‘Pawn’ in energy stand-off, Germany’s Uniper suffers $12.5 billion loss

By Christoph Steitz, Tom Käckenhoff and Vera Eckert

FRANKFURT/DUESSELDORF (Reuters) – Uniper, the highest-profile company sufferer of Europe’s vitality disaster to this point, reported a 12.3 billion euro loss ($12.5 billion) as a consequence of Russian fuel provide cuts, saying it had turn into a “pawn” within the vitality standoff between the European Union and Moscow.

Germany’s largest importer of Russian fuel wanted a 15 billion euro authorities bailout final month after Russia drastically lower flows, forcing Uniper to purchase fuel elsewhere at a lot greater costs.

The bailout has laid naked Germany’s reliance on Russian fuel, which accounted for round 55% of the whole final yr, and the prices of switching to various sources to maintain on powering Europe’s high economic system.

Greater than half of Uniper’s first-half loss was brought on by lowered provides from Russia, which has been locked in an financial battle with the West since its invasion of Ukraine.

“For globally energetic international oil and fuel firms, such losses may be bearable. In Germany, however, there’s not a single vitality firm that such a improvement wouldn’t convey to its knees,” Chief Government Klaus-Dieter Maubach mentioned.

“We at Uniper have de facto turn into a pawn on this battle.”

Maubach mentioned Uniper was analyzing authorized steps in opposition to principal provider Gazprom, which has declared drive majeure relating to deliveries, an argument Uniper disputes.

Underscoring Uniper’s dedication to ship agreed volumes of fuel, Maubach warned Europe’s vitality crunch was removed from easing and fuel provide in coming winter stays extraordinarily difficult.

Uniper expects a mid to excessive single digit billion euro working loss this yr and mentioned 2023 would mark a transition yr earlier than the group might exit the “loss zone” in 2024.

Other than fairness supplied by the state and greater loans from state-lender KfW, assist will even come through a fuel levy that lets utilities move on a lot of the prices of costlier fuel to prospects from October, Uniper mentioned.

Uniper, whose shares fell 8%, mentioned this might considerably scale back losses from the fourth quarter onwards.

‘CHAIN REACTION’

Moscow has lower flows through the Nord Stream 1 pipeline to only a fifth, blaming defective or delayed tools.

Berlin has mentioned this can be a pretext and Maubach mentioned Uniper shared the federal government’s view that Gazprom might enhance provides through the pipeline if it wished to or use various routes.

The primary-half loss additionally consists of 2.7 billion euros in impairments associated to the cancelled Nord Stream 2 pipeline, which Uniper backed financially, along with write-downs on its Russian enterprise Unipro, which it nonetheless plans to promote.

“Probably the most pressing job for Uniper is to search out various fuel provides,” Third Bridge analyst Allegra Dawes mentioned, including she anticipated deliveries of liquefied pure fuel (LNG) through a deliberate Uniper-led terminal in Wilhelmshaven by the primary half of 2023.

Maubach mentioned the group was in touch with Canada and different suppliers about extra LNG deliveries.

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

The bailout additionally consists of an undefined authorities backstop ought to losses from fuel purchases to offset decrease Russian deliveries exceed 7 billion euros, which Maubach mentioned wouldn’t dilute shareholders additional.

“This can stop a sequence response that may do rather more harm. Our high precedence now could be to swiftly implement the stabilisation bundle,” he mentioned.

Uniper, which expects the bundle to be accepted at a rare common assembly within the autumn, mentioned it wanted to attend for a transparent sign from the European Fee on the way it thinks in regards to the bailout first.

($1=0.9821 euros)

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