Asphyxiated by Russian gas cuts, Uniper plunges into the stock market

The German energy group has suspended its annual targets and called on Berlin for help, following the sharp reduction in its Russian gas deliveries. Its action unscrews on the stock market.

Things are not looking up for Uniper

. In great difficulty since the beginning of the year, the largest gas importer across the Rhine announced on Thursday that it was suspending its financial objectives for the 2022 financial year, both in terms of its operating profit (Ebit) and its adjusted net profit. He also warns that his results for the first semesterwhich are to be released in the coming days, will be significantly below 2021 levels.



“Business has deteriorated significantly due to (…) the sharp reduction in gas deliveries from Russia.”

Klaus Dieter Maubach

CEO of Uniper

An announcement that quickly resulted in a plummet of more than 15% of its share on the Frankfurt Stock Exchange. Since the beginning of the year, it has lost no less than two thirds of its value.

Financial strangulation

“Business has deteriorated significantly due to… the strong reduction in gas deliveries from Russia”, justified Klaus-Dieter Maubach, the CEO of Uniper. A reduction which concerns 60% of gas volumes delivered by its Russian supplier Gazprom via the Nord Stream pipeline since June 16.

To remedy this and supply its customers, the group is forced, like other European intermediaries, to cover purchases on the so-called “spot” market, i.e. the spot market. The problem is that the prices on this market are much more expensive than those obtained through long-term contracts. Uniper says it suffers from “significant financial burdens” without any possibility for the moment of passing on these additional costs to consumers. It also states that “the duration and scope of Russian gas supply restrictions” have made the company’s financial outlook “uncertain”.

-60%

Uniper is suffering from the recent 60% reduction in gas deliveries to Germany from the Russian group Gazprom.

State called to the rescue

The situation is such that the group has decided to call on the German state for help. “Uniper has entered into discussions with the German government on possible stabilization measures,” he said in a statement. Several options are on the table, such as public “guarantees” on loans, “state equity investments” or even direct “credits” of the public bank KfW, it is specified.

Berlin launched in April a program of loans and public guarantees of more than 100 billion euros, intended to help companies suffering from the effects of the war in Ukraine. The first company to benefit from it was theformer German subsidiary of Gazprom, Gazprom Germania, with a credit line of 9 to 10 billion euros. Threatened with bankruptcy, the company was nationalized by Germany early April and renamed “Securing Energy for Europe”.

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