Uniper Gains from Gas Contract
Uniper, the fossil fuel generation and trading firm being spun off from E.ON, said its first half adjusted pre-tax operating earnings (Ebitda) of €1.5bn was some 50% higher than its 1H 2015 figure of €1bn.
The main driver was previously announced changes to its long-term contracts with Gazprom announced in 1Q 2016. Uniper finance chief Christopher Delbruck told reporters that these enabled Uniper to release provisions made in previous years – which had a €0.4bn positive impact on its results. This and other positive impetuses in Uniper’s Global Commodities raised that segment’s Ebitda to €1.2bn in 1H 2016, from €0.4bn in 1H 2015.
Despite that, senior management said that Uniper made a “significant payment” in 2Q 2016 to Gazprom – understood to be an agreed repayment of dividends by western partners in the Yuzhno Russkoye field that they were overpaid during the past decade. The amount was not disclosed.
In contrast, European generation continued to be plagued by continued low wholesale power prices in Germany and Scandinavia, with its adjusted Ebitda declining by one-fifth to €0.4bn. Maasvlakte 3, the new coal-fired unit in the Netherlands, made its first positive contribution to earnings.
The company is still consolidated into E.ON accounts, but will change once an initial public offering takes place in September. Trading in Uniper stock is expected to begin mid-September. For each ten shares of E.ON stock they hold, E.ON shareholders will receive one additional share of Uniper stock.
E.ON had said in its 1H results on August 10 that Uniper recorded a net loss of €3.9bn for the period, made up of €2.9bn impairments mainly on power generation and gas storage and a €0.9bn charge on contracts on gas storage facilities.
Uniper CEO Klaus Schafer said the firm plans to divest at least €2bn of assets by end-2017 but declined to indicate what it is eying for sale yet. Reports have suggested its stake in Yuzhno-Russkoye might be one, although management hinted that – unless talks on a CO2 tax in France go their way – one option might be to exit from coal and even gas-fired generation in France. Schafer declined to discuss next steps regarding the Nord Stream 2 project, following the exit of all foreign shareholders in the project just over a week ago.
Uniper CEO Klaus Schafer (Photo credit: E.ON / Uniper)
Wholesale power prices in Europe had improved markedly, said Schafer, and he also said the Swedish government’s decision to rescind all taxes on nuclear energy from January 2019 and to consider a similar move re hydro-power was a positive. E.ON's Swedish nuclear assets have been transferred to Uniper, but the group's German nuclear interests will stay within E.ON group.
Mark Smedley