Bailed-out Uniper expects lower 2024 profits on falling energy prices
Reuters
Published Feb 28, 2024 06:39
Updated Feb 28, 2024 15:58
By Christoph Steitz and Tom Käckenhoff
FRANKFURT/DUESSELDORF (Reuters) -Bailed-out German utility Uniper expects a significant fall in profit this year, it said on Wednesday, blaming lower wholesale energy prices that have also clouded the outlook for rivals across Europe.
The company forecast adjusted net profit of between 0.7 billion and 1.1 billion euros ($758 million to $1.2 billion) this year. Last year it made a record 4.43 billion euros, helped by one-off gains.
The outlook reflects a normalisation of wholesale power and gas prices that had risen sharply when Europe severed most energy ties with Russia.
RWE (LON:0HA0) and France's EDF (EPA:EDF) have also warned of lower 2024 profit in recent weeks.
Thinly-traded shares in Uniper were 7% lower at 1120 GMT.
Uniper was rescued by the German government at the height of Europe's energy crisis in 2022 in a 13.5 billion euro bailout after Moscow's halt to gas supplies via the Nord Stream pipeline forced the company to buy replacement volumes at sky-high prices.
As a result of the crisis, Uniper lodged billions of euros worth of damage claims against Gazprom (MCX:GAZP), a legal process Uniper CEO Michael Lewis said would come to a conclusion this year.
Uniper also said the sale of its North American power business - part of asset sales demanded by Brussels in return for approving the bailout - was at an advanced stage.
"Uniper finished 2023 with exceptionally good results. That gives us financial flexibility to systematically implement our strategy," said finance chief Jutta Doenges, referring to the group's 8 billion euro plan to expand its renewables portfolio and cut CO2 emissions.
Sources this month told Reuters that the German government, which owns more than 99% of Uniper, was considering releasing a 20-30% stake in a listing next year as a first step to reversing the bailout.
Lewis said that once the government decided to sell its shares it would help arrive at a more appropriate valuation of Uniper, saying the current market valuation of 23 billion euros was distorted due to the low free-float.
Uniper, which has set aside a 2.2 billion euro provision to start paying back the state money, said its adjusted core profit would decline to between 1.5 billion and 2 billion euros this year from 7.16 billion in 2023.
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Written By: Reuters
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