Uniper Has Tough First Half
German utility Uniper posted adjusted pre-tax profit (Ebit) of €308mn in the first half of the year, about half the €601mn in the same period last year, it said August 8. But it stands by its guidance of €550mn-€850mn for the full year.
Operating earnings in the first half of 2019 were down, but mostly because the year before saw some one-off gains and "temporary price-driven increase in costs for carbon allowances." But it will however recover these higher costs at the end of the year, it said. Higher output and power prices in Russia helped Ebit. It has also not had any payment from the UK capacity mechanism, which remains suspended.
CEO Andreas Schierenbeck said a "reliable energy supply and innovative customer solutions are increasingly in demand. That's exactly what Uniper delivers. Our company is well positioned to play a key role in the energy world of the future.... The rising prices that we saw on Europe's power markets in the first half of 2019 are giving us increasing momentum."
Uniper CFO Sascha Bibert said the second half of the year would be better, highlighting its business in Russia and gas, which are both showing year-on-year improvements. Its business in Russia has also prevented Finnish Fortum from gaining control of the company, leading to angry exchanges and resignations at the time of its annual general meeting this spring. Several shareholders have called for Uniper to sell its Russian business.
Adjusted Ebit at the European Generation segment more than halved to €173mn from €372mn. There was lower output from Maasvlakte 3 in the Netherlands and unit 2 at Ringhals nuclear power station in Sweden – in which Uniper owns a minority stake – and production interruptions in France caused by strikes.
The Global Commodities segment's operating earnings also halved to €91mn from €186mn, but that was more to do with gains the previous year related to LNG deliveries. Successful optimisation at gas-trading venues this year could not fully offset the adverse factors, it said.
Operating earnings at Uniper's power business in Russia were significantly higher than in the prior-year period. Higher power prices and increased output at Surgutskaya power station and at units 1 and 2 of Beryozovskaya power station were the principal positive factors. Uniper adjusted the schedule for the repair of Beryozovskaya unit 3's boiler and now expects the unit to reenter service in the first quarter of 2020.
Uniper recorded net income of €968mn in the first half of 2019, compared with a loss the year before. This was mainly due to positive effects resulting from the marking to market of commodity derivatives at the balance-sheet date. Uniper uses derivatives to shield its power and gas business from price fluctuations.