Helen’s interim report January–March 2025: The strategy demonstrated its strength as profit performance improved and coal-related costs were relegated to history
January–March 2025
- Consolidated net sales decreased year-on-year and amounted to EUR 528 million (EUR 631 million).
- Operating profit increased and amounted to EUR 99 million (EUR 60 million).
- Electricity sales increased by 19 per cent to 1,777 GWh (1,490 GWh).
- Electricity distribution in Helsinki increased by 15 per cent to 1,453 GWh (1,260 GWh).
- Heat sales decreased by 18 per cent to 2,214 GWh (2,713 GWh).
- Cooling sales increased by 3 per cent to 37 GWh (36 GWh).
Consolidated key figures
| EUR million unless otherwise noted | Q1/2025 | Q1/2024 | Change | 2024 |
|---|---|---|---|---|
| Net sales | 528 | 631 | -16% | 1,523 |
| Operating profit before depreciations (EBITDA) | 135 | 119 | 13% | 306 |
| Operating profit (EBIT) | 99 | 60 | 65% | 159 |
| % of net sales | 19% | 9% | 111% | 10% |
| Profit before taxes | 88 | 59 | 49% | 145 |
| Gross capital expenditure | 70 | 102 | -31% | 568 |
| Cash flow from operating activities | 179 | 69 | 159% | 255 |
| Net debt | 1,045 | 823 | 27% | 1,154 |
| Net debt/EBITDA LTM |
3.3 |
2.8 |
4% | 3.8 |
| Gearing, % | 45% | 37% | 22% | 51% |
| Equity ratio, % | 56% | 55% | 2% | 55% |
| Return on capital employed (ROCE) LTM, % | 5% | 4% | 25% | 5% |
| Balance sheet total | 4,158 | 4,063 | 2% | 4,120 |
| Personnel, average | 701 | 789 | -11% | 777 |
Financial performance
Helen's net sales decreased by 16 per cent year-on-year, mainly due to a decline in the market price of electricity, and amounted to EUR 528 million (EUR 631 million). The average spot price of electricity in the first quarter was EUR 49 (EUR 73) per MWh, which is significantly lower than the average price of the previous year. Net sales derived from electricity production were lower than the previous year due to the decline in the market price. Net sales from electricity retail were also below the previous year’s level due to the decrease in the selling price of electricity. District heating net sales declined significantly due to weak demand caused by the mild weather. Electricity transmission net sales increased.
A key development with regard to the profitability of Helen’s business units is district heating turning profitable due to lower production costs. Production costs have decreased significantly as a result of the reduced use of fossil fuels. The company’s profitability was also significantly improved by the lower use of emission allowances. The profitability of electricity production declined year-on-year, mainly due to the decreased market price of electricity. The electricity retail business returned to profitability.
Depreciation amounted to EUR 36 million (EUR 59 million). The depreciation reported for the previous year included accelerated depreciation of EUR 18 million associated with the discontinuation of coal-based production at the Salmisaari power plant.
Operating profit came to EUR 99 million (EUR 60 million). The significant improvement in operating profit was attributable to lower material costs due to the decreased share of fossil fuels. Comparable adjusted operating profit, excluding non-recurring items, was EUR 99 million (EUR 78 million). Comparable relative profitability improved significantly year-on-year to 22 per cent (12 per cent). The reported return on capital employed improved to 5 per cent (4 per cent).
Comments by CEO Olli Sirkka
The transformation of Helen’s production structure was reflected in financial performance in the first quarter of 2025. Operating profit increased significantly and relative profitability improved. The positive trend demonstrates that Helen’s strategic choices regarding the early shutdown of coal-fired power plants and the transition to clean energy production were good decisions. Helen’s strategy is working well, and its continued implementation will improve the company’s financial position further. At the same time, emissions are continuing to decline steadily.
Helen phased out coal at the turn of March–April, when the company closed down the Salmisaari power plant and discontinued the use of coal in its energy production. Heat production is rapidly becoming increasingly electric. Going forward, it will consist of heat pumps, electric boilers and sustainable bioenergy. The main forms of electricity production are hydro, nuclear, wind and solar power.
The phasing out of coal-based production was reflected during the review period in a decrease in fuel-related costs, among other things. We reduced fuel purchases and freed up capital from inventories which, after the discontinuation of the use of coal, consists of pellets, wood chips and oil. In addition to the decrease in fuel costs, there was also a year-on-year decrease in Helen's costs related to emission allowances.
In line with Helen's strategy, our target is to phase out biomass combustion by 2040. This requires us to find new heat production solutions. To accomplish this target, we made progress with our nuclear energy programme during the period under review. The goal of the programme is to build a combined heat and power plant or a district heating plant. The first phase of the programme is planned to be completed in 2026.
As the review period progressed, the price of electricity decreased relative to the expectations at the turn of the year. Low electricity prices fit Helen’s business model, as we operate in the electricity market in diverse ways as a producer, vendor and consumer. Low electricity prices are particularly advantageous for district heating, which is increasingly reliant on electricity. New, lower energy prices for district heat entered into effect at the beginning of January. When electricity prices are volatile, we can balance out the fluctuations in prices by reducing the use of electricity during periods of high prices.
Significant events in January–March
- The parent company acquired the electricity sales business of Raseborgs Energi Ab, as a result of which the electricity customers of Raseborgs Energi Ab transferred to Helen. The transaction strengthens Helen’s position in the Finnish energy market and supports the company’s goal of becoming the most significant player in the retail market for electricity.
- The heating boiler in Salmisaari, which has been converted from a coal-powered boiler to a pellet-fired boiler, went into commercial production. The electric boilers located at the same production site went into test production use.
Significant events after the review period
- The parent company closed the Salmisaari coal-fired power plant on 1 April and discontinued the use of coal. The end of coal-based energy production means that Helen’s annual emissions will decrease by half when compared to 2024. The City of Helsinki's emissions will also decrease by approximately 30 per cent. At the national level in Finland, the change will reduce emissions by almost two per cent.
- In April, the parent company deployed a new ERP system that creates the conditions for more harmonised and efficient operating processes.
Outlook
The consumption of natural gas in Central Europe was high during the winter, which led to the storage levels of gas storage facilities falling well below 30 per cent at the end of the review period. In the two preceding years, the gas storage levels have been over 50 per cent after the winter. The EU has set a binding 90% filling target for gas storage facilities by the beginning of November, which will lead to higher gas purchasing needs in the summer and early autumn than in the past years. The expected demand will sustain a fairly high market price for natural gas and also increase the price of electricity in Central Europe. Through transmission connections, this may also have an indirect impact on electricity prices in Finland, especially in circumstances where the availability of renewable electricity in Finland and the neighbouring areas is weak.
Helen operates in electricity markets in diverse roles as a producer, vendor and consumer, which reduces its exposure to the risks caused by market fluctuations. In its business operations, Helen also aims to take advantage of the opportunities presented by price fluctuations. By operating in accordance with its strategy, the company will also be increasingly able to balance fluctuations in prices in the future by increasing electricity consumption when supply is high, and reducing consumption when supply is low. The profit outlook for 2025 is expected to be slightly better than the previous year.
In 2025, a significant amount of new wind power capacity will be completed in Finland, which is expected to increase the volatility of the electricity market. However, the weak general economic situation and falling electricity prices have reduced the number of new wind power projects as investors’ interest in wind power has declined. Ministerial initiatives on nuclear power production subsidies further weaken investors’ interest in wind power and other forms of energy production and storage.
As district heating becomes cleaner and its price falls, the general public's perception of it has changed. It is now increasingly seen as a form of heating with equal climate impacts compared to geothermal heat. This trend predicts that the customer churn, which has affected district heating, will slow down and eventually turn into increased demand. The positive development is supported by the convenience offered by district heating and the benefits it brings to customers and the entire energy system. The outlook for district heating is positive for 2025.
The clean transition will place new demands on the electricity network. When combined heat and power generation is discontinued, there will be hardly any electricity produced in Helsinki, but the capital’s electricity consumption will increase year by year. Securing the transmission capacity of the main grid in the Helsinki metropolitan area is an absolute prerequisite for an increasingly electrified society. This will require rapid progress in regulatory and licensing matters. The price increases in main grid fees and changes in the regulatory model challenge the profitability of electricity transmission, while the electricity network investment needs in Helsinki are increasing.
Helen’s investments in carbon neutral electricity, heat and cooling production are becoming concrete as new wind and solar farms and electricity storage facilities are built around Finland and existing production sites in Helsinki are transformed. The company’s production structure is shifting from combined heat and power generation to separate production, in which the main electricity production forms are hydro, nuclear, wind and solar power. Heat production is rapidly becoming increasingly electric. In the future, it will consist of heat pumps, electric boilers and sustainable bioenergy.
Green hydrogen will emerge as a new addition to Helen’s production palette. The preconditions for large-scale production will be investigated by means of a pilot plant. Assessments of the role of small-scale nuclear power as part of a sustainable energy system are also moving forward.
Helen's half-year report will be published on 1 August 2025.