Uniper : After first half of year Uniper on course to meet 2018 outlook

DGAP-News: Uniper SE / Key word(s): Half Year Results/Quarterly / Interim Statement

07.08.2018 / 07:26
The issuer is solely responsible for the content of this announcement.

• Adjusted EBIT of EUR0.6 billion (H1 2017: EUR0.9 billion); anticipated decline due to portfolio changes and non-recurrence of one-off items
• Net loss of EUR522 million results primarily from non-cash-effective marking to market of commodity derivatives
• Adjusted funds from operations (adjusted FFO) of EUR0.6 billion slightly below prior year (H1 2017: EUR0.7 billion)
• Outlook and dividend proposal for 2018 reaffirmed
• Strategy implementation: conversion to gas will secure future of Scholven power plant
• Fortum CFO Markus Rauramo becomes member of Uniper Supervisory Board

Uniper posted operating earnings (adjusted EBIT) of EUR601 million in the first half of 2018. The roughly EUR330 million decline relative to the prior-year period was anticipated by the company and is attributable in part to the already-communicated changes in its portfolio. This includes in particular the absence of earnings streams from the divested stake in Yuzhno-Russkoye gas field and from decommissioned generating units: Maasvlakte 1 and 2 in the Netherlands and Oskarshamn 1 in Sweden. Adjusted EBIT was adversely affected by the non-recurrence of the insurance payment for Berezovskaya 3 power plant in Russia received in the second quarter of the prior year. Adjusted funds from operations (adjusted FFO) of EUR589 million were only slightly below the prior-year figure.

CFO Christopher Delbrück says: 'Uniper's first-half operating earnings and cash flows are fully in line with our expectations. This positions us well to achieve our targets for full-year 2018. Today, we therefore reaffirm our outlook for adjusted EBIT of between EUR0.8 and EUR1.1 billion for the 2018 financial year as well as our dividend proposal. Over the medium term, the positive developments on international energy and commodity markets will give our business further tailwinds. At the same time, we're systematically implementing our strategy and delivering reliably on our promises.'

Operating earnings at Uniper's European Generation segment benefited from already-known tax reductions on hydro and nuclear power stations in Sweden and increased utilization of hydro capacity. Adjusted EBIT continued to be adversely affected by lower achieved prices for hydro and nuclear power. The positive factors included income from capacity-market payments in the United Kingdom and effects from the reversal of provisions. Earnings at Uniper's gas business recovered in the second quarter after a comparatively weak start to the year. Factoring out the non-recurrence of the insurance payment for Berezovskaya 3 received in 2017, operating earnings at the International Power segment were largely stable. Although adjusted EBIT was adversely affected by lower output and negative currency-translation effects, it benefited from the upward adjustment of tariff payments for new generating capacity at Surgutskaya power station.

Uniper recorded a net loss of EUR522 million for the first half of 2018. This was mainly attributable to the marking to market of commodity derivatives at the balance-sheet date, which is not cash-effective. Uniper uses derivatives, among other purposes, to hedge its long-term power and gas positions against price fluctuations.

Uniper's operating cash flow totaled EUR465 million in the first half of 2018 (H1 2017: EUR1.4 billion). Adjusted funds from operations (adjusted FFO) amounted to EUR589 million (H1 2017: EUR678 million).^[1] The EUR89 million decline relative to the prior-year period mainly reflects lower cash-effective EBIT. This was partially offset by a reduction in the utilization of provisions and positive tax effects.

Uniper's economic net debt stood at EUR3.3 billion at June 30, 2018. The increase of EUR0.8 billion relative to year-end 2017 is attributable to changes in the accounting treatment of liabilities from leases. In addition, due to higher commodity prices Uniper had to provide more collateral to back its trading transactions, which had an adverse impact on liquid funds at the end of the second quarter. Investments and the dividend payout required liquid funds as well.

Uniper's outlook for full-year 2018 is unchanged. The company continues to expect its adjusted EBIT to be between EUR0.8 and EUR1.1 billion. Uniper intends to propose a dividend of about EUR310 million for financial year 2018.

Conversion to gas to secure future of Scholven power plant
In late July Uniper concluded a long-term extension of its partnership with an industrial enterprise near Scholven power plant in Gelsenkirchen, Germany. To assure Scholven's future, Uniper plans to completely redesign the asset. The power plant's existing hard-coal-fired generating units will be supplemented and eventually completely replaced by technologically advanced gas-fired capacity. A combined-heat-and-power unit consisting of two gas turbines and a steam boiler will be installed at the site by the end of 2022 at the latest. The asset will ensure a high degree of supply security and will be tailored entirely to the needs of the industrial customer and Uniper's district-heat business. The project will build on the existing infrastructure and Uniper's long-standing partnerships to create new prospects for its power plant in the Ruhr region.

Fortum CFO Markus Rauramo becomes member of Uniper Supervisory Board
At the request of the Uniper Management Board, the Düsseldorf district court appointed Markus Rauramo, CFO of Fortum Oyi, as a member of the Uniper Supervisory Board effective July 30, 2018. With the appointment of Markus Rauramo, the Uniper Supervisory Board is once again complete and has equal representation. Markus Rauramo joins the Uniper Supervisory Board as the successor to the E.ON representative, who ended his service on Uniper Supervisory Board after Fortum acquired E.ON's stake in Uniper.

Uniper is a leading international energy company with operations in more than 40 countries and around 12,000 employees. Uniper's business is to provide a reliable supply of energy and related services. Its main operations include power generation in Europe and Russia and global energy trading. Its headquarters are in Düsseldorf, Germany.

Uniper's sales and earnings performance in the first half of 2018

EUR in millions	H1 2018	H1 2017	+/- %
Uniper sales	35,968	37,305	-3.6%
European Generation	5,725	3,718	54.0%
Global Commodities	37,693	36,916	2.1%
International Power	527	606	-13%
Administration/Consolidation	-7,977	-3,935	>-100%
Uniper adjusted EBIT1	601	930	-35.4%
European Generation1	372	284	31.0%
Global Commodities1	186	262	-29.0%
International Power1	142	477	-70.2%
Administration/Consolidation1	-99	-93	-6.5%
Net income/loss	-522	1,057	>-100%
Attributable to Uniper SE shareholders	-546	967	>-100%
Attributable to non-controlling interests	24	90	-73.3%
Operating cash flow	465	1,407	>-100%
Adjusted funds from operations (Adjusted FFO)2	589	678	-13.1%
Economic net debt	-3,294	-2,4453	34.7%

¹Adjusted to exclude non-operating effects.
¹Adjusted to exclude mainly items that do not reflect underlying cash flow available for distribution.
³Figure at year-end 2017.

For further information please contact:

Christine Bossak
T [phone]
M [phone]
[e-mail]

This press release may contain forward-looking statements based on current assumptions and forecasts made by Uniper SE management and other information currently available to Uniper. Various known and unknown risks, uncertainties, and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Uniper SE does not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to conform them to future events or developments.^[1] Adjusted Funds from operations' (adjusted FFO) is a key figure used by Uniper since 2017 in part to assess the potential dividend payout to its shareholders and to calculate the Management Board's variable compensation.

07.08.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de