Germany’s largest gas importer assumes that spending on gas replacement purchases will be lower than before.
(Photo: AP)
Dusseldorf The Düsseldorf-based energy group Uniper expects lower losses for the 2022 financial year than previously assumed. The forecast for the results had improved significantly, the company announced on Wednesday afternoon in a mandatory announcement. However, clearly negative results are still expected.
According to the announcement, Uniper made a loss of 3.4 billion euros in the fourth quarter due to high gas replacement procurement costs. For the entire 2022 financial year, losses would total 13.2 billion euros.
According to Uniper, the expected future losses due to ongoing gas replacement procurement costs for reduced Russian gas deliveries as of December 31, 2022 amount to around 5.9 billion euros. Overall, Uniper would have made a loss of only 19.1 billion euros due to the loss of Russian gas supplies.
A good 19 billion euros is a gigantic sum. However, Uniper had originally expected total losses of around 40 billion euros to be more than twice as high. The gas importer obtained most of its gas from the Russian company Gazprom, which has not supplied gas to Uniper since September.
Uniper has to supply gas to hundreds of industrial companies and municipal utilities in Germany itself and is therefore doomed to make losses: The company has to buy gas at high prices on the world market and sell it cheaper to its own customers with whom it has already agreed fixed prices. Because of this burden, the German state took over 99 percent of the company at the turn of the year in order to protect Uniper from bankruptcy and the municipal utilities and companies from gas bottlenecks.
Warm temperatures relieve Uniper
The fact that Uniper’s losses are now apparently much lower than originally expected is probably due to the currently low gas prices. Uniper can currently buy gas cheaper than initially thought. The gas price on the exchanges is still a multiple of the level that was considered normal before the Ukraine war. But it has fallen significantly again compared to last summer.
Uniper’s Chief Financial Officer, Tiina Tuomela, said on Wednesday: “The development of the gas price has a very significant impact on Uniper’s costs for the current and future procurement of replacement gas.” Due to the significant drop in the gas price at the end of 2022, Uniper reduced the forecast for losses from future gas replacement procurement costs from around 30 billion euros to around 5.9 billion euros.
The development of the gas price has a significant impact on Uniper’s costs for current and future gas replacement procurement. Tiina Tuomela, CFO Uniper
One reason for the low gas prices at the end of the year is the temperatures, which have been unusually warm on average this winter so far. For example, European households use less gas than usual, and lower gas demand causes prices to fall.
On Wednesday, the gas price on the Dutch exchange TTF was around 60 euros for one megawatt hour. Last August, it had meanwhile risen to well over 300 euros.
However, it is unclear how the prices will develop. Uniper therefore points out that the actual losses of the Group and the expected losses from gas replacement procurement costs can continue to fluctuate significantly in the future with changing gas prices.
As a result of the latest developments, Uniper expects adjusted earnings before interest and taxes (Adjusted EBIT) of minus EUR 10.4 billion for the 2022 financial year. In the previous year, the company posted an increase of 1.19 billion euros in adjusted earnings.
In terms of adjusted net income, Uniper expects a loss of around seven billion euros, compared to a profit of 906 million euros in the previous year. Uniper intends to publish the detailed results for the 2022 financial year on February 17.
Losses will continue to accumulate until at least 2024
Some of the gas supply contracts with municipal utilities and companies that Uniper has to serve will run until 2024. Until then, the group will continue to make losses in the gas trading business – provided gas prices do not fall so much that they are below the sales prices agreed with customers .
It is still unclear how the crisis company Uniper will continue. However, an internal paper from the Federal Ministry of Economics recently stated that Uniper’s “value-maximizing sale of remaining healthy components” is an important goal. It is already clear that Uniper will have to sell the Datteln 4 coal-fired power plant.
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