The ailing energy company Uniper is entering the final negotiation phase for nationalization with a double-digit billion loss. By the end of September, the reported net loss this year was 40.3 billion euros, as Germany’s largest gas importer announced on Thursday when presenting the nine-month interim report in Düsseldorf.
A good three quarters are due to expected valuation effects and provisions in connection with the Russian gas cuts. A loss of ten billion euros has already been realised. The energy company, which is about to be nationalized, does not dare to make a more precise earnings forecast. This is currently not possible until further notice, said CFO Tiina Tuomela in a conference call.
tightened liquidity needs
The Düsseldorf-based company is in trouble because Russia is no longer delivering gas to Germany. The gas wholesaler had focused heavily on supplies from Russia and is a supplier to over 100 municipal utilities and large companies. It thus plays a central role in the supply of natural gas in Germany. “Uniper plays a key role in securing the energy supply with electricity and gas for the winter of 2022/2023 and the following years,” emphasized Tuomela.
In the third quarter, the company’s liquidity requirements increased again, since Russia has not been supplying gas to Germany since the beginning of September after initially partial supply cuts. While the high gas prices gave Uniper a good boost a year ago, they are now the core problem. The gas that it can no longer get from Russia has to be bought more expensively on the gas market.
Accordingly, Uniper’s full-year result is extremely dependent on the strongly fluctuating gas price. Uniper does not want to make any concrete assumptions about how this will develop. “It all depends on the weather,” said Tuomela. After reaching a record high at the end of August, the gas price has fallen significantly in recent weeks, which has meant that Uniper has suffered almost no losses through replacement procurement volumes.
Millions lost every day
According to calculations by the analysts at Bankhaus Metzler, the provisions made correspond to an average daily loss of EUR 60 million over the next year and a half, i.e. up to the end of the 2023/2024 winter heating period. In August, the losses were now more than 100 million euros a day.
According to the company, the provisions made for future losses are based on the assumption that no further gas will come from Russia. A specific price was also set for the replacement purchase, which Uniper did not name. A gas levy or a similar state-introduced instrument is also not accepted. Should the group be able to pass on part of its losses, the losses could be reduced.
Because of the liquidity problems, the group, the German government, and Uniper’s previous majority shareholder Fortum from Finland agreed a month ago to nationalize Uniper. Among other things, a capital increase and the acquisition of the Uniper shares from Fortum are planned. The federal government should then own around 98.5 percent of the shares in Uniper. Coordination with the federal government for the stabilization package is now in the final phase. Shareholders are expected to vote at an extraordinary general meeting in the second half of December.
Extraordinary General Meeting
In addition, the shareholders will probably have to meet a second time at the end of the year. Since Uniper’s losses also affect the balance sheet equity, the group had to report the loss of more than half of its share capital at the end of October. In terms of stock corporation law, this entails the obligation to convene an extraordinary general meeting. The management wants to inform investors about the loss and explain the company’s situation.
The state-owned KfW bank is helping until the stabilization package has been finalised. So far, Uniper has used 14 billion euros of the 18 billion euros of the credit line provided, it is now said. The group confirmed the preliminary figures presented a week ago. Accordingly, the adjusted operating loss before interest and taxes amounted to almost 4.8 billion euros. The adjusted group deficit is 3.2 billion euros. The two key figures are intended to reflect the operational development of the Group and have been adjusted for valuation effects.
