Uniper Has Good Q1 Built on Gas
German utility Uniper reported a big year-on-year increase in its adjusted pre-tax (Ebit) Q1 profits May 7, which it said was mainly due to the gas business. The restoration of the UK capacity market, which pays plants for availability, if not commodity, was another factor, it said.
Uniper's "diversified and flexible gas storage and gas optimisation portfolios" allowed supply and demand to meet profitably in "highly volatile markets."
Adjusted pre-tax earnings were €651 ($703)mn, more than three times the €185mn in Q1 2019. Adjusted net income followed the development of adjusted Ebit and, at €499mn, is a multiple of last year's €117mn. Debt was unchanged at around €2.7bn. Net income was $484mn, down from $758mn in 2019.
Hydro and nuclear power plants also made positive contributions thanks to higher electricity prices and production volumes. International Generation revenues declined, however on lower electricity prices on the day-ahead market thanks to a weather-related higher supply of electricity and lower foreign demand.
With regard to the outlook for the full year 2020, Uniper continues to expect adjusted EBIT of between €750mn and €1bn and an adjusted consolidated profit of between €550mn and €800mn. As a dividend for the 2020 financial year, Uniper is targeting a distribution of €500mn. Its biggest shareholder is the Finnish state, whose utility Fortum took a majority stake in the company late March.
CEO Andreas Schierenbeck said the positive interim result showed "the robustness of our business model with a flexible gas portfolio and power generation that support security of supply. Our coal exit plan is being implemented quickly; Uniper's expertise in the gas business enables the expansion and rapid development of new hydrogen solutions."
CFO Sascha Bibert said the company had already come a long way towards achieving the earnings targets for 2020 and it had reduced its dependency on commodity markets in recent months. Much of its power plant portfolio is "systemically important and is remunerated or receives capacity payments. In addition, over 95% of our electricity production for 2020 is already sold. "