ortum had hedged 60% of its Nordic power output for 2019 at an average price of EUR 28/MWh by the end of the June, the Finnish utility said on Thursday.
The group hedged 75% of its remaining 2018 output at an average price of EUR 29/MWh, according to its interim financial report.
By comparison, the group had hedged 45% of its 2019 output at an average price of EUR 26/MWh and 65% of its remaining 2018 output at EUR 27/MWh by the end of March.
Although hedging prices have increased during the second quarter, they are still considerably below current market prices, with the 2019 Nordic power contract closing at EUR 37.60/MWh on Wednesday.
The price area difference contracts (Epad) indicate prices of EUR 42.40/MWh in Finland and EUR 39.41/MWh in Sweden’s SE3 price area.
Most of Fortum’s production is located in Finland and Sweden.
The Finnish group posted an operating profit of EUR 738m for the first six months, up from EUR 456m in January-June 2017.
The group attributed the gain to higher power prices, with its Nordic power production achieving an average price of EUR 33.40/MWh throughout the period, up from EUR 31.30/MWh in first-half last year.
The group’s Nordic power production volumes were unchanged year on year at 23.4 TWh, with hydropower output rising from 10.1 TWh to 11.4 TWh and nuclear power falling from 12.8 TWh due to the decomissioning of the 473 MW Oskarshamn 1 nuclear reactor in Sweden in June last year.
Swedish energy group Vattenfall had hedged 64% of its expected 2019 Nordic power sales at an average price of EUR 27/MWh by the end of June, an unchanged price from the previous quarter.
The company also hedged 30% of its 2020 output at EUR 30/MWh, according to its first-half financial report published on Friday.
In comparison, it had sold 59% of next year’s production at EUR 27/MWh and 26% of 2020 output at EUR 30/MWh by the end of the first quarter.
Hedging levels are down year on year, however. One year ago, the group had hedged 68% of its power sales one year into the future and 49% two years ahead.
The Nordic Year 2019 and 2020 contracts were last seen at EUR 38.15/MWh and EUR 30.90/MWh respectively at Nasdaq Commodities.
Higher power prices
The Swedish group posted an operating profit of SEK 9.8bn (EUR 939m) for the first six months, down from SEK 10.5bn one year ago mainly due to weaker profits from its heat segment, which includes gas and coal-fired power and heat plants.
Average Nordic power prices rose 33% year on year to EUR 38.90/MWh in the first six months of the year, a development which partly compensated for the decline in profits from the firm’s heating unit.
Vattenfall generated 66.6 TWh of electricity in the first six months, up from 64.9 TWh in the first half of last year.