🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

'Massive scars': Germany's Uniper posts record 40 billion euro net loss

Published 11/03/2022, 02:46 AM
Updated 11/03/2022, 08:06 AM
© Reuters. FILE PHOTO: Logo of Uniper is pictured at the company's headquarters in Duesseldorf, Germany, September 21, 2022. REUTERS/Wolfgang Rattay
GAZP
-
DTEGY
-

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) - Soon-to-be-nationalised gas importer Uniper reported a record 40 billion euro ($39.3 billion) net loss in the first nine months of this year, the biggest in German corporate history, after Russia stopped its supplies.

The loss further highlights how Russia's decision to sever a decade-long supply relationship with Europe, most notably Germany, is impacting the continent's energy sector, with Uniper the crisis' biggest corporate casualty so far.

It also marks the biggest loss in German corporate history, according to Mark Spoerer, who holds the chair for economic and social history at the University of Regensburg, even dwarfing more recent outliers such as the 25 billion euros Deutsche Telekom (OTC:DTEGY) disclosed for 2002.

Since the start of the year shares in Uniper have lost 93% of their value, giving it a current market value of 1.1 billion euros, down from 15.2 billion euros on Jan. 3.

"Our half-year numbers already indicated that this has left massive scars in our financial results," Chief Financial Officer Tiina Tuomela said, adding that an agreed stabilisation package that will see Germany take over Uniper was currently being finalised.

Uniper said the net loss factored in 10 billion euros of realised losses the company incurred by replacing Russian gas volumes on the spot market at much higher prices.

GRAPHIC - Uniper's market cap collapse

https://fingfx.thomsonreuters.com/gfx/mkt/byprlonampe/uniper5.PNG

This caused daily losses of more than 100 million euros when gas prices spiked over the summer, a number has come down to less than 10 million per day at the end of October as markets have cooled off, Uniper said.

The net loss also includes 31 billion euros of future losses related to the same issue.

Shares in the company were down 3%.

Tuomela said talks were now focused on how to replace a planned gas levy, due to come into effect on Oct. 1 but scrapped at the last minute, with an instrument that will effectively pass on the massive losses to Uniper's future owner - the German government.

Uniper has threatened legal action against its former main supplier Gazprom (MCX:GAZP), and is weighing proceedings before a Swedish arbitration court to claim billions of euros in compensation.

"We are also working intensively to restructure our gas portfolio in order to minimise risks and to end by 2024 the losses resulting from suspended Russian gas deliveries," Tuomela said.

Among the group's top priorities are a planned exit from the Russian market, where it owns a 83.7% stake in Unipro, it said, adding the Russian division's recent performance had increased interest among possible buyers.

© Reuters. FILE PHOTO: Logo of Uniper is pictured at the company's headquarters in Duesseldorf, Germany, September 21, 2022. REUTERS/Wolfgang Rattay

Under the agreement with Berlin, Uniper has received 18 billion euros worth of credit lines from state lender KfW, 14 billion of which had been drawn down as of the end of October, it said.

($1 = 1.0187 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.