial assets at
\namortised cost, financial assets at fair value through profit or loss and financial assets at fair value
\nthrough other comprehensive income. The classification is made at initial recognition and depends on
\nthe financial asset's contractual cash flow characteristics and the Group's business model for managing
\nthem.
\nIn order for the financial asset to be classified and measured at amortised cost or fair value through
\nother comprehensive income, it needs to give rise to cash flows that are solely payments of the principal
\nand interest on the principal amount outstanding (SPPI). This assessment is referred to as the SPPI test
\nand is performed at an instrument level. When the SPPI criteria is not met, financial assets are classified
\nto fair value through profit or loss category.
\nFinancial assets are presented as non-current assets unless they are held for trading, expected to be
\nrealised within 12 months at the closing date or they have a maturity of under 12 months at closing date.
\nThese are classified as current assets.
\nFINANCIAL ASSETS AT AMORTISED COST
\nFortum measures financial assets at amortised cost when the financial asset is included in the held-to-
\ncollect business model with fixed or determinable payments that are payments of amount outstanding or
\ninterest on it. They arise when the Group provides money, goods or services directly to a debtor.
\nFinancial assets at amortised cost include non-derivative financial assets with fixed or determinable
\npayments that are not quoted in an active market.
\nFinancial assets at amortised cost are subject to impairment using expected credit loss (ECL) model.
\nGains and losses from derecognition of the asset are recognised in profit and loss.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
\nFinancial assets at fair value through profit or loss include financial assets held for trading in the short
\nterm, financial assets designated upon initial recognition irrevocably as fair value through profit or loss
\nand financial assets mandatorily recognised at fair value through profit or loss according to IFRS 9.
\nDerivatives are classified as held for trading unless they are designated as effective hedging
\ninstruments.
\nGains and losses arising from changes in the fair value are included in the income statement in the
\nperiod in which they arise.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
\nOther equity investments designated at fair value through other comprehensive income are not subject
\nto impairment assessment and accumulated reserves are not recycled to profit or loss upon
\nderecognition. Dividends received are recognised in profit and loss.
\nDERECOGNITION
\nFortum derecognises financial assets when the rights to receive cash flows from the assets have expired
\nor when it has substantially transferred the risks and rewards of the assets outside of the Group.
\nIMPAIRMENT
\nFortum recognises an allowance for expected credit losses (ECL) according to IFRS 9 for financial
\nassets measured at amortised cost. See further information on ECL in
\ue001
Note 4.4.1
Credit quality of
\nmajor financial assets and in
\ue001
Note 23
Trade and other receivables.
\nFinancial assets measured at fair value through profit or loss are not included in ECL assessment as
\nthey are already measured at fair value. A financial asset is written-off when there is no reasonable
\nexpectation of recovering the contractual cash flows.
\nFINANCIAL LIABILITIES
\nAll financial liabilities are recognised initially at fair value. In the case of loans and borrowings and
\npayables, incurred transaction costs are deducted. In subsequent periods, all financial liabilities, except
\nderivatives and financial liabilities which the Group has at initial recognition irrevocably designated at fair
\nvalue through profit or loss, are stated at amortised cost; any difference between proceeds (net of
\ntransaction costs) and the redemption value is recognised as interest cost over the period of the
\nborrowing using the effective interest rate method.
\nDerivative financial instruments entered into by the Group, that are not designated as hedging
\ninstruments are classified as liabilities at fair value through profit and loss. Amortisation of the effective
\ninterest rate and gains and losses of liabilities are recognised in the income statement.
\nGroup\u2019s financial liabilities include trade and other payables, loans and borrowings and derivative
\nfinancial instruments. Borrowings or portion of borrowings being hedged with a fair value hedge are
\nrecognised at fair value through profit or loss. Derecognition of financial liabilities takes place when the
\nGroup has fulfilled the contractual obligations.
\nACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
\nWithin the ordinary course of business, the Group routinely enters into sale and purchase transactions
\nfor commodities. Contracts that were entered into and continue to be held for the purpose of receipt or
\ndelivery of the commodity in accordance with the Group's expected sale, purchase or usage
\nrequirements are not within the scope of IFRS 9 (\"own use exemption\"). Physical contracts to buy or sell
\na non-financial item, which are fair valued using the fair value option to off-set accounting mismatch, or
\nwhere own use exemption or hedge accounting cannot be applied are fair valued through the income
\nstatement.
\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and
\nare subsequently remeasured at their fair value. Gains and losses resulting from the initial fair value
\nmeasurement of a
derivative (\u201cday one\u201d gains and losses) are eliminated against the corresponding
\nderivative asset or liability, if the initial fair value is determined based on valuation model with input
\nparameters that are unobservable from active markets. For derivatives whose initial fair value is
\nevidenced by a quoted price in an active market for an identical contract or based on a valuation
\ntechnique that uses only data from observable markets, gains and losses from the initial measurement
\nare accounted for similarly to gains or losses on the subsequent measurement.
\nThe method of recognising the resulting gain or loss on the subsequent measurement depends on
\nwhether the derivative is designated as a hedging instrument eligible for hedge accounting, and if so, the
\nnature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of
\nhighly probable forecast transactions (cash flow hedges); (2) hedges of the fair value of recognised
\nassets or liabilities, or unrecognised firm commitments (fair value hedge); or (3) hedges of net
\ninvestments in foreign operations.
\nThe Group documents at the inception of the transaction the relationship between hedging
\ninstruments and hedged items, whether the hedged item is one or several risk components separately or
\nin aggregation, as well as its risk management objective and strategy for undertaking various hedge
\ntransactions. When applying hedge accounting the Group also documents its assessment, of whether
\nthe derivatives that are used in hedging transactions are meeting the hedge accounting effectiveness
\ncriteria: (1) there is an economic relationship between the hedged item and the hedging instrument, (2)
\nthe effect of credit risk does not dominate the value changes that result from that economic relationship;
\nand (3) the hedge ratio of the hedging relationship is the same as applied in the risk management. The
\nGroup also documents its assessment, both at hedge inception and on an ongoing basis, of whether the
\nderivatives that are used in hedging transactions are highly effective by assessing the prospective
\ncapacity of the derivatives in offsetting changes in fair values or cash flows of hedged items. Hedge
\naccounting is discontinued only when the hedging relationship ceases to meet the hedge effectiveness
\ncriteria.
74
\nCASH FLOW HEDGE
\nThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash
\nflow hedges are recognised in equity. Gain or loss relating to the ineffective portion is recognised
\nimmediately in the income statement. Amounts accumulated in equity are recycled in the income
\nstatement in the periods when the hedged item will affect profit and loss (e.g. when the forecasted sale
\nthat is hedged takes place). However, when the forecast transaction that is hedged results in the
\nrecognition of a non-financial asset (e.g. inventory) or a liability, the gains and losses previously deferred
\nin equity are transferred from equity and included in the initial measurement of the cost of the asset or
\nliability. When a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
\nexisting in equity is recognised in the income statement when the forecast transaction is ultimately also
\nrecognised in the income statement. When a forecasted transaction is no longer expected to occur, the
\ncumulative gain or loss that was reported in equity is immediately recognised in the income statement.
\nFortum hedges its exposure to commodity market risks and applies hedge accounting by risk
\ncomponents. Hedge accounting is applied to Nordic electricity price risk, where the Nordic area priced
\nphysical electricity delivery is commonly divided into three risk components: (1) system price risk, (2)
\nelectricity price area difference risk (EPAD) and (3) currency risk. For each of these separate risk
\ncomponents there are specific derivative contracts available, which each are being effective hedges for
\nthe associated risk components.
\nIn addition, hedge accounting is applied to certain derivative contracts hedging gas price risk. These
\nare physically settled fixed-price forward and futures contracts, for which the own-use exemption cannot
\nbe applied (failed own-use contracts), where the contract constitutes an effective hedge of cash flows of
\nthe gas volumes to be delivered (\u201call
-
in one\u201d hedge).
\nFAIR VALUE HEDGE
\nChanges in the fair value of derivatives that are designated and qualify as fair value hedges are
\nrecorded in the income statement, together with any changes in the fair value of the hedged asset or
\nliability that are attributable to the hedged risk.
\nIf the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount
\nof a hedged item for which the effective interest method is used is amortised to profit or loss for the
\nperiods until maturity of the hedged item.
\nNET INVESTMENT HEDGING IN FOREIGN OPERATIONS
\nHedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any
\ngain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in
\nequity; the gain or loss relating to the ineffective portion is recognised immediately in the income
\nstatement. Gains and losses accumulated in equity are included in the income statement when the
\nforeign operation is disposed of.
\nDERIVATIVES THAT DO NOT QUALIFY FOR HEDGE ACCOUNTING
\nCertain derivative instruments representing economic hedging relationship do not qualify for hedge
\naccounting. Unrealised fair value changes of non-hedge accounted commodity derivatives hedging
\nfuture cash flow and physical contracts that are accounted for as derivatives within the scope of IFRS 9
\nare recognised in items affecting comparability in the income statement. Gains and losses on interest
\nrate and currency derivative instruments are recognised in finance costs
\u2013
net with corresponding hedge
\nitems.
\nFinancial assets and liabilities in the tables below are split into categories in accordance with IFRS 9.
\nThe categories are further divided into classes which are the basis for valuing a respective asset or
\nliability. Further information can be found in the Notes mentioned in the table.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12392": {
"value": "FINANCIAL ASSETS Fortum classifies its financial assets in the following categories according to IFRS 9: financial assets at
\namortised cost, financial assets at fair value through profit or loss and financial assets at fair value
\nthrough other comprehensive income. The classification is made at initial recognition and depends on
\nthe financial asset's contractual cash flow characteristics and the Group's business model for managing
\nthem.
\nIn order for the financial asset to be classified and measured at amortised cost or fair value through
\nother comprehensive income, it needs to give rise to cash flows that are solely payments of the principal
\nand interest on the principal amount outstanding (SPPI). This assessment is referred to as the SPPI test
\nand is performed at an instrument level. When the SPPI criteria is not met, financial assets are classified
\nto fair value through profit or loss category.
\nFinancial assets are presented as non-current assets unless they are held for trading, expected to be
\nrealised within 12 months at the closing date or they have a maturity of under 12 months at closing date.
\nThese are classified as current assets.
\nFINANCIAL ASSETS AT AMORTISED COST
\nFortum measures financial assets at amortised cost when the financial asset is included in the held-to-
\ncollect business model with fixed or determinable payments that are payments of amount outstanding or
\ninterest on it. They arise when the Group provides money, goods or services directly to a debtor.
\nFinancial assets at amortised cost include non-derivative financial assets with fixed or determinable
\npayments that are not quoted in an active market.
\nFinancial assets at amortised cost are subject to impairment using expected credit loss (ECL) model.
\nGains and losses from derecognition of the asset are recognised in profit and loss.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
\nFinancial assets at fair value through profit or loss include financial assets held for trading in the short
\nterm, financial assets designated upon initial recognition irrevocably as fair value through profit or loss
\nand financial assets mandatorily recognised at fair value through profit or loss according to IFRS 9.
\nDerivatives are classified as held for trading unless they are designated as effective hedging
\ninstruments.
\nGains and losses arising from changes in the fair value are included in the income statement in the
\nperiod in which they arise.
\nFINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
\nOther equity investments designated at fair value through other comprehensive income are not subject
\nto impairment assessment and accumulated reserves are not recycled to profit or loss upon
\nderecognition. Dividends received are recognised in profit and loss.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12416": {
"value": "FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Financial assets at fair value through profit or loss include financial assets held for trading in the short
\nterm, financial assets designated upon initial recognition irrevocably as fair value through profit or loss
\nand financial assets mandatorily recognised at fair value through profit or loss according to IFRS 9.
\nDerivatives are classified as held for trading unless they are designated as effective hedging
\ninstruments.
\nGains and losses arising from changes in the fair value are included in the income statement in the
\nperiod in which they arise.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12432": {
"value": "DERECOGNITION Fortum derecognises financial assets when the rights to receive cash flows from the assets have expired
\nor when it has substantially transferred the risks and rewards of the assets outside of the Group.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12438": {
"value": "IMPAIRMENT Fortum recognises an allowance for expected credit losses (ECL) according to IFRS 9 for financial
\nassets measured at amortised cost. See further information on ECL in
\ue001
Note 4.4.1
Credit quality of
\nmajor financial assets and in
\ue001
Note 23
Trade and other receivables.
\nFinancial assets measured at fair value through profit or loss are not included in ECL assessment as
\nthey are already measured at fair value. A financial asset is written-off when there is no reasonable
\nexpectation of recovering the contractual cash flows.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12454": {
"value": "FINANCIAL LIABILITIES All financial liabilities are recognised initially at fair value. In the case of loans and borrowings and
\npayables, incurred transaction costs are deducted. In subsequent periods, all financial liabilities, except
\nderivatives and financial liabilities which the Group has at initial recognition irrevocably designated at fair
\nvalue through profit or loss, are stated at amortised cost; any difference between proceeds (net of
\ntransaction costs) and the redemption value is recognised as interest cost over the period of the
\nborrowing using the effective interest rate method.
\nDerivative financial instruments entered into by the Group, that are not designated as hedging
\ninstruments are classified as liabilities at fair value through profit and loss. Amortisation of the effective
\ninterest rate and gains and losses of liabilities are recognised in the income statement.
\nGroup\u2019s financial liabilities include trade and other payables, loans and borrowings and derivative
\nfinancial instruments. Borrowings or portion of borrowings being hedged with a fair value hedge are
\nrecognised at fair value through profit or loss. Derecognition of financial liabilities takes place when the
\nGroup has fulfilled the contractual obligations.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12471": {
"value": "ACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Within the ordinary course of business, the Group routinely enters into sale and purchase transactions
\nfor commodities. Contracts that were entered into and continue to be held for the purpose of receipt or
\ndelivery of the commodity in accordance with the Group's expected sale, purchase or usage
\nrequirements are not within the scope of IFRS 9 (\"own use exemption\"). Physical contracts to buy or sell
\na non-financial item, which are fair valued using the fair value option to off-set accounting mismatch, or
\nwhere own use exemption or hedge accounting cannot be applied are fair valued through the income
\nstatement.
\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and
\nare subsequently remeasured at their fair value. Gains and losses resulting from the initial fair value
\nmeasurement of a
derivative (\u201cday one\u201d gains and losses) are eliminated against the corresponding
\nderivative asset or liability, if the initial fair value is determined based on valuation model with input
\nparameters that are unobservable from active markets. For derivatives whose initial fair value is
\nevidenced by a quoted price in an active market for an identical contract or based on a valuation
\ntechnique that uses only data from observable markets, gains and losses from the initial measurement
\nare accounted for similarly to gains or losses on the subsequent measurement.
\nThe method of recognising the resulting gain or loss on the subsequent measurement depends on
\nwhether the derivative is designated as a hedging instrument eligible for hedge accounting, and if so, the
\nnature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of
\nhighly probable forecast transactions (cash flow hedges); (2) hedges of the fair value of recognised
\nassets or liabilities, or unrecognised firm commitments (fair value hedge); or (3) hedges of net
\ninvestments in foreign operations.
\nThe Group documents at the inception of the transaction the relationship between hedging
\ninstruments and hedged items, whether the hedged item is one or several risk components separately or
\nin aggregation, as well as its risk management objective and strategy for undertaking various hedge
\ntransactions. When applying hedge accounting the Group also documents its assessment, of whether
\nthe derivatives that are used in hedging transactions are meeting the hedge accounting effectiveness
\ncriteria: (1) there is an economic relationship between the hedged item and the hedging instrument, (2)
\nthe effect of credit risk does not dominate the value changes that result from that economic relationship;
\nand (3) the hedge ratio of the hedging relationship is the same as applied in the risk management. The
\nGroup also documents its assessment, both at hedge inception and on an ongoing basis, of whether the
\nderivatives that are used in hedging transactions are highly effective by assessing the prospective
\ncapacity of the derivatives in offsetting changes in fair values or cash flows of hedged items. Hedge
\naccounting is discontinued only when the hedging relationship ceases to meet the hedge effectiveness
\ncriteria.
74
\nCASH FLOW HEDGE
\nThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash
\nflow hedges are recognised in equity. Gain or loss relating to the ineffective portion is recognised
\nimmediately in the income statement. Amounts accumulated in equity are recycled in the income
\nstatement in the periods when the hedged item will affect profit and loss (e.g. when the forecasted sale
\nthat is hedged takes place). However, when the forecast transaction that is hedged results in the
\nrecognition of a non-financial asset (e.g. inventory) or a liability, the gains and losses previously deferred
\nin equity are transferred from equity and included in the initial measurement of the cost of the asset or
\nliability. When a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
\nexisting in equity is recognised in the income statement when the forecast transaction is ultimately also
\nrecognised in the income statement. When a forecasted transaction is no longer expected to occur, the
\ncumulative gain or loss that was reported in equity is immediately recognised in the income statement.
\nFortum hedges its exposure to commodity market risks and applies hedge accounting by risk
\ncomponents. Hedge accounting is applied to Nordic electricity price risk, where the Nordic area priced
\nphysical electricity delivery is commonly divided into three risk components: (1) system price risk, (2)
\nelectricity price area difference risk (EPAD) and (3) currency risk. For each of these separate risk
\ncomponents there are specific derivative contracts available, which each are being effective hedges for
\nthe associated risk components.
\nIn addition, hedge accounting is applied to certain derivative contracts hedging gas price risk. These
\nare physically settled fixed-price forward and futures contracts, for which the own-use exemption cannot
\nbe applied (failed own-use contracts), where the contract constitutes an effective hedge of cash flows of
\nthe gas volumes to be delivered (\u201call
-
in one\u201d hedge).
\nFAIR VALUE HEDGE
\nChanges in the fair value of derivatives that are designated and qualify as fair value hedges are
\nrecorded in the income statement, together with any changes in the fair value of the hedged asset or
\nliability that are attributable to the hedged risk.
\nIf the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount
\nof a hedged item for which the effective interest method is used is amortised to profit or loss for the
\nperiods until maturity of the hedged item.
\nNET INVESTMENT HEDGING IN FOREIGN OPERATIONS
\nHedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any
\ngain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in
\nequity; the gain or loss relating to the ineffective portion is recognised immediately in the income
\nstatement. Gains and losses accumulated in equity are included in the income statement when the
\nforeign operation is disposed of.
\nDERIVATIVES THAT DO NOT QUALIFY FOR HEDGE ACCOUNTING
\nCertain derivative instruments representing economic hedging relationship do not qualify for hedge
\naccounting. Unrealised fair value changes of non-hedge accounted commodity derivatives hedging
\nfuture cash flow and physical contracts that are accounted for as derivatives within the scope of IFRS 9
\nare recognised in items affecting comparability in the income statement. Gains and losses on interest
\nrate and currency derivative instruments are recognised in finance costs
\u2013
net with corresponding hedge
\nitems.
\nFinancial assets and liabilities in the tables below are split into categories in accordance with IFRS 9.
\nThe categories are further divided into classes which are the basis for valuing a respective asset or
\nliability. Further information can be found in the Notes mentioned in the table.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12472": {
"value": "ACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Within the ordinary course of business, the Group routinely enters into sale and purchase transactions
\nfor commodities. Contracts that were entered into and continue to be held for the purpose of receipt or
\ndelivery of the commodity in accordance with the Group's expected sale, purchase or usage
\nrequirements are not within the scope of IFRS 9 (\"own use exemption\"). Physical contracts to buy or sell
\na non-financial item, which are fair valued using the fair value option to off-set accounting mismatch, or
\nwhere own use exemption or hedge accounting cannot be applied are fair valued through the income
\nstatement.
\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and
\nare subsequently remeasured at their fair value. Gains and losses resulting from the initial fair value
\nmeasurement of a
derivative (\u201cday one\u201d gains and losses) are eliminated against the corresponding
\nderivative asset or liability, if the initial fair value is determined based on valuation model with input
\nparameters that are unobservable from active markets. For derivatives whose initial fair value is
\nevidenced by a quoted price in an active market for an identical contract or based on a valuation
\ntechnique that uses only data from observable markets, gains and losses from the initial measurement
\nare accounted for similarly to gains or losses on the subsequent measurement.
\nThe method of recognising the resulting gain or loss on the subsequent measurement depends on
\nwhether the derivative is designated as a hedging instrument eligible for hedge accounting, and if so, the
\nnature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of
\nhighly probable forecast transactions (cash flow hedges); (2) hedges of the fair value of recognised
\nassets or liabilities, or unrecognised firm commitments (fair value hedge); or (3) hedges of net
\ninvestments in foreign operations.
\nThe Group documents at the inception of the transaction the relationship between hedging
\ninstruments and hedged items, whether the hedged item is one or several risk components separately or
\nin aggregation, as well as its risk management objective and strategy for undertaking various hedge
\ntransactions. When applying hedge accounting the Group also documents its assessment, of whether
\nthe derivatives that are used in hedging transactions are meeting the hedge accounting effectiveness
\ncriteria: (1) there is an economic relationship between the hedged item and the hedging instrument, (2)
\nthe effect of credit risk does not dominate the value changes that result from that economic relationship;
\nand (3) the hedge ratio of the hedging relationship is the same as applied in the risk management. The
\nGroup also documents its assessment, both at hedge inception and on an ongoing basis, of whether the
\nderivatives that are used in hedging transactions are highly effective by assessing the prospective
\ncapacity of the derivatives in offsetting changes in fair values or cash flows of hedged items. Hedge
\naccounting is discontinued only when the hedging relationship ceases to meet the hedge effectiveness
\ncriteria.
74
\nCASH FLOW HEDGE
\nThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash
\nflow hedges are recognised in equity. Gain or loss relating to the ineffective portion is recognised
\nimmediately in the income statement. Amounts accumulated in equity are recycled in the income
\nstatement in the periods when the hedged item will affect profit and loss (e.g. when the forecasted sale
\nthat is hedged takes place). However, when the forecast transaction that is hedged results in the
\nrecognition of a non-financial asset (e.g. inventory) or a liability, the gains and losses previously deferred
\nin equity are transferred from equity and included in the initial measurement of the cost of the asset or
\nliability. When a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
\nexisting in equity is recognised in the income statement when the forecast transaction is ultimately also
\nrecognised in the income statement. When a forecasted transaction is no longer expected to occur, the
\ncumulative gain or loss that was reported in equity is immediately recognised in the income statement.
\nFortum hedges its exposure to commodity market risks and applies hedge accounting by risk
\ncomponents. Hedge accounting is applied to Nordic electricity price risk, where the Nordic area priced
\nphysical electricity delivery is commonly divided into three risk components: (1) system price risk, (2)
\nelectricity price area difference risk (EPAD) and (3) currency risk. For each of these separate risk
\ncomponents there are specific derivative contracts available, which each are being effective hedges for
\nthe associated risk components.
\nIn addition, hedge accounting is applied to certain derivative contracts hedging gas price risk. These
\nare physically settled fixed-price forward and futures contracts, for which the own-use exemption cannot
\nbe applied (failed own-use contracts), where the contract constitutes an effective hedge of cash flows of
\nthe gas volumes to be delivered (\u201call
-
in one\u201d hedge).
\nFAIR VALUE HEDGE
\nChanges in the fair value of derivatives that are designated and qualify as fair value hedges are
\nrecorded in the income statement, together with any changes in the fair value of the hedged asset or
\nliability that are attributable to the hedged risk.
\nIf the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount
\nof a hedged item for which the effective interest method is used is amortised to profit or loss for the
\nperiods until maturity of the hedged item.
\nNET INVESTMENT HEDGING IN FOREIGN OPERATIONS
\nHedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any
\ngain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in
\nequity; the gain or loss relating to the ineffective portion is recognised immediately in the income
\nstatement. Gains and losses accumulated in equity are included in the income statement when the
\nforeign operation is disposed of.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12473": {
"value": "ACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Within the ordinary course of business, the Group routinely enters into sale and purchase transactions
\nfor commodities. Contracts that were entered into and continue to be held for the purpose of receipt or
\ndelivery of the commodity in accordance with the Group's expected sale, purchase or usage
\nrequirements are not within the scope of IFRS 9 (\"own use exemption\"). Physical contracts to buy or sell
\na non-financial item, which are fair valued using the fair value option to off-set accounting mismatch, or
\nwhere own use exemption or hedge accounting cannot be applied are fair valued through the income
\nstatement.
\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and
\nare subsequently remeasured at their fair value. Gains and losses resulting from the initial fair value
\nmeasurement of a
derivative (\u201cday one\u201d gains and losses) are eliminated against the corresponding
\nderivative asset or liability, if the initial fair value is determined based on valuation model with input
\nparameters that are unobservable from active markets. For derivatives whose initial fair value is
\nevidenced by a quoted price in an active market for an identical contract or based on a valuation
\ntechnique that uses only data from observable markets, gains and losses from the initial measurement
\nare accounted for similarly to gains or losses on the subsequent measurement.
\nThe method of recognising the resulting gain or loss on the subsequent measurement depends on
\nwhether the derivative is designated as a hedging instrument eligible for hedge accounting, and if so, the
\nnature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of
\nhighly probable forecast transactions (cash flow hedges); (2) hedges of the fair value of recognised
\nassets or liabilities, or unrecognised firm commitments (fair value hedge); or (3) hedges of net
\ninvestments in foreign operations.
\nThe Group documents at the inception of the transaction the relationship between hedging
\ninstruments and hedged items, whether the hedged item is one or several risk components separately or
\nin aggregation, as well as its risk management objective and strategy for undertaking various hedge
\ntransactions. When applying hedge accounting the Group also documents its assessment, of whether
\nthe derivatives that are used in hedging transactions are meeting the hedge accounting effectiveness
\ncriteria: (1) there is an economic relationship between the hedged item and the hedging instrument, (2)
\nthe effect of credit risk does not dominate the value changes that result from that economic relationship;
\nand (3) the hedge ratio of the hedging relationship is the same as applied in the risk management. The
\nGroup also documents its assessment, both at hedge inception and on an ongoing basis, of whether the
\nderivatives that are used in hedging transactions are highly effective by assessing the prospective
\ncapacity of the derivatives in offsetting changes in fair values or cash flows of hedged items. Hedge
\naccounting is discontinued only when the hedging relationship ceases to meet the hedge effectiveness
\ncriteria.
74
\nCASH FLOW HEDGE
\nThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash
\nflow hedges are recognised in equity. Gain or loss relating to the ineffective portion is recognised
\nimmediately in the income statement. Amounts accumulated in equity are recycled in the income
\nstatement in the periods when the hedged item will affect profit and loss (e.g. when the forecasted sale
\nthat is hedged takes place). However, when the forecast transaction that is hedged results in the
\nrecognition of a non-financial asset (e.g. inventory) or a liability, the gains and losses previously deferred
\nin equity are transferred from equity and included in the initial measurement of the cost of the asset or
\nliability. When a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss
\nexisting in equity is recognised in the income statement when the forecast transaction is ultimately also
\nrecognised in the income statement. When a forecasted transaction is no longer expected to occur, the
\ncumulative gain or loss that was reported in equity is immediately recognised in the income statement.
\nFortum hedges its exposure to commodity market risks and applies hedge accounting by risk
\ncomponents. Hedge accounting is applied to Nordic electricity price risk, where the Nordic area priced
\nphysical electricity delivery is commonly divided into three risk components: (1) system price risk, (2)
\nelectricity price area difference risk (EPAD) and (3) currency risk. For each of these separate risk
\ncomponents there are specific derivative contracts available, which each are being effective hedges for
\nthe associated risk components.
\nIn addition, hedge accounting is applied to certain derivative contracts hedging gas price risk. These
\nare physically settled fixed-price forward and futures contracts, for which the own-use exemption cannot
\nbe applied (failed own-use contracts), where the contract constitutes an effective hedge of cash flows of
\nthe gas volumes to be delivered (\u201call
-
in one\u201d hedge).
\nFAIR VALUE HEDGE
\nChanges in the fair value of derivatives that are designated and qualify as fair value hedges are
\nrecorded in the income statement, together with any changes in the fair value of the hedged asset or
\nliability that are attributable to the hedged risk.
\nIf the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount
\nof a hedged item for which the effective interest method is used is amortised to profit or loss for the
\nperiods until maturity of the hedged item.
\nNET INVESTMENT HEDGING IN FOREIGN OPERATIONS
\nHedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any
\ngain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in
\nequity; the gain or loss relating to the ineffective portion is recognised immediately in the income
\nstatement. Gains and losses accumulated in equity are included in the income statement when the
\nforeign operation is disposed of.
\nDERIVATIVES THAT DO NOT QUALIFY FOR HEDGE ACCOUNTING
\nCertain derivative instruments representing economic hedging relationship do not qualify for hedge
\naccounting. Unrealised fair value changes of non-hedge accounted commodity derivatives hedging
\nfuture cash flow and physical contracts that are accounted for as derivatives within the scope of IFRS 9
\nare recognised in items affecting comparability in the income statement. Gains and losses on interest
\nrate and currency derivative instruments are recognised in finance costs
\u2013
net with corresponding hedge
\nitems.
\nFinancial assets and liabilities in the tables below are split into categories in accordance with IFRS 9.
\nThe categories are further divided into classes which are the basis for valuing a respective asset or
\nliability. Further information can be found in the Notes mentioned in the table.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13028": {
"value": "15 Financial assets and liabilities by fair value hierarchy ACCOUNTING POLICIES
\nFair value measurements are classified using a fair value hierarchy i.e. Level 1, Level 2 and Level 3 that
\nreflects the significance of the inputs used in making the measurements.
\nFAIR VALUES UNDER LEVEL 1 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 1 is based on unadjusted quoted
\nprices in active markets at the closing date. Level 1 consist e.g. commodity derivatives traded in active
\nmarkets.
\nFAIR VALUES UNDER LEVEL 2 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 2 is based on observable input
\nparameters, which are other than quoted prices.
\nThe fair value of financial instruments traded in active markets in Level 2 is calculated using prices
\nderived from quoted market prices at the closing date. Known calculation techniques, such as estimated
\ndiscounted cash flows, are used to determine fair value of interest rate and currency financial
\ninstruments. The fair value of interest-rate swaps is calculated as the present value of the estimated
\nfuture cash flows. The fair value of forward foreign exchange contracts is determined using forward
\nexchange market rates at the closing date. Fair values of options are determined by using option
\nvaluation models. The fair value of financial liabilities is estimated by discounting the future contractual
\ncash flows at the current market interest rate that is available to the Group for similar financial
\ninstruments. The counterparty credit risk has been taken into account when determining fair value. The
\ncredit risk is determined based on a portfolio valuation in a bilateral approach.
\nThe Group bases the calculation on existing market conditions at each closing date. Financial
\ninstruments used in Fortum are standardised products that are either cleared via exchanges or widely
\ntraded in the market. Credit risk from trading commodity derivatives is mitigated by clearing trades
\nthrough exchanges or by limiting trades to OTC counterparties considered to be creditworthy, or secured
\nby credit worthy guarantees. Financial derivatives are traded with credit worthy financial institutions with
\ninvestment grade ratings.
\nFAIR VALUES UNDER LEVEL 3 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 3 is based on unobservable input
\nparameters.
\nLevel 3 consist mainly investments in unlisted shares classified as other investments for which the fair
\nvalue can't be reliably measured and derivative financial instrument for which the fair value has been
\ndetermined using valuation techniques with unobservable inputs. The input parameters of Level 3 of the
\nfair value hierarchy for equity investments are specified taking into account economic developments and
\navailable industry and corporate data. The counterparty credit risk has been adjusted when determining
\nthe fair value.
78
\nFinancial assets
\nLevel 1
Level 2
Level 3
Netting
\n2)
\nTotal
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nIn non-current assets
\nOther investments
\n1)
\n20
-
71
-
46
543
99
543
216
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
54
62
-9
54
53
\nNon-hedge accounting
85
5,136
58
11,708
57
207
-30
-96
170
16,955
\nInterest rate and currency derivatives
4
\nHedge accounting
116
54
116
54
\nNon-hedge accounting
3
34
3
34
\nInterest-bearing receivables
-
111
31
36
31
147
\nTotal in non-current assets
85
5,318
231
11,904
631
342
-30
-105
917
17,459
\nIn current assets
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
781
50
542
572
-546
-207
777
416
\nNon-hedge accounting
1,129
22,876
252
45,575
9
326
-796
-4,028
594
64,750
\nInterest rate and currency derivatives
4
\nHedge accounting
23
57
23
57
\nNon-hedge accounting
92
170
92
170
\nOther receivables
-
13
-
13
\nInterest-bearing receivables
527
596
7
4
535
600
\nTotal in current assets
2,437
23,522
909
46,387
16
330
-1,342
-4,235
2,021
66,006
\nTotal
2,522
28,840
1,140
58,291
648
672
-1,372
-4,340
2,938
83,465
\n1) Other investments mainly include shares in unlisted companies.
\n2) Receivables and liabilities from standard electricity and other commodity derivative contracts against exchanges with same delivery period are netted in Fortum, except Uniper segment included in 31 Dec 2021 balances.
79
\nFinancial liabilities
\nLevel 1
Level 2
Level 3
Netting
\n2)
\nTotal
\nEUR million
Note
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nIn non-current liabilities
\nInterest-bearing liabilities
\n1)
\n27
580
1,669
580
1,669
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
390
257
-9
390
248
\nNon-hedge accounting
38
4,874
234
11,336
4
259
-30
-96
246
16,373
\nInterest rate and currency derivatives
4
\nHedge accounting
121
27
121
27
\nNon-hedge accounting
-
8
-
8
\nTotal in non-current liabilities
38
4,874
1,324
13,298
4
259
-30
-105
1,336
18,326
\nIn current liabilities
\nInterest-bearing liabilities
27
527
549
527
549
\nDerivative financial instruments
\nCommodity derivatives
4
\nHedge accounting
2,672
420
1,240
2,721
-546
-207
3,366
2,934
\nNon-hedge accounting
883
20,316
465
52,531
1
86
-796
-4,028
553
68,905
\nInterest rate and currency derivatives
4
\nHedge accounting
3
4
3
4
\nNon-hedge accounting
51
103
51
103
\nTotal in current liabilities
3,555
20,736
2,286
55,908
1
86
-1,342
-4,235
4,500
72,496
\nTotal
3,593
25,610
3,610
69,205
5
345
-1,372
-4,340
5,836
90,822
\n1) Fair valued part of bonds when hedge accounting is applied (fair value hedge).
\n2) Receivables and liabilities from standard electricity and other commodity derivative contracts against exchanges with same delivery period are netted in Fortum, except Uniper segment included in 31 Dec 2021 balances.
\nAt the end of December 2022, the net fair value of commodity derivatives was EUR -2,960 million, including assets of EUR 1,594 million and liabilities of EUR 4,554 million (EUR -6,225 million in December 2021,
\nincluding assets of EUR 82 billion and liabilities of EUR 88 billion). The change from December 2021 mainly relates to deconsolidation of Uniper at 30 September 2022 which was dampened by impacts from increased
\ncommodity market prices affecting the continuing operations.
\nNet fair value amount of interest rate and currency derivatives was EUR 61 million, including assets EUR 235 million and liabilities EUR 175 million. Fortum has cash collateral agreements with some counterparties. At
\nthe end of December 2022 Fortum had received EUR 64 million from collateral agreements. The received cash has been booked as short-term liability.
\nThe increase in other investments in fair value hierarchy level 3 mainly relate to the 1.3 GW portfolio of wind projects in R
ussia. Uniper\u2019s fair valued l
ong-term gas supply contracts accounted for as derivatives, EUR
\n3,529 million, were transferred from level 2 to level 3 during the reporting period due to changed market situation affecting the inputs used to determine the credit value adjustment. Uniper deconsolidation decreased total
\nlevel 3 fair values by EUR 1,416 million. There were no other transfers out of level 3. Gains and losses of level 3 items in consolidated income statement are presented mainly in items affecting comparability. See
\n\ue001
Not
e
7
Comparable operating profit and comparable net profit.
\nChanges in fair value hierarchy Level 3
\nEUR million
1 Jan 2022
Purchases
Sales
Settlements
\nGains / losses in
\nincome
\nstatement
\nTransfers and
\nadditions into
\nlevel 3
\nGains / losses
\nin OCI
\nDisposal of
\nsubsidiary
\ncompanies
31 Dec 2022
\nOn balance sheet, net
\nOther investments
99
19
-17
-126
572
-2
-2
543
\nCommodity derivatives, fair values
765
135
-104
-1,903
3,529
-1
-2,360
61
\nCommodity derivatives, day-1 gains and losses
-575
2
24
-397
946
-
\nInterest bearing receivables
40
-4
3
39
\nTotal on balance sheet, net
329
21
118
-84
-2,423
4,101
-3
-1,416
643",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13032": {
"value": "ACCOUNTING POLICIES Fair value measurements are classified using a fair value hierarchy i.e. Level 1, Level 2 and Level 3 that
\nreflects the significance of the inputs used in making the measurements.
\nFAIR VALUES UNDER LEVEL 1 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 1 is based on unadjusted quoted
\nprices in active markets at the closing date. Level 1 consist e.g. commodity derivatives traded in active
\nmarkets.
\nFAIR VALUES UNDER LEVEL 2 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 2 is based on observable input
\nparameters, which are other than quoted prices.
\nThe fair value of financial instruments traded in active markets in Level 2 is calculated using prices
\nderived from quoted market prices at the closing date. Known calculation techniques, such as estimated
\ndiscounted cash flows, are used to determine fair value of interest rate and currency financial
\ninstruments. The fair value of interest-rate swaps is calculated as the present value of the estimated
\nfuture cash flows. The fair value of forward foreign exchange contracts is determined using forward
\nexchange market rates at the closing date. Fair values of options are determined by using option
\nvaluation models. The fair value of financial liabilities is estimated by discounting the future contractual
\ncash flows at the current market interest rate that is available to the Group for similar financial
\ninstruments. The counterparty credit risk has been taken into account when determining fair value. The
\ncredit risk is determined based on a portfolio valuation in a bilateral approach.
\nThe Group bases the calculation on existing market conditions at each closing date. Financial
\ninstruments used in Fortum are standardised products that are either cleared via exchanges or widely
\ntraded in the market. Credit risk from trading commodity derivatives is mitigated by clearing trades
\nthrough exchanges or by limiting trades to OTC counterparties considered to be creditworthy, or secured
\nby credit worthy guarantees. Financial derivatives are traded with credit worthy financial institutions with
\ninvestment grade ratings.
\nFAIR VALUES UNDER LEVEL 3 MEASUREMENT HIERARCHY
\nThe fair value of financial assets and liabilities classified as Level 3 is based on unobservable input
\nparameters.
\nLevel 3 consist mainly investments in unlisted shares classified as other investments for which the fair
\nvalue can't be reliably measured and derivative financial instrument for which the fair value has been
\ndetermined using valuation techniques with unobservable inputs. The input parameters of Level 3 of the
\nfair value hierarchy for equity investments are specified taking into account economic developments and
\navailable industry and corporate data. The counterparty credit risk has been adjusted when determining
\nthe fair value.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13477": {
"value": "16 Intangible assets ACCOUNTING POLICIES
\nIntangible assets, except goodwill, are stated at historical cost less accumulated amortisation and
\nimpairment losses; and amortised on a straight-line basis over their expected useful lives.
\nThe assets\u2019 residual values and useful lives
are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
\nGOODWILL
\nGoodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of
\nnet identifiable assets of the acquired subsidiary, associate or joint venture at the date of acquisition.
\nGoodwill on acquisitions of subsidiaries is included in intangible assets and tested annually for
\nimpairment. Goodwill on acquisition of associates and joint ventures is included in investments in
\nassociates and joint ventures and is tested for impairment as part of the overall balance. Goodwill is
\ncarried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed.
\nGains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity
\nsold.
\nCONTRACT-BASED INTANGIBLE ASSETS
\nMajority of contract-based intangible assets are concession rights in Germany, which are valued at
\namortised costs. Contract-based intangible assets in 2021 related to Uniper.
\nRESEARCH AND DEVELOPMENT COSTS
\nResearch and development costs are recognised as expense as incurred and included in other
\nexpenses in the consolidated income statement. If development costs are expected to generate future
\nincome, they are capitalised as intangible assets and depreciated over the period of the income streams.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nASSIGNED VALUES AND USEFUL LIVES IN ACQUISITIONS
\nIn an acquisition acquired intangible and tangible assets are fair valued and their remaining useful lives
\nare determined. Management believes that the assigned values and useful lives, as well as the underlying
\nassumptions, are reasonable. Different assumptions and assigned lives could have a significant impact
\non the reported amounts.
\nThe Group has significant carrying values in property, plant and equipment, intangible assets and
\nparticipations in associated companies and joint ventures which are tested for impairment according to
\nthe accounting policy. See further information on the impairment testing in
\ue001
Note 19
Impairment testing.
\nGoodwill
Contract-based
Other
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
\nCost 1 January
1,021
1,069
1,334
1,328
1,586
1,514
3,941
3,911
\nTranslation differences and other
\nadjustments
10
22
-5
29
-96
27
-91
78
\nCapital expenditure
1
-
-
-
125
118
126
119
\nDisposals
-
-
-
-1
-71
-21
-71
-21
\nDisposal of subsidiary companies
\n1)
\n-615
-70
-1,329
-22
-664
-58
-2,608
-150
\nReclassifications
-
-
-
-
48
6
48
6
\nCost 31 December
417
1,021
-
1,334
929
1,586
1,346
3,941
\nAccumulated depreciation 1 January
-
-
820
794
955
850
1,775
1,643
\nTranslation differences and other
\nadjustments
-
-
-6
29
-85
16
-91
45
\nDisposals
-
-
-
-1
-71
-20
-71
-21
\nDisposal of subsidiary companies
\n1)
\n-
-
-830
-22
-447
-37
-1,277
-59
\nReclassifications
-
-
-
-
34
-
34
-
\nDepreciation for the year
-
-
14
20
130
144
144
164
\nImpairment charges
\n2)
\n167
-
1
-
6
2
174
2
\nAccumulated depreciation 31 December
167
-
-
820
521
955
689
1,775
\nBS
Carrying amount 31 December
250
1,021
-
514
408
632
657
2,167
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\n2) See
\ue001
Note 19
Impairment testing.
\nChanges during the year include Uniper until 30 September 2022.
\nGoodwill in groups of cash-generating units
\nGoodwill is allocated to operating segments corresponding to groups of cash-generating units that benefit
\nfrom the synergies of the acquired goodwill.
\nEUR million
2022
2021
\nConsumer Solutions
214
223
\nCity Solutions
36
137
\nUniper
-
515
\nRussia
-
144
\nTotal
250
1,021
\nOther intangible assets
\nOther intangible assets include customer contracts, and costs for software products and software
\nlicenses.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13478": {
"value": "16 Intangible assets ACCOUNTING POLICIES
\nIntangible assets, except goodwill, are stated at historical cost less accumulated amortisation and
\nimpairment losses; and amortised on a straight-line basis over their expected useful lives.
\nThe assets\u2019 residual values and useful lives
are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
\nGOODWILL
\nGoodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of
\nnet identifiable assets of the acquired subsidiary, associate or joint venture at the date of acquisition.
\nGoodwill on acquisitions of subsidiaries is included in intangible assets and tested annually for
\nimpairment. Goodwill on acquisition of associates and joint ventures is included in investments in
\nassociates and joint ventures and is tested for impairment as part of the overall balance. Goodwill is
\ncarried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed.
\nGains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity
\nsold.
\nCONTRACT-BASED INTANGIBLE ASSETS
\nMajority of contract-based intangible assets are concession rights in Germany, which are valued at
\namortised costs. Contract-based intangible assets in 2021 related to Uniper.
\nRESEARCH AND DEVELOPMENT COSTS
\nResearch and development costs are recognised as expense as incurred and included in other
\nexpenses in the consolidated income statement. If development costs are expected to generate future
\nincome, they are capitalised as intangible assets and depreciated over the period of the income streams.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nASSIGNED VALUES AND USEFUL LIVES IN ACQUISITIONS
\nIn an acquisition acquired intangible and tangible assets are fair valued and their remaining useful lives
\nare determined. Management believes that the assigned values and useful lives, as well as the underlying
\nassumptions, are reasonable. Different assumptions and assigned lives could have a significant impact
\non the reported amounts.
\nThe Group has significant carrying values in property, plant and equipment, intangible assets and
\nparticipations in associated companies and joint ventures which are tested for impairment according to
\nthe accounting policy. See further information on the impairment testing in
\ue001
Note 19
Impairment testing.
\nGoodwill
Contract-based
Other
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
\nCost 1 January
1,021
1,069
1,334
1,328
1,586
1,514
3,941
3,911
\nTranslation differences and other
\nadjustments
10
22
-5
29
-96
27
-91
78
\nCapital expenditure
1
-
-
-
125
118
126
119
\nDisposals
-
-
-
-1
-71
-21
-71
-21
\nDisposal of subsidiary companies
\n1)
\n-615
-70
-1,329
-22
-664
-58
-2,608
-150
\nReclassifications
-
-
-
-
48
6
48
6
\nCost 31 December
417
1,021
-
1,334
929
1,586
1,346
3,941
\nAccumulated depreciation 1 January
-
-
820
794
955
850
1,775
1,643
\nTranslation differences and other
\nadjustments
-
-
-6
29
-85
16
-91
45
\nDisposals
-
-
-
-1
-71
-20
-71
-21
\nDisposal of subsidiary companies
\n1)
\n-
-
-830
-22
-447
-37
-1,277
-59
\nReclassifications
-
-
-
-
34
-
34
-
\nDepreciation for the year
-
-
14
20
130
144
144
164
\nImpairment charges
\n2)
\n167
-
1
-
6
2
174
2
\nAccumulated depreciation 31 December
167
-
-
820
521
955
689
1,775
\nBS
Carrying amount 31 December
250
1,021
-
514
408
632
657
2,167
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\n2) See
\ue001
Note 19
Impairment testing.
\nChanges during the year include Uniper until 30 September 2022.
\nGoodwill in groups of cash-generating units
\nGoodwill is allocated to operating segments corresponding to groups of cash-generating units that benefit
\nfrom the synergies of the acquired goodwill.
\nEUR million
2022
2021
\nConsumer Solutions
214
223
\nCity Solutions
36
137
\nUniper
-
515
\nRussia
-
144
\nTotal
250
1,021
\nOther intangible assets
\nOther intangible assets include customer contracts, and costs for software products and software
\nlicenses.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13479": {
"value": "16 Intangible assets ACCOUNTING POLICIES
\nIntangible assets, except goodwill, are stated at historical cost less accumulated amortisation and
\nimpairment losses; and amortised on a straight-line basis over their expected useful lives.
\nThe assets\u2019 residual values and useful lives
are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
\nGOODWILL
\nGoodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of
\nnet identifiable assets of the acquired subsidiary, associate or joint venture at the date of acquisition.
\nGoodwill on acquisitions of subsidiaries is included in intangible assets and tested annually for
\nimpairment. Goodwill on acquisition of associates and joint ventures is included in investments in
\nassociates and joint ventures and is tested for impairment as part of the overall balance. Goodwill is
\ncarried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed.
\nGains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity
\nsold.
\nCONTRACT-BASED INTANGIBLE ASSETS
\nMajority of contract-based intangible assets are concession rights in Germany, which are valued at
\namortised costs. Contract-based intangible assets in 2021 related to Uniper.
\nRESEARCH AND DEVELOPMENT COSTS
\nResearch and development costs are recognised as expense as incurred and included in other
\nexpenses in the consolidated income statement. If development costs are expected to generate future
\nincome, they are capitalised as intangible assets and depreciated over the period of the income streams.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nASSIGNED VALUES AND USEFUL LIVES IN ACQUISITIONS
\nIn an acquisition acquired intangible and tangible assets are fair valued and their remaining useful lives
\nare determined. Management believes that the assigned values and useful lives, as well as the underlying
\nassumptions, are reasonable. Different assumptions and assigned lives could have a significant impact
\non the reported amounts.
\nThe Group has significant carrying values in property, plant and equipment, intangible assets and
\nparticipations in associated companies and joint ventures which are tested for impairment according to
\nthe accounting policy. See further information on the impairment testing in
\ue001
Note 19
Impairment testing.
\nGoodwill
Contract-based
Other
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
\nCost 1 January
1,021
1,069
1,334
1,328
1,586
1,514
3,941
3,911
\nTranslation differences and other
\nadjustments
10
22
-5
29
-96
27
-91
78
\nCapital expenditure
1
-
-
-
125
118
126
119
\nDisposals
-
-
-
-1
-71
-21
-71
-21
\nDisposal of subsidiary companies
\n1)
\n-615
-70
-1,329
-22
-664
-58
-2,608
-150
\nReclassifications
-
-
-
-
48
6
48
6
\nCost 31 December
417
1,021
-
1,334
929
1,586
1,346
3,941
\nAccumulated depreciation 1 January
-
-
820
794
955
850
1,775
1,643
\nTranslation differences and other
\nadjustments
-
-
-6
29
-85
16
-91
45
\nDisposals
-
-
-
-1
-71
-20
-71
-21
\nDisposal of subsidiary companies
\n1)
\n-
-
-830
-22
-447
-37
-1,277
-59
\nReclassifications
-
-
-
-
34
-
34
-
\nDepreciation for the year
-
-
14
20
130
144
144
164
\nImpairment charges
\n2)
\n167
-
1
-
6
2
174
2
\nAccumulated depreciation 31 December
167
-
-
820
521
955
689
1,775
\nBS
Carrying amount 31 December
250
1,021
-
514
408
632
657
2,167
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\n2) See
\ue001
Note 19
Impairment testing.
\nChanges during the year include Uniper until 30 September 2022.
\nGoodwill in groups of cash-generating units
\nGoodwill is allocated to operating segments corresponding to groups of cash-generating units that benefit
\nfrom the synergies of the acquired goodwill.
\nEUR million
2022
2021
\nConsumer Solutions
214
223
\nCity Solutions
36
137
\nUniper
-
515
\nRussia
-
144
\nTotal
250
1,021
\nOther intangible assets
\nOther intangible assets include customer contracts, and costs for software products and software
\nlicenses.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoodwillExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13484": {
"value": "ACCOUNTING POLICIES
\nIntangible assets, except goodwill, are stated at historical cost less accumulated amortisation and
\nimpairment losses; and amortised on a straight-line basis over their expected useful lives.
\nThe assets\u2019 residual values and useful lives
are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
CONTRACT-BASED INTANGIBLE ASSETS
\nMajority of contract-based intangible assets are concession rights in Germany, which are valued at
\namortised costs. Contract-based intangible assets in 2021 related to Uniper.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13486": {
"value": "ACCOUNTING POLICIES Intangible assets, except goodwill, are stated at historical cost less accumulated amortisation and
\nimpairment losses; and amortised on a straight-line basis over their expected useful lives.
\nThe assets\u2019 residual values and useful lives
are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
GOODWILL
\nGoodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of
\nnet identifiable assets of the acquired subsidiary, associate or joint venture at the date of acquisition.
\nGoodwill on acquisitions of subsidiaries is included in intangible assets and tested annually for
\nimpairment. Goodwill on acquisition of associates and joint ventures is included in investments in
\nassociates and joint ventures and is tested for impairment as part of the overall balance. Goodwill is
\ncarried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed.
\nGains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity
\nsold.
\nCONTRACT-BASED INTANGIBLE ASSETS
\nMajority of contract-based intangible assets are concession rights in Germany, which are valued at
\namortised costs. Contract-based intangible assets in 2021 related to Uniper.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13499": {
"value": "GOODWILL Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of
\nnet identifiable assets of the acquired subsidiary, associate or joint venture at the date of acquisition.
\nGoodwill on acquisitions of subsidiaries is included in intangible assets and tested annually for
\nimpairment. Goodwill on acquisition of associates and joint ventures is included in investments in
\nassociates and joint ventures and is tested for impairment as part of the overall balance. Goodwill is
\ncarried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed.
\nGains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity
\nsold.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13517": {
"value": "RESEARCH AND DEVELOPMENT COSTS Research and development costs are recognised as expense as incurred and included in other
\nexpenses in the consolidated income statement. If development costs are expected to generate future
\nincome, they are capitalised as intangible assets and depreciated over the period of the income streams.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13536": {
"value": "Goodwill
Contract-based
Other
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
\nCost 1 January
1,021
1,069
1,334
1,328
1,586
1,514
3,941
3,911
\nTranslation differences and other
\nadjustments
10
22
-5
29
-96
27
-91
78
\nCapital expenditure
1
-
-
-
125
118
126
119
\nDisposals
-
-
-
-1
-71
-21
-71
-21
\nDisposal of subsidiary companies
\n1)
\n-615
-70
-1,329
-22
-664
-58
-2,608
-150
\nReclassifications
-
-
-
-
48
6
48
6
\nCost 31 December
417
1,021
-
1,334
929
1,586
1,346
3,941
\nAccumulated depreciation 1 January
-
-
820
794
955
850
1,775
1,643
\nTranslation differences and other
\nadjustments
-
-
-6
29
-85
16
-91
45
\nDisposals
-
-
-
-1
-71
-20
-71
-21
\nDisposal of subsidiary companies
\n1)
\n-
-
-830
-22
-447
-37
-1,277
-59
\nReclassifications
-
-
-
-
34
-
34
-
\nDepreciation for the year
-
-
14
20
130
144
144
164
\nImpairment charges
\n2)
\n167
-
1
-
6
2
174
2
\nAccumulated depreciation 31 December
167
-
-
820
521
955
689
1,775
\nBS
Carrying amount 31 December
250
1,021
-
514
408
632
657
2,167
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\n2) See
\ue001
Note 19
Impairment testing.
Land and waterfall rights
Buildings and structures
Machinery, equipment and other
\nAdvances paid and
\nconstruction in progress
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nCost 1 January
4,371
4,436
10,574
10,400
32,996
32,285
1,172
1,602
49,113
48,723
\nTranslation differences and other adjustments
-275
-75
422
145
588
444
-166
41
569
554
\nAcquisition of subsidiary companies
8
-
8
-
-
-
6
-
21
-
\nCapital expenditure
\n1)
\n4
6
13
56
49
232
758
754
824
1,046
\nAdditions to right-of-use assets
6
34
29
41
12
97
-
-
47
173
\nDecreases in right-of-use assets
-
-
-18
-11
-12
-21
-
-
-30
-32
\nNuclear asset retirement cost
-
-
-
-
-9
56
-
-
-9
56
\nDisposals
-4
-14
-35
-33
-149
-337
-3
-8
-190
-392
\nDisposal of subsidiary companies
\n2)
\n-1,680
-17
-7,645
-257
-26,086
-602
-1,033
-100
-36,444
-975
\nReclassifications
-
2
58
233
135
841
-222
-1,116
-28
-41
\nCost 31 December
2,429
4,371
3,406
10,574
7,525
32,996
513
1,172
13,872
49,113
\nAccumulated depreciation 1 January
279
280
6,164
5,936
23,460
22,983
162
157
30,064
29,357
\nTranslation differences and other adjustments
-7
4
199
143
63
180
-4
-2
252
325
\nAcquisition of subsidiary companies
-
-
1
-
-
-
-
-
1
-
\nDisposals
-
-10
-33
-32
-100
-331
-1
-1
-134
-373
\nDisposal of subsidiary companies
\n2)
\n-275
-1
-5,089
-78
-20,589
-269
-164
-
-26,116
-348
\nDecreases in right-of-use assets
-
-
-5
-1
-10
-12
-
-
-15
-13
\nDepreciation for the year
11
5
316
180
666
932
-
1
994
1,117
\nImpairment charges
\n3)
\n1
-
518
19
1,050
15
5
-
1,574
34
\nReclassifications
-3
-
-83
-3
72
-40
-
8
-14
-35
\nAccumulated depreciation 31 December
5
279
1,989
6,164
4,612
23,460
-
162
6,606
30,064
\nBS
Carrying amount 31 December
2,424
4,093
1,417
4,410
2,913
9,536
513
1,010
7,266
19,049
\n1) Includes EUR 51 million (2021: 50) of other asset retirement costs.
\n2) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\n3) See
\ue001
Note 19
Impairment testing.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13747": {
"value": "17 Property, plant and equipment and right-of-use assets ACCOUNTING POLICIES
\nProperty, plant and equipment mainly include power and heat production-related buildings, structures
\nand machinery, waterfall rights, and other buildings and machinery.
\nProperty, plant and equipment are stated at historical cost less accumulated depreciation and
\nimpairment losses on the consolidated balance sheet. Historical cost includes expenditure that is directly
\nattributable to the acquisition of an item. Borrowing costs are included in the cost of qualified assets.
\nAdditionally, the cost of an item of property, plant and equipment includes the estimated cost of its
\ndismantlement, removal or restoration when there is a contractual obligation towards a third party, or a
\nlegal obligation.
\nAcquired assets on the acquisition of a new subsidiary are stated at their fair values at the date of
\nacquisition.
\nSee
\ue001
Note 30
Other provisions for information about asset retirement obligations,
\ue001
Note 29
Nuclear-
\nrelated assets and liabilities, for information about provisions for decommissioning nuclear power plants
\nand
\ue001
Note 34
Leases, for information about right-of-use assets.
\nLand, water areas and waterfall rights are not depreciated since they have indefinite useful lives.
\nDepreciation on other assets is calculated using the straight-line method to allocate their cost to their
\nresidual values over their estimated useful lives, as follows:
\n\u2022
Buildings and structures: 10-50 years
\n\u2022
Machinery and equipment: 3-65 years
\nSubsequent costs are included in the asset\u2019s carrying amount or recognised as a separate asset, as
\nappropriate, only when it is probable that future economic benefits associated with the item will flow to
\nthe Group and the cost of the item can be measured reliably. All other repairs and maintenance
\nexpenses are charged to the income statement during the financial period in which they are incurred.
\nThe assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
\nEconomic lives and book values of property, plant and equipment reflect approved actions towards
\nFortum\u2019s climate
-related targets.
\nBORROWING COSTS
\nBorrowing costs directly attributable to the construction of qualifying assets are added to the cost of
\nthose assets. Qualifying assets are assets that take a substantial time to get ready for their intended use
\nor sale.
82
\nLand and waterfall rights
Buildings and structures
Machinery, equipment and other
\nAdvances paid and
\nconstruction in progress
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nCost 1 January
4,371
4,436
10,574
10,400
32,996
32,285
1,172
1,602
49,113
48,723
\nTranslation differences and other adjustments
-275
-75
422
145
588
444
-166
41
569
554
\nAcquisition of subsidiary companies
8
-
8
-
-
-
6
-
21
-
\nCapital expenditure
\n1)
\n4
6
13
56
49
232
758
754
824
1,046
\nAdditions to right-of-use assets
6
34
29
41
12
97
-
-
47
173
\nDecreases in right-of-use assets
-
-
-18
-11
-12
-21
-
-
-30
-32
\nNuclear asset retirement cost
-
-
-
-
-9
56
-
-
-9
56
\nDisposals
-4
-14
-35
-33
-149
-337
-3
-8
-190
-392
\nDisposal of subsidiary companies
\n2)
\n-1,680
-17
-7,645
-257
-26,086
-602
-1,033
-100
-36,444
-975
\nReclassifications
-
2
58
233
135
841
-222
-1,116
-28
-41
\nCost 31 December
2,429
4,371
3,406
10,574
7,525
32,996
513
1,172
13,872
49,113
\nAccumulated depreciation 1 January
279
280
6,164
5,936
23,460
22,983
162
157
30,064
29,357
\nTranslation differences and other adjustments
-7
4
199
143
63
180
-4
-2
252
325
\nAcquisition of subsidiary companies
-
-
1
-
-
-
-
-
1
-
\nDisposals
-
-10
-33
-32
-100
-331
-1
-1
-134
-373
\nDisposal of subsidiary companies
\n2)
\n-275
-1
-5,089
-78
-20,589
-269
-164
-
-26,116
-348
\nDecreases in right-of-use assets
-
-
-5
-1
-10
-12
-
-
-15
-13
\nDepreciation for the year
11
5
316
180
666
932
-
1
994
1,117
\nImpairment charges
\n3)
\n1
-
518
19
1,050
15
5
-
1,574
34
\nReclassifications
-3
-
-83
-3
72
-40
-
8
-14
-35
\nAccumulated depreciation 31 December
5
279
1,989
6,164
4,612
23,460
-
162
6,606
30,064
\nBS
Carrying amount 31 December
2,424
4,093
1,417
4,410
2,913
9,536
513
1,010
7,266
19,049
\n1) Includes EUR 51 million (2021: 50) of other asset retirement costs.
\n2) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\n3) See
\ue001
Note 19
Impairment testing.
\nChanges during the year include Uniper until 30 September 2022.
\nProperty, plant and equipment that are subject to restrictions in the form of real estate mortgages amount to EUR 167 million (2021: 81). See
\ue001
Note 36
Pledged assets and contingent liabilities.
\nBorrowing costs of EUR 5 million relating to continuing operations were capitalised in 2022 (2021: 3). The interest rate used for capitalising borrowing costs varied from 2% to 10% (2021: 2%-7%). For constructions
\nfinanced by the Group, a uniform rate may be used based on interest rates of financial liabilities, including leases.
\nProperty, plant and equipment includes right-of-use assets from leases in which Fortum acts as the lessee. See
\ue001
Note 34
Leases.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13751": {
"value": "ACCOUNTING POLICIES Property, plant and equipment mainly include power and heat production-related buildings, structures
\nand machinery, waterfall rights, and other buildings and machinery.
\nProperty, plant and equipment are stated at historical cost less accumulated depreciation and
\nimpairment losses on the consolidated balance sheet. Historical cost includes expenditure that is directly
\nattributable to the acquisition of an item. Borrowing costs are included in the cost of qualified assets.
\nAdditionally, the cost of an item of property, plant and equipment includes the estimated cost of its
\ndismantlement, removal or restoration when there is a contractual obligation towards a third party, or a
\nlegal obligation.
\nAcquired assets on the acquisition of a new subsidiary are stated at their fair values at the date of
\nacquisition.
\nSee
\ue001
Note 30
Other provisions for information about asset retirement obligations,
\ue001
Note 29
Nuclear-
\nrelated assets and liabilities, for information about provisions for decommissioning nuclear power plants
\nand
\ue001
Note 34
Leases, for information about right-of-use assets.
\nLand, water areas and waterfall rights are not depreciated since they have indefinite useful lives.
\nDepreciation on other assets is calculated using the straight-line method to allocate their cost to their
\nresidual values over their estimated useful lives, as follows:
\n\u2022
Buildings and structures: 10-50 years
\n\u2022
Machinery and equipment: 3-65 years
\nSubsequent costs are included in the asset\u2019s carrying amount or recognised as a separate asset, as
\nappropriate, only when it is probable that future economic benefits associated with the item will flow to
\nthe Group and the cost of the item can be measured reliably. All other repairs and maintenance
\nexpenses are charged to the income statement during the financial period in which they are incurred.
\nThe assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
\nEconomic lives and book values of property, plant and equipment reflect approved actions towards
\nFortum\u2019s climate
-related targets.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13752": {
"value": "ACCOUNTING POLICIES Property, plant and equipment mainly include power and heat production-related buildings, structures
\nand machinery, waterfall rights, and other buildings and machinery.
\nProperty, plant and equipment are stated at historical cost less accumulated depreciation and
\nimpairment losses on the consolidated balance sheet. Historical cost includes expenditure that is directly
\nattributable to the acquisition of an item. Borrowing costs are included in the cost of qualified assets.
\nAdditionally, the cost of an item of property, plant and equipment includes the estimated cost of its
\ndismantlement, removal or restoration when there is a contractual obligation towards a third party, or a
\nlegal obligation.
\nAcquired assets on the acquisition of a new subsidiary are stated at their fair values at the date of
\nacquisition.
\nSee
\ue001
Note 30
Other provisions for information about asset retirement obligations,
\ue001
Note 29
Nuclear-
\nrelated assets and liabilities, for information about provisions for decommissioning nuclear power plants
\nand
\ue001
Note 34
Leases, for information about right-of-use assets.
\nLand, water areas and waterfall rights are not depreciated since they have indefinite useful lives.
\nDepreciation on other assets is calculated using the straight-line method to allocate their cost to their
\nresidual values over their estimated useful lives, as follows:
\n\u2022
Buildings and structures: 10-50 years
\n\u2022
Machinery and equipment: 3-65 years
\nSubsequent costs are included in the asset\u2019s carrying amount or recognised as a separate asset, as
\nappropriate, only when it is probable that future economic benefits associated with the item will flow to
\nthe Group and the cost of the item can be measured reliably. All other repairs and maintenance
\nexpenses are charged to the income statement during the financial period in which they are incurred.
\nThe assets\u2019 residual values and useful lives are reviewed, and adjusted if appropriate, at each closing
\ndate. An asset\u2019s carrying amount is written down to its recoverable amount if the asset\u2019s carrying amount
\nis greater than its estimated recoverable amount. See further information on the impairment testing in
\n\ue001
Note 19
Impairment testing.
\nEconomic lives and book values of property, plant and equipment reflect approved actions towards
\nFortum\u2019s climate
-related targets.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13787": {
"value": "All other repairs and maintenance expenses are charged to the income statement during the financial period in which they are incurred.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRepairsAndMaintenanceExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13802": {
"value": "BORROWING COSTS Borrowing costs directly attributable to the construction of qualifying assets are added to the cost of
\nthose assets. Qualifying assets are assets that take a substantial time to get ready for their intended use
\nor sale.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14116": {
"value": "18 Participations in associated companies and joint
\nventures
\nACCOUNTING POLICIES
\nThe Group\u2019s i
nterests in associated companies and jointly controlled entities are accounted for using the
\nequity method of accounting. Assets acquired and liabilities assumed in the investment in associates or
\njoint ventures are measured initially at their fair values at the acquisition date. The excess of the cost of
\nacquisition over the fair value of the Group\u2019s share of the identifiable net assets acquired is recorded as
\ngoodwill.
\nThe Group\u2019s share of its associates or joint ventures post
-acquisition profits or losses after tax, and
\nthe expenses related to the adjustments to the fair values of the assets and liabilities assumed are
\nrecognised in the income statement. The cumulative post-acquisition movements are adjusted against
\nthe carrying amount of the investment.
The Group\u2019s share of post
-acquisition adjustments to associates
\nor joint ventures equity that has not been recognised in the associate\u2019s or joint venture\u2019s income
\nstatement, is recognised directly in Group\u2019s shareholder\u2019s equity, and against the carrying a
mount of the
\ninvestment.
\nWhen the Group\u2019s share of losses in an associate or a joint venture equals or exceeds its interest in
\nthe associate or joint venture, including any other unsecured receivables, the Group does not recognise
\nfurther losses, unless it has incurred obligations or made payments on behalf of the associate or joint
\nventure.
\nMaterial unrealised gains on transactions between the Group and its associates or joint ventures are
\neliminated to the extent of the Group\u2019s interest in the associate o
r joint venture. Material unrealised
\nlosses are also eliminated, unless the transaction provides evidence of an impairment of the asset
\ntransferred. Accounting policies of associates or joint ventures have been changed where necessary to
\nensure consistency with the policies adopted by the Group.
\nIf more recent information is not available, the share of the profit of certain associated or joint venture
\ncompanies is included in the consolidated accounts based on the latest available information.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
\nManagement is required to make significant judgements when assessing the nature of Fortum\u2019s interest
\nin its investees and when considering the classification of Fortum\u2019s joint arrangements. In the
\nclassification, emphasis has been put on decision making, legal structure, financing and risks of the
\narrangements.
\nManagement judgement is required when testing the carrying amounts for participations in associated
\ncompanies and joint ventures for impairment. See
\ue001
Note 19
Impairment testing for more information.
\n18.1 Principal associated companies and joint ventures
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
OKG AB
TVO Oyj
\nNature of the relationship
Co-owned
\nnuclear company
\nCo-owned
\nhydro company
\nCo-owned
\nnuclear company
\nCo-owned
\nnuclear company
\nClassification
Associated
\ncompany
\nAssociated
\ncompany
\nAssociated
\ncompany
\nJoint venture
\nSegment
Generation
Generation
Generation
Generation
\nDomicile
Sweden
Finland
Sweden
Finland
\nOwnership interest, %
\n1)
\n26
58
46
26
\nVotes, %
26
28
46
26
\n1) Kemijoki and TVO have different series of shares. The ownership interest varies due to the changes in equity assigned to the different
\nshare series. In 2022 there were no changes in the ownership interests in Kemijoki and TVO.
\nShareholdings in power production companies
\nPower plants are often built jointly with other power producers. Under the consortium agreements, each owner is
\nentitled to electricity in proportion to its share of ownership, or other agreements, and each owner is liable for an
\nequivalent portion of costs. The production companies are not profit making, since the owners purchase
\nelectricity at production cost, including interest cost and production taxes. The share of profit of these companies
\nis mainly IFRS adjustments (e.g. accounting for nuclear-related assets and liabilities) and depreciations on fair
\nvalue adjustments from historical acquisitions since the companies are not profit making under local accounting
\nprinciples.
\nFortum has material shareholdings in such power production companies (mainly nuclear and hydro) that are
\nconsolidated using equity method either as associated companies (Forsmarks Kraftgrupp AB, Kemijoki Oy and
\nOKG) or as joint venture (Teollisuuden Voima Oyj (TVO)).
\nIn Sweden, nuclear production company shareholdings are 25.5% ownership of the shares in Forsmarks
\nKraftgrupp AB and 45.5% ownership of the shares in OKG AB. Excluding non-controlling interests in the
\nsubsidiaries, Fortum\u2019s participation
in the companies are 22.2% and 43.4% respectively, which reflects the share
\nof electricity produced that Fortum can sell further to the market. The minority part of the electricity purchased is
\ninvoiced further to each minority owner according to their respective shareholding and treated as pass-through.
\nIn Finland, Fortum has an ownership in power production company TVO that has two series of shares which
\nentitle the shareholders to electricity produced in the different power plants owned by TVO. Shares in series A
\nentitle to electricity produced in nuclear power plants Olkiluoto 1 and 2 and Fortum owns 26.6% of these shares.
\nSeries B entitles to electricity in the nuclear power plant currently under test production phase, Olkiluoto 3, and
\nFortum\u2019s ownersh
ip in this share series is 25.0%.
\nSee also Associated companies in
\ue001
Note 29
Nuclear-related assets and liabilities.
\nThe most significant hydro production company shareholding is 63.8% of the hydro shares and 26.7% of the
\nmonetary shares in Kemijoki Oy. Each owner of hydro shares is entitled to the hydropower production in
\nproportion to its hydro shareholding.
\nChanges in shareholdings in principal associated companies and joint ventures
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG Aktiebolag (OKG AB), with Fortum
\nowning 45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March 2020 to 30
\nSeptember 2022. On deconsolidation of Uniper at 30 September 2022, OKG AB was reclassified as an
\nassociated company.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path. Therefore, TGC-1 is no longer classified as a principal associated company
\nat 31 December 2022.
\nOn 20 September 2021, Fortum concluded the sale of its 50% ownership in the Swedish district heating
\nand cooling company Stockholm Exergi Holding AB (publ). See also
\ue001
Note 3.2.2
Other disposals.
Summarised financial information of the principal associated companies in 2022
\nEUR million
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
OKG AB
\nBalance sheet
31 Dec 2021
31 Dec 2021
31 Dec 2021
\nNon-current assets
2,393
489
825
\nCurrent assets
525
5
184
\nNon-current liabilities
2,783
289
920
\nCurrent liabilities
105
154
76
\nEquity
31
52
13
\nAttributable to the owners of the parent
31
52
13
\nAttributable to non-controlling interests
-
-
-
\nStatement of comprehensive income
\n1 Jan 2021 -
\n31 Dec 2021
\n1 Jan 2021 -
\n31 Dec 2021
\n1 Jan 2021 -
\n31 Dec 2021
\nSales
594
50
312
\nProfit or loss
-
1
2
\nAttributable to the owners of the parent
-
1
2
\nAttributable to non-controlling interests
-
-
-
\nTotal comprehensive income
-
1
2
\nAttributable to the owners of the parent
-
1
2
\nAttributable to non-controlling interests
-
-
-
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the associate 1 January
12
30
-
\nReclassification
-4
6
\nChange in share of profit and OCI items
-1
-
\nGroup's interest in the equity of the associate
\n31 December
8
30
6
\nFair values on acquisitions and different accounting
\nprinciples
\n1)
\n77
148
-6
\nCarrying amount 31 December
85
178
-
\n1) Impact of different accounting principles include mainly IFRS adjustments for nuclear-related assets and liabilities, capitalised borrowing
\ncosts and fair value adjustment for the acquired assets and liabilities. Fortum records its share of nuclear-related assets and liabilities in its
\nnuclear associated companies according to equity method. The basis for recognition is similar as for Loviisa power plant, see accounting
\nprinciples in
\ue001
Note 29
Nuclear-related assets and liabilities.
\n2) The market quotation was impacted by the limited free float of TGC-1 shares in 2021.
\nSummarised financial information of the principal associated companies in 2021
\nEUR million
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
TGC-1
\nBalance sheet
31 Dec 2020
31 Dec 2020
30 Sept 2021
\nNon-current assets
2,619
483
1,863
\nCurrent assets
441
7
273
\nNon-current liabilities
2,899
323
213
\nCurrent liabilities
128
116
223
\nEquity
33
52
1,700
\nAttributable to the owners of the parent
33
52
1,548
\nAttributable to non-controlling interests
-
-
153
\nStatement of comprehensive income
\n1 Jan 2020 -
\n31 Dec 2020
\n1 Jan 2020 -
\n31 Dec 2020
\n1 Oct 2020 -
\n30 Sept 2021
\nSales
561
53
1,136
\nProfit or loss
-1
1
104
\nAttributable to the owners of the parent
-1
1
103
\nAttributable to non-controlling interests
-
-
2
\nTotal comprehensive income
-1
1
105
\nAttributable to the owners of the parent
-1
1
103
\nAttributable to non-controlling interests
-
-
2
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the associate 1 January
12
30
409
\nChange in share of profit and OCI items
-
-
31
\nDividends received
-
-
-14
\nTranslation differences and other adjustments
-
-
39
\nGroup's interest in the equity of the associate
\n31 December
12
30
464
\nFair values on acquisitions and different accounting
\nprinciples
\n1)
\n479
149
-8
\nCarrying amount 31 December
491
179
456
\nMarket value of listed shares
\n2)
\n135
Summarised financial information of the principal joint ventures
\n2022
2021
\nEUR million
TVO Oyj
TVO Oyj
\nBalance sheet
31 Dec 2022
31 Dec 2021
\nNon-current assets
8,308
7,946
\nCurrent assets
863
716
\nof which cash and cash equivalents
353
172
\nNon-current liabilities
6,517
5,967
\nof which non-current interest-bearing liabilities
5,223
4,599
\nCurrent liabilities
437
632
\nof which current financial liabilities
259
449
\nEquity
2,218
2,063
\nAttributable to the shareholders of the company
2,218
2,063
\nAttributable to non-controlling interests
-
-
\nStatement of comprehensive income
\n1 Jan 2022 -
\n31 Dec 2022
\n1 Jan 2021 -
\n31 Dec 2021
\nSales
358
299
\nDepreciation and amortisation
-47
-44
\nInterest income
6
5
\nInterest expense
-81
-42
\nIncome tax expense or income
0
-
\nProfit or loss
-48
-20
\nOther comprehensive income
212
44
\nTotal comprehensive income
164
25
\nAttributable to the shareholders of the company
164
25
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the joint venture at 1 January
523
518
\nChange in share of profit and OCI items
41
5
\nGroup's interest in the equity of the joint venture 31 December
564
523
\nFair values on acquisitions and different accounting principles
\n1)
\n-9
3
\nCarrying amount 31 December
556
526
\n1) Impact of different accounting principles include mainly IFRS adjustments for nuclear-related assets and liabilities and capitalised
\nborrowing costs. Fortum records its share of nuclear-related assets and liabilities in its nuclear associated companies according to equity
\nmethod. The basis for recognition is similar as for Loviisa power plant, see accounting principles in
\ue001
Note 29
Nuclear-related assets and
\nliabilities.
\n18.2 Participations in and share of profits from associated companies
\nand joint ventures
\nParticipations in associated companies and joint ventures on the balance sheet
\nEUR million
2022
2021
\nPrincipal associates
262
1,126
\nPrincipal joint ventures
556
526
\nOther associates
158
309
\nOther joint ventures
273
500
\nBS
Total
1,249
2,461
\nChanges in participation during the year
\n2022
2021
\nEUR million
\nAssociated
\ncompanies
\nJoint
\nventures
\nAssociated
\ncompanies
\nJoint
\nventures
\nOpening balance 1 January
1,435
1,026
1,508
1,404
\nInvestments
5
9
6
39
\nShare of profit of associates and joint ventures
-542
-16
104
88
\nDividend income received
-21
-16
-37
-76
\nDivestments and capital returns
\n1)
\n-15
-13
-18
-551
\nDisposal of subsidiary companies
\n2)
\n-527
-109
-
-
\nReclassifications
70
-137
-152
94
\nOCI items in associates and joint ventures
1
40
-1
39
\nTranslation differences and other adjustments
14
45
26
-12
\nCarrying amount at 31 December
421
828
1,435
1,026
\n1) Divestments and capital returns in 2021 mainly relate to the sale of Stockholm Exergi AB.
\n2) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022. Disposal of subsidiary companies and
\nReclassifications include EUR -671 million from the deconsolidation of Uniper at 30 September 2022.
\nDuring 2022 Fortum received EUR 37 million (2021: 113) in dividends from associates and joint
\nventures. 2021 included EUR 42 million dividends from Stockholm Exergi.
\nThe share of profits of associates and joint ventures include EUR 414 million impairments related to
\nFortum\u2019s ownership in the Russian TGC
-1 and EUR 62 million of impairments of the renewables joint
\nventures in Russia. See
\ue001
Note 19
Impairment testing.
\nFor information about investments and divestments of shares in associated companies and joint
\nventures, see
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
Share of profit of associates and joint ventures
\nEUR million
2022
2021
\nPrincipal associates
\nForsmarks Kraftgrupp AB
-78
40
\nKemijoki Oy
-1
-1
\nOKG AB
-99
28
\nPrincipal associates, total
-178
67
\nPrincipal joint ventures
\nTVO Oyj
-13
-3
\nPrincipal joint ventures, total
-13
-3
\nOther associates
-420
33
\nOther joint ventures
-17
72
\nIS
Total
-629
168
\nThere are no unrecognised share of losses of associated companies and joint ventures.
\nComparable share of profit of associates and joint ventures
\nEUR million
2022
2021
\nIS
Share of profit/loss of associates and joint ventures
-629
168
\nAdjustments to share of profit/loss of associates and joint ventures
618
-65
\nComparable share of profit/loss of associates and joint ventures
-11
104
\nIn 2022, the adjustment to share of profits of associates and joint ventures include EUR 414 million
\nimpairments related to Fortum\u2019s ownership in the Russian TGC
-1 and EUR 62 million of impairments of
\nthe renewables joint ventures in Russia. See
\ue001
Note 19
Impairment testing.
Associated companies and joint ventures by segment
\nEntity Name
Country
Segment
\nGroup
\nholding %
\nBattery Intelligence Oy
Finland
C
32.9
\nChempolis Oy
Finland
C
32.9
\nKemijoki Oy
Finland
G
28.2
\nPosiva Oy
Finland
G
40.0
\nPuro.earth Oy
Finland
O
16.6
\nSallila Energia Oy
Finland
O
46.0
\nTeollisuuden Voima Oyj
Finland
G
25.8
\nTurun Seudun Energiantuotanto Oy
Finland
C
53.5
\nTurun Seudun Kaukol\u00e4mp\u00f6 Oy
Finland
C
30.0
\nWello Oy
Finland
O
16.2
\n1)
\nAssam Bio Refinery Private Limited
India
C
40.3
\nFortum Charge & Drive India Private Limited
India
C
63.0
\nIndia Sun B.V.
Netherlands
C
43.8
\nNordic Wind B.V.
Netherlands
G
20.0
\nYustek Holding B.V.
Netherlands
R
50.0
\nFortum Nordkraft Vind DA
Norway
G
50.0
\nLinnvasselv Kraftlag SA
Norway
G
50.0
\nFortum-New Generation 4 Limited Liability Company
Russia
R
50.0
\nTGC1 Territorial Generating Company 1
Russia
R
29.99
\nUral energy retail LLC
Russia
R
50.0
\n\u00c5ngefallen Kraft AB
Sweden
G
50.0
\nBl\u00e5sj\u00f6n Kraft AB
Sweden
G
50.0
\nForsmarks Kraftgrupp Aktiebolag
Sweden
G
25.5
\nHorrmundsvalla Kraftaktiebolag
Sweden
G
50.0
\nOKG Aktiebolag
Sweden
G
45.5
\nStensj\u00f6n Kraft AB
Sweden
G
50.0
\nT\u00e5sans Kraftaktiebolag
Sweden
G
40.0
\nV\u00e4sa Kraftaktiebolag
Sweden
G
50.0
\nVattenkraftens Milj\u00f6fond Sverige AB
Sweden
G
22.7
\nSouth Clyde Energy Recovery Holdings Limited
United Kingdom
C
50.0
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfJointVenturesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14117": {
"value": "18 Participations in associated companies and joint
\nventures
\nACCOUNTING POLICIES
\nThe Group\u2019s i
nterests in associated companies and jointly controlled entities are accounted for using the
\nequity method of accounting. Assets acquired and liabilities assumed in the investment in associates or
\njoint ventures are measured initially at their fair values at the acquisition date. The excess of the cost of
\nacquisition over the fair value of the Group\u2019s share of the identifiable net assets acquired is recorded as
\ngoodwill.
\nThe Group\u2019s share of its associates or joint ventures post
-acquisition profits or losses after tax, and
\nthe expenses related to the adjustments to the fair values of the assets and liabilities assumed are
\nrecognised in the income statement. The cumulative post-acquisition movements are adjusted against
\nthe carrying amount of the investment.
The Group\u2019s share of post
-acquisition adjustments to associates
\nor joint ventures equity that has not been recognised in the associate\u2019s or joint venture\u2019s income
\nstatement, is recognised directly in Group\u2019s shareholder\u2019s equity, and against the carrying a
mount of the
\ninvestment.
\nWhen the Group\u2019s share of losses in an associate or a joint venture equals or exceeds its interest in
\nthe associate or joint venture, including any other unsecured receivables, the Group does not recognise
\nfurther losses, unless it has incurred obligations or made payments on behalf of the associate or joint
\nventure.
\nMaterial unrealised gains on transactions between the Group and its associates or joint ventures are
\neliminated to the extent of the Group\u2019s interest in the associate o
r joint venture. Material unrealised
\nlosses are also eliminated, unless the transaction provides evidence of an impairment of the asset
\ntransferred. Accounting policies of associates or joint ventures have been changed where necessary to
\nensure consistency with the policies adopted by the Group.
\nIf more recent information is not available, the share of the profit of certain associated or joint venture
\ncompanies is included in the consolidated accounts based on the latest available information.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
\nManagement is required to make significant judgements when assessing the nature of Fortum\u2019s interest
\nin its investees and when considering the classification of Fortum\u2019s joint arrangements. In the
\nclassification, emphasis has been put on decision making, legal structure, financing and risks of the
\narrangements.
\nManagement judgement is required when testing the carrying amounts for participations in associated
\ncompanies and joint ventures for impairment. See
\ue001
Note 19
Impairment testing for more information.
\n18.1 Principal associated companies and joint ventures
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
OKG AB
TVO Oyj
\nNature of the relationship
Co-owned
\nnuclear company
\nCo-owned
\nhydro company
\nCo-owned
\nnuclear company
\nCo-owned
\nnuclear company
\nClassification
Associated
\ncompany
\nAssociated
\ncompany
\nAssociated
\ncompany
\nJoint venture
\nSegment
Generation
Generation
Generation
Generation
\nDomicile
Sweden
Finland
Sweden
Finland
\nOwnership interest, %
\n1)
\n26
58
46
26
\nVotes, %
26
28
46
26
\n1) Kemijoki and TVO have different series of shares. The ownership interest varies due to the changes in equity assigned to the different
\nshare series. In 2022 there were no changes in the ownership interests in Kemijoki and TVO.
\nShareholdings in power production companies
\nPower plants are often built jointly with other power producers. Under the consortium agreements, each owner is
\nentitled to electricity in proportion to its share of ownership, or other agreements, and each owner is liable for an
\nequivalent portion of costs. The production companies are not profit making, since the owners purchase
\nelectricity at production cost, including interest cost and production taxes. The share of profit of these companies
\nis mainly IFRS adjustments (e.g. accounting for nuclear-related assets and liabilities) and depreciations on fair
\nvalue adjustments from historical acquisitions since the companies are not profit making under local accounting
\nprinciples.
\nFortum has material shareholdings in such power production companies (mainly nuclear and hydro) that are
\nconsolidated using equity method either as associated companies (Forsmarks Kraftgrupp AB, Kemijoki Oy and
\nOKG) or as joint venture (Teollisuuden Voima Oyj (TVO)).
\nIn Sweden, nuclear production company shareholdings are 25.5% ownership of the shares in Forsmarks
\nKraftgrupp AB and 45.5% ownership of the shares in OKG AB. Excluding non-controlling interests in the
\nsubsidiaries, Fortum\u2019s participation
in the companies are 22.2% and 43.4% respectively, which reflects the share
\nof electricity produced that Fortum can sell further to the market. The minority part of the electricity purchased is
\ninvoiced further to each minority owner according to their respective shareholding and treated as pass-through.
\nIn Finland, Fortum has an ownership in power production company TVO that has two series of shares which
\nentitle the shareholders to electricity produced in the different power plants owned by TVO. Shares in series A
\nentitle to electricity produced in nuclear power plants Olkiluoto 1 and 2 and Fortum owns 26.6% of these shares.
\nSeries B entitles to electricity in the nuclear power plant currently under test production phase, Olkiluoto 3, and
\nFortum\u2019s ownersh
ip in this share series is 25.0%.
\nSee also Associated companies in
\ue001
Note 29
Nuclear-related assets and liabilities.
\nThe most significant hydro production company shareholding is 63.8% of the hydro shares and 26.7% of the
\nmonetary shares in Kemijoki Oy. Each owner of hydro shares is entitled to the hydropower production in
\nproportion to its hydro shareholding.
\nChanges in shareholdings in principal associated companies and joint ventures
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG Aktiebolag (OKG AB), with Fortum
\nowning 45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March 2020 to 30
\nSeptember 2022. On deconsolidation of Uniper at 30 September 2022, OKG AB was reclassified as an
\nassociated company.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path. Therefore, TGC-1 is no longer classified as a principal associated company
\nat 31 December 2022.
\nOn 20 September 2021, Fortum concluded the sale of its 50% ownership in the Swedish district heating
\nand cooling company Stockholm Exergi Holding AB (publ). See also
\ue001
Note 3.2.2
Other disposals.
Summarised financial information of the principal associated companies in 2022
\nEUR million
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
OKG AB
\nBalance sheet
31 Dec 2021
31 Dec 2021
31 Dec 2021
\nNon-current assets
2,393
489
825
\nCurrent assets
525
5
184
\nNon-current liabilities
2,783
289
920
\nCurrent liabilities
105
154
76
\nEquity
31
52
13
\nAttributable to the owners of the parent
31
52
13
\nAttributable to non-controlling interests
-
-
-
\nStatement of comprehensive income
\n1 Jan 2021 -
\n31 Dec 2021
\n1 Jan 2021 -
\n31 Dec 2021
\n1 Jan 2021 -
\n31 Dec 2021
\nSales
594
50
312
\nProfit or loss
-
1
2
\nAttributable to the owners of the parent
-
1
2
\nAttributable to non-controlling interests
-
-
-
\nTotal comprehensive income
-
1
2
\nAttributable to the owners of the parent
-
1
2
\nAttributable to non-controlling interests
-
-
-
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the associate 1 January
12
30
-
\nReclassification
-4
6
\nChange in share of profit and OCI items
-1
-
\nGroup's interest in the equity of the associate
\n31 December
8
30
6
\nFair values on acquisitions and different accounting
\nprinciples
\n1)
\n77
148
-6
\nCarrying amount 31 December
85
178
-
\n1) Impact of different accounting principles include mainly IFRS adjustments for nuclear-related assets and liabilities, capitalised borrowing
\ncosts and fair value adjustment for the acquired assets and liabilities. Fortum records its share of nuclear-related assets and liabilities in its
\nnuclear associated companies according to equity method. The basis for recognition is similar as for Loviisa power plant, see accounting
\nprinciples in
\ue001
Note 29
Nuclear-related assets and liabilities.
\n2) The market quotation was impacted by the limited free float of TGC-1 shares in 2021.
\nSummarised financial information of the principal associated companies in 2021
\nEUR million
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
TGC-1
\nBalance sheet
31 Dec 2020
31 Dec 2020
30 Sept 2021
\nNon-current assets
2,619
483
1,863
\nCurrent assets
441
7
273
\nNon-current liabilities
2,899
323
213
\nCurrent liabilities
128
116
223
\nEquity
33
52
1,700
\nAttributable to the owners of the parent
33
52
1,548
\nAttributable to non-controlling interests
-
-
153
\nStatement of comprehensive income
\n1 Jan 2020 -
\n31 Dec 2020
\n1 Jan 2020 -
\n31 Dec 2020
\n1 Oct 2020 -
\n30 Sept 2021
\nSales
561
53
1,136
\nProfit or loss
-1
1
104
\nAttributable to the owners of the parent
-1
1
103
\nAttributable to non-controlling interests
-
-
2
\nTotal comprehensive income
-1
1
105
\nAttributable to the owners of the parent
-1
1
103
\nAttributable to non-controlling interests
-
-
2
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the associate 1 January
12
30
409
\nChange in share of profit and OCI items
-
-
31
\nDividends received
-
-
-14
\nTranslation differences and other adjustments
-
-
39
\nGroup's interest in the equity of the associate
\n31 December
12
30
464
\nFair values on acquisitions and different accounting
\nprinciples
\n1)
\n479
149
-8
\nCarrying amount 31 December
491
179
456
\nMarket value of listed shares
\n2)
\n135
Summarised financial information of the principal joint ventures
\n2022
2021
\nEUR million
TVO Oyj
TVO Oyj
\nBalance sheet
31 Dec 2022
31 Dec 2021
\nNon-current assets
8,308
7,946
\nCurrent assets
863
716
\nof which cash and cash equivalents
353
172
\nNon-current liabilities
6,517
5,967
\nof which non-current interest-bearing liabilities
5,223
4,599
\nCurrent liabilities
437
632
\nof which current financial liabilities
259
449
\nEquity
2,218
2,063
\nAttributable to the shareholders of the company
2,218
2,063
\nAttributable to non-controlling interests
-
-
\nStatement of comprehensive income
\n1 Jan 2022 -
\n31 Dec 2022
\n1 Jan 2021 -
\n31 Dec 2021
\nSales
358
299
\nDepreciation and amortisation
-47
-44
\nInterest income
6
5
\nInterest expense
-81
-42
\nIncome tax expense or income
0
-
\nProfit or loss
-48
-20
\nOther comprehensive income
212
44
\nTotal comprehensive income
164
25
\nAttributable to the shareholders of the company
164
25
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the joint venture at 1 January
523
518
\nChange in share of profit and OCI items
41
5
\nGroup's interest in the equity of the joint venture 31 December
564
523
\nFair values on acquisitions and different accounting principles
\n1)
\n-9
3
\nCarrying amount 31 December
556
526
\n1) Impact of different accounting principles include mainly IFRS adjustments for nuclear-related assets and liabilities and capitalised
\nborrowing costs. Fortum records its share of nuclear-related assets and liabilities in its nuclear associated companies according to equity
\nmethod. The basis for recognition is similar as for Loviisa power plant, see accounting principles in
\ue001
Note 29
Nuclear-related assets and
\nliabilities.
\n18.2 Participations in and share of profits from associated companies
\nand joint ventures
\nParticipations in associated companies and joint ventures on the balance sheet
\nEUR million
2022
2021
\nPrincipal associates
262
1,126
\nPrincipal joint ventures
556
526
\nOther associates
158
309
\nOther joint ventures
273
500
\nBS
Total
1,249
2,461
\nChanges in participation during the year
\n2022
2021
\nEUR million
\nAssociated
\ncompanies
\nJoint
\nventures
\nAssociated
\ncompanies
\nJoint
\nventures
\nOpening balance 1 January
1,435
1,026
1,508
1,404
\nInvestments
5
9
6
39
\nShare of profit of associates and joint ventures
-542
-16
104
88
\nDividend income received
-21
-16
-37
-76
\nDivestments and capital returns
\n1)
\n-15
-13
-18
-551
\nDisposal of subsidiary companies
\n2)
\n-527
-109
-
-
\nReclassifications
70
-137
-152
94
\nOCI items in associates and joint ventures
1
40
-1
39
\nTranslation differences and other adjustments
14
45
26
-12
\nCarrying amount at 31 December
421
828
1,435
1,026
\n1) Divestments and capital returns in 2021 mainly relate to the sale of Stockholm Exergi AB.
\n2) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022. Disposal of subsidiary companies and
\nReclassifications include EUR -671 million from the deconsolidation of Uniper at 30 September 2022.
\nDuring 2022 Fortum received EUR 37 million (2021: 113) in dividends from associates and joint
\nventures. 2021 included EUR 42 million dividends from Stockholm Exergi.
\nThe share of profits of associates and joint ventures include EUR 414 million impairments related to
\nFortum\u2019s ownership in the Russian TGC
-1 and EUR 62 million of impairments of the renewables joint
\nventures in Russia. See
\ue001
Note 19
Impairment testing.
\nFor information about investments and divestments of shares in associated companies and joint
\nventures, see
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
Share of profit of associates and joint ventures
\nEUR million
2022
2021
\nPrincipal associates
\nForsmarks Kraftgrupp AB
-78
40
\nKemijoki Oy
-1
-1
\nOKG AB
-99
28
\nPrincipal associates, total
-178
67
\nPrincipal joint ventures
\nTVO Oyj
-13
-3
\nPrincipal joint ventures, total
-13
-3
\nOther associates
-420
33
\nOther joint ventures
-17
72
\nIS
Total
-629
168
\nThere are no unrecognised share of losses of associated companies and joint ventures.
\nComparable share of profit of associates and joint ventures
\nEUR million
2022
2021
\nIS
Share of profit/loss of associates and joint ventures
-629
168
\nAdjustments to share of profit/loss of associates and joint ventures
618
-65
\nComparable share of profit/loss of associates and joint ventures
-11
104
\nIn 2022, the adjustment to share of profits of associates and joint ventures include EUR 414 million
\nimpairments related to Fortum\u2019s ownership in the Russian TGC
-1 and EUR 62 million of impairments of
\nthe renewables joint ventures in Russia. See
\ue001
Note 19
Impairment testing.
Associated companies and joint ventures by segment
\nEntity Name
Country
Segment
\nGroup
\nholding %
\nBattery Intelligence Oy
Finland
C
32.9
\nChempolis Oy
Finland
C
32.9
\nKemijoki Oy
Finland
G
28.2
\nPosiva Oy
Finland
G
40.0
\nPuro.earth Oy
Finland
O
16.6
\nSallila Energia Oy
Finland
O
46.0
\nTeollisuuden Voima Oyj
Finland
G
25.8
\nTurun Seudun Energiantuotanto Oy
Finland
C
53.5
\nTurun Seudun Kaukol\u00e4mp\u00f6 Oy
Finland
C
30.0
\nWello Oy
Finland
O
16.2
\n1)
\nAssam Bio Refinery Private Limited
India
C
40.3
\nFortum Charge & Drive India Private Limited
India
C
63.0
\nIndia Sun B.V.
Netherlands
C
43.8
\nNordic Wind B.V.
Netherlands
G
20.0
\nYustek Holding B.V.
Netherlands
R
50.0
\nFortum Nordkraft Vind DA
Norway
G
50.0
\nLinnvasselv Kraftlag SA
Norway
G
50.0
\nFortum-New Generation 4 Limited Liability Company
Russia
R
50.0
\nTGC1 Territorial Generating Company 1
Russia
R
29.99
\nUral energy retail LLC
Russia
R
50.0
\n\u00c5ngefallen Kraft AB
Sweden
G
50.0
\nBl\u00e5sj\u00f6n Kraft AB
Sweden
G
50.0
\nForsmarks Kraftgrupp Aktiebolag
Sweden
G
25.5
\nHorrmundsvalla Kraftaktiebolag
Sweden
G
50.0
\nOKG Aktiebolag
Sweden
G
45.5
\nStensj\u00f6n Kraft AB
Sweden
G
50.0
\nT\u00e5sans Kraftaktiebolag
Sweden
G
40.0
\nV\u00e4sa Kraftaktiebolag
Sweden
G
50.0
\nVattenkraftens Milj\u00f6fond Sverige AB
Sweden
G
22.7
\nSouth Clyde Energy Recovery Holdings Limited
United Kingdom
C
50.0
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14119": {
"value": "18 Participations in associated companies and joint ventures
\nACCOUNTING POLICIES
\nThe Group\u2019s i
nterests in associated companies and jointly controlled entities are accounted for using the
\nequity method of accounting. Assets acquired and liabilities assumed in the investment in associates or
\njoint ventures are measured initially at their fair values at the acquisition date. The excess of the cost of
\nacquisition over the fair value of the Group\u2019s share of the identifiable net assets acquired is recorded as
\ngoodwill.
\nThe Group\u2019s share of its associates or joint ventures post
-acquisition profits or losses after tax, and
\nthe expenses related to the adjustments to the fair values of the assets and liabilities assumed are
\nrecognised in the income statement. The cumulative post-acquisition movements are adjusted against
\nthe carrying amount of the investment.
The Group\u2019s share of post
-acquisition adjustments to associates
\nor joint ventures equity that has not been recognised in the associate\u2019s or joint venture\u2019s income
\nstatement, is recognised directly in Group\u2019s shareholder\u2019s equity, and against the carrying a
mount of the
\ninvestment.
\nWhen the Group\u2019s share of losses in an associate or a joint venture equals or exceeds its interest in
\nthe associate or joint venture, including any other unsecured receivables, the Group does not recognise
\nfurther losses, unless it has incurred obligations or made payments on behalf of the associate or joint
\nventure.
\nMaterial unrealised gains on transactions between the Group and its associates or joint ventures are
\neliminated to the extent of the Group\u2019s interest in the associate o
r joint venture. Material unrealised
\nlosses are also eliminated, unless the transaction provides evidence of an impairment of the asset
\ntransferred. Accounting policies of associates or joint ventures have been changed where necessary to
\nensure consistency with the policies adopted by the Group.
\nIf more recent information is not available, the share of the profit of certain associated or joint venture
\ncompanies is included in the consolidated accounts based on the latest available information.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
\nManagement is required to make significant judgements when assessing the nature of Fortum\u2019s interest
\nin its investees and when considering the classification of Fortum\u2019s joint arrangements. In the
\nclassification, emphasis has been put on decision making, legal structure, financing and risks of the
\narrangements.
\nManagement judgement is required when testing the carrying amounts for participations in associated
\ncompanies and joint ventures for impairment. See
\ue001
Note 19
Impairment testing for more information.
\n18.1 Principal associated companies and joint ventures
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
OKG AB
TVO Oyj
\nNature of the relationship
Co-owned
\nnuclear company
\nCo-owned
\nhydro company
\nCo-owned
\nnuclear company
\nCo-owned
\nnuclear company
\nClassification
Associated
\ncompany
\nAssociated
\ncompany
\nAssociated
\ncompany
\nJoint venture
\nSegment
Generation
Generation
Generation
Generation
\nDomicile
Sweden
Finland
Sweden
Finland
\nOwnership interest, %
\n1)
\n26
58
46
26
\nVotes, %
26
28
46
26
\n1) Kemijoki and TVO have different series of shares. The ownership interest varies due to the changes in equity assigned to the different
\nshare series. In 2022 there were no changes in the ownership interests in Kemijoki and TVO.
\nShareholdings in power production companies
\nPower plants are often built jointly with other power producers. Under the consortium agreements, each owner is
\nentitled to electricity in proportion to its share of ownership, or other agreements, and each owner is liable for an
\nequivalent portion of costs. The production companies are not profit making, since the owners purchase
\nelectricity at production cost, including interest cost and production taxes. The share of profit of these companies
\nis mainly IFRS adjustments (e.g. accounting for nuclear-related assets and liabilities) and depreciations on fair
\nvalue adjustments from historical acquisitions since the companies are not profit making under local accounting
\nprinciples.
\nFortum has material shareholdings in such power production companies (mainly nuclear and hydro) that are
\nconsolidated using equity method either as associated companies (Forsmarks Kraftgrupp AB, Kemijoki Oy and
\nOKG) or as joint venture (Teollisuuden Voima Oyj (TVO)).
\nIn Sweden, nuclear production company shareholdings are 25.5% ownership of the shares in Forsmarks
\nKraftgrupp AB and 45.5% ownership of the shares in OKG AB. Excluding non-controlling interests in the
\nsubsidiaries, Fortum\u2019s participation
in the companies are 22.2% and 43.4% respectively, which reflects the share
\nof electricity produced that Fortum can sell further to the market. The minority part of the electricity purchased is
\ninvoiced further to each minority owner according to their respective shareholding and treated as pass-through.
\nIn Finland, Fortum has an ownership in power production company TVO that has two series of shares which
\nentitle the shareholders to electricity produced in the different power plants owned by TVO. Shares in series A
\nentitle to electricity produced in nuclear power plants Olkiluoto 1 and 2 and Fortum owns 26.6% of these shares.
\nSeries B entitles to electricity in the nuclear power plant currently under test production phase, Olkiluoto 3, and
\nFortum\u2019s ownersh
ip in this share series is 25.0%.
\nSee also Associated companies in
\ue001
Note 29
Nuclear-related assets and liabilities.
\nThe most significant hydro production company shareholding is 63.8% of the hydro shares and 26.7% of the
\nmonetary shares in Kemijoki Oy. Each owner of hydro shares is entitled to the hydropower production in
\nproportion to its hydro shareholding.
\nChanges in shareholdings in principal associated companies and joint ventures
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG Aktiebolag (OKG AB), with Fortum
\nowning 45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March 2020 to 30
\nSeptember 2022. On deconsolidation of Uniper at 30 September 2022, OKG AB was reclassified as an
\nassociated company.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path. Therefore, TGC-1 is no longer classified as a principal associated company
\nat 31 December 2022.
\nOn 20 September 2021, Fortum concluded the sale of its 50% ownership in the Swedish district heating
\nand cooling company Stockholm Exergi Holding AB (publ). See also
\ue001
Note 3.2.2
Other disposals.
84
\nSummarised financial information of the principal associated companies in 2022
\nEUR million
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
OKG AB
\nBalance sheet
31 Dec 2021
31 Dec 2021
31 Dec 2021
\nNon-current assets
2,393
489
825
\nCurrent assets
525
5
184
\nNon-current liabilities
2,783
289
920
\nCurrent liabilities
105
154
76
\nEquity
31
52
13
\nAttributable to the owners of the parent
31
52
13
\nAttributable to non-controlling interests
-
-
-
\nStatement of comprehensive income
\n1 Jan 2021 -
\n31 Dec 2021
\n1 Jan 2021 -
\n31 Dec 2021
\n1 Jan 2021 -
\n31 Dec 2021
\nSales
594
50
312
\nProfit or loss
-
1
2
\nAttributable to the owners of the parent
-
1
2
\nAttributable to non-controlling interests
-
-
-
\nTotal comprehensive income
-
1
2
\nAttributable to the owners of the parent
-
1
2
\nAttributable to non-controlling interests
-
-
-
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the associate 1 January
12
30
-
\nReclassification
-4
6
\nChange in share of profit and OCI items
-1
-
\nGroup's interest in the equity of the associate
\n31 December
8
30
6
\nFair values on acquisitions and different accounting
\nprinciples
\n1)
\n77
148
-6
\nCarrying amount 31 December
85
178
-
\n1) Impact of different accounting principles include mainly IFRS adjustments for nuclear-related assets and liabilities, capitalised borrowing
\ncosts and fair value adjustment for the acquired assets and liabilities. Fortum records its share of nuclear-related assets and liabilities in its
\nnuclear associated companies according to equity method. The basis for recognition is similar as for Loviisa power plant, see accounting
\nprinciples in
\ue001
Note 29
Nuclear-related assets and liabilities.
\n2) The market quotation was impacted by the limited free float of TGC-1 shares in 2021.
\nSummarised financial information of the principal associated companies in 2021
\nEUR million
\nForsmarks
\nKraftgrupp AB
Kemijoki Oy
TGC-1
\nBalance sheet
31 Dec 2020
31 Dec 2020
30 Sept 2021
\nNon-current assets
2,619
483
1,863
\nCurrent assets
441
7
273
\nNon-current liabilities
2,899
323
213
\nCurrent liabilities
128
116
223
\nEquity
33
52
1,700
\nAttributable to the owners of the parent
33
52
1,548
\nAttributable to non-controlling interests
-
-
153
\nStatement of comprehensive income
\n1 Jan 2020 -
\n31 Dec 2020
\n1 Jan 2020 -
\n31 Dec 2020
\n1 Oct 2020 -
\n30 Sept 2021
\nSales
561
53
1,136
\nProfit or loss
-1
1
104
\nAttributable to the owners of the parent
-1
1
103
\nAttributable to non-controlling interests
-
-
2
\nTotal comprehensive income
-1
1
105
\nAttributable to the owners of the parent
-1
1
103
\nAttributable to non-controlling interests
-
-
2
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the associate 1 January
12
30
409
\nChange in share of profit and OCI items
-
-
31
\nDividends received
-
-
-14
\nTranslation differences and other adjustments
-
-
39
\nGroup's interest in the equity of the associate
\n31 December
12
30
464
\nFair values on acquisitions and different accounting
\nprinciples
\n1)
\n479
149
-8
\nCarrying amount 31 December
491
179
456
\nMarket value of listed shares
\n2)
\n135
85
\nSummarised financial information of the principal joint ventures
\n2022
2021
\nEUR million
TVO Oyj
TVO Oyj
\nBalance sheet
31 Dec 2022
31 Dec 2021
\nNon-current assets
8,308
7,946
\nCurrent assets
863
716
\nof which cash and cash equivalents
353
172
\nNon-current liabilities
6,517
5,967
\nof which non-current interest-bearing liabilities
5,223
4,599
\nCurrent liabilities
437
632
\nof which current financial liabilities
259
449
\nEquity
2,218
2,063
\nAttributable to the shareholders of the company
2,218
2,063
\nAttributable to non-controlling interests
-
-
\nStatement of comprehensive income
\n1 Jan 2022 -
\n31 Dec 2022
\n1 Jan 2021 -
\n31 Dec 2021
\nSales
358
299
\nDepreciation and amortisation
-47
-44
\nInterest income
6
5
\nInterest expense
-81
-42
\nIncome tax expense or income
0
-
\nProfit or loss
-48
-20
\nOther comprehensive income
212
44
\nTotal comprehensive income
164
25
\nAttributable to the shareholders of the company
164
25
\nReconciliation to carrying amount in Fortum Group
\nGroup's interest in the equity of the joint venture at 1 January
523
518
\nChange in share of profit and OCI items
41
5
\nGroup's interest in the equity of the joint venture 31 December
564
523
\nFair values on acquisitions and different accounting principles
\n1)
\n-9
3
\nCarrying amount 31 December
556
526
\n1) Impact of different accounting principles include mainly IFRS adjustments for nuclear-related assets and liabilities and capitalised
\nborrowing costs. Fortum records its share of nuclear-related assets and liabilities in its nuclear associated companies according to equity
\nmethod. The basis for recognition is similar as for Loviisa power plant, see accounting principles in
\ue001
Note 29
Nuclear-related assets and
\nliabilities.
\n18.2 Participations in and share of profits from associated companies
\nand joint ventures
\nParticipations in associated companies and joint ventures on the balance sheet
\nEUR million
2022
2021
\nPrincipal associates
262
1,126
\nPrincipal joint ventures
556
526
\nOther associates
158
309
\nOther joint ventures
273
500
\nBS
Total
1,249
2,461
\nChanges in participation during the year
\n2022
2021
\nEUR million
\nAssociated
\ncompanies
\nJoint
\nventures
\nAssociated
\ncompanies
\nJoint
\nventures
\nOpening balance 1 January
1,435
1,026
1,508
1,404
\nInvestments
5
9
6
39
\nShare of profit of associates and joint ventures
-542
-16
104
88
\nDividend income received
-21
-16
-37
-76
\nDivestments and capital returns
\n1)
\n-15
-13
-18
-551
\nDisposal of subsidiary companies
\n2)
\n-527
-109
-
-
\nReclassifications
70
-137
-152
94
\nOCI items in associates and joint ventures
1
40
-1
39
\nTranslation differences and other adjustments
14
45
26
-12
\nCarrying amount at 31 December
421
828
1,435
1,026
\n1) Divestments and capital returns in 2021 mainly relate to the sale of Stockholm Exergi AB.
\n2) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022. Disposal of subsidiary companies and
\nReclassifications include EUR -671 million from the deconsolidation of Uniper at 30 September 2022.
\nDuring 2022 Fortum received EUR 37 million (2021: 113) in dividends from associates and joint
\nventures. 2021 included EUR 42 million dividends from Stockholm Exergi.
\nThe share of profits of associates and joint ventures include EUR 414 million impairments related to
\nFortum\u2019s ownership in the Russian TGC
-1 and EUR 62 million of impairments of the renewables joint
\nventures in Russia. See
\ue001
Note 19
Impairment testing.
\nFor information about investments and divestments of shares in associated companies and joint
\nventures, see
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
86
\nShare of profit of associates and joint ventures
\nEUR million
2022
2021
\nPrincipal associates
\nForsmarks Kraftgrupp AB
-78
40
\nKemijoki Oy
-1
-1
\nOKG AB
-99
28
\nPrincipal associates, total
-178
67
\nPrincipal joint ventures
\nTVO Oyj
-13
-3
\nPrincipal joint ventures, total
-13
-3
\nOther associates
-420
33
\nOther joint ventures
-17
72
\nIS
Total
-629
168
\nThere are no unrecognised share of losses of associated companies and joint ventures.
\nComparable share of profit of associates and joint ventures
\nEUR million
2022
2021
\nIS
Share of profit/loss of associates and joint ventures
-629
168
\nAdjustments to share of profit/loss of associates and joint ventures
618
-65
\nComparable share of profit/loss of associates and joint ventures
-11
104
\nIn 2022, the adjustment to share of profits of associates and joint ventures include EUR 414 million
\nimpairments related to Fortum\u2019s ownership in the Russian TGC
-1 and EUR 62 million of impairments of
\nthe renewables joint ventures in Russia. See
\ue001
Note 19
Impairment testing.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14774": {
"value": "19 Impairment testing ACCOUNTING POLICIES
\nThe carrying values of goodwill, other intangible assets, property, plant and equipment, right-of-use
\nassets, and non-financial investments are reviewed regularly for indication of impairment.
\nIndications of impairment are business-specific and are thus analysed separately by each segment;
\nand include risks, such as changes in electricity and fuel prices, regulatory/political risks relating to
\nenergy taxes, price regulations, and limitations to the lifetime of assets.
\nImpairment testing is performed if there is an indication of impairment; and the asset is written down to its
\nrecoverable amount if its carrying amount is greater than the estimated
re
coverable amount.
\nIn addition, goodwill and other intangible assets that have an
indefinite useful life, and as such are not
\nsubject to amortisation, are tested annually for impairment, even if there is no indication of impairment.
\nImpairment testing is performed and documented annually in connection with the long-term forecasting
\nprocess.
\nAnnual impairment testing is performed on a cash-generating unit level. Fortum defines cash-
\ngenerating unit as the smallest group of assets that generate cash flows that are independent of the cash
\nflows generated by other assets.
\nGoodwill is allocated to groups of cash-generating units that benefit from the synergies of the acquired
\ngoodwill.
\nFortum uses value in use to establish the recoverable amount of cash-generating units. Value in use
\nis determined by discounting future cash flows expected to be derived from group of assets. The
\ncarrying amount of group of cash generating units comprises net operating assets, including goodwill
\nand fair value adjustments arising from
acquisitions.
\nNon-financial assets, other than goodwill, that have been impaired in the past are reviewed for possible
\nreversal of
impairment at each reporting date.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS
\nRELATED TO IMPAIRMENT TESTING
\nImpairment testing is forward-looking and requires management to make certain assumptions, as
\nexplained below.
\nThe recoverable amounts of cash-generating units are determined by value in use calculations. These
\ncalculations are based on estimated discounted future cash flows in local currency from most recent,
\nlong-term forecast, and / or long-term assumptions approved by management. Cash flows cover an
\nexplicit forecast period of three years for City Solutions CGU and six years for Consumer Solutions
\nCGU. Cash flow projections beyond the explicit forecast period are estimated by extrapolating
\nprojections using a steady or declining growth rate.
\nThe period covered by cash flows is related to the useful lives of the assets being reviewed for
\nimpairment. The growth rate used to extrapolate the cash flow projections until the end of assets' useful
\nlives is in line with the assumed inflation, taking into consideration market outlook forecast. Cash flows
\narising from future investments, such as new plants, are excluded; unless projects have been started, in
\nwhich case the cash outflow needed to complete the started projects is included.
\nThe discount rates reflect current assessments of the time value of money and relevant market risk
\npremiums specific to each cash generating unit, reflecting risks and uncertainties for which the future
\ncashflow estimates have not been adjusted.
\nPreparation of these cash flow estimates requires management to make assumptions relating to
\nfuture expectations. Assumptions vary depending on the business the tested assets are in. Approved
\nactions towards Fortum\u2019s climate targets are reflected in the assumptions used in the impairment testing.
\nKey assumptions used in impairment testing are presented below, as well as the basis for determining
\nthe value of each assumption. Assumptions are based on internal and external data that are consistent
\nwith observable market information, when applicable.
87
\nKey assumptions
Basis for determining the value for key assumptions
\nPower market development, recycling
\nand waste solutions market
\ndevelopment
\nHistorical analysis and prospective forecasting
\nRegulation framework
Current market setup and prospective forecasting
\nUtilisation of power plants and
\ntreatment facilities
\nPast experience, technical assessment and forecasted market development
\nForecasted maintenance investments
Past experience, technical assessment and planned maintenance work
\nDiscount rate
Mostly market based information
\nImpairment testing due to triggering event
\nOn 24 February 2022, Russia started a widespread invasion into Ukraine. As a consequence, the US, the
\nEU and the UK, amongst others, imposed sanctions targeting Russia\u2019s ability to access capital and
\nfinancial markets, sanctioning numerous individuals and banks; as well as trading in general. The war, the
\nresulting sanctions, and the impact on business operations was considered as an impairment indicator,
\nwhich triggered impairment testing on the Russia cash-generating unit (CGU) at 31 March 2022.
\nFor goodwill, other intangible assets, property, plant and equipment, and right-of-use assets, Fortum
\nuses value in use to establish the recoverable amount of CGUs. Value in use is determined by
\ndiscounting future cash flows expected to be derived from a group of assets. In order to reflect the
\nuncertainty related to the Russia-Ukraine geopolitical situation at 31 March 2022, Fortum used the
\nexpected cash flow approach with three different probability-weighted cash flow scenarios prepared by the
\nmanagement: the base scenario with 40% weighting, as well as two different downside scenarios, each
\nwith 30% weighting. Cash flows used for annual impairment testing at the previous year end were based
\non the most likely scenario. In addition, Fortum updated the discount rate for Russia CGU. Discount rate
\nfrom 11% to 31% was applied on a reducing scale over the cash flow period, with higher discount rate in
\nthe first three years.
\nThe recoverable amount of the Russian associate TCG-1 was based on fair value less costs of disposal
\nusing two different probability-weighted scenarios prepared by the management. The scenarios were
\nconsistent with external sources of information, the recoverable amount corresponding to fair value
\nhierarchy level 3.
\nThe recoverable amount of the Russia CGU (Russia segment) was below the book value resulting in
\nEUR 445 million impairment charge in I/2022. Impairment was recognised against goodwill, property,
\nplant and equipment and participations in associates and joint ventures.
\nDiscontinued operations (Uniper)
\nImpairment testing was also performed on the Unipro CGU at 31 March 2022. Unipro CGU was
\nreclassified as discontinued operations in III/2022. The recoverable amount of the Unipro CGU was below
\nthe book value resulting in EUR 555 million impairment charge in I/2022.
\nAnnual impairment testing
\nAnnual impairment testing was performed as at 31 December 2022.
\nFortum is pursuing a controlled exit from the Russian market with potential divestments of its Russian
\noperations as the preferred path, however there are no decisions and these processes might take some
\ntime and are subject to regulatory approvals, Fortum continues to classify its Russian operations as
\ncontinuing. Fortum generally uses value in use to establish the recoverable amount of CGUs. However, in
\nconnection with the annual impairment testing as of 31 December 2022, management concluded that due
\nto the increasingly complex operating environment and prolonged uncertainty regarding the future of its
\nRussian operations, fair value less costs of disposal is now more appropriate method to establish the
\nrecoverable amount of the Russia CGU. Fair value less costs of disposal for the Russia CGU was
\ndetermined by an external party and is based on discounted cash flow model using 12.8% to 13.9%
\ndiscount rate. Management made an additional risk adjustment to account for market restrictions. The
\nvaluation method is consistent with external sources of information, the recoverable amount
\ncorresponding to fair value hierarchy level 3. Management estimates that value in use method would not
\ngive a higher value to the Russia CGU.
\nThe recoverable amount of the Russian associate TGC-1 was based on fair value less costs of disposal
\nusing quoted market price, the recoverable amount corresponding to fair value hierarchy level 2.
\nThe recoverable amount of the Russia CGU (Russia segment) was below the book value resulting in
\nEUR 778 million impairment charge in the Russia CGU. Impairments were recognised against property,
\nplant and equipment and participations in associates and joint ventures. Total impairment charges in 2022
\nfor the Russia CGU amount to EUR 1,697 million, including EUR 905 million impairment of intangible
\nassets and property, plant and equipment, EUR 475 million impairment of participations in associates and
\njoint ventures, EUR 145 million expected credit losses on Russian deposits and receivables, as well as
\nEUR 171 million write down of other shares.
The remaining book value of Russia segment\u2019s net assets is
\napproximately EUR 1.7 billion at 31 December 2022 (31 Dec 2021: 2.5). The book value is based on the
\nassumption that the controlled exit can be executed, and that other assumptions made by management
\nrealise as expected. The carrying amount of the Russia CGU is equal to its recoverable amount, meaning
\nthat any detrimental future changes may cause further impairment.
\nSee also
\ue001
Note 2
Critical accounting estimates and judgements.
\nThe table below presents long-term pre-tax discount rates used in impairment testing by cash generating
\nunits:
\nDiscount rate %
2022
2021
\nConsumer Solutions
\n1)
\n7.6-9.8
4.5-5.6
\nCity Solutions
\n1)
\n7.4
4.8
\nRussia
12.8-13.9
11.7
\nUniper
\n1)
\nN/A
4.6-11.7
\n1) Discount rate depends on location and type of business.
\nAt 31 December 2022, the recoverable amounts of Consumer Solutions and City Solutions CGUs were
\ngreater than their carrying values and therefore no impairments were booked.
\nThe Group has considered the sensitivity of key assumptions as part of the impairment testing. When
\ndoing this, any consequential effect of the change on the other variables has also been considered. The
\ncalculations are most sensitive to changes in estimated future EBITDA levels, and changes in discount
\nrate. Management estimates that no reasonably possible change in the discount rate used, or in future
\nearnings would cause the carrying amount to exceed its recoverable amount in Consumer Solutions or
\nCity Solutions cash generating units.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14778": {
"value": "ACCOUNTING POLICIES The carrying values of goodwill, other intangible assets, property, plant and equipment, right-of-use
\nassets, and non-financial investments are reviewed regularly for indication of impairment.
\nIndications of impairment are business-specific and are thus analysed separately by each segment;
\nand include risks, such as changes in electricity and fuel prices, regulatory/political risks relating to
\nenergy taxes, price regulations, and limitations to the lifetime of assets.
\nImpairment testing is performed if there is an indication of impairment; and the asset is written down to its
\nrecoverable amount if its carrying amount is greater than the estimated
re
coverable amount.
\nIn addition, goodwill and other intangible assets that have an
indefinite useful life, and as such are not
\nsubject to amortisation, are tested annually for impairment, even if there is no indication of impairment.
\nImpairment testing is performed and documented annually in connection with the long-term forecasting
\nprocess.
\nAnnual impairment testing is performed on a cash-generating unit level. Fortum defines cash-
\ngenerating unit as the smallest group of assets that generate cash flows that are independent of the cash
\nflows generated by other assets.
\nGoodwill is allocated to groups of cash-generating units that benefit from the synergies of the acquired
\ngoodwill.
\nFortum uses value in use to establish the recoverable amount of cash-generating units. Value in use
\nis determined by discounting future cash flows expected to be derived from group of assets. The
\ncarrying amount of group of cash generating units comprises net operating assets, including goodwill
\nand fair value adjustments arising from
acquisitions.
\nNon-financial assets, other than goodwill, that have been impaired in the past are reviewed for possible
\nreversal of
impairment at each reporting date.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14779": {
"value": "ACCOUNTING POLICIES The carrying values of goodwill, other intangible assets, property, plant and equipment, right-of-use
\nassets, and non-financial investments are reviewed regularly for indication of impairment.
\nIndications of impairment are business-specific and are thus analysed separately by each segment;
\nand include risks, such as changes in electricity and fuel prices, regulatory/political risks relating to
\nenergy taxes, price regulations, and limitations to the lifetime of assets.
\nImpairment testing is performed if there is an indication of impairment; and the asset is written down to its
\nrecoverable amount if its carrying amount is greater than the estimated
re
coverable amount.
\nIn addition, goodwill and other intangible assets that have an
indefinite useful life, and as such are not
\nsubject to amortisation, are tested annually for impairment, even if there is no indication of impairment.
\nImpairment testing is performed and documented annually in connection with the long-term forecasting
\nprocess.
\nAnnual impairment testing is performed on a cash-generating unit level. Fortum defines cash-
\ngenerating unit as the smallest group of assets that generate cash flows that are independent of the cash
\nflows generated by other assets.
\nGoodwill is allocated to groups of cash-generating units that benefit from the synergies of the acquired
\ngoodwill.
\nFortum uses value in use to establish the recoverable amount of cash-generating units. Value in use
\nis determined by discounting future cash flows expected to be derived from group of assets. The
\ncarrying amount of group of cash generating units comprises net operating assets, including goodwill
\nand fair value adjustments arising from
acquisitions.
\nNon-financial assets, other than goodwill, that have been impaired in the past are reviewed for possible
\nreversal of
impairment at each reporting date.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14965": {
"value": "20 Other non-current assets EUR million
2022
2021
\nOther investments
543
254
\nInterest-free receivables
85
316
\nBS
Total
628
570
\nOther investments mainly include certain subsidiaries that are not included in the consolidated financial
\nstatements on materiality grounds, accounted for outside the scope of IFRS 9 and measured at cost, as
\nwell as shares in unlisted companies. Change in other investments from 31 December 2021 is mainly due
\nto the 1.3 GW portfolio of wind projects in Russia, as well as the deconsolidation of Uniper at 30
\nSeptember 2022.
\nInterest-free receivables mainly include prepaid expenses. Change in interest-free receivables from 31
\nDecember 2021 is mainly due to the deconsolidation of Uniper at 30 September 2022.
\n21 Interest-bearing receivables
\nEUR million
2022
2021
\nInterest-bearing receivables
1,281
2,971
\nFinance lease receivables
3
136
\nTotal
1,284
3,107
\n2022
2021
\nEUR million
\nCarrying
\namount
\nFair
\nvalue
\nCarrying
\namount
\nFair
\nvalue
\nLong-term loan receivables from associates and joint ventures
593
612
1,138
1,185
\nNon-current securities
-
-
111
111
\nOther long-term interest-bearing receivables
31
31
1,024
1,024
\nTotal long-term interest-bearing receivables
624
643
2,273
2,320
\nCollateral arrangement securities
527
527
549
549
\nOther short-term interest-bearing receivables
130
130
149
149
\nTotal short-term interest-bearing receivables
657
657
698
698
\nTotal
1,281
1,301
2,971
3,018
\nChanges in interest-bearing receivables from 31 December 2021 are mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nLong-term interest-bearing receivables include receivables from associated companies and joint
\nventures of EUR 593 million (2021: 1,138). These receivables include EUR 498 million from Swedish
\nnuclear companies, Forsmarks Kraftgrupp AB and OKG AB (2021: 955 Forsmarks Kraftgrupp AB and
\nRinghals AB), which are mainly funded with shareholder loans, pro-
rata to each shareholder\u2019s ownership
.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15061": {
"value": "22 Inventories ACCOUNTING POLICIES
\nInventories are stated at the lower of cost and net realisable value being the estimated selling price for
\nthe end product, less applicable variable selling expenses and other production costs. Cost is generally
\ndetermined using the weighted average cost method.
\nInventories which are acquired for the purpose of buying and selling commodities in the near future,
\ngenerating profit from the fluctuation in market price, are stated at fair value less cost to sell.
\nEMISSION ALLOWANCES
\nInventories include CO
2
emission allowances for covering emissions caused by power and heat
\nproduction. CO
2
emission allowances received free of charge are accounted at nominal value.
\nPurchases of CO
2
emissions allowances meeting the IFRS 9 \u201cown
use\u201d
-criteria, are accounted for at
\ncontracted purchase price. Purchases of CO
2
emission allowances, which have failed to meet the \u201cown
\nuse\u201d \u2013
criteria, and are thus accounted for as derivatives, are recognised at market price applicable at the
\ntime of delivery.
\nCO
2
emission costs are settled by returning the emission allowances. The obligation for CO
2
emission
\ncosts is presented in Other payables, see
\ue001
Note 33
Trade and other payables. To the extent that the
\nGroup already holds allowances to cover the emission costs, the obligation is measured at the carrying
\namount of those allowances. Any shortfall of allowances needed to cover the settlement obligation is
\nvalued at the current market value of allowances.
\nThe emission cost is recognised in the consolidated income statement within materials and services.
\nEUR million
2022
2021
\nRaw materials and supplies
298
703
\nGoods purchased for resale
-
1,247
\nEmission rights and green certificates
112
168
\nOther
55
156
\nBS
Total
465
2,275
\nRaw materials and supplies mainly consist of fuels consumed in the production process, or in the
\nrendering of services; and include, in particular, coal, uranium and nuclear fuel rods. Goods purchased for
\nresale include gas and coal inventories. Other mainly consists of work in progress and finished goods.
\nChange in inventories from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30
\nSeptember 2022.
\nIn 2021, inventories stated at fair value less costs to sell amounted to EUR 74 million and related to
\nUniper.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInventoriesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15065": {
"value": "ACCOUNTING POLICIES Inventories are stated at the lower of cost and net realisable value being the estimated selling price for
\nthe end product, less applicable variable selling expenses and other production costs. Cost is generally
\ndetermined using the weighted average cost method.
\nInventories which are acquired for the purpose of buying and selling commodities in the near future,
\ngenerating profit from the fluctuation in market price, are stated at fair value less cost to sell.
\nEMISSION ALLOWANCES
\nInventories include CO
2
emission allowances for covering emissions caused by power and heat
\nproduction. CO
2
emission allowances received free of charge are accounted at nominal value.
\nPurchases of CO
2
emissions allowances meeting the IFRS 9 \u201cown
use\u201d
-criteria, are accounted for at
\ncontracted purchase price. Purchases of CO
2
emission allowances, which have failed to meet the \u201cown
\nuse\u201d \u2013
criteria, and are thus accounted for as derivatives, are recognised at market price applicable at the
\ntime of delivery.
\nCO
2
emission costs are settled by returning the emission allowances. The obligation for CO
2
emission
\ncosts is presented in Other payables, see
\ue001
Note 33
Trade and other payables. To the extent that the
\nGroup already holds allowances to cover the emission costs, the obligation is measured at the carrying
\namount of those allowances. Any shortfall of allowances needed to cover the settlement obligation is
\nvalued at the current market value of allowances.
\nThe emission cost is recognised in the consolidated income statement within materials and services.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15073": {
"value": "EMISSION ALLOWANCES Inventories include CO
2
emission allowances for covering emissions caused by power and heat
\nproduction. CO
2
emission allowances received free of charge are accounted at nominal value.
\nPurchases of CO
2
emissions allowances meeting the IFRS 9 \u201cown
use\u201d
-criteria, are accounted for at
\ncontracted purchase price. Purchases of CO
2
emission allowances, which have failed to meet the \u201cown
\nuse\u201d \u2013
criteria, and are thus accounted for as derivatives, are recognised at market price applicable at the
\ntime of delivery.
\nCO
2
emission costs are settled by returning the emission allowances. The obligation for CO
2
emission
\ncosts is presented in Other payables, see
\ue001
Note 33
Trade and other payables. To the extent that the
\nGroup already holds allowances to cover the emission costs, the obligation is measured at the carrying
\namount of those allowances. Any shortfall of allowances needed to cover the settlement obligation is
\nvalued at the current market value of allowances.
The emission cost is recognised in the consolidated income statement within materials and services.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmissionRightsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15145": {
"value": "23 Trade and other receivables ACCOUNTING POLICIES
\nTrade receivables include revenue based on an estimate of electricity, gas, heat and cooling already
\ndelivered but not yet measured and not yet invoiced.
\nImpairment losses for trade receivables are calculated according to the expected credit loss (ECL)
\nmodel. Loss allowances on trade receivables are measured at an amount equal to lifetime expected
\ncredit losses.
\nAn allowance is made on the balance sheet for the expected future credit losses and remains on the
\nbalance sheet until it is written off as a credit loss or reversed. Allowances may remain on the balance
\nsheet for several years pending the outcome of collection processes and court proceedings. Write-off
\npolicies differ by country depending on local legislation and assessment of recovery possibilities. For
\nlarge trade receivables, ECL is calculated for the individual customer based on the estimated probability
\nof default and expected recovery rate for the customer. These estimates are derived from available
\nmarket data when possible, or based on the customer\u2019s rating. Adjustments are made if there are
\nindications of decreased creditworthiness, e.g. based on payment behaviour. ECL for trade receivables
\nfrom small customers are calculated on portfolio basis by country and business segment. The credit loss
\nallowances are based on historical analysis of losses when possible, or on average default rates for
\ncustomers based on externally available information. These rates are adjusted if there are any forward-
\nlooking indicators showing changes in expected credit losses. Trade receivables overdue more than
\n180 days are generally considered to be credit-impaired and allowances are made for the full amount,
\nadjusted for expected recovery rates.
\nEUR million
2022
2021
\nTrade receivables
1,625
12,916
\nOther
142
1,940
\nBS
Total
1,767
14,856
\nOther category includes other operating assets, accrued income and prepaid expenses. Change in trade
\nand other receivables from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30
\nSeptember 2022.
\nTrade receivables
\nAgeing analysis of trade receivables
\n2022
2021
\nEUR million
Gross
\nExpected
\ncredit
\nloss
\nallowance
\nExpected
\ncredit
\nloss rate,
\n%
Gross
\nExpected
\ncredit
\nloss
\nallowance
\nExpected
\ncredit
\nloss rate,
\n%
\nNot past due
1,541
3
0
12,662
14
0
\nPast due 1-30 days
70
3
4
192
5
2
\nPast due 31-90 days
9
2
22
22
9
42
\nPast due 91-180 days
6
3
50
34
16
48
\nPast due more than 181 days
77
67
87
204
154
75
\nTotal
1,703
78
5
13,114
198
2
\nChanges in expected credit loss allowance
\nEUR million
2022
2021
\n1 January
198
178
\nExpected credit loss allowance recognised during the year
78
43
\nDisposal of subsidiary companies
-168
-
\nWrite-offs
-39
-25
\nTranslation differences and other changes
9
3
\n31 December
78
198
\nChanges during the year include Uniper until 30 September 2022.
\nTrade receivables by currency (Gross)
\nEUR million
2022
2021
\nEUR
461
9,966
\nNOK
456
353
\nSEK
406
346
\nPLN
207
143
\nRUB
163
295
\nUSD
3
1,196
\nGBP
-
795
\nOther
7
20
\nTotal
1,703
13,114
\nTrade receivables are arising from a large number of customers mainly in EUR, NOK and SEK mitigating
\nthe concentration of risk.
\nFor further information regarding credit risk management and credit risks, see
\ue001
Counterparty and
\ncredit risks
in the Operating and financial review and
\ue001
Note 4.4
Credit risk.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15149": {
"value": "ACCOUNTING POLICIES Trade receivables include revenue based on an estimate of electricity, gas, heat and cooling already
\ndelivered but not yet measured and not yet invoiced.
\nImpairment losses for trade receivables are calculated according to the expected credit loss (ECL)
\nmodel. Loss allowances on trade receivables are measured at an amount equal to lifetime expected
\ncredit losses.
\nAn allowance is made on the balance sheet for the expected future credit losses and remains on the
\nbalance sheet until it is written off as a credit loss or reversed. Allowances may remain on the balance
\nsheet for several years pending the outcome of collection processes and court proceedings. Write-off
\npolicies differ by country depending on local legislation and assessment of recovery possibilities. For
\nlarge trade receivables, ECL is calculated for the individual customer based on the estimated probability
\nof default and expected recovery rate for the customer. These estimates are derived from available
\nmarket data when possible, or based on the customer\u2019s rating. Adjustments are made if there are
\nindications of decreased creditworthiness, e.g. based on payment behaviour. ECL for trade receivables
\nfrom small customers are calculated on portfolio basis by country and business segment. The credit loss
\nallowances are based on historical analysis of losses when possible, or on average default rates for
\ncustomers based on externally available information. These rates are adjusted if there are any forward-
\nlooking indicators showing changes in expected credit losses. Trade receivables overdue more than
\n180 days are generally considered to be credit-impaired and allowances are made for the full amount,
\nadjusted for expected recovery rates.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15172": {
"value": "EUR million 2022
2021
\nTrade receivables
1,625
12,916
\nOther
142
1,940
\nBS
Total
1,767
14,856
\nOther category includes other operating assets, accrued income and prepaid expenses. Change in trade
\nand other receivables from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30
\nSeptember 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15194": {
"value": "Ageing analysis of trade receivables 2022
2021
\nEUR million
Gross
\nExpected
\ncredit
\nloss
\nallowance
\nExpected
\ncredit
\nloss rate,
\n%
Gross
\nExpected
\ncredit
\nloss
\nallowance
\nExpected
\ncredit
\nloss rate,
\n%
\nNot past due
1,541
3
0
12,662
14
0
\nPast due 1-30 days
70
3
4
192
5
2
\nPast due 31-90 days
9
2
22
22
9
42
\nPast due 91-180 days
6
3
50
34
16
48
\nPast due more than 181 days
77
67
87
204
154
75
\nTotal
1,703
78
5
13,114
198
2
\nChanges in expected credit loss allowance
\nEUR million
2022
2021
\n1 January
198
178
\nExpected credit loss allowance recognised during the year
78
43
\nDisposal of subsidiary companies
-168
-
\nWrite-offs
-39
-25
\nTranslation differences and other changes
9
3
\n31 December
78
198
\nChanges during the year include Uniper until 30 September 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15336": {
"value": "24 Liquid funds ACCOUNTING POLICIES
\nCash and cash equivalents in Liquid funds include cash in hand, deposits held at call with banks and
\nother short-term, highly liquid investments with original maturities of three months or less. Cash and
\ncash equivalents, deposits and commercial papers are measured at amortised cost. Fixed-term
\nsecurities are measured at fair value through profit or loss.
\nDrawn amount of bank overdrafts are shown within borrowings in current liabilities on the balance
\nsheet. Trading-related cash collaterals are included in margin receivables and otherwise restricted cash
\nis treated as short-term interest-bearing receivables.
\nEUR million
2022
2021
\nCash at bank and in hand
2,673
3,858
\nDeposits and securities with maturity under 3 months
1,098
3,687
\nCash and cash equivalents
3,771
7,545
\nDeposits and commercial papers with maturity more than 3 months
147
-
\nSecurities, fixed-term with maturity more than 3 months
-
47
\nDeposits and securities, maturity over 3 months but less than 12 months
147
47
\nBS
Total
3,919
7,592
\nChanges in liquid funds from 31 December 2021 are mainly due to the deconsolidation of Uniper at 30
\nSeptember 2022.
\nAt the end of the reporting period, the Group\u2019s liquid funds totalled EUR 3,919 million (2021: 7,592).
\nLiquid funds include EUR 247 million relating to Fortum\u2019s Russian operations (2021: 300). These funds
\nare not available to the other Group companies as payment transactions with the Russian Federation are
\nsubject to general restrictions.
\nLiquid funds totalling EUR 3,600 million (2021: 7,342) are placed with counterparties that have an
\ninvestment grade credit rating.
\nAt the end of the reporting period, Fortum had undrawn committed credit facilities amounting to EUR
\n7,200 million. The undrawn facilities consisted of EUR 2,000 million Liquidity revolving credit facility
\nmaturing in June 2023 (6+6 months extension options by Fortum), EUR 2,400 million Core revolving credit
\nfacility maturing in June 2025 (1+1 year extension options by the lenders), EUR 2,000 million Solidium
\nbridge financing facility maturing in September 2023 and EUR 800 million bilateral revolving credit facility
\nmaturing in December 2023. In addition, Fortum has EUR 100 million committed overdraft limits that are
\nvalid until further notice.
\nThe EUR 3,000 million revolving credit facility with maturity in July 2022 was cancelled in June 2022
\nand the EUR 1,750 million revolving credit facility with maturity in June 2023 was repaid and cancelled in
\nJune 2022.
\nFor further information regarding credit risk management and credit risks, see
\ue001
Note 4.4
Credit risk.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15340": {
"value": "ACCOUNTING POLICIES Cash and cash equivalents in Liquid funds include cash in hand, deposits held at call with banks and
\nother short-term, highly liquid investments with original maturities of three months or less. Cash and
\ncash equivalents, deposits and commercial papers are measured at amortised cost. Fixed-term
\nsecurities are measured at fair value through profit or loss.
\nDrawn amount of bank overdrafts are shown within borrowings in current liabilities on the balance
\nsheet. Trading-related cash collaterals are included in margin receivables and otherwise restricted cash
\nis treated as short-term interest-bearing receivables.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15341": {
"value": "ACCOUNTING POLICIES Cash and cash equivalents in Liquid funds include cash in hand, deposits held at call with banks and
\nother short-term, highly liquid investments with original maturities of three months or less. Cash and
\ncash equivalents, deposits and commercial papers are measured at amortised cost. Fixed-term
\nsecurities are measured at fair value through profit or loss.
\nDrawn amount of bank overdrafts are shown within borrowings in current liabilities on the balance
\nsheet. Trading-related cash collaterals are included in margin receivables and otherwise restricted cash
\nis treated as short-term interest-bearing receivables.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRestrictedCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15382": {
"value": "Liquid funds include EUR 247 million relating to Fortum\u2019s Russian operations (2021: 300). These funds are not available to the other Group companies as payment transactions with the Russian Federation are
\nsubject to general restrictions.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15405": {
"value": "25 Share capital 2022
2021
\nEUR million
\nNumber of
\nshares
\nShare
\ncapital
\nNumber of
\nshares
\nShare
\ncapital
\nRegistered shares at 1 January
888,294,465
3,046
888,294,465
3,046
\nShare issue to Solidium Oy
8,970,000
-
-
-
\nRegistered shares at 31 December
897,264,465
3,046
888,294,465
3,046
\nFortum Corporation has one class of shares. By the end of 2022, a total of 897,264,465 shares had been
\nissued. Each share entitles the holder to one vote at the Annual General Meeting. All shares entitle
\nholders to an equal dividend. At the end of 2022 For
tum Corporation\u2019s share capital, paid in its entirety
\nand entered in the trade register, was EUR 3,046,185,953.00.
\nOn 6 September 2022, Fortum announced that it had agreed with the Finnish State on a EUR 2.35
\nbillion bridge financing arrangement. On 26 September 2022, Fortum announced to draw the first tranche
\nof the liquidity facility, EUR 350 million. As a condition in the agreement following the first draw down, the
\nFinnish State-owned holding company, Solidium Oy, was entitled to subscribe 8,970,000 new ordinary
\nregistered shares in Fortum in a directed share issue, without payment. The share issue to Solidium Oy
\nwas resolved in the Extraordinary General Meeting on 23 November 2022 and the new shares were
\nregistered with the Finnish trade register on 25 November 2022. The new shares carry full shareholder
\nrights, including the right to dividend, as of the registration date. The total amount of shares outstanding in
\nthe company after the registration of the new shares is 897,264,465. As a consequence, the shares under
\nthe control of the State of Finland has increased from 50.76% to 51.26%.
\nFortum Corporation\u2019s shares are listed on Nasdaq Helsinki. The trading code is FORTUM. Fortum
\nCorporation\u2019s shares are in the Finnish book entry system maintained by Eur
oclear Finland Ltd.
\nDetails on the President and CEO and other members of the Fortum Executive Management Team\u2019s
\nshareholdings and interest in the equity incentive schemes is presented in
\ue001
Note 10
Employee benefits
\nand Board remuneration.
\n25.1 Authorisations from the Annual General Meeting 2022
\nIn 2022, the Annual General Meeting decided to authorise the Board of Directors to decide on the
\nrepurchase and disposal of the company\u2019s own shares up to a maximum number of 20,000,000 shares,
\nwhich corresponded to approximately 2.25% of all the shares in the company on 28 March 2022. Only the
\nunrestricted equity of the company can be used to repurchase own shares on the basis of the authorisation.
\nThese authorisations are effective until the next Annual General Meeting and, in any event, for a period no
\nlonger than 18 months. These authorisations had not been used as per 1 March 2023.
\n25.2 Convertible bond loans and bonds with warrants
\nFortum Corporation has not issued any convertible bonds or bonds with attached warrants, which would
\nentitle the bearer to subscribe for Fortum shares. The Board of Directors of Fortum Corporation has no
\nunused authorisations from the General Meeting of shareholders to issue convertible bond loans or bonds
\nwith warrants or increase th
e company\u2019s share capital.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15439": {
"value": "On 6 September 2022, Fortum announced that it had agreed with the Finnish State on a EUR 2.35 billion bridge financing arrangement. On 26 September 2022, Fortum announced to draw the first tranche
\nof the liquidity facility, EUR 350 million. As a condition in the agreement following the first draw down, the
\nFinnish State-owned holding company, Solidium Oy, was entitled to subscribe 8,970,000 new ordinary
\nregistered shares in Fortum in a directed share issue, without payment. The share issue to Solidium Oy
\nwas resolved in the Extraordinary General Meeting on 23 November 2022 and the new shares were
\nregistered with the Finnish trade register on 25 November 2022. The new shares carry full shareholder
\nrights, including the right to dividend, as of the registration date. The total amount of shares outstanding in
\nthe company after the registration of the new shares is 897,264,465. As a consequence, the shares under
\nthe control of the State of Finland has increased from 50.76% to 51.26%.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15485": {
"value": "26 Non-controlling interests Principal non-controlling interests
\nEUR million
2022
2021
\nUniper, Germany
-
1,318
\nFortum Oslo Varme AS Group, Norway
-
150
\nOther
67
66
\nBS
Total
67
1,534
\nChange in non-controlling interests from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nUniper
\nEUR million
2021
\nSales
105,992
\nProfit for the period
-4,122
\nDividends paid to non-controlling interests
-157
\nTotal cash flows
2,663
\nCurrent assets
91,093
\nCurrent liabilities
95,331
\nCurrent net liabilities
-4,238
\nNon-current assets
27,683
\nNon-current liabilities
25,782
\nNon-current net assets
1,901
\nNet liabilities
-2,337
\nof which attributable to non-controlling interests
1,318
\nOwnership interests held by non-controlling interests (%)
22",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15537": {
"value": "27 Interest-bearing liabilities Financial net debt and adjusted net debt
\nEUR million
2022
2021
\n+ Interest-bearing liabilities
7,785
17,220
\n-
BS
Liquid funds
3,919
7,592
\n- Non-current securities
-
111
\n- Collateral arrangement securities
527
549
\n- Securities in interest-bearing receivables
527
660
\n-
BS
Margin receivables
2,607
9,163
\n+
BS
Margin liabilities
352
985
\n+/- Net margin liabilities/receivables
-2,255
-8,179
\nFinancial net debt
1,084
789
\n+
BS
Pension obligations
13
1,190
\n+ Other asset retirement obligations
19
872
\n-
BS
Share of Finnish and Swedish Nuclear Waste Funds
966
3,515
\n+
BS
Nuclear provisions
966
3,891
\n+ Nuclear provisions net of assets in Nuclear Waste Funds
0
375
\n+ Total provisions net of assets in Nuclear Waste Funds
33
2,438
\nAdjusted net debt
1,117
3,227
\nFortum has a collateral arrangement to release cash from the Nordic Power Exchange. This arrangement
\nis presented with equal amounts, EUR 527 million (2021: 549), as a short-term interest-bearing liability
\nand an interest-bearing receivable.
\nUnderfunded pension obligations and asset retirement obligations, net of share in nuclear waste funds,
\nare included in adjusted net debt.
\nInterest-bearing liabilities
\nEUR million
2022
2021
\nNon-current loans
3,558
7,756
\nCurrent loans
4,108
8,389
\nTotal loans
7,666
16,144
\nNon-current lease liabilities
100
945
\nCurrent lease liabilities
19
130
\nTotal lease liabilities
119
1,075
\nTotal
7,785
17,220
92
\nEUR million
2022
2021
\nBonds
1,545
2,706
\nLoans from financial institutions
980
3,715
\nReborrowing from the Finnish State Nuclear Waste Management Fund
918
916
\nLease liabilities
100
945
\nOther long-term interest-bearing liabilities
115
419
\nBS
Total long-term interest-bearing liabilities
3,658
8,701
\nCurrent portion of long-term bonds
1,090
999
\nCurrent portion of loans from financial institutions
539
468
\nCurrent portion of other long-term interest-bearing liabilities
-
264
\nCommercial paper liabilities
475
3,129
\nCurrent portion of lease liabilities
19
130
\nCollateral arrangement liability
527
549
\nOther short-term interest-bearing liabilities
1,477
2,980
\nBS
Total short-term interest-bearing liabilities
4,127
8,519
\nTotal
7,785
17,220
\nLoans
\nRepricing
\nEUR million
\nEffective
\ninterest
\nrate, %
\nCarrying
\namount
\n2022
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
\nFair
\nvalue
\n2022
\nCarrying
\namount
\n2021
\nFair
\nvalue
\n2021
\nBonds
1.8
2,634
1,088
715
832
2,569
3,705
3,919
\nLoans from financial institutions
4.5
1,519
1,343
-
177
1,545
4,183
4,222
\nReborrowing from the Finnish
\nState Nuclear Waste
\nManagement Fund
\n1)
\n0.5
918
918
-
-
938
1,165
1,213
\nOther long-term loans
4.6
115
82
-
33
126
433
463
\nTotal long-term loans
\n2)
\n2.4
5,187
3,430
715
1,042
5,178
9,487
9,817
\nCollateral arrangement liability
0.9
527
527
-
-
527
549
549
\nCommercial paper liabilities
2.9
475
475
-
-
475
3,129
3,129
\nOther short-term loans
7.2
1,477
1,477
-
-
1,477
2,980
2,980
\nTotal short-term loans
5.0
2,479
2,479
-
-
2,479
6,658
6,658
\nTotal
\n3)
\n3.3
7,666
5,909
715
1,042
7,657
16,144
16,475
\n1) The reborrowing from the Finnish State Nuclear Waste Management Fund includes the part relating to Loviisa nuclear power plant as well
\nas borrowing done through TVO.
\n2) Includes current portion of long-term loans of EUR 1,629 million (2021: 1,731).
\n3) The average interest rate on loans and derivatives was 3.9% (2021: 1.3%).
\nChanges in interest-bearing liabilities from 31 December 2021 are mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nIn January 2022, Fortum repaid the drawn amount of EUR 500 million of its EUR 800 million bilateral
\nrevolving credit facility. In March 2022, Fortum repaid EUR 247 million of the nuclear waste fund loans
\ntotalling EUR 918 million after the repayment.
\nIn June 2022, Fortum drew EUR 800 million of its EUR 800 million bilateral revolving credit facility.
\nFortum signed a new EUR 5,500 million revolving credit facility which consists of a EUR 3,100 million
\nLiquidity revolving credit facility and a EUR 2,400 million Core revolving credit facility. Fortum drew EUR
\n2,000 million from the Liquidity revolving credit facility and at the same time repaid and cancelled the EUR
\n1,750 million revolving credit facility. The remaining balance of the bridge loan, EUR 450 million, was
\nprepaid in June 2022.
\nIn July 2022, Fortum executed the second drawdown of EUR 600 million from the Liquidity revolving
\ncredit facility. In August 2022, Fortum drew the remaining EUR 500 million from the Liquidity revolving
\ncredit facility and furthermore drew EUR 1,000 million from the Core revolving facility.
\nIn September 2022, Fortum utilised the remaining part, EUR 1,400 million, of the Core revolving credit
\nfacility. Fortum repaid a maturing bond of EUR 1,000 million in September 2022. Additionally, Fortum
\nsigned a EUR 2,350 million bridge financing facility with Finnish State-owned company Solidium. Fortum
\ndrew EUR 350 million from the Solidium bridge financing facility in September 2022.
\nIn November 2022, Fortum repaid EUR 1,400 million part of the Core revolving credit facility and
\nFortum used the one year extension option of the EUR 800 million bilateral revolving credit facility to
\nmature in December 2023. In December 2022, Uniper repaid the shareholder loan of EUR 4,000 million to
\nFortum. Fortum repaid the remaining EUR 1,000 million of the Core revolving credit facility, EUR 2,000
\nmillion of the Liquidity credit facility and the EUR 800 million bilateral revolving credit facility was fully
\nrepaid in December 2022.
\nCurrent loans, EUR 4,108 million (2021: 8,389), include the current portion of long-term loans, EUR
\n1,629 million (2021: 1,731), and short-term loans EUR 2,479 million (2021: 6,658).
\nCurrent portion of long-term loans, EUR 1,629 million, consist of maturing bonds and loans from
\nfinancial institutions. Maturing bonds include EUR 1,000 million bond maturing in February 2023 and EUR
\n90 million Swedish krona bond maturing in June 2023. Maturing loans from financial institutions include
\nEUR 500 million loan maturing in June 2023 (with 8-month extension option by Fortum).
\nShort-term loans, EUR 2,479 million, include EUR 1,100 million drawdowns from Liquidity revolving
\ncredit facility (with 6+6 months extension options by Fortum), a EUR 350 million drawdown from Solidium
\nbridge financing facility and use of commercial paper programmes of EUR 475 million.
\nThe average interest rate for the portfolio of EUR loans was 3.1% at the balance sheet date (2021:
\n0.6%). The average interest rate on total loans and derivatives was 3.9% at the balance sheet date (2021:
\n1.3%).
\nInterest-bearing liabilities of EUR 7,785 million include EUR 204 million interest-bearing liabilities
\nrelating to Fortum\u2019s Russian operations,
which consists of EUR 199 million loans and EUR 5 million lease
\nliabilities.
\nFor more information, see
\ue001
Note 4
Financial risk management,
\ue001
Note 34
Leases,
\ue001
Note 36
Pledged
\nassets and contingent liabilities and
\ue001
Note 38
Related party transactions.
93
\nReconciliation of interest-bearing liabilities
\nNon-cash changes
\nEUR million
1 Jan 2022
\nDivestment of
\nsubsidiary
\ncompanies
\nCash flow from
\nfinancing activities
\n1)
\nNon-cash collateral
\narrangement
\nValuation
\ndifferences/
\nChange in
\nconsolidation
Lease liabilities
31 Dec 2022
\nBonds
3,705
-1,000
-71
2,634
\nReborrowing from the Finnish State Nuclear Waste Management Fund
1,165
-247
918
\nFinancial and other interest-bearing liabilities
\n2)
\n11,274
-19,723
9,672
-21
2,910
4,113
\nLease liabilities
1,075
-874
-104
22
119
\nTotal
17,220
-20,597
8,320
-21
2,840
22
7,785
\nNon-cash changes
\nEUR million
1 Jan 2021
\nDivestment of
\nsubsidiary
\ncompanies
\nCash flow from
\nfinancing activities
\nNon-cash collateral
\narrangement
\nValuation
\ndifferences/
\nChange in
\nconsolidation
Lease liabilities
31 Dec 2021
\nBonds
4,258
-500
-52
3,705
\nReborrowing from the Finnish State Nuclear Waste Management Fund
1,145
21
1,165
\nFinancial and other interest-bearing liabilities
4,204
-202
7,120
117
35
11,274
\nLease liabilities
1,055
-152
173
1,075
\nTotal
10,662
-202
6,488
117
-17
173
17,220
\n1) Repayments and borrowings from continuing and discontinued operations.
\n2) Other interest-bearing liabilities include impact from Uniper deconsolidation as well as Uniper and OKG AB shareholder loans which were previously eliminated in group consolidation.
\nBond issues
\nIssued/Maturity
\nInterest
\nbasis
\nInterest
\nrate, %
\nEffective
\ninterest, %
Currency
\nNominal
\nvalue
\nmillion
\nCarrying
\namount
\nEUR
\nmillion
\nFortum Corporation EUR 8,000 million EMTN Programme
\n1)
\n2019/2023
Fixed
0.875
0.996
EUR
1,000
998
\n2019/2026
Fixed
1.625
1.638
EUR
750
715
\n2019/2029
Fixed
2.125
2.247
EUR
750
735
\n2013/2023
Floating
Stibor 3M+1.13
SEK
1,000
90
\n2013/2043
Fixed
3.500
3.719
EUR
100
97
\nTotal outstanding carrying amount 31 December 2022
2,634
\n1) EMTN = Euro Medium Term Note",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15538": {
"value": "27 Interest-bearing liabilities Financial net debt and adjusted net debt
\nEUR million
2022
2021
\n+ Interest-bearing liabilities
7,785
17,220
\n-
BS
Liquid funds
3,919
7,592
\n- Non-current securities
-
111
\n- Collateral arrangement securities
527
549
\n- Securities in interest-bearing receivables
527
660
\n-
BS
Margin receivables
2,607
9,163
\n+
BS
Margin liabilities
352
985
\n+/- Net margin liabilities/receivables
-2,255
-8,179
\nFinancial net debt
1,084
789
\n+
BS
Pension obligations
13
1,190
\n+ Other asset retirement obligations
19
872
\n-
BS
Share of Finnish and Swedish Nuclear Waste Funds
966
3,515
\n+
BS
Nuclear provisions
966
3,891
\n+ Nuclear provisions net of assets in Nuclear Waste Funds
0
375
\n+ Total provisions net of assets in Nuclear Waste Funds
33
2,438
\nAdjusted net debt
1,117
3,227
\nFortum has a collateral arrangement to release cash from the Nordic Power Exchange. This arrangement
\nis presented with equal amounts, EUR 527 million (2021: 549), as a short-term interest-bearing liability
\nand an interest-bearing receivable.
\nUnderfunded pension obligations and asset retirement obligations, net of share in nuclear waste funds,
\nare included in adjusted net debt.
\nInterest-bearing liabilities
\nEUR million
2022
2021
\nNon-current loans
3,558
7,756
\nCurrent loans
4,108
8,389
\nTotal loans
7,666
16,144
\nNon-current lease liabilities
100
945
\nCurrent lease liabilities
19
130
\nTotal lease liabilities
119
1,075
\nTotal
7,785
17,220
92
\nEUR million
2022
2021
\nBonds
1,545
2,706
\nLoans from financial institutions
980
3,715
\nReborrowing from the Finnish State Nuclear Waste Management Fund
918
916
\nLease liabilities
100
945
\nOther long-term interest-bearing liabilities
115
419
\nBS
Total long-term interest-bearing liabilities
3,658
8,701
\nCurrent portion of long-term bonds
1,090
999
\nCurrent portion of loans from financial institutions
539
468
\nCurrent portion of other long-term interest-bearing liabilities
-
264
\nCommercial paper liabilities
475
3,129
\nCurrent portion of lease liabilities
19
130
\nCollateral arrangement liability
527
549
\nOther short-term interest-bearing liabilities
1,477
2,980
\nBS
Total short-term interest-bearing liabilities
4,127
8,519
\nTotal
7,785
17,220
\nLoans
\nRepricing
\nEUR million
\nEffective
\ninterest
\nrate, %
\nCarrying
\namount
\n2022
\nUnder
\n1 year
\n1-5
\nyears
\nOver
\n5 years
\nFair
\nvalue
\n2022
\nCarrying
\namount
\n2021
\nFair
\nvalue
\n2021
\nBonds
1.8
2,634
1,088
715
832
2,569
3,705
3,919
\nLoans from financial institutions
4.5
1,519
1,343
-
177
1,545
4,183
4,222
\nReborrowing from the Finnish
\nState Nuclear Waste
\nManagement Fund
\n1)
\n0.5
918
918
-
-
938
1,165
1,213
\nOther long-term loans
4.6
115
82
-
33
126
433
463
\nTotal long-term loans
\n2)
\n2.4
5,187
3,430
715
1,042
5,178
9,487
9,817
\nCollateral arrangement liability
0.9
527
527
-
-
527
549
549
\nCommercial paper liabilities
2.9
475
475
-
-
475
3,129
3,129
\nOther short-term loans
7.2
1,477
1,477
-
-
1,477
2,980
2,980
\nTotal short-term loans
5.0
2,479
2,479
-
-
2,479
6,658
6,658
\nTotal
\n3)
\n3.3
7,666
5,909
715
1,042
7,657
16,144
16,475
\n1) The reborrowing from the Finnish State Nuclear Waste Management Fund includes the part relating to Loviisa nuclear power plant as well
\nas borrowing done through TVO.
\n2) Includes current portion of long-term loans of EUR 1,629 million (2021: 1,731).
\n3) The average interest rate on loans and derivatives was 3.9% (2021: 1.3%).
\nChanges in interest-bearing liabilities from 31 December 2021 are mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nIn January 2022, Fortum repaid the drawn amount of EUR 500 million of its EUR 800 million bilateral
\nrevolving credit facility. In March 2022, Fortum repaid EUR 247 million of the nuclear waste fund loans
\ntotalling EUR 918 million after the repayment.
\nIn June 2022, Fortum drew EUR 800 million of its EUR 800 million bilateral revolving credit facility.
\nFortum signed a new EUR 5,500 million revolving credit facility which consists of a EUR 3,100 million
\nLiquidity revolving credit facility and a EUR 2,400 million Core revolving credit facility. Fortum drew EUR
\n2,000 million from the Liquidity revolving credit facility and at the same time repaid and cancelled the EUR
\n1,750 million revolving credit facility. The remaining balance of the bridge loan, EUR 450 million, was
\nprepaid in June 2022.
\nIn July 2022, Fortum executed the second drawdown of EUR 600 million from the Liquidity revolving
\ncredit facility. In August 2022, Fortum drew the remaining EUR 500 million from the Liquidity revolving
\ncredit facility and furthermore drew EUR 1,000 million from the Core revolving facility.
\nIn September 2022, Fortum utilised the remaining part, EUR 1,400 million, of the Core revolving credit
\nfacility. Fortum repaid a maturing bond of EUR 1,000 million in September 2022. Additionally, Fortum
\nsigned a EUR 2,350 million bridge financing facility with Finnish State-owned company Solidium. Fortum
\ndrew EUR 350 million from the Solidium bridge financing facility in September 2022.
\nIn November 2022, Fortum repaid EUR 1,400 million part of the Core revolving credit facility and
\nFortum used the one year extension option of the EUR 800 million bilateral revolving credit facility to
\nmature in December 2023. In December 2022, Uniper repaid the shareholder loan of EUR 4,000 million to
\nFortum. Fortum repaid the remaining EUR 1,000 million of the Core revolving credit facility, EUR 2,000
\nmillion of the Liquidity credit facility and the EUR 800 million bilateral revolving credit facility was fully
\nrepaid in December 2022.
\nCurrent loans, EUR 4,108 million (2021: 8,389), include the current portion of long-term loans, EUR
\n1,629 million (2021: 1,731), and short-term loans EUR 2,479 million (2021: 6,658).
\nCurrent portion of long-term loans, EUR 1,629 million, consist of maturing bonds and loans from
\nfinancial institutions. Maturing bonds include EUR 1,000 million bond maturing in February 2023 and EUR
\n90 million Swedish krona bond maturing in June 2023. Maturing loans from financial institutions include
\nEUR 500 million loan maturing in June 2023 (with 8-month extension option by Fortum).
\nShort-term loans, EUR 2,479 million, include EUR 1,100 million drawdowns from Liquidity revolving
\ncredit facility (with 6+6 months extension options by Fortum), a EUR 350 million drawdown from Solidium
\nbridge financing facility and use of commercial paper programmes of EUR 475 million.
\nThe average interest rate for the portfolio of EUR loans was 3.1% at the balance sheet date (2021:
\n0.6%). The average interest rate on total loans and derivatives was 3.9% at the balance sheet date (2021:
\n1.3%).
\nInterest-bearing liabilities of EUR 7,785 million include EUR 204 million interest-bearing liabilities
\nrelating to Fortum\u2019s Russian operations,
which consists of EUR 199 million loans and EUR 5 million lease
\nliabilities.
\nFor more information, see
\ue001
Note 4
Financial risk management,
\ue001
Note 34
Leases,
\ue001
Note 36
Pledged
\nassets and contingent liabilities and
\ue001
Note 38
Related party transactions.
93
\nReconciliation of interest-bearing liabilities
\nNon-cash changes
\nEUR million
1 Jan 2022
\nDivestment of
\nsubsidiary
\ncompanies
\nCash flow from
\nfinancing activities
\n1)
\nNon-cash collateral
\narrangement
\nValuation
\ndifferences/
\nChange in
\nconsolidation
Lease liabilities
31 Dec 2022
\nBonds
3,705
-1,000
-71
2,634
\nReborrowing from the Finnish State Nuclear Waste Management Fund
1,165
-247
918
\nFinancial and other interest-bearing liabilities
\n2)
\n11,274
-19,723
9,672
-21
2,910
4,113
\nLease liabilities
1,075
-874
-104
22
119
\nTotal
17,220
-20,597
8,320
-21
2,840
22
7,785
\nNon-cash changes
\nEUR million
1 Jan 2021
\nDivestment of
\nsubsidiary
\ncompanies
\nCash flow from
\nfinancing activities
\nNon-cash collateral
\narrangement
\nValuation
\ndifferences/
\nChange in
\nconsolidation
Lease liabilities
31 Dec 2021
\nBonds
4,258
-500
-52
3,705
\nReborrowing from the Finnish State Nuclear Waste Management Fund
1,145
21
1,165
\nFinancial and other interest-bearing liabilities
4,204
-202
7,120
117
35
11,274
\nLease liabilities
1,055
-152
173
1,075
\nTotal
10,662
-202
6,488
117
-17
173
17,220
\n1) Repayments and borrowings from continuing and discontinued operations.
\n2) Other interest-bearing liabilities include impact from Uniper deconsolidation as well as Uniper and OKG AB shareholder loans which were previously eliminated in group consolidation.
\nBond issues
\nIssued/Maturity
\nInterest
\nbasis
\nInterest
\nrate, %
\nEffective
\ninterest, %
Currency
\nNominal
\nvalue
\nmillion
\nCarrying
\namount
\nEUR
\nmillion
\nFortum Corporation EUR 8,000 million EMTN Programme
\n1)
\n2019/2023
Fixed
0.875
0.996
EUR
1,000
998
\n2019/2026
Fixed
1.625
1.638
EUR
750
715
\n2019/2029
Fixed
2.125
2.247
EUR
750
735
\n2013/2023
Floating
Stibor 3M+1.13
SEK
1,000
90
\n2013/2043
Fixed
3.500
3.719
EUR
100
97
\nTotal outstanding carrying amount 31 December 2022
2,634
\n1) EMTN = Euro Medium Term Note",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16058": {
"value": "The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated income statement, because of items of income or expense that are taxable
\nor deductible in other years and items that are never tax
able or deductible. The Group\u2019s liability for
\ncurrent tax is calculated using tax rates that have been enacted or substantively enacted by the end of
\nthe reporting period.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16067": {
"value": "Deferred tax is provided in full, using the balance sheet approach on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
\nstatements. However, if the deferred tax arises from initial recognition of an asset or liability in a
\ntransaction other than a business combination that at the time of the transaction affects neither
\naccounting nor taxable profit or loss, it is not accounted for. Deferred tax is determined using tax rates
\n(and laws) that have been enacted or substantially enacted by the closing date and are expected to
\napply when the related deferred tax asset is realised or the deferred tax liability is settled.
\nDeferred tax assets are recognised to the extent that it is probable that future taxable profit will be
\navailable against which the temporary differences can be utilised. Deferred tax assets are set off against
\ndeferred tax liabilities if they relate to income taxes levied by the same taxation authority.
\nDeferred tax is provided on temporary differences arising from investments in subsidiaries, associates
\nand joint ventures, except where the timing of the reversal of the temporary difference is controlled by
\nthe Group, and it is probable that the temporary difference will not be reversed in the foreseeable future.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16111": {
"value": "28.1 Deferred taxes on the balance sheet 2022
2021
\nEUR million
1 Jan
Change
31 Dec
1 Jan
Change
31 Dec
\nBS
Deferred tax assets
2,149
-1,215
933
1,089
1,060
2,149
\nBS
Deferred tax liabilities
-827
676
-152
-952
125
-827
\nNet deferred taxes
1,321
-539
782
138
1,184
1,321
\nDeferred tax assets are recognised to the extent it is probable that future taxable profit will be available
\nagainst which the unused tax losses, unused tax credits and deductible temporary differences can be
\nutilised in the relevant jurisdictions. As of 31 December 2022, Fortum has recognised deferred tax assets
\nof EUR 933 million (2021: EUR 2,149 million).
\nDeferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
\ncurrent tax assets against current tax liabilities and when the deferred income taxes relate to the same
\nfiscal authority.
95
\nMovement in deferred tax assets and liabilities 2022
\nEUR million
Intangible assets
\nProperty, plant and
\nequipment and
\nright-of-use assets
Pension obligations
Provisions
\nDerivative financial
\ninstruments
\nTax losses and tax
\ncredits carry-
\nforward
Other
Net deferred taxes
\n1 January 2022
-200
-1,551
268
1,658
1,476
146
-476
1,321
\nCharged to income statement
-15
275
-16
5,869
29
702
215
7,061
\nCharged to other comprehensive income
-
-
-33
-
248
-
-
215
\nExchange rate differences, reclassifications and other changes
5
-85
-144
-38
-39
-9
40
-269
\nDisposals of subsidiary companies
\n1)
\n156
830
-77
-7,509
-1,126
-89
269
-7,546
\n31 December 2022
-54
-530
-3
-19
589
751
48
782
\nMovement in deferred tax assets and liabilities 2021
\nEUR million
Intangible assets
\nProperty, plant and
\nequipment and
\nright-of-use assets
Pension obligations
Provisions
\nDerivative financial
\ninstruments
\nTax losses and tax
\ncredits carry-
\nforward
Other
Net deferred taxes
\n1 January 2021
-241
-1,228
542
1,273
-63
168
-312
138
\nCharged to income statement
44
-282
-156
395
1,258
-23
-161
1,076
\nCharged to other comprehensive income
-
-
-98
-
269
-
0
171
\nExchange rate differences, reclassifications and other changes
-2
-44
-20
-10
11
1
0
-63
\nAcquisitions and disposals
0
2
-
0
0
0
-3
-1
\n31 December 2021
-200
-1,551
268
1,658
1,476
146
-476
1,321
\n1) Disposals of subsidiary companies in 2022 included EUR 7 595 million from the deconsolidation of Uniper as of 30 September 2022. See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022. Charges to income statement regarding Uniper is presented in the results from discontinued operations. See
\ue001
Note 3.4
Discontinued operations.
\nNet change in deferred taxes from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30 September 2022. The decrease was partly offset by an increase in deferred tax assets related to derivatives
\ncaused by high commodity market prices. The increase in deferred tax assets on tax loss carry forward is mainly in Ireland and caused by the Uniper divestment and Russia related impairments. Fortum has prepared a
\ncomprehensive forecast to assess the future profitability of the Irish legal entity holding the loss carried forward, and has relied on this estimate to support the value of the deferred tax asset of EUR 706 million at 31
\nDecember 2022.
96
\nExpiry of tax losses carried forward and recognised deferred tax assets
\n2022
2021
\nEUR million
\nTax
\nlosses
\nDeferred
\ntax
\nasset
\nTax
\nlosses
\nDeferred
\ntax
\nasset
\nTax losses carried forward without expiration date
\n1)
\n5,836
749
675
132
\nTax losses carried forward with expiration date
9
2
58
8
\nTotal
5,844
751
733
139
\n1) Majority relates to Ireland.
\nDeferred tax assets are recognised for tax losses carried forward to the extent that realisation of the
\nrelated tax benefit through future profits is probable. The increase is mainly in Ireland related to impacts
\ncaused by Uniper divestment.
\nUnrecognised deferred tax
\nThe amount of temporary differences, tax losses carried forward and tax credits for which no deferred tax
\nasset was recognised due to uncertainty of utilisation:
\nEUR million
2022
2021
\nTemporary differences
280
4,910
\nTax losses carried forward
108
463
\nTax credits
5
3
\nTotal
393
5,376
\nThe decrease of unrecognised amounts of temporary differences and losses carry forwards is mainly due
\nto the deconsolidation of Uniper at 30 September 2022. The unrecognised temporary differences in 2022
\nmainly relate to Germany.
\nDeferred tax liabilities were not recognised on temporary differences of EUR 476 million (2021: 164)
\nrelating to investments in subsidiaries as Fortum can control the reversal effect, and it is probable that
\ntemporary differences will not be reversed in the foreseeable future. Such temporary differences are
\nmainly related to undistributed taxable profits from Russia.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16391": {
"value": "28.2 Income tax receivables EUR million
2022
2021
\nBelgium
36
113
\nOther
35
48
\nBS
Total
71
161
\nIncome tax receivable in Belgium relates to ongoing tax disputes on income tax assessments for
\nthe years 2008
\u2013
2012. Total amount of these taxes was EUR 113 million, which was booked as a
\nreceivable on the consolidated balance sheet on 31 December 2021. On 29 June 2022, the Antwerp court
\nof First Instance, Belgium, ruled in favour of Fortum on the company\u2019s income tax assessments in
\nBelgium for the years 2009-2012, and in September 2022, the Belgian tax authorities refunded Fortum the
\npaid taxes amounting to EUR 78 million. The amount for the year 2008, EUR 36 million, continues to be
\nrecognised on the balance sheet. See
\ue001
Note 37
Legal actions and official proceedings.
\nOther income tax receivables reflect corporate income taxes paid mainly in relation to the financial year,
\nas well as payments according to received tax audit assessments in relation to previous years.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16422": {
"value": "29 Nuclear-related assets and liabilities ACCOUNTING POLICIES
\nFortum owns Loviisa nuclear power plant in Finland. In Fortum's consolidated balance sheet, Share in
\nthe Nuclear Waste Funds and the Nuclear provisions relate to Loviisa nuclear power plant.
\nComparatives include also Barseb\u00e4ck Kraftbolag AB and OKG Aktiebolag AB.
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG AB, with Fortum owning
\n45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March 2020 to 30
\nSeptember 2022. On deconsolidation of Uniper on 30 September 2022, OKG AB was reclassified as an
\nassociated company. Uniper\u2019s 100% owners
hip in Barseb\u00e4ck Kraftbolag AB was also deconsolidated.
\nFortum\u2019s shares in the Nuclear Waste Funds are accounted for according to IFRIC 5, Rights to
\ninterests arising from decommissioning, restoration and environmental rehabilitation funds which states
\nthat the fund assets are measured at the lower of fair value or the value of the related liabilities since
\nFortum does not have control or joint control over the Nuclear Waste Funds. The Nuclear Waste Funds
\nare managed by governmental authorities. The related provisions are the provision for decommissioning
\nand the provision for disposal of spent fuel.
\nThe fair values of the provisions are calculated according to IAS 37 by discounting the separate future
\ncash flows, which are based on estimated future costs and actions already taken. The initial net present
\nvalue of the provision for decommissioning (at the time of commissioning the nuclear power plant) has
\nbeen included in the investment cost and is depreciated over the estimated operating time of the nuclear
\npower plant. Changes in the technical plans etc., which have an impact on the future cash flow of the
\nestimated costs for decommissioning, are accounted for by discounting the additional costs to the
\ncurrent point in time. The increased asset retirement cost due to the increased provision for
\ndecommissioning is added to property, plant and equipment and depreciated over the remaining
\nestimated operating time of the nuclear power plant. For power plant units taken from use the increase is
\nrecognised immediately in the income statement.
\nThe provision for spent fuel covers the future disposal costs for fuel used until the end of the
\naccounting period. Costs for disposal of spent fuel are expensed during the operating time based on fuel
\nusage. The impact of the possible changes in the estimated future cash flow for related costs is
\nrecognised immediately in the income statement based on the accumulated amount of fuel used until the
\nend of the accounting period. The related interest costs due to unwinding of the provision is recognised
\nin other financial items - net.
\nThe interest income and possible fair valuation effects on the Nuclear Waste Funds assets are
\npresented in other financial items - net.
\nFortum's actual share of the Nuclear Waste Funds can be higher than the carrying value of the Fund
\nin the balance sheet. The legal nuclear liability should be fully covered by payments and guarantees to
\nthe Nuclear Waste Fund in Finland. The same applies in Sweden for the nuclear power plants that are
\ntaken out of operation. For Swedish nuclear power plants in operation the nuclear liability should be fully
\ncovered at the end of the plants operating lifetimes. The difference between the legal liability and
\nprovisions can be material per power plant, as the legal liability in Finland is not discounted while the
\nprovisions are and in Sweden the legal liability is based on different assumptions than the provisions.
\nThe annual fees to the Fund are based on changes in the legal liability, the return generated in the
\nNuclear Waste Fund and incurred costs of taken actions.
\nFortum also has minority interests in other nuclear power companies, i.e. Teollisuuden Voima Oyj
\n(TVO) in Finland and Forsmarks Kraftgrupp AB (Forsmark) in Sweden. The minority shareholdings are
\nclassified as associated companies and joint ventures and are consolidated with equity method. Both the
\nFinnish and the Swedish companies are non-profit making, i.e. electricity production is invoiced to the
\nowners at cost according to local GAAP. Accounting policies of the associates regarding nuclear-related
\nassets and liabilities have been changed where necessary to ensure consistency with the policies
\nadopted by the Group.
97
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS MADE
\nWHEN ESTIMATING PROVISIONS RELATED TO NUCLEAR PRODUCTION
\nThe provision for future obligations for nuclear waste management including decommissioning of
\nFortum's nuclear power plants and related spent fuel is based on long-term cash flow forecasts of
\nestimated future costs. The main assumptions are technical plans, timing, cost estimates and discount
\nrate. The technical plans, timing and cost estimates are approved by governmental authorities.
\nAny changes in the assumed discount rate would affect the provision. If the discount rate used would
\nbe lowered, the provision would increase. For the power plants where the actual Share of the Nuclear
\nWaste Fund is higher than the provision an increase in provisions would be offset by an increase in the
\nrecorded share of Fortum's part of the Nuclear Waste Funds on the balance sheet. The total effect on
\nthe income statement would be positive since the decommissioning part of the provision is treated as an
\nasset retirement obligation. This situation will prevail as long as the actual Share of the Nuclear Waste
\nFund is higher than recognised in the balance sheet and IFRS is limiting the carrying value of the assets
\nto the amount of the provision since Fortum does not have control or joint control over the fund.
\nBoth in Finland and in Sweden nuclear operators are legally obligated for the decommissioning of the
\nplants and the disposal of spent fuel (nuclear waste management). In both countries the nuclear operators
\nare obligated to secure the funding of nuclear waste management by paying to government operated
\nnuclear waste funds. The nuclear operators also have to give securities to guarantee that sufficient funds
\nexist to cover future expenses of decommissioning of the power plant and the disposal of spent fuel.
\n29.1 Nuclear-related assets and liabilities for consolidated nuclear
\npower plants
\nEUR million
2022
2021
\nCarrying values on the balance sheet
\nBS
Nuclear provisions
966
3,891
\nBS
Fortum's share of the Nuclear Waste Funds
966
3,515
\nFortum's share of the fair value of the net assets in the Nuclear Waste Funds in Finland and Sweden
1,148
3,924
\nShare of fund not recognised on the balance sheet
182
408
\nNuclear provision and fund accounted according to IFRS
\nNuclear provisions include the provision for decommissioning and the provision for disposal of spent fuel.
\nThe carrying value of the nuclear provisions, calculated according to IAS 37, decreased by EUR 2,924
\nmillion compared to 31 December 2021, totalling EUR 966 million at 31 December 2022. The decrease is
\nmainly due to the deconsolidation of Uniper. Cost estimate and technical plan updates did not have a
\nsignificant effect on Fortum\u2019s financials.
\nFortum's share of the Nuclear Waste Funds are from an IFRS perspective overfunded by EUR 182
\nmillion, since Fortum's share of the Funds on 31 December 2022 was EUR 1,148 million and the carrying
\nvalue on the balance sheet was EUR 966 million. The Fund on Fortum's balance sheet can at maximum
\nbe equal to the amount of the provisions according to IFRS. As long as the Fund is overfunded from an
\nIFRS perspective, the other financial items - net, is adjusted positively if the provisions increase more than
\nthe Fund, and negatively if the provision decreases below the actual value of the fund.
\nLegal liability for Loviisa nuclear power plant
\nThe legal liability on 31 December 2022, decided by the Ministry of Economic Affairs and Employment in
\nDecember 2022, was EUR 1,197 million.
\nThe legal liability is based on a cost estimate, which is updated every year; and a technical plan, which
\nis updated every three years. The legal liability is determined by assuming that the decommissioning
\nwould start at the beginning of the year following the assessment year and discounting is not applied in
\ndetermining the amount.
Finnish nuclear operators submitted updated technical plan and cost estimates to
\nthe Ministry of Economic Affairs and Employment in June 2022. The decision on the updated legal liability
\nfrom the Ministry of Economic Affairs and Employment was received in December 2022.
\nFortum\u2019s share in the Finnish Nuclear Waste Fund
\nAccording to Nuclear Energy Act, Fortum is obligated to contribute funds in full to the State Nuclear Waste
\nManagement Fund to cover the legal liability. Fortum contributes funds to the Finnish State Nuclear Waste
\nManagement Fund based on the yearly funding obligation target decided by the governmental authorities
\nin connection with the decision of size of the legal liability. The current funding obligation target decided in
\nDecember 2022 is EUR 1,197 million.
\nNuclear provisions
\nEUR million
2022
2021
\n1 January
3,891
3,866
\nIncrease in provisions
40
211
\nProvision used
-145
-189
\nProvision reversed
-16
-
\nUnwinding of discount
65
65
\nExchange rate differences
-173
-62
\nDisposal of subsidiary companies
\n1)
\n-2,696
-
\nBS
31 December
966
3,891
\nBS
Fortum's share in the Nuclear Waste Funds
966
3,515
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022.
\nBorrowing from the State Nuclear Waste Management Fund
\nParticipants in the Finnish State Nuclear Waste Management Fund are allowed to borrow from the fund
\naccording to certain rules. Fortum uses the right to borrow back and has pledged shares in Kemijoki Oy
\nas security for the loans. The loans are renewed yearly. See
\ue001
Note 27
Interest-bearing liabilities and
\n\ue001
Note 36
Pledged assets and contingent liabilities.
\n29.2 Nuclear power plants in associated companies and joint ventures
\nOKG, Forsmark and TVO are non-profit making companies, i.e. electricity production is invoiced to the
\nowners at cost. Invoiced cost is accounted for according to local GAAP. In addition to the invoiced
\nelectricity production cost, Fortum makes IFRS adjustments to comply with Fortum's accounting
\nprinciples. These adjustments include also Fortum's share of the companies' nuclear waste funds and
\nnuclear provisions.
\nThe tables below present the 100% figures relating to nuclear funds and provisions for the companies
\nas well as Fortum's net share.
98
\nTVO's total nuclear related assets and liabilities (100%)
\nEUR million
2022
2021
\nCarrying values in TVO with Fortum assumptions
\nNuclear provisions
1,620
1,713
\nShare of the State Nuclear Waste Management Fund
1,157
1,159
\nNet amount
-463
-554
\nof which Fortum's net share consolidated with equity method
-116
-139
\nTVO's legal liability and actual share of the State Nuclear Waste Management Fund
\nLiability for nuclear waste management according to the Nuclear Energy Act
1,840
1,816
\nShare in the State Nuclear Waste Management Fund
1,436
1,451
\nShare of the fund not recognised on the balance sheet
279
292
\nTVO's legal liability, provision and share of the fund are based on the same principles as described above
\nfor Loviisa nuclear power plant. The liabilities and shares in the Fund are calculated and recorded
\nseparately for OL1/OL2 plant units and OL3 plant unit, as the corresponding total cost estimates are
\nprepared separately. The updated technical plan did not have a material impact on Fortum\u2019s share in
\nTVO\u2019s nuclear related assets and liabilities.
\nThe difference between TVO's share in the State Nuclear Waste Management Fund and the carrying
\nvalue of the TVO's share in the Fund is due to IFRIC 5, which requires that the carrying amount of the
\nshare in the State Nuclear Waste Management Fund is the lower of fair value or the value of the related
\nliability. On 31 December 2022 the OL1/OL2 plant units' share in the Fund is higher than the provision
\naccording to IFRS. The OL3 plant unit's share in the Fund is on the other hand lower than the provision
\naccording to IFRS. TVO's share of the Finnish State Nuclear Waste Management Fund is from an IFRS
\nperspective overfunded by EUR 279 million (of which Fortum's share is EUR 74 million), since TVO's
\nshare of the Fund on 31 December 2022 was EUR 1,436 million and the carrying value on the
\nconsolidated balance sheet with Fortum assumptions was EUR 1,157 million.
\nParticipants in the Finnish State Nuclear Waste Management Fund are allowed to borrow from the fund
\naccording to certain rules. Fortum is using the right to reborrow funds through TVO based on its
\nownership. See more information in
\ue001
Note 27
Interest-bearing liabilities.
\nOKG\u2019s and Forsmark\u2019s total nuclear related assets and liabilities (100%)
\nEUR million
2022
2021
\nOKG's and Forsmark's nuclear-related assets and liabilities with Fortum
\nassumptions
\n1)
\nNuclear provisions
4,641
2,634
\nShare in the State Nuclear Waste Management Fund
3,200
2,397
\nNet amount
-1,441
-237
\nof which Fortum's net share consolidated with equity method
-456
-76
\n1) Comparatives do not include OKG AB as it is included in the comparatives of consolidated nuclear power plants. Comparatives include
\nUniper's minority ownership of Forsmark which is now deconsolidated.
\nIn Sweden, Svensk K\u00e4rnbr\u00e4nslehantering AB (SKB), a company owned by the nuclear operators, takes
\ncare of all nuclear waste management-related activities on behalf of nuclear operators. SKB receives its
\nfunding from the Swedish Nuclear Waste Fund, which in turn is financed by the nuclear operators.
\nNuclear waste fees and guarantees are normally updated every three years by governmental decision
\nafter a proposal from the Swedish Radiation Safety Authority (SSM). The proposal is based on cost
\nestimates done by SKB and the license holders. An updated technical plan for nuclear waste
\nmanagement was decided by SKB in December 2022. In December 2020, the Swedish government
\ndecided the waste fees and guarantees for year 2021 only, and in January 2022 for 2022-2023. Nuclear
\nwaste fees paid by licensees with a unit/units that are still in operation are currently based on future costs
\nwith the assumed lifetime of 50 years for each unit of a nuclear power plant. The fee is calculated in
\nrelation to the energy delivered and set as an amount of \u00f6re (1 \u00f6re = SEK 0.01) per kWh delivered.
\nStatus of TVO\u2019s Olkiluoto 3 project
\nFortum is participating in the country's fifth nuclear power plant unit, Olkiluoto 3 (OL3), through the
\nshareholding in Teollisuuden Voima Oyj (TVO) with an approximately 25% share representing some 400
\nMW in capacity. Olkiluoto 3 (OL3), currently under test production phase, was procured as a fixed-price
\nturnkey project from a consortium (Plant Supplier) formed by Areva GmbH, Areva NP SAS and Siemens
\nAG. As stipulated in the plant contract, the consortium companies have joint and several liability for the
\ncontractual obligations.
\nIn March 2018, TVO signed a comprehensive settlement agreement with the plant supplier consortium
\ncompanies Areva NP, Areva GmbH, and Siemens AG as well as with Areva Group parent company Areva
\nSA, a company wholly owned by the French State. The settlement agreement was amended with
\nagreements signed in June 2021. The supplier consortium companies committed to ensuring that the
\nfunds dedicated to the completion of the OL3 project will be adequate and will cover all applicable
\nguarantee periods, including setting up a trust mechanism funded by Areva companies to secure the
\nfinancing of the costs of completing the OL3 project. During the period under review, the fund, which was
\npreviously replenished in July 2021, has been used to cover costs incurred to the Areva companies for the
\ncompletion of the OL3 project in accordance with the settlement agreement.
\nOn 12 March 2022, OL3 was connected to the national grid and electricity production started. The
\nelectricity power level was gradually increased to approximately 850 megawatts, until the production tests
\nwere interrupted on 26 April 2022 due to the boron pumps unexpectedly switching on. Simultaneously, a
\nleak in the generator\u2019s cooling system was observed. Foreign material detached from the steam guide
\nplates was found in the turbine\u2019s steam reheater in May
2022, which required repair work. The work was
\ncompleted on 8 August 2022. TVO communicated on 11 August 2022 that a turbine automation update of
\napproximately two weeks would be carried out. The test production continued on 28 August 2022 with
\ntests at a 60% power level. On 6 September 2022, STUK granted
permission to increase OL3\u2019s power
\nlevel to over 60% and from thereon to 100%. According to STUK, the production tests and investigations
\nconducted so far showed that OL3 has worked safely, and that increasing the plant unit\u2019s power level can
\nbe continued. Tests at an 80% power level were started on 9 September 2022. Tests at full power,
\napproximately 1,600 megawatts, were started on 30 September 2022. Test production was interrupted on
\n18 October 2022 due to damage detected in the internals of feedwater pumps
in OL3\u2019s
turbine island.
\nTest production continued 27 December 2022 after investigations into the damage were mainly
\ncompleted.
\nAccording to latest information received from the Plant Supplier, OL3\u2019s regular electricity production is
\nto start in April 2023. The Plant Supplier is obliged to complete the plant unit in accordance with the plant
\ncontract and settlement agreements.
\nNuclear-related guarantees
\nIn addition to nuclear waste fees nuclear power companies provide guarantees for any uncovered liability
\nand unexpected events.
\nFor more information regarding Fortum's guarantees given on behalf of nuclear companies, see
\n\ue001
Note 36
Pledged assets and contingent liabilities.
99
\n30 Other provisions
\nACCOUNTING POLICIES
\nProvisions are recognised when the Group has a present legal or constructive obligation to a third party
\nas a result of past events, it is probable that an outflow of resources will be required to settle the
\nobligation and the amount can be reliably estimated.
\nProvisions are measured at the present value of the expenditures expected to be required to settle the
\nobligation at the reporting date using a discount rate that reflects current market assessment of the time
\nvalue of money. When risk is not covered in the estimated cash flows, the discount rate also includes the
\nrisks specific to the obligation.
\nIncrease in the provision due to the passage of time and changes in provisions due to changes in
\ndiscount rates are recognised as interest expense in the consolidated income statement. Changes in
\nprovisions, except for changes in asset retirement obligations, are recognised in the consolidated
\nincome statement.
\nASSET RETIREMENT OBLIGATIONS
\nAsset retirement obligations for the decommissioning or dismantling of property, plant and equipment
\nare recognised either when there is a contractual obligation towards a third party or a legal obligation.
\nThe obligation is generally based on detailed cost estimates validated by external experts.
\nThe asset retirement obligation is recognised as part of the cost of an item of property, plant and
\nequipment when the asset is put in service. Costs are depreciated over the remainder of the asset's
\nuseful life. Changes in asset retirement obligations are recognised in property, plant and equipment on
\nthe consolidated balance sheet; unless the item of property, plant and equipment has already been fully
\ndepreciated when changes are recognised in the consolidated income statement.
\nONEROUS CONTRACT PROVISIONS
\nAn onerous contract provision is recognised for a contract under which the unavoidable costs of meeting
\nthe obligations under the contract exceed the economic benefits expected to be received under it.
\nUnavoidable costs is the lower of the excess obligation from the performance under the contract, and
\nany potential penalties or compensation arising in the event of non-performance.
\nENVIRONMENTAL PROVISIONS
\nEnvironmental provisions are recognised based on the current interpretation of environmental laws and
\nregulations when it is probable that a present obligation has arisen, and the amount of such liability can
\nbe reliably estimated. The obligation is generally based on detailed cost estimates validated by external
\nexperts.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS MADE
\nWHEN ESTIMATING PROVISIONS
\nProvisions for present obligations require management judgment in determining whether it is probable
\nthat an outflow of economic benefits will be required to settle the obligation. Estimation is required in
\ndetermining the value of the obligation as the amount recognised as a provision is based on the best
\nestimate of unavoidable costs required to settle the obligation at the end of the reporting period. When
\nestimating unavoidable costs, management may be required to consider a range of possible outcomes
\nand their associated probabilities, risks and uncertainties surrounding the events and circumstances, as
\nwell as making assumptions of the timing of payment. Estimation is also required in determining the rate
\nused to discount provisions to present value. Changes in estimates of timing or amounts of costs
\nrequired to settle the obligation may become necessary as time passes and/or more accurate
\ninformation becomes available.
\nEUR million
\nSupplier-
\nand
\ncustomer-
\nrelated
\nAsset
\nretire-
\nment
\nPower
\nproduc-
\ntion
\nrelated
\nGas distri-
\nbution-
\nrelated
\nEnvironmental
\nremediation
\nand
\nsimilar
\nPersonnel-
\nrelated
Other
Total
\n1 January 2022
2,893
872
653
354
253
368
1,013
6,406
\nIncrease in provisions
26,590
8
12
9
11
61
218
26,909
\nProvisions used
-1,647
-4
-
-66
-9
-94
-56
-1,877
\nUnused provisions reversed
-295
-50
-
-66
-2
-56
-139
-608
\nExchange rate
\ndifferences and other
\nchanges
-1
-1
-
-1
-1
1
-94
-96
\nUnwinding of discounting
-76
-36
-112
-27
-24
-28
-19
-322
\nDisposal of subsidiary
\ncompanies
\n1)
\n-27,465
-770
-552
-203
-186
-253
-852
-30,281
\n31 December 2022
-
19
-
-
41
-
70
130
\nBS
Of which current
\nprovisions
-
-
-
-
-
-
13
13
\nBS
Of which non-current
\nprovisions
-
19
-
-
41
-
58
118
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022.
\nProvisions for supplier- and customer-related obligations in 2021 related to Uniper and included EUR
\n2.6 billion of onerous contract provisions for procurement of electricity sales contracts for which the own-
\nuse exemption under IFRS 9 is applied, and to long-term infrastructure purchase contracts used in the
\ngas storage business.
\nProvisions for asset retirement obligations consist of obligations for conventional power plants. The
\nmajority of the provision is estimated to be used within 5-10 years. In 2021, provisions for asset retirement
\nobligations were mainly related to Uniper and consisted of obligations for conventional and renewable
\nenergy power plants, including the conventional plant components in the nuclear power segment; as well
\nas provisions for environmental improvements at gas storage facilities.
\nPower production-related provisions in 2021 related to Uniper and consisted mainly of provisions from
\nthe hydroelectric power business.
\nGas distribution-related provisions in 2021 related to Uniper and consisted mainly of onerous contract
\nprovisions for gas transportation and regasification.
\nEnvironmental provisions mainly include provisions for redevelopment and water protection measures,
\nthe rehabilitation of contaminated sites, and other environmental improvement measures. The majority of
\nthe provision is estimated to be used within 10-15 years.
\nPersonnel-related provisions in 2021 related to Uniper and mainly included provisions for performance-
\nbased compensation components, long-service bonus obligations, in-kind obligations, restructuring and
\nother deferred personnel costs.
\nOther provisions include a number of individually immaterial items, and in 2021 mainly related to
\nUniper.
\nFor provisions for decommissioning, and provision for disposal of spent fuel for nuclear production, see
\n\ue001
Note 29
Nuclear-related assets and liabilities.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfProvisionsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16425": {
"value": "ACCOUNTING POLICIES
\nFortum owns Loviisa nuclear power plant in Finland. In Fortum's consolidated balance sheet, Share in
\nthe Nuclear Waste Funds and the Nuclear provisions relate to Loviisa nuclear power plant.
\nComparatives include also Barseb\u00e4ck Kraftbolag AB and OKG Aktiebolag AB.
\nFortum and Uniper are co-owners in the Swedish nuclear company OKG AB, with Fortum owning
\n45.5%. Fortum accounted for the shareholding in OKG AB as a subsidiary from 31 March 2020 to 30
\nSeptember 2022. On deconsolidation of Uniper on 30 September 2022, OKG AB was reclassified as an
\nassociated company. Uniper\u2019s 100% owners
hip in Barseb\u00e4ck Kraftbolag AB was also deconsolidated.
\nFortum\u2019s shares in the Nuclear Waste Funds are accounted for according to IFRIC 5, Rights to
\ninterests arising from decommissioning, restoration and environmental rehabilitation funds which states
\nthat the fund assets are measured at the lower of fair value or the value of the related liabilities since
\nFortum does not have control or joint control over the Nuclear Waste Funds. The Nuclear Waste Funds
\nare managed by governmental authorities. The related provisions are the provision for decommissioning
\nand the provision for disposal of spent fuel.
\nThe fair values of the provisions are calculated according to IAS 37 by discounting the separate future
\ncash flows, which are based on estimated future costs and actions already taken. The initial net present
\nvalue of the provision for decommissioning (at the time of commissioning the nuclear power plant) has
\nbeen included in the investment cost and is depreciated over the estimated operating time of the nuclear
\npower plant. Changes in the technical plans etc., which have an impact on the future cash flow of the
\nestimated costs for decommissioning, are accounted for by discounting the additional costs to the
\ncurrent point in time. The increased asset retirement cost due to the increased provision for
\ndecommissioning is added to property, plant and equipment and depreciated over the remaining
\nestimated operating time of the nuclear power plant. For power plant units taken from use the increase is
\nrecognised immediately in the income statement.
\nThe provision for spent fuel covers the future disposal costs for fuel used until the end of the
\naccounting period. Costs for disposal of spent fuel are expensed during the operating time based on fuel
\nusage. The impact of the possible changes in the estimated future cash flow for related costs is
\nrecognised immediately in the income statement based on the accumulated amount of fuel used until the
\nend of the accounting period. The related interest costs due to unwinding of the provision is recognised
\nin other financial items - net.
\nThe interest income and possible fair valuation effects on the Nuclear Waste Funds assets are
\npresented in other financial items - net.
\nFortum's actual share of the Nuclear Waste Funds can be higher than the carrying value of the Fund
\nin the balance sheet. The legal nuclear liability should be fully covered by payments and guarantees to
\nthe Nuclear Waste Fund in Finland. The same applies in Sweden for the nuclear power plants that are
\ntaken out of operation. For Swedish nuclear power plants in operation the nuclear liability should be fully
\ncovered at the end of the plants operating lifetimes. The difference between the legal liability and
\nprovisions can be material per power plant, as the legal liability in Finland is not discounted while the
\nprovisions are and in Sweden the legal liability is based on different assumptions than the provisions.
\nThe annual fees to the Fund are based on changes in the legal liability, the return generated in the
\nNuclear Waste Fund and incurred costs of taken actions.
\nFortum also has minority interests in other nuclear power companies, i.e. Teollisuuden Voima Oyj
\n(TVO) in Finland and Forsmarks Kraftgrupp AB (Forsmark) in Sweden. The minority shareholdings are
\nclassified as associated companies and joint ventures and are consolidated with equity method. Both the
\nFinnish and the Swedish companies are non-profit making, i.e. electricity production is invoiced to the
\nowners at cost according to local GAAP. Accounting policies of the associates regarding nuclear-related
\nassets and liabilities have been changed where necessary to ensure consistency with the policies
\nadopted by the Group.
ACCOUNTING POLICIES
\nProvisions are recognised when the Group has a present legal or constructive obligation to a third party
\nas a result of past events, it is probable that an outflow of resources will be required to settle the
\nobligation and the amount can be reliably estimated.
\nProvisions are measured at the present value of the expenditures expected to be required to settle the
\nobligation at the reporting date using a discount rate that reflects current market assessment of the time
\nvalue of money. When risk is not covered in the estimated cash flows, the discount rate also includes the
\nrisks specific to the obligation.
\nIncrease in the provision due to the passage of time and changes in provisions due to changes in
\ndiscount rates are recognised as interest expense in the consolidated income statement. Changes in
\nprovisions, except for changes in asset retirement obligations, are recognised in the consolidated
\nincome statement.
\nASSET RETIREMENT OBLIGATIONS
\nAsset retirement obligations for the decommissioning or dismantling of property, plant and equipment
\nare recognised either when there is a contractual obligation towards a third party or a legal obligation.
\nThe obligation is generally based on detailed cost estimates validated by external experts.
\nThe asset retirement obligation is recognised as part of the cost of an item of property, plant and
\nequipment when the asset is put in service. Costs are depreciated over the remainder of the asset's
\nuseful life. Changes in asset retirement obligations are recognised in property, plant and equipment on
\nthe consolidated balance sheet; unless the item of property, plant and equipment has already been fully
\ndepreciated when changes are recognised in the consolidated income statement.
\nONEROUS CONTRACT PROVISIONS
\nAn onerous contract provision is recognised for a contract under which the unavoidable costs of meeting
\nthe obligations under the contract exceed the economic benefits expected to be received under it.
\nUnavoidable costs is the lower of the excess obligation from the performance under the contract, and
\nany potential penalties or compensation arising in the event of non-performance.
\nENVIRONMENTAL PROVISIONS
\nEnvironmental provisions are recognised based on the current interpretation of environmental laws and
\nregulations when it is probable that a present obligation has arisen, and the amount of such liability can
\nbe reliably estimated. The obligation is generally based on detailed cost estimates validated by external
\nexperts.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16761": {
"value": "30 Other provisions ACCOUNTING POLICIES
\nProvisions are recognised when the Group has a present legal or constructive obligation to a third party
\nas a result of past events, it is probable that an outflow of resources will be required to settle the
\nobligation and the amount can be reliably estimated.
\nProvisions are measured at the present value of the expenditures expected to be required to settle the
\nobligation at the reporting date using a discount rate that reflects current market assessment of the time
\nvalue of money. When risk is not covered in the estimated cash flows, the discount rate also includes the
\nrisks specific to the obligation.
\nIncrease in the provision due to the passage of time and changes in provisions due to changes in
\ndiscount rates are recognised as interest expense in the consolidated income statement. Changes in
\nprovisions, except for changes in asset retirement obligations, are recognised in the consolidated
\nincome statement.
\nASSET RETIREMENT OBLIGATIONS
\nAsset retirement obligations for the decommissioning or dismantling of property, plant and equipment
\nare recognised either when there is a contractual obligation towards a third party or a legal obligation.
\nThe obligation is generally based on detailed cost estimates validated by external experts.
\nThe asset retirement obligation is recognised as part of the cost of an item of property, plant and
\nequipment when the asset is put in service. Costs are depreciated over the remainder of the asset's
\nuseful life. Changes in asset retirement obligations are recognised in property, plant and equipment on
\nthe consolidated balance sheet; unless the item of property, plant and equipment has already been fully
\ndepreciated when changes are recognised in the consolidated income statement.
\nONEROUS CONTRACT PROVISIONS
\nAn onerous contract provision is recognised for a contract under which the unavoidable costs of meeting
\nthe obligations under the contract exceed the economic benefits expected to be received under it.
\nUnavoidable costs is the lower of the excess obligation from the performance under the contract, and
\nany potential penalties or compensation arising in the event of non-performance.
\nENVIRONMENTAL PROVISIONS
\nEnvironmental provisions are recognised based on the current interpretation of environmental laws and
\nregulations when it is probable that a present obligation has arisen, and the amount of such liability can
\nbe reliably estimated. The obligation is generally based on detailed cost estimates validated by external
\nexperts.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS: ASSUMPTIONS MADE
\nWHEN ESTIMATING PROVISIONS
\nProvisions for present obligations require management judgment in determining whether it is probable
\nthat an outflow of economic benefits will be required to settle the obligation. Estimation is required in
\ndetermining the value of the obligation as the amount recognised as a provision is based on the best
\nestimate of unavoidable costs required to settle the obligation at the end of the reporting period. When
\nestimating unavoidable costs, management may be required to consider a range of possible outcomes
\nand their associated probabilities, risks and uncertainties surrounding the events and circumstances, as
\nwell as making assumptions of the timing of payment. Estimation is also required in determining the rate
\nused to discount provisions to present value. Changes in estimates of timing or amounts of costs
\nrequired to settle the obligation may become necessary as time passes and/or more accurate
\ninformation becomes available.
\nEUR million
\nSupplier-
\nand
\ncustomer-
\nrelated
\nAsset
\nretire-
\nment
\nPower
\nproduc-
\ntion
\nrelated
\nGas distri-
\nbution-
\nrelated
\nEnvironmental
\nremediation
\nand
\nsimilar
\nPersonnel-
\nrelated
Other
Total
\n1 January 2022
2,893
872
653
354
253
368
1,013
6,406
\nIncrease in provisions
26,590
8
12
9
11
61
218
26,909
\nProvisions used
-1,647
-4
-
-66
-9
-94
-56
-1,877
\nUnused provisions reversed
-295
-50
-
-66
-2
-56
-139
-608
\nExchange rate
\ndifferences and other
\nchanges
-1
-1
-
-1
-1
1
-94
-96
\nUnwinding of discounting
-76
-36
-112
-27
-24
-28
-19
-322
\nDisposal of subsidiary
\ncompanies
\n1)
\n-27,465
-770
-552
-203
-186
-253
-852
-30,281
\n31 December 2022
-
19
-
-
41
-
70
130
\nBS
Of which current
\nprovisions
-
-
-
-
-
-
13
13
\nBS
Of which non-current
\nprovisions
-
19
-
-
41
-
58
118
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nChanges during the year include Uniper until 30 September 2022.
\nProvisions for supplier- and customer-related obligations in 2021 related to Uniper and included EUR
\n2.6 billion of onerous contract provisions for procurement of electricity sales contracts for which the own-
\nuse exemption under IFRS 9 is applied, and to long-term infrastructure purchase contracts used in the
\ngas storage business.
\nProvisions for asset retirement obligations consist of obligations for conventional power plants. The
\nmajority of the provision is estimated to be used within 5-10 years. In 2021, provisions for asset retirement
\nobligations were mainly related to Uniper and consisted of obligations for conventional and renewable
\nenergy power plants, including the conventional plant components in the nuclear power segment; as well
\nas provisions for environmental improvements at gas storage facilities.
\nPower production-related provisions in 2021 related to Uniper and consisted mainly of provisions from
\nthe hydroelectric power business.
\nGas distribution-related provisions in 2021 related to Uniper and consisted mainly of onerous contract
\nprovisions for gas transportation and regasification.
\nEnvironmental provisions mainly include provisions for redevelopment and water protection measures,
\nthe rehabilitation of contaminated sites, and other environmental improvement measures. The majority of
\nthe provision is estimated to be used within 10-15 years.
\nPersonnel-related provisions in 2021 related to Uniper and mainly included provisions for performance-
\nbased compensation components, long-service bonus obligations, in-kind obligations, restructuring and
\nother deferred personnel costs.
\nOther provisions include a number of individually immaterial items, and in 2021 mainly related to
\nUniper.
\nFor provisions for decommissioning, and provision for disposal of spent fuel for nuclear production, see
\n\ue001
Note 29
Nuclear-related assets and liabilities.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16792": {
"value": "ENVIRONMENTAL PROVISIONS Environmental provisions are recognised based on the current interpretation of environmental laws and
\nregulations when it is probable that a present obligation has arisen, and the amount of such liability can
\nbe reliably estimated. The obligation is generally based on detailed cost estimates validated by external
\nexperts.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDecommissioningRestorationAndRehabilitationProvisionsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16793": {
"value": "ENVIRONMENTAL PROVISIONS Environmental provisions are recognised based on the current interpretation of environmental laws and
\nregulations when it is probable that a present obligation has arisen, and the amount of such liability can
\nbe reliably estimated. The obligation is generally based on detailed cost estimates validated by external
\nexperts.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEnvironmentRelatedExpenseExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16982": {
"value": "ACCOUNTING POLICIES The Group companies have various pension schemes in accordance with the local conditions and
\npractices in the countries in which they operate. The schemes are generally funded through various
\npension vehicles including payments to insurance companies, Group\u2019s pension funds and other
\nseparate arrangements. The Group has both defined benefit and defined contribution plans.
\nFor defined benefit plans, pension costs are assessed using the projected unit credit method. The
\ncost of providing pensions is charged to the income statement as to spread the service cost over the
\nservice lives of employees. Current and past service cost, as well as gains or losses from settlements
\nare reported under personnel costs. The net interest is reported in financial items.
\nThe defined benefit obligation is calculated annually on the balance sheet date and is measured as
\nthe present value of the estimated future cash flows using interest rates of high-quality corporate bonds,
\nor similar, that have terms to maturity approximating to the terms of the related pension liability. The plan
\nassets for pensions are valued at market value. The net liability recognised on the balance sheet is the
\ndefined benefit obligation at the closing date less the fair value of plan assets.
\nAny net asset position that might arise from offsetting the present value of the defined benefit obliga-
\ntions against the corresponding fair value of plan assets is recognised taking into account the applicable
\nasset restrictions. Such an asset position is reported in Other non-current assets on the balance sheet.
\nIn the case of a plan amendment, curtailment or settlement (each a \"plan event\") occurring in a
\ndefined benefit plan during an annual reporting period, the current service cost and the net interest on
\nthe net liability or asset are remeasured for the remainder of the reporting period after the plan event.
\nThe actuarial assumptions applicable as of the date of the plan event are to be used as the basis for
\nsuch remeasurement. When the benefits of a plan are changed, or when a plan is curtailed, the resulting
\nchange in the present value of the defined benefit obligation that relates to past service, or the gain or
\nloss related to a curtailment is recognised immediately in profit or loss. Gains or losses on settlements of
\ndefined benefit plans are recognised when the settlement occurs.
\nRemeasurements of the net defined benefit liability or asset include actuarial gains and losses that
\nmay arise especially from differences between estimated and actual variations in underlying
\nassumptions about demographic and financial variables; and, additionally, from developments in these
\nassumptions as of each reporting date. Additionally included is the difference between the actual return
\non plan assets and the interest income on plan assets contained in the net interest result, as well as any
\nchange in the effect of the asset ceiling, excluding amounts already included in net interest.
\nRemeasurement results and related deferred taxes are recognised in full in the period in which they
\noccur and are reported in other comprehensive income.
\nThe Group's contributions to defined contribution plans are charged to the income statement in the
\nperiod to which the contributions relate.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17569": {
"value": "32 Other non-current liabilities EUR million
2022
2021
\nContract liabilities
-
95
\nConnection fees
70
70
\nOther
51
232
\nBS
Total
121
397
\nChange in other non-current liabilities from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nConnection fees include refundable fees paid by the customer when connected to district heating
\nnetwork in Finland. Connection fees were refundable until 2013.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17593": {
"value": "33 Trade and other payables EUR million
2022
2021
\nTrade payables
720
12,152
\nAccrued expenses and deferred income
\nAccrued personnel expenses
109
256
\nAccrued interest expenses
59
72
\nContract liabilities
24
754
\nOther accrued expenses and deferred income
201
144
\nOther liabilities
\nLiability to return emission rights
\n1)
\n99
1,938
\nCurrent tax liability
261
735
\nOther
185
425
\nBS
Total
1,657
16,477
\n1) For additional information see
\ue001
Note 22
Inventories.
\nChange in trade and other payables from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nContract liabilities comprise mainly of project and waste management services that are invoiced but not
\ndelivered at the reporting date.
\nThe management considers that the amount of trade and other payables approximates fair value.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17594": {
"value": "33 Trade and other payables EUR million
2022
2021
\nTrade payables
720
12,152
\nAccrued expenses and deferred income
\nAccrued personnel expenses
109
256
\nAccrued interest expenses
59
72
\nContract liabilities
24
754
\nOther accrued expenses and deferred income
201
144
\nOther liabilities
\nLiability to return emission rights
\n1)
\n99
1,938
\nCurrent tax liability
261
735
\nOther
185
425
\nBS
Total
1,657
16,477
\n1) For additional information see
\ue001
Note 22
Inventories.
\nChange in trade and other payables from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nContract liabilities comprise mainly of project and waste management services that are invoiced but not
\ndelivered at the reporting date.
\nThe management considers that the amount of trade and other payables approximates fair value.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17595": {
"value": "33 Trade and other payables EUR million
2022
2021
\nTrade payables
720
12,152
\nAccrued expenses and deferred income
\nAccrued personnel expenses
109
256
\nAccrued interest expenses
59
72
\nContract liabilities
24
754
\nOther accrued expenses and deferred income
201
144
\nOther liabilities
\nLiability to return emission rights
\n1)
\n99
1,938
\nCurrent tax liability
261
735
\nOther
185
425
\nBS
Total
1,657
16,477
\n1) For additional information see
\ue001
Note 22
Inventories.
\nChange in trade and other payables from 31 December 2021 is mainly due to the deconsolidation of
\nUniper at 30 September 2022.
\nContract liabilities comprise mainly of project and waste management services that are invoiced but not
\ndelivered at the reporting date.
\nThe management considers that the amount of trade and other payables approximates fair value.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17656": {
"value": "34 Leases ACCOUNTING POLICIES
\nLESSEE ACCOUNTING
\nThe Group leases mainly office buildings and land areas. The 2021 comparative also included gas
\nstorage facilities related to Uniper. The Group recognises all leases, with the exception of short-term (i.e.
\nlease term less than 12 months) and low value leases as right-of-use assets with a corresponding lease
\nliability at the date at which the leased asset is available for use by the Group.
\nRight-of-use assets and lease liabilities are initially recognised on the consolidated balance sheet at
\nfuture fixed lease payments over the lease term. Lease payments are discounted to present value.
\nRight-of-use assets are depreciated on a straight-line basis over the lease term, or the useful life of the
\nleased asset if shorter; and reviewed periodically for indication of impairment.
\nWhen the future lease payments are revised due to changes in index-linked considerations or the
\nlease term changes, the right-of-use asset and the corresponding lease liability is remeasured. Any
\ndifferences arising on reassessments are recognised in the consolidated income statement.
\nInterest expense on lease liabilities is presented within Interest expense in the consolidated income
\nstatement. In the consolidated cash flow statement, the principal portion of the lease payment is
\npresented under Payments of long-term liabilities, and the interest portion as Interest paid under Funds
\nfrom operations. Variable lease payments, as well as costs for leases not capitalised due to exemptions
\nin the standard, are expensed to consolidated income statement.
\nCRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS:
\nESTIMATES TO DETERMINE LEASE LIABILITY
\nCalculation of the lease liability requires certain assumption based input factors. The main estimates are
\nrelated to the lease term, the discount rate, as well as the determination whether a contract contains a
\nlease.
\nIn determining the lease term, management considers all facts and circumstances that create an
\neconomic incentive to exercise an extension option, or not to exercise a termination option. Extension
\noptions are only included in the lease term if the lease is reasonably certain to be extended. The lease
\nterm is reassessed if underlying circumstances are significantly changing.
\nLease payments are discounted to present value using an incremental borrowing rate. The
\nincremental borrowing rate is determined based on reasonable third party financing conditions
\nconsidering the length of the lease term and the currency of cash flows.
\nA contract is or contains a lease if the Group has the right to control the use of an identified asset for a
\nperiod of time in exchange for a consideration. A capacity portion of an asset is an identified asset if it is
\nphysically distinct, or if the Group has the right to use substantially all the capacity of the asset during
\nthe lease term.
\nLESSOR ACCOUNTING
\nLeases in which the Group acts as the lessor and substantially all the risks and rewards arising from the
\nuse of the leased asset are transferred to the lessee are classified as finance leases. Finance lease
\nreceivables mainly relate to Russia. The 2021 comparative also included finance lease receivables
\nconcerning certain electricity delivery contracts related to Uniper.
\nIn this type of lease, the present value of the minimum lease payments is recorded as a receivable.
\nInterest income from such arrangements is recognised over the lease term, using the effective interest
\nmethod.
\n34.1 Amounts recognised in consolidated financial statements
\nLessee
\nEUR million
2022
2021
\nIn consolidated income statement
\nDepreciation, of which
-21
-22
\nLand
-2
-1
\nBuildings and structures
-13
-14
\nMachinery and equipment
-7
-7
\nInterest expense on lease liabilities
-2
-3
\nExpense relating to variable lease payments within Other expenses
0
-1
\nExpense relating to low-value asset leases within Other expenses
-1
-2
\nIncome from subleasing right-of-use assets
0
1
\nOn consolidated balance sheet
\nAdditions to right-of-use assets, of which
47
173
\nLand
6
35
\nBuildings and structures
29
41
\nMachinery and equipment
12
97
\nAcquisition of subsidiary companies, of which
1
-
\nLand
1
-
\nDisposal of subsidiary companies, of which
\n1)
\n-508
-7
\nLand
-40
-6
\nBuildings and structures
-403
0
\nMachinery and equipment
-64
0
\nCarrying amount of right-of-use assets, of which
122
730
\nLand
55
93
\nBuildings and structures
55
536
\nMachinery and equipment
12
101
\nLease liabilities
119
1,075
\nIn consolidated cash flow statement
\nCash outflow for leases
-22
-25
\n1) See
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued operations.
\nMaturity of undiscounted lease liabilities
\nEUR million
2022
\nDue within one year
18
\nDue after one year and within five years
53
\nDue after five years
57
\nTotal
128
\nChange in leases from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30 September
\n2022. See
\ue001
Note 4
Financial risk management,
\ue001
Note 17
Property, plant and equipment and right-of-use
\nassets, and
\ue001
Note 27
Interest-bearing liabilities for more information.
105
\nLessor
\nEUR million
2022
2021
\nIn consolidated income statement
\nRental income from operating lease
19
17
\nOn consolidated balance sheet
\nLease receivables
3
136
\nCurrent
3
17
\nNon-current
0
119
\nMaturity analysis of undiscounted lease payments - Finance leases
\nDue within 1 year
3
26
\nDue in 1 to 2 years
-
23
\nDue in 2 to 3 years
-
23
\nDue in 3 to 4 years
-
23
\nDue in 4 to 5 years
-
22
\nDue in more than 5 years
-
92
\nTotal undiscounted lease payments
3
209
\nInterest component
0
73",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17660": {
"value": "ACCOUNTING POLICIES LESSEE ACCOUNTING
\nThe Group leases mainly office buildings and land areas. The 2021 comparative also included gas
\nstorage facilities related to Uniper. The Group recognises all leases, with the exception of short-term (i.e.
\nlease term less than 12 months) and low value leases as right-of-use assets with a corresponding lease
\nliability at the date at which the leased asset is available for use by the Group.
\nRight-of-use assets and lease liabilities are initially recognised on the consolidated balance sheet at
\nfuture fixed lease payments over the lease term. Lease payments are discounted to present value.
\nRight-of-use assets are depreciated on a straight-line basis over the lease term, or the useful life of the
\nleased asset if shorter; and reviewed periodically for indication of impairment.
\nWhen the future lease payments are revised due to changes in index-linked considerations or the
\nlease term changes, the right-of-use asset and the corresponding lease liability is remeasured. Any
\ndifferences arising on reassessments are recognised in the consolidated income statement.
\nInterest expense on lease liabilities is presented within Interest expense in the consolidated income
\nstatement. In the consolidated cash flow statement, the principal portion of the lease payment is
\npresented under Payments of long-term liabilities, and the interest portion as Interest paid under Funds
\nfrom operations. Variable lease payments, as well as costs for leases not capitalised due to exemptions
\nin the standard, are expensed to consolidated income statement.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17870": {
"value": "35 Capital and other commitments Capital and other commitments are contractual or regulatory obligations that are not recognised as
\nliabilities on the consolidated balance sheet, or disclosed as contingent liabilities. Change in capital and
\nother commitments from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30
\nSeptember 2022.
\n35.1 Capital commitments
\nEUR billion
2022
2021
\nProperty, plant and equipment and intangible assets
0.4
1.0
\nCapital commitments at 31 December 2021 included Uniper segment\u2019s commitments of EUR 0.5 billion.
\n35.2 Other commitments to associates and joint ventures
\nTeollisuuden Voima Oyj (TVO) is building Olkiluoto 3, the nuclear power plant funded through external
\nloans, share issues and shareholder loans according to shareholders' agreement between the owners of
\nTVO. At end of December 2022, Fortum had EUR 232 million (2021: 232) outstanding receivables
\nregarding Olkiluoto 3, and is additionally committed to providing at maximum EUR 100 million. TVO
\nshareholder loan is classified as participation in joint ventures. For more information, see
\ue001
Note 29
\nNuclear-related assets and liabilities.
\nFortum has formed a joint venture with Green Investment Group to build the South Clyde waste-to-
\nenergy plant in Glasgow, Scotland. At 31 December 2022, Fortum had an outstanding commitment of
\nEUR 54 million to the joint venture, which is funded by external loans, share issues and shareholder
\nloans.
\n35.3 Other commitments
\nIn June 2018, the Swedish Government approved the legislation regarding Sweden\u2019s national strategy for
\nimplementation of the EU\u2019s W
ater Framework Directive. The largest hydro industry companies will create
\na common hydro-power fund to finance large parts of the environmental actions needed. The fund will
\nhave a total financial cap of SEK 10 billion to be paid over a 20-year period, and the largest operators will
\ncontribute to the fund proportionately based on their respective market share of hydro-power production.
\nFortum's share is 31% of the funds' total financing.
\nOn 2 May 2022, Fennovoima announced that it had terminated the contract for the delivery of the
\nnuclear power plant with RAOS Project Oy. At 31 December 2021, Fortum Power and Heat Holding Oy
\nhad EUR 69 million commitment to providing financing to Voimaosakeyhti\u00f6 SF for its participation in the
\nFennovoima nuclear power project in Finland.
106
\n36 Pledged assets and contingent liabilities
\nACCOUNTING POLICIES
\nPLEDGED ASSETS
\nPledged assets are given to a lender as security for a loan, trading or other commitment. If the borrower
\nor trading party is unable to make the agreed payments, the lender can use the pledged assets to
\nmitigate its losses. Pledged assets at Fortum mostly consist of securities and real estate mortgages.
\nCONTINGENT LIABILITIES
\nA contingent liability is disclosed when there is a possible obligation that arises from past events and
\nwhose existence is only confirmed by one or more doubtful future events; or when there is an obligation
\nthat is not recognised as a liability or provision because it is not probable that an outflow of resources
\nwill be required, or the amount of the obligation cannot be reliably estimated.
\n36.1 Pledged assets
\nFor debt
\nFortum has pledged shares in Kemijoki as a security for the reborrowing from the Finnish State Nuclear
\nWaste Management Fund for the Loviisa nuclear power plant part, amounting to EUR 689 million (31 Dec
\n2021: 876).
\nReal estate mortgages total EUR 41 million (2021: 41).
\nFor other commitments
\nFortum has pledged real estate mortgages in Pyh\u00e4joki hydro plant as security to the Ministry of Economic
\nAffairs and Employment amounting to EUR 126 million (2021: 81). These are given as a security for the
\nuncovered part of the legal liability and unexpected events relating to future costs for decommissioning
\nand disposal of spent fuel in Loviisa nuclear power plant. According to the Nuclear Energy Act, Fortum is
\nobligated to contribute the funds in full to the State Nuclear Waste Management Fund to cover the legal
\nliability. Any uncovered legal liability relates to periodising of the payments to the fund. The size of the
\nsecurities given is updated yearly in the second quarter based on the decisions regarding the legal
\nliabilities and the funding target which are determined at the end of the previous year.
See
\ue001
Note 29
\nNuclear-related assets and liabilities.
\n36.2 Contingent liabilities
\nIn relation to divestment of shareholdings, Fortum has entered into indemnification agreements, which
\ncover the customary representations and warranties, as well as environmental damage and tax
\ncontingencies. Any obligations that may exist are covered in the first instance by provisions of the
\ncompanies sold before Fortum itself is required to make any payments. Moreover, the Fortum Group has
\ncommitments under which it assumes joint and several liability arising from its interests in non-corporate
\ncommercial partnerships and consortia in which it participates.
\nFortum's 100% owned subsidiary Fortum Heat and Gas Oy has a contingent liability, based on the
\nFinnish Companies Act's (734/1978) Chapter 14a Paragraph 6, with Neste Oyj following the demerger of
\nFortum Oil and Gas Oy in 2004.
\nIn 2021 Fortum signed an EUR 8 billion credit facility agreement with Uniper comprising tranches for
\nboth a shareholder loan and a parent company guarantee. The shareholder loan, EUR 4 billion, was
\nrepaid on 21 December 2022 on completion of the transaction to sell Uniper to the German State. Out of
\nthe EUR 4.0 billion parent company guarantee facility that Fortum had granted to Uniper, a total of EUR
\n3.0 billion was released by year-end 2022. The remaining, approximately EUR 1.0 billion, with a full
\nGerman State back-to-back guarantee (indemnity), will be released latest at the end of June 2023.
\n36.3 Guarantees relating to Nuclear operations
\nWith respect to the activities of the Swedish nuclear power plants, the companies of the Swedish nuclear
\nunits have issued guarantees for OKG and Forsmark to governmental authorities in accordance with the
\nSwedish law. There are two types of guarantees given. The Financing Amount is given to cover Fortum's
\nshare of the uncovered part in the Nuclear Waste Fund, assuming no further production and that no
\nfurther nuclear waste fees are paid in. The uncovered amount is calculated by the authorities and is based
\non the difference between the expected costs and the funds to cover these costs at the time of the
\ncalculation. The Supplementary Amount constitutes a guarantee for deficits that can arise as a result of
\nunplanned events. The amounts for the guarantees are normally updated every third year by
\ngovernmental decision. In addition, the licensees are responsible for all costs related to the disposal of
\nlow-level radioactive waste.
\nOwners of nuclear facilities in Finland and Sweden have statutory liabilities for damages resulting from
\naccidents occurring in those nuclear facilities and for accidents involving any radioactive substance
\nconnected to the operation of those facilities. Third-party liability relating to nuclear accidents is strictly
\nunder the plant operator\u2019s responsibility.
\nIn Finland, as the operator of the Loviisa power plant, Fortum has a statutory liability insurance policy of
\napproximately EUR 1.2 billion.
\nIn Sweden, the operator of a nuclear power plant in operation is required to have a liability insurance or
\nother financial cover in the amount equivalent to EUR 1.2 billion per site.
\nThe necessary insurances for the nuclear power plants have been purchased. Similar insurance
\npolicies are in place also for the operators where Fortum has minority interest.
\nThe guarantee given on behalf of Teollisuuden Voima Oyj to the Ministry of Economic Affairs and
\nEmployment increased following the fuel loading in Olkiluoto 3, and
amounts to EUR 136 million (2021:
\n122). The guarantee covers the unpaid legal liability due to periodisation as well as risks for unexpected
\nfuture costs.
\nFor information regarding nuclear-related assets and liabilities see
\ue001
Note 29
Nuclear-related assets
\nand liabilities.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17871": {
"value": "35 Capital and other commitments Capital and other commitments are contractual or regulatory obligations that are not recognised as
\nliabilities on the consolidated balance sheet, or disclosed as contingent liabilities. Change in capital and
\nother commitments from 31 December 2021 is mainly due to the deconsolidation of Uniper at 30
\nSeptember 2022.
\n35.1 Capital commitments
\nEUR billion
2022
2021
\nProperty, plant and equipment and intangible assets
0.4
1.0
\nCapital commitments at 31 December 2021 included Uniper segment\u2019s commitments of EUR 0.5 billion.
\n35.2 Other commitments to associates and joint ventures
\nTeollisuuden Voima Oyj (TVO) is building Olkiluoto 3, the nuclear power plant funded through external
\nloans, share issues and shareholder loans according to shareholders' agreement between the owners of
\nTVO. At end of December 2022, Fortum had EUR 232 million (2021: 232) outstanding receivables
\nregarding Olkiluoto 3, and is additionally committed to providing at maximum EUR 100 million. TVO
\nshareholder loan is classified as participation in joint ventures. For more information, see
\ue001
Note 29
\nNuclear-related assets and liabilities.
\nFortum has formed a joint venture with Green Investment Group to build the South Clyde waste-to-
\nenergy plant in Glasgow, Scotland. At 31 December 2022, Fortum had an outstanding commitment of
\nEUR 54 million to the joint venture, which is funded by external loans, share issues and shareholder
\nloans.
\n35.3 Other commitments
\nIn June 2018, the Swedish Government approved the legislation regarding Sweden\u2019s national strategy for
\nimplementation of the EU\u2019s W
ater Framework Directive. The largest hydro industry companies will create
\na common hydro-power fund to finance large parts of the environmental actions needed. The fund will
\nhave a total financial cap of SEK 10 billion to be paid over a 20-year period, and the largest operators will
\ncontribute to the fund proportionately based on their respective market share of hydro-power production.
\nFortum's share is 31% of the funds' total financing.
\nOn 2 May 2022, Fennovoima announced that it had terminated the contract for the delivery of the
\nnuclear power plant with RAOS Project Oy. At 31 December 2021, Fortum Power and Heat Holding Oy
\nhad EUR 69 million commitment to providing financing to Voimaosakeyhti\u00f6 SF for its participation in the
\nFennovoima nuclear power project in Finland.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17928": {
"value": "PLEDGED ASSETS Pledged assets are given to a lender as security for a loan, trading or other commitment. If the borrower
\nor trading party is unable to make the agreed payments, the lender can use the pledged assets to
\nmitigate its losses. Pledged assets at Fortum mostly consist of securities and real estate mortgages.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForCollateralExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17935": {
"value": "CONTINGENT LIABILITIES A contingent liability is disclosed when there is a possible obligation that arises from past events and
\nwhose existence is only confirmed by one or more doubtful future events; or when there is an obligation
\nthat is not recognised as a liability or provision because it is not probable that an outflow of resources
\nwill be required, or the amount of the obligation cannot be reliably estimated.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17943": {
"value": "36.1 Pledged assets For debt
\nFortum has pledged shares in Kemijoki as a security for the reborrowing from the Finnish State Nuclear
\nWaste Management Fund for the Loviisa nuclear power plant part, amounting to EUR 689 million (31 Dec
\n2021: 876).
\nReal estate mortgages total EUR 41 million (2021: 41).
\nFor other commitments
\nFortum has pledged real estate mortgages in Pyh\u00e4joki hydro plant as security to the Ministry of Economic
\nAffairs and Employment amounting to EUR 126 million (2021: 81). These are given as a security for the
\nuncovered part of the legal liability and unexpected events relating to future costs for decommissioning
\nand disposal of spent fuel in Loviisa nuclear power plant. According to the Nuclear Energy Act, Fortum is
\nobligated to contribute the funds in full to the State Nuclear Waste Management Fund to cover the legal
\nliability. Any uncovered legal liability relates to periodising of the payments to the fund. The size of the
\nsecurities given is updated yearly in the second quarter based on the decisions regarding the legal
\nliabilities and the funding target which are determined at the end of the previous year.
See
\ue001
Note 29
\nNuclear-related assets and liabilities.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCollateralExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17965": {
"value": "36.2 Contingent liabilities In relation to divestment of shareholdings, Fortum has entered into indemnification agreements, which
\ncover the customary representations and warranties, as well as environmental damage and tax
\ncontingencies. Any obligations that may exist are covered in the first instance by provisions of the
\ncompanies sold before Fortum itself is required to make any payments. Moreover, the Fortum Group has
\ncommitments under which it assumes joint and several liability arising from its interests in non-corporate
\ncommercial partnerships and consortia in which it participates.
\nFortum's 100% owned subsidiary Fortum Heat and Gas Oy has a contingent liability, based on the
\nFinnish Companies Act's (734/1978) Chapter 14a Paragraph 6, with Neste Oyj following the demerger of
\nFortum Oil and Gas Oy in 2004.
\nIn 2021 Fortum signed an EUR 8 billion credit facility agreement with Uniper comprising tranches for
\nboth a shareholder loan and a parent company guarantee. The shareholder loan, EUR 4 billion, was
\nrepaid on 21 December 2022 on completion of the transaction to sell Uniper to the German State. Out of
\nthe EUR 4.0 billion parent company guarantee facility that Fortum had granted to Uniper, a total of EUR
\n3.0 billion was released by year-end 2022. The remaining, approximately EUR 1.0 billion, with a full
\nGerman State back-to-back guarantee (indemnity), will be released latest at the end of June 2023.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18054": {
"value": "38 Related party transactions 38.1 The Finnish State and companies owned by the Finnish State
\nAt the end of 2022, the Finnish State owned 51.26% of the company\u2019s shares (2021: 50.76%). On 6
\nSeptember 2022, Fortum announced that it had agreed with the Finnish State on a EUR 2.35 billion
\nbridge financing arrangement. On 26 September 2022, Fortum announced to draw the first tranche of the
\nliquidity facility, EUR 350 million. The bridge loan facility is linked to the six-month Euribor; the margin for
\nthe first six months is 10% and for the following six months 12%.
\nAs a condition in the agreement following the first draw down, the Finnish State-owned holding company,
\nSolidium Oy, was entitled to subscribe 8,970,000 new ordinary registered shares in Fortum in a directed
\nshare issue, without payment. The share issue to Solidium Oy was resolved in the Extraordinary General
\nMeeting on 23 November 2022 and the new shares were registered with the Finnish trade register on 25
\nNovember 2022. The new shares carry full shareholder rights, including the right to dividend, as of the
\nregistration date. As a consequence, the proportion of shares under the control of the State of Finland has
\nincreased to 51.26%.
\nThe Finnish Parliament has authorised the Government to reduce the Finnish State\u2019s holding in Fortum
\nCorporation to no less than 50.1% of the share capital and voting rights.
\nAll transactions between Fortum and other companies owned by the Finnish State are on arm\u2019s length
\nbasis.
\n38.2 Board of Directors and Fortum Executive Management
\nThe key management personnel of the Fortum Group are the members of Fortum Executive Management
\nand the Board of Directors.
\nFortum has not been involved in any material transactions with members of the Board of Directors or
\nFortum Executive Management. No loans exist to any member of the Board of Directors or Fortum
\nExecutive Management at 31 December 2022.
\nThe total compensation (including pension benefits and social costs) for the key management
\npersonnel for 2022 was EUR 10 million (2021: 13). See
\ue001
Note 10
Employee benefits and Board
\nremuneration for further information on the Board of Directors and Fortum Executive Management
\nremuneration and shareholdings.
\n38.3 Associated companies and joint ventures
\nIn the ordinary course of business, Fortum engages in transactions with associated companies, joint
\nventures, and other related parties. These transactions are on the same commercial terms as they would
\nbe with third parties, except for some associates and joint ventures, as noted below.
\nFortum owns shareholdings in associated companies and joint ventures which own hydro and nuclear
\npower plants. Under consortium agreements, each owner is entitled to electricity in proportion to its share
\nof ownership, or based on other agreement. In turn, each owner is liable for an equivalent portion of costs,
\nregardless of output. These associated companies and joint ventures are not profit making since the
\nowners purchase electricity at production cost, including interest costs and production taxes. See
\n\ue001
Note 18
Participations in associated companies and joint ventures.
108
\n38.4 Balances and transactions with related parties
\nTransactions with associates, joint ventures and other related parties
\nAssociated
\ncompanies
Joint ventures
\nOther related
\nparties
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
\nSales
2
2
72
18
-
-
74
20
\nPurchases
284
234
154
146
-
-
438
379
\nOther income
-
1
4
19
-
-
4
20
\nInterest income on loan receivables
10
10
2
3
-
-
12
13
\nBalances with associates, joint ventures and other related parties
\nAssociated
\ncompanies
Joint ventures
\nOther related
\nparties
Total
\nEUR million
2022
2021
2022
2021
2022
2021
2022
2021
\nReceivables
\nLong-term interest-bearing loan receivables
505
1,009
88
129
-
-
593
1,138
\nTrade and other receivables
12
4
75
70
-
36
87
110
\nLiabilities
\nLong-term loan payables
-
-
229
228
-
-
229
228
\nShort-term loan payables
-
-
-
62
-
69
-
131
\nTrade and other payables
3
4
50
32
-
78
53
114
\nUniper was classified as discontinued operations in 2022, and 2021 income statement comparatives have
\nbeen restated. This means that Uniper SE\u2019s transactions with its related parties are excluded from the
\nabove table but balances with its related parties are included in 2021. See also
\ue001
Note 1
Significant
\naccounting policies and
\ue001
Note 3
Acquisitions, disposals, assets held for sale and discontinued
\noperations.
\nOther related parties are entities that are not consolidated on materiality grounds. For more information
\nsee
\ue001
Note 1
Significant accounting policies.
\nSee also
\ue001
Note 29
Nuclear-related assets and liabilities and
\ue001
Note 36
Pledged assets and contingent
\nliabilities for details on commitments related to associates and joint ventures.
\nTransactions with Russian joint ventures
\nOn 18 January 2022, Fortum announced that 1.3 GW portfolio of wind projects is being transferred to a
\nnew joint venture. However, this wind portfolio is now part of the assets and operations that are subject to
\nthe ongoing divestment process following Fortum\u2019s decision for a controlled exit from Russia as a result of
\nthe Russia-Ukraine war
. Fortum\u2019s ownership interest in the 1.3 GW portf
olio is presented in other non-
\ncurrent assets and in interest-bearing liabilities.
\nIn June 2021, the Fortum-Rusnano wind investment fund sold the 200-MW Kalmykia wind parks to the
\nFortum-Russian Direct Investment Fund (RDIF) joint venture. Fortum recorded a gain of EUR 11 million
\nfrom the transfer in the share of profits from associates and joint ventures.
\nOn 2 March 2021, Fortum announced it had decided to construct the largest solar power plant in Russia
\nthrough a joint venture established with RDIF. The power plant is based on capacities won by Fortum in
\nCSA auctions in 2018 and 2019. In March 2021, Fortum sold the CSA-backed solar power project to the
\njoint venture with RDIF.
\n38.5 Pension funds
\nAt 31 December 2022, Fortum has a pension fund in Finland, which is a stand-alone legal entity
\nmanaging pension assets related to part of the pension coverage in Finland. Following the
\ndeconsolidation of Uniper at 30 September 2022, Fortum no longer has pension funds in Germany or the
\nUnited Kingdom. Fortum\u2019s Swedi
sh pension fund was terminated in 2022. In 2022, Fortum had a net
\nincome of EUR 11 million from pension funds, including a termination fee for the Swedish pension fund,
\npartly offset by direct contributions paid (2021: 64 expense). See
\ue001
Note 31
Pension obligations.
\nThe assets in the pension fund in Finland include Fortum shares representing 0.04% (2021: 0.04%) of
\nthe company\u2019s outstanding shares. The loan granted by Fortum\u2019s Finnish pension fund has been secured
\nby real estate mortgages of EUR 41 million (2021: 41). See
\ue001
Note 36
Pledged assets and contingent
\nliabilities.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18295": {
"value": "39 Events after the balance sheet date On 16 February 2023, the Finnish Government granted a new operating license for both units at Fortum\u2019s
\nLoviisa nuclear power plant until the end of 2050. Over the course of the new licence period, the plant is
\nexpected to generate up to 170 terawatt hours of CO
2
-free electricity. Investments related to the
\ncontinuation of operations and lifetime extension will amount to an estimated EUR 1 billion until 2050.
\nOver the past five years, Fortum has already invested approximately EUR 300 million in refurbishing the
\nLoviisa power plant. The Loviisa power plant is the first nuclear power plant in Finland. The power plant
\nhas two units: unit 1 started operating in February 1977, and unit 2 in November 1980.
\nAt the beginning of March 2023, the Fortum Board of Directors resolved on Fortum\u2019s new strategy.
\nFortum\u2019s strategic priorities are to deliver reliable clean energy and drive decarbonisation in industr
ies in
\nthe Nordics. The strategy includes new financial and sustainability targets:
\n\u2022
Updated financial guidance to ensure credit rating of at least BBB and optimal financial flexibility for
\nfuture growth: long-term financial net debt-to-comparable EBITDA of 2.0
\u2013
2.5 times.
\n\u2022
Disciplined growth in clean energy with capital expenditure of up to EUR 1.5 billion during 2023
\u2013
2025.
\nInvestment hurdles of project WACC + 150
\u2013
400 basis points will be applied and evaluated against the
\ncompany\u2019s climate and biodiversity t
argets.
\n\u2022
Renewed dividend policy with payout ratio of 60
\u201390% of comparable EPS. Fortum\u2019s Board of Directors
\nproposes a dividend of EUR 0.91 per share for the year 2022 corresponding to a pay-out of 75% based
\non comparable EPS for continuing operations of EUR 1.21 (excluding Russian operations).
\n\u2022
Fortum has brought forward its target to reach carbon neutrality to 2030 (Scopes 1, 2, 3) and will exit all
\ncoal already by the end of 2027. To reach carbon neutrality, Fortum is committed to setting emission
\nreduction targets based on the climate science (SBTi 1.5\u00b0C), assuming Russia exit. To measure
\nprogress, mid-point targets have been set for specific emissions at below 20 g CO
2
/kWh for total energy
\nproduction and at below 10 g CO
2
/kWh for power generation by 2028.
\n\u2022
Fortum is also committing to an ambitious biodiversity target to have no net loss of biodiversity
\n(excluding any aquatic impacts) from existing and new operations (Scopes 1, 2) from 2030 onwards. In
\naddition, the company will reduce its negative dynamic terrestrial impacts in upstream Scope 3 by 50%
\nby 2030 (base-year 2021). Fortum will continue local initiatives, especially in hydropower production,
\nand is committed to develop a science-
based methodology to assess the company\u2019s aquatic impacts
\nduring 2023.
\n\u2022
Fortum is already taking steps to reach the environmental targets and examples of these include the
\nLoviisa nuclear plant lifetime extension, increasing the use on hydro power and the ongoing
\ndecarbonisation projects in district heating.
\nAt the beginning of March 2023, the Fortum Board of Directors resolved on revising the financial segment
\nreporting to match the new business structure and strategy. As of the beginning of 2023, Fortum will
\nreport its financial performance in the following reporting segments:
\n\u2022
The Generation segment will include the Hydro Generation, Nuclear Generation, Corporate Customers
\nand Markets and Renewables and Decarbonisation business units.
\n\u2022
The Consumer Solutions segment includes the Consumer Solutions business unit.
\n\u2022
The Other segment includes the Circular Solutions business unit, Innovation and Venturing activities,
\nenabling functions and corporate management.
\nFortum will continue to consolidate and report its Russian operations as a separate segment for the time
\nbeing; however, Fortum will continue to assess the basis for consolidation in the coming quarters. Fortum
\nis committed to exiting the Russian market and a divestment is being pursued.
\nFortum will publish restated quarterly segment financials for 2022 before publication of the first quarter
\n2023 results on 11 May 2023.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18379": {
"value": "40 Group companies by segment G = Generation
1) Shares held by the parent company
\nC = City Solutions
\nCS = Consumer Solutions
\nO = Other Operations
\nR = Russia
\nGroup holding % for companies owned via subsidiaries is based on the Fortum Corporation ownership %
\nin the direct subsidiary times the ownership % of the direct subsidiary in the indirect
\nsubsidiary/associate/joint venture as of 31 December 2022.
\nSubsidiaries by segment
\nEntity Name
Domicile
Segment
Group holding, %
\nBr\u00e4ndskogen Vindkraft Ab Oy
Finland
G
100.0
\nEkopartnerit Turku Oy
Finland
C
51.0
\nEX-KE Oy
Finland
CS
100.0
\nFortum Alku Oy
Finland
O
100.0
\nFortum Asiakaspalvelu Oy
Finland
CS
100.0
\nFortum Assets Oy
Finland
O
100.0
\nFortum Battery Recycling Oy
Finland
C
100.0
\nFortum Bio Oy
Finland
O
100.0
\nFortum Clean Oy
Finland
O
100.0
\n1)
\nFortum Heat and Gas Oy
Finland
C,O
100.0
\n1)
\nFortum Kasvu Oy
Finland
O
100.0
\nFortum Markets Oy
Finland
CS
100.0
\nFortum Norm Oy
Finland
O
100.0
\n1)
\nFortum Power and Heat Holding Oy
Finland
G
100.0
\nFortum Power and Heat Oy
Finland
C,CS,G,O,R
100.0
\n1)
\nFortum Real Estate Oy
Finland
O
100.0
\n1)
\nFortum Renewables Oy
Finland
G
100.0
\nFortum RES Oy
Finland
O
100.0
\nFortum TwoGether Oy
Finland
O
100.0
\n1)
\nFortum Waste Solutions Oy
Finland
C
100.0
\n1)
\nKatajam\u00e4en Tuulivoima Oy
Finland
G
100.0
\nKoillis-Pohjan Energiantuotanto Oy
Finland
G
100.0
\nLamminnevan Tuulivoima Oy
Finland
G
100.0
\nMolpe Vindkraft Ab/Oy
Finland
G
100.0
\nN\u00e4rpes Vindkraft Ab/Oy
Finland
G
100.0
\nOy Pauken Ab
Finland
O
100.0
\nOy Tersil Ab
Finland
O
100.0
\nOy Tertrade Ab
Finland
O
100.0
\nPenkkisuon Tuulivoima Oy
Finland
G
100.0
\nPjelax Vindkraft Ab/Oy
Finland
G
60.0
\nPoikel Vindkraft Ab/Oy
Finland
G
100.0
\nTecofe Oy
Finland
G
100.0
\nTGS Finland Oy
Finland
C
100.0
\nBarry Danmark ApS
Denmark
O
100.0
\nFortum Waste Solutions A/S
Denmark
C
100.0
\nEntity Name
Domicile
Segment
Group holding, %
\nFortum CFS Eesti OU
Estonia
O
100.0
\nBarry France SAS
France
O
100.0
\nFortum France S.A.S
France
G
100.0
\nFortum Batterie Recycling GmbH
Germany
C
100.0
\nFortum Deutschland SE
Germany
O
100.0
\nFortum Service Deutschland GmbH
Germany
C,G,O
100.0
\nMAWAL Energie GmbH
Germany
O
100.0
\nSALWAL Energie GmbH
Germany
O
100.0
\nTGS Germany GmbH
Germany
C
100.0
\nFortum Insurance Limited
Guernsey
O
100.0
\nFortum India Private Limited
India
C
100.0
\n1)
\nSolar One Energy Private Limited
India
C
100.0
\nSolarXL Alpha Energy Private Limited
India
C
100.0
\nSolarXL Beta Energy Private Limited
India
C
100.0
\nSolarXL Delta Energy Private Limited
India
C
100.0
\nSolarXL Gamma Energy Private Limited
India
C
100.0
\nSolarXL Zeta Energy Private Limited
India
C
100.0
\nPT Fortum Energy Solution
Indonesia
C
95.0
\nFortum eNext Ireland Ltd
Ireland
C
100.0
\nFortum Finance Ireland Designated Activity Company
Ireland
O,C,G
100.0
\n1)
\nFortum Global Finance Designated Activity Company
Ireland
O
100.0
\nFortum P&H Ireland Limited
Ireland
O
100.0
\nFortum Participation Limited
Ireland
O,C
100.0
\nFortum 2 B.V.
Netherlands
C
100.0
\nFortum 3 B.V.
Netherlands
C
100.0
\nFortum H&C B.V.
Netherlands
C
100.0
\nFortum Holding B.V.
Netherlands
C,CS,G,O,R
100.0
\n1)
\nFortum Hydro B.V.
Netherlands
O
100.0
\nFortum Power Holding B.V.
Netherlands
O
100.0
\nFortum Russia B.V.
Netherlands
R
100.0
\nFortum SAR B.V.
Netherlands
C
100.0
\nFortum Star B.V.
Netherlands
C
100.0
\nPolarSolar B.V.
Netherlands
C
100.0
\nFortum Consumer Solutions AS
Norway
CS
100.0
\nFortum Forvaltning AS
Norway
C,O,G
100.0
\nFortum Hedging AS
Norway
G
100.0
\nFortum Kundesenter AS
Norway
CS
100.0
\nFortum Plastics Recycling Norway AS
Norway
C
100.0
\nFortum Str\u00f8m AS
Norway
CS
100.0
\nFortum Waste Solutions Norway AS
Norway
C
100.0
\nNorgesEnergi AS
Norway
CS
100.0
\nTellier Service AS
Norway
CS
100.0
\nFortum Marketing and Sales Polska S.A.
Poland
CS
100.0
\nFortum Network Cz\u0119stochowa Sp. z o.o.
Poland
C
100.0
\nFortum Network P\u0142ock Sp. z o.o.
Poland
C
100.0
\nFortum Network Wroc\u0142aw Sp. z o.o.
Poland
C
100.0
\nFortum Power and Heat Polska Sp. z o.o.
Poland
C,CS
100.0
\nFortum Service Poland Sp. z o.o.
Poland
O
100.0
\nFortum Silesia SA
Poland
C
100.0
\nFortum Sprzeda\u017c Sp. z o.o.
Poland
CS
100.0
\nFortum Wind Energy Joint Stock Company, AO FEW
Russia
R
98.2
\nFortum-New Generation 3 Limited Liability Company
Russia
R
100.0
111
\nEntity Name
Domicile
Segment
Group holding, %
\nFortum-New Generation 5 Limited Liability Company
Russia
R
98.2
\nJoint Stock Company Chelyabenergoremont
Russia
R
100.0
\nLLC Bugulchanskaya Solar power station
Russia
R
98.2
\nPAO Fortum
Russia
R
98.2
\nUral Heat Networks Company Joint Stock Company
Russia
R
98.2
\nYlyanovsk Wind Farm LLC
Russia
R
98.2
\nHQ Services Limited
Rwanda
C
49.0
\nEscandinava de Electricidad S.L.U
Spain
CS
100.0
\nBlybergs Kraftaktiebolag
Sweden
G
66.7
\nBorgvik Vindkraft AB
Sweden
G
100.0
\nBr\u00e4nn\u00e4lven Kraft AB
Sweden
G
67.0
\nBullerforsens Kraft Aktiebolag
Sweden
G
88.0
\nEnergikundservice Sverige AB
Sweden
CS
100.0
\nFortum 1 AB
Sweden
R
100.0
\nFortum Energy AB
Sweden
CS
100.0
\nFortum Fastigheter AB
Sweden
O
100.0
\nFortum Gr\u00f6n AB
Sweden
O
100.0
\nFortum Markets AB
Sweden
CS
100.0
\nFortum Mockfors Kraft AB
Sweden
G
88.0
\nFortum Power AB
Sweden
O
100.0
\n1)
\nFortum Produktionsn\u00e4t AB
Sweden
G
100.0
\nFortum Sverige AB
Sweden
C,G,O
100.0
\nFortum Sweden AB
Sweden
C,O
100.0
\n1)
\nFortum Vindkraft Sverige 3 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 4 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 5 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 6 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 7 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 8 AB
Sweden
G
100.0
\nFortum Vindkraft Sverige 9 AB
Sweden
G
100.0
\nFortum Waste Solutions AB
Sweden
C
100.0
\nFortum Waste Solutions Holding AB
Sweden
C
100.0
\nG\u00f6ta Energi AB
Sweden
CS
100.0
\nMellansvensk Kraftgrupp Aktiebolag
Sweden
G
86.9
\nNya Bullerforsen Kraft AB
Sweden
G
88.0
\nOre\u00e4lvens Kraftaktiebolag
Sweden
G
65.0
\nSalviken Solpark AB
Sweden
G
100.0
\nS\u00e4var Vindkraft AB
Sweden
G
100.0
\nTGS Sweden AB
Sweden
C
100.0
\nUddeholm Kraft Aktiebolag
Sweden
G
100.0
\nV\u00e4rmlandskraft-OKG-del\u00e4garna Aktiebolag
Sweden
G
73.3
\nFortum Carlisle Limited
United Kingdom
C
100.0
\nFortum Energy Limited
United Kingdom
O
100.0
\nFortum O&M (UK) Limited
United Kingdom
C
100.0
\nFortum Ratcliffe Limited
United Kingdom
C
100.0
\nIVO Energy Limited
United Kingdom
G
100.0
\nValo Ventures I LP Fund
USA
O
99.0",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:635400IUIZZIUJSAMF76",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
}
}
}