The company, which is heavily dependent on Russian gas, is now in talks with the federal government about stabilization measures. Uniper announced on Wednesday evening in Dsseldorf that it was examining how the company’s liquidity could be further secured. The management around CEO Klaus-Dieter Maubach collected the forecast for the year. Already in the first quarter, billions in losses had accumulated at the Dsseldorfer because of the Russia engagement.
According to Uniper, since mid-June it has only received 40 percent of the contractually guaranteed gas volumes from GAZPROM and has had to procure replacement volumes at significantly higher prices.
Uniper has concluded more than 50 percent of its long-term supply contracts with Russia, a source that is now drying up, explained the situation to analyst Guido Hoymann from Bankhaus Metzler. Alberto Gandolfi from the US investment bank Goldman Sachs calculates that the additional replacement purchases on the Uniper market could potentially cost around 500 million euros for a full month.
“We already had a significantly increased need for liquidity at the end of last year due to the enormous increase in gas prices,” said CEO Klaus-Dieter Maubach the night before, explaining the step to ask the federal government for help. “In order to counteract this, we had already expanded our credit lines and, among other things, received a facility from the state-owned KfW in the amount of two billion euros, which we have not used to date.”
Developments have now “notably worsened” as a result of the war in Ukraine and the resulting sharp reduction in gas supplies from Russia, Maubach explained. “Therefore, we are now talking to the federal government again about stabilization measures, for which a number of instruments are possible, such as guarantees and security payments, an increase in the current credit facility through to participation in the form of equity.” A spokeswoman for Economics Minister Robert Habeck (Greens) confirmed talks on Thursday.
Uniper also suspended the previous earnings forecast the evening before. In the first half of the year, based on preliminary figures, operating profits should also be significantly below those of the same period last year, it said. A year ago, Uniper had earned 580 million euros in the first six months before interest, taxes and special effects. Adjusted net income at the time was EUR 485 million.
In the first quarter, Uniper had already recorded a loss of over three billion euros due to its strong commitment to Russia. This was mainly due to value adjustments as a result of the international sanctions against Russia. The write-downs mainly affected Uniper’s Russian subsidiary Unipro and the group’s loan to Nord Stream 2 AG. Uniper had completely written off the loan for the Baltic Sea pipeline, which was co-financed by the Russian energy group GAZPROM.
Financial aid from Finland for Uniper unlikely – Fortum sees Germany as an obligation
The chances for the troubled energy company Uniper to get help from the Finnish state are obviously extremely slim. The Finnish government is unlikely to help Uniper, but instead will focus on Uniper’s majority shareholder Fortum itself, Bloomberg news agency reported on Thursday, citing a person familiar with the situation. Any funding that Fortum may require will be considered if the need arises, it said. The Finnish state holds a little over 50 percent of Fortum, which holds 78 percent of Uniper.
Fortum had explained in the morning that Germany also had a duty to save his daughter and that a “national and industry-wide effort” was needed. Uniper has already “partially” utilized a credit facility of EUR 8 billion granted by Fortum.
Uniper’s call for help to the state shocks investors in the energy sector
The company’s shares, which are listed on the MDAX and are majority owned by the Finnish utility Fortum, collapsed on Thursday. In early trading, the paper temporarily lost up to almost 23 percent to 12.76 euros. In the meantime, however, the share has been able to reduce the losses somewhat and is now temporarily 17.89 percent lower at EUR 13.59.
Since the beginning of the year, the losses have now totaled almost 70 percent. The market capitalization fell by ten billion euros to around five billion euros in the period.
One trader commented that Uniper must now ask the German taxpayer to bail it out. The warning makes it clear how critical, if not even dangerous, the current situation is if the Federal Network Agency does not determine and announce the gas shortage soon.
In this case, Uniper assumes that some of the current burdens can then be passed on to customers. This is currently not possible. The shares of the utility companies EON and RWE were also affected in the generally weakened market environment and at times fell 4.66 percent to 7.98 euros and 5.51 percent to 34.99 euros.
“The situation at Uniper and also the German suppliers shows how dangerous the general situation is for the entire European energy sector at the moment. Due to links with each other and partially overlapping business areas, only very few energy companies can avoid the risks,” commented market expert Andreas Lipkow from Comdirect. He almost feels reminded of the financial and banking crisis of 2007/2008. “Back then, the situation was also hardly manageable at the beginning and the consequences were sometimes devastating.” In the energy sector, for the time being, everything depends on further supplies from Russia and the rapid deployment of alternatives.
And RBC analyst John Musk explained: As part of the gas emergency plan, the Federal Network Agency should allow the people of Düsseldorf to pass on higher costs to customers. He calculated that the throttled gas supply from Russia is currently costing the group around 30 million euros per day.
JPMorgan analyst Vincent Ayral estimates the costs incurred by Uniper as a result of the gas bottleneck at EUR 20 million per day. It will only be a few months before the group can draw on the two billion euros loan that has already been granted by the KfW.
Ayral warned that many “municipal utilities” had less solid balance sheets and might not have as much time as Uniper. He therefore assumes that the federal government is currently “working hard on the details” of how the energy companies could pass on the high costs and that this is the reason why the “gas shortage” has not yet been declared. This is also tricky because it is likely to have a significant impact on the economy. But Ayral expects a decision to be a matter of days or weeks rather than months.
ESPOO / DSSELDORF / FRANKFURT (dpa-AFX)
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