Fortum Shares Gain Most in Six Years on Extra Shareholder Payout

Fortum Oyj shares advanced most since January 2009 after Finland’s biggest power generator said it plans to return more capital to shareholders.

The stock increased as much as 9.3 percent in intraday trading at 10:45 a.m. in Helsinki, with volume more than twice the three-month daily average. Fortum proposed a regular dividend of 1.1 euros a share and an extra payout of 20 euro cents, compared with the 1.1 euros paid for 2013.

The extra distribution reflects profit made as Fortum sold its Finnish and Norwegian electricity-distribution networks last year to focus on its core operation of power generation from hydro and nuclear plants. The Espoo, Finland-based company said it’s still evaluating the sale of its Swedish power distribution.

“The expected sale of the Swedish network this year will likely trigger a bonus dividend again,” Ingo Becker, an analyst at Kepler Cheuvreux, said in a note to clients. “Left pocket-right pocket from an investor’s standpoint, but welcome in the current market,” he said. Becker recommends investors hold the share.

Fourth-quarter comparable operating profit of 436 million euros ($499 million) exceeded the 347 million-euro average estimate of analysts in Bloomberg survey. Fortum reiterated its profit target of 18.2 billion rubles for the Russian unit for this year.

“Fortum’s 2014 results were good in a market dominated by negative drivers: low spot prices, a very weak ruble and warm weather,” Tapio Kuula, who stepped down as chief executive officer on Jan. 31 after his cancer recurred, said in a statement. “Fortum was able to reach a strong result largely due to its successful execution of both the efficiency program and divestments according to plan.”

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