Belgium, (Brussels Morning Newspaper) German power utility Uniper posted net losses of 40 billion euro in the first three quarters of the year, one of the largest in German corporate history.
The company, which the German government is nationalising, is paying a high price for its reliance on Russian gas imports as relations between Moscow and the EU deteriorate, according to Reuters reporting on Thursday.
While the lion’s share of the energy sector in Europe is struggling to find alternatives to cheap Russian gas, Uniper is the largest corporate casualty thus far.
Uniper’s market value stood at roughly 15.2 billion euro at the start of the year, but shares dropped 93% in the energy crunch, bringing down Uniper’s market value to approximately 1.14 billion.
Uniper CFO Tiina Tuomela noted “our half-year numbers already indicated that this has left massive scars in our financial results” and added that planned nationalisation will stabilise the company. She pointed out that negotiations are nearing completion.
Uniper pointed out that net losses include the hit worth roughly 10 billion euro that it incurred by buying gas on the spot market to replace Russian imports as well as expected losses of 31 billion related to the issue.
Tuomela pointed out that negotiations are focused on ways to replace a levy on natural gas with an instrument that will pass on Uniper’s massive losses to its future owner.
Legal action against Gazprom
As the German government is in the process of nationalising Uniper, the company has announced plans to take legal action against Russian energy company Gazprom, Uniper’s former supplier.
Uniper previously noted that it was thinking about starting a process before a Swedish arbitration court with the aim of claiming compensation from Gazprom.
“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 noted.
She reminded that Uniper is planning to withdraw from the Russian market, pointing out that the company holds 83.7% of Unipro power utility.
According to Uniper, Unipro’s recent business performance increased interest in the company among potential buyers.
