Bailout German utility Uniper posts $12.2 billion net loss

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Bailout German utility Uniper posts $12.2 billion net loss

The bailed-out German utility's earnings provided a glimpse into the depth of Europe's energy crisis, and Uniper SE suffered a net loss of more than 12 billion euros $12.2 billion in the first half of the year.

Russia has curbed gas supplies to the European Union amid heightened tensions over its invasion of Ukraine, with the effect rippling across the continent, and threatening to push some of the continent's largest economies into recession.

In the firm s earnings statement, Klaus-Dieter Maubach said that Uniper has played a crucial role in stabilizing Germany's gas supply, as well as the cost of billions in losses due to the drop in gas deliveries from Russia.

The IFRS loss includes a 6.5 billion-euro hit from future gas shortages and impairments of 2.7 billion euro related to its Nord Stream 2 loan and goodwills from the Global Commodities and the Russian Power Generation unit, the firm said.

Supply curtailments forced Uniper to buy gas in the spot market to fulfill contracts, pushing it to the edge of insolvency. That led to 17 billion-euro rescue package from the German government to prevent the company's collapse, which could have had a domino effect on the country s energy system.

In the first half, Uniper posted a loss before interest and taxes of 564 million, after earnings of 580 million in the same period last year.

The company said that the forecast for the year still can't be issued within an adequate range because of the volatile environment. Germany is still heavily dependent on Russian supplies despite efforts to diversify - and is racing to build sufficient stockpiles to avoid severe rationing when the weather turns cold.

The government is considering the phaseout of its remaining nuclear power plants and wants to revive coal power plants. This week it slapped a levy on gas use, leaving households bracing for higher energy bills and exacerbating the cost-of-living crisis in Europe.

Moscow and Berlin are in a standoff over the return of a key turbine for the Nord Stream gas pipeline, with the machine stranded in Germany after repairs in Canada. Gazprom PJSC has slashed flows via Nord Stream to just 20% of capacity, prompting the German government to voice concerns that supply could be cut off completely.

Uniper will have to deal with the full economic loss of Russian gas until September 30, when the government will introduce a mechanism to allow utilities to pass on 90% of costs to customers.

CFO Tiina Tuomela said that the company expects to see an improvement in earnings in 2023 and will leave the loss zone beginning in 2024.

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