Uniper eyes green future with billions-strong investment, state exit
Reuters
Published Aug 01, 2023 06:34
Updated Aug 01, 2023 16:56
By Vera Eckert and Rachel More
DUESSELDORF (Reuters) -German utility Uniper mapped out plans to move away from fossil fuels on Tuesday with billions of euros in green investments, hailing record earnings in the first half of 2023 as a turnaround following its bailout just a year earlier.
"Uniper is back on track," said new CEO Michael Lewis, who was installed to steer the company, once Germany's biggest importer of Russian gas, out of the crisis triggered by an end in deliveries from Russia's Gazprom (GAZP.MM).
He presented plans to invest 8 billion euros ($8.79 billion) through 2030 on a green transformation, triple the company's average annual investments of the past three years.
The planned transformation consists of decarbonising Uniper's existing power and gas assets and building up new ones.
"This will enable us to create a system that ensures continuity while allowing flexibility," the CEO said at a press conference.
Uniper's turnaround was largely driven by the company hedging its gas supply commitments for the years 2023 and 2024 at lower prices, after being forced to replace missing Russian volumes at surging prices on spot markets last year.
Expecting no further financial losses from procuring replacement gas volumes, Uniper said on Tuesday no further capital increases from the German state would be necessary.
Its credit line from the KfW state lender has been reduced ahead of schedule to 11.5 billion euros from 16.5 billion euros, the company said.
Uniper on Tuesday reiterated its 2023 outlook, which foresees operating earnings and net profit in a mid single-digit billion euro range, but warned that this result was largely based on exceptional circumstances.
Shares rose by as much as 5% on news of the final results and investment plan, before settling at 2.6% at 1152 GMT.
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Asked by investors for a timeline on the German government's exit, CFO Jutta Doenges called for patience and pointed to the terms of the bailout, which requires Berlin to reduce its stake to no more than 25% plus one share by the end of 2028.
Berlin's exit could take the form of a sale to an investor or an IPO process, Doenges told reporters in Duesseldorf.
The German government has welcomed Uniper's strong half-year performance, which saw adjusted earnings before interest and tax (EBIT) of 3.7 billion euros, after a 757-million-euro loss a year earlier.
The government plans to present an exit plan by the end of this year.
"We're confident that we're doing our part of the necessary steps to bring Uniper back to the market," Lewis said, painting the green investment plan as a chance to diversify the utility's portfolio to shield it against future volatility.
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The company is aiming to transition away from natural gas towards hydrogen and biomethane, although its plan to reduce carbon emissions also relies on carbon capture and expanding imports.
Uniper's new strategy also includes targeted growth in solar and wind farms, with 80% of Uniper's installed generating capacity to be zero-carbon by 2030, the company said, adding it would end coal-fired power generation by 2029 at the latest.
In solar and wind power, Uniper has more than 1 gigawatt (GW) of secured projects as well as early-stage plans for four more gigawatts.
($1 = 0.9098 euros)
Written By: Reuters
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