Struggling Uniper reports further declines - Gas provider's shares slide again in MDax index
Uniper, a significant player in Europe's energy sector, is in the eye of the storm due to the gas crisis, with drastic cutbacks in deliveries from Russia in recent weeks, making it the largest gas importer in Germany. This situation forces Uniper to buy costlier gas from the market to fulfill contracts, straining its finances due to the lower deliveries and a heavy reliance on Russian gas. This predicament has resulted in mounting liquidity issues for Uniper, as it's yet to pass on the price hikes to customers. With over 100 municipal utilities and industrial companies relying on Uniper, the German government is set to intervene soon, not only with a 30% stake but also the gas surcharge to aid Uniper.
However, Uniper must weather the full economic loss incurred due to purchasing substitutes for Russian gas until the end of September. The gas surcharge decided by the federal government will only come into effect from October 1st, allowing Uniper to primarily pass on its costs to consumers. This unavoidable predicament leaves Uniper heavily indebted.
In the Red by Over 12 Billion
Uniper's adjusted operating result (EBIT) took a significant hit, plunging to minus 564 million euros compared to a positive profit of 580 million euros a year ago. The adjusted net result suffered too, sinking to minus 359 million euros from a profit of 485 million euros. Uniper refrains from offering any forecasts but anticipates losses for the business year, aiming for improvement in 2023 and leaving the loss zone in 2024.
CEO Klaus-Dieter Maubach acknowledges Uniper's valiant effort in keeping Germany's gas supply stable amidst billions in losses due to the sharp decline in Russian gas supplies. The federal government's quick response is commendable, with Maubach expressing urgency to implement the stabilization package promptly.
Uniper Share Nosedives Again
The first-quarter results for Uniper, as dismal as anticipated, have been overshadowed by the scale of the Russian gas shortage. JPMorgan analyst Vincent Ayral comments, "While the figures are weak, they are not the central focus given the magnitude of the Russian gas shortage." Lower production capacities on the British sales market also contributed negatively. Uniper's stock has been a risky bet, with BÖRSE ONLINE advising only the bravest and most risk-tolerant investors to consider a long-term investment in Uniper shares. The stock values of competitors E.on and RWE also dropped slightly in response to Uniper's predicament.
Uniper anticipates losses for the business year, expecting improvement in 2023 and leaving the loss zone in 2024, due to the sharp decline in Russian gas supplies and the subsequent surcharge decided by the federal government starting from October 1st. As a result of the gas crisis, Uniper's adjusted operating result (EBIT) plummeted to a negative 564 million euros, and their adjusted net result also dwindled to a loss of 359 million euros. Given the magnitude of the Russian gas shortage, Uniper shares have nosedived, with analysts advising only the bravest and risk-tolerant investors to consider a long-term investment. Russia's energy market and the industry's finance sector may be significantly affected by Uniper's mounting liquidity issues and resulting debt, which stands over 12 billion euros.
