Annual Report 2013 | Suomeksi |

4 Capital risk management

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Fortum wants to have a prudent and efficient capital structure which at the same time allows the implementation of its strategy. Maintaining a strong balance sheet and the flexibility of the capital structure is a priority. The Group monitors the capital structure based on Comparable net debt to EBITDA ratio. Net debt is calculated as interest-bearing liabilities less cash and cash equivalents. EBITDA is calculated by adding back depreciation, amortisation and impairment charges to operating profit, whereas Comparable EBITDA is calculated by deducting items affecting comparability and net release of CSA provision from EBITDA. Fortum's net debt to EBITDA target is around 3.
In April 2013, Fortum's Board of Directors updated the company's dividend policy. The new dividend policy ensures that shareholders receive a fair remuneration for their entrusted capital, supported by the company’s long-term strategy that aims at increasing earnings per share and thereby the dividend. When proposing the dividend, the Board of Directors looks at a range of factors, including the macro environment, balance sheet strength as well as future investment plans. Fortum Corporation’s target is to pay a stable, sustainable and over time increasing dividend, in the range of 50-80% of earnings per share, excluding one-off items.
Fortum Corporation's long-term credit rating with S&P was reaffirmed at A- (negative outlook) in December. As of April 2013, Fitch Ratings provides a rating of Fortum Corporation and any subsequently issued securities under Fortum's EMTN programme. Fitch's current long-term issuer default rating of Fortum Corporation is A- (negative outlook) was also reaffirmed in December. Fortum decided to terminate the rating relationship with Moody’s Investors Service in February. Moody’s had at the time being an A2 rating with a negative outlook.
Net debt/EBITDA ratios
EUR million Note 2013 2012
Interest-bearing liabilities 1) 28 9,118 8,777
Less: Cash and cash equivalents 1) 25 1,269 963
Net debt 7,849 7,814
Operating profit 1,712 1,874
Add: Depreciation, amortisation and impairment charges 740 664
EBITDA 2,452 2,538
Less: Items affecting comparability 105 122
Less: Net release of CSA provision 48 -
Comparable EBITDA 2,299 2,416
Net debt/EBITDA 3.2 3.1
Comparable net debt/EBITDA 3.4 3.2
1) Including interest-bearing debt of EUR 20 million and cash balances of EUR 15 million (2012: 0) classified as assets held for sale in balance sheet.

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