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 Moscow drastically cut flows, forcing Uniper to buy gas elsewhere at much higher prices.
The bailout has laid bare Germany’s reliance on Russian gas imports, 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.
“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 supply customers with agreed volumes of gas, Maubach warned energy supply in Europe 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.
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 canceled 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 it 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 stabilization 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. – Rappler.com
$1 = 0.9821 euros