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    UN01   DE000UNSE018

UNIPER SE

(UN01)
  Report
Real-time Estimate Tradegate  -  11:08 2022-09-28 am EDT
4.056 EUR   -0.29%
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'Pawn' in energy stand-off, Germany's Uniper suffers $12.5 bln loss

08/17/2022 | 01:57am EDT

* Loss driven by lower Russian gas flows, impairments

* Uniper bailed out by the state amid energy crisis

* Company says it cannot give 2022 outlook for now

* Shares down 8% (Recasts with CEO comments)

FRANKFURT/DUESSELDORF, Aug 17 (Reuters) - Uniper, the highest-profile corporate victim of Europe's energy crisis so far, reported a 12.3 billion euro loss ($12.5 billion) due to Russian gas supply cuts, saying it had become a "pawn" in the energy standoff between the European Union and Moscow.

Germany's largest importer of Russian gas needed a 15 billion euro government bailout last month after Russia drastically cut flows, forcing Uniper to buy gas elsewhere at much higher prices.

The bailout has laid bare Germany's reliance on Russian gas, which accounted for around 55% of the total last year, and the costs of switching to alternative sources to keep on powering Europe's top economy.

More than half of Uniper's first-half loss was caused by reduced supplies from Russia, which has been locked in an economic conflict with the West since its invasion of Ukraine.

"For globally active foreign oil and gas companies, such losses might be bearable. In Germany, on the other hand, there is not a single energy company that such a development would not bring to its knees," Chief Executive Klaus-Dieter Maubach said.

"We at Uniper have de facto become a pawn in this conflict."

Maubach said Uniper was examining legal steps against main supplier Gazprom, which has declared force majeure regarding deliveries, an argument Uniper disputes.

Underscoring Uniper's commitment to deliver agreed volumes of gas, Maubach warned Europe's energy crunch was far from easing and gas supply in coming winter remains extremely challenging.

Uniper expects a mid to high single digit billion euro operating loss this year and said 2023 would mark a transition year before the group could exit the "loss zone" in 2024.

Apart from equity provided by the state and bigger loans from state-lender KfW, help will also come via a gas levy that lets utilities pass on most of the costs of more expensive gas to customers from October, Uniper said.

Uniper, whose shares fell 8%, said this would significantly reduce losses from the fourth quarter onwards.

'CHAIN REACTION'

Moscow has cut flows via the Nord Stream 1 pipeline to just a fifth, blaming faulty or delayed equipment.

Berlin has said this is a pretext and Maubach said Uniper shared the government's view that Gazprom could increase supplies via the pipeline if it wanted to or use alternative routes.

The first-half loss also includes 2.7 billion euros in impairments related to the cancelled Nord Stream 2 pipeline, which Uniper backed financially, in addition to write-downs on its Russian business Unipro, which it still plans to sell.

"The most urgent task for Uniper is to find alternative gas supplies," Third Bridge analyst Allegra Dawes said, adding she expected deliveries of liquefied natural gas (LNG) via a planned Uniper-led terminal in Wilhelmshaven by the first half of 2023.

Maubach said the group was in contact with Canada and other suppliers about additional LNG deliveries.

As part of the state bailout, Germany will take a 30% stake in Uniper and has pledged 9 billion euros of credit lines via KfW, 5 billion euros of which have been drawn.

The bailout also includes an undefined government backstop should losses from gas purchases to offset lower Russian deliveries exceed 7 billion euros, which Maubach said would not dilute shareholders further.

"This will prevent a chain reaction that would do much more damage. Our top priority now is to swiftly implement the stabilisation package," he said.

Uniper, which expects the package to be approved at an extraordinary general meeting in the autumn, said it needed to wait for a clear signal from the European Commission on how it thinks about the bailout first.

($1=0.9821 euros)

(Reporting by Christoph Steitz, Tom Kaeckenhoff and Vera Eckert; Editing by Uttaresh.V, Edmund Blair and Tomasz Janowski)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
FORTUM OYJ -0.34% 13.45 Delayed Quote.-50.26%
GAZPROM 0.04% 198 End-of-day quote.-42.32%
LONDON BRENT OIL 2.08% 88.14 Delayed Quote.7.68%
S&P GSCI NATURAL GAS INDEX -0.84% 314.4021 Real-time Quote.83.38%
UNIPER SE 0.69% 4.1 Delayed Quote.-90.27%
UNIPRO -0.07% 1.469 End-of-day quote.-43.76%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -0.69% 57.75 Delayed Quote.-21.89%
WTI 2.64% 80.792 Delayed Quote.4.16%
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Analyst Recommendations on UNIPER SE
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Financials
Sales 2022 169 B 162 B 162 B
Net income 2022 -4 303 M -4 130 M -4 130 M
Net Debt 2022 846 M 812 M 812 M
P/E ratio 2022 -0,57x
Yield 2022 0,60%
Capitalization 1 489 M 1 429 M 1 429 M
EV / Sales 2022 0,01x
EV / Sales 2023 0,01x
Nbr of Employees 11 249
Free-Float 22,0%
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Mean consensus UNDERPERFORM
Number of Analysts 7
Last Close Price 4,07 €
Average target price 12,05 €
Spread / Average Target 196%
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Managers and Directors
Klaus-Dieter Maubach Chief Executive Officer
Tiina Marjukka Tuomela Chief Financial Officer
Markus Heikki Erdem Rauramo Chairman-Supervisory Board
David Bryson Chief Operating Officer
Patrick Wolff Chief Compliance Officer & General Counsel
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