Page 7 - FSUOGM Week 44 2022

FSUOGM COMMENTARY FSUOGM

The share price of Uniper has already tumbled Uniper fares this winter, and how much the Ger-
93% this year. When its results were announced, man government has to spend to support it.
there was hardly an impact, as investors had As for the time being, Uniper is increasingly
largely anticipated the disastrous numbers. becoming dependent on credit lines from state
Uniper is due to receive a €30bn aid package lender KfW. It has already gone through €14bn
as part of its bailout, to cover some of the mil- of a €18bn facility it received from the bank, and
lions of euros it has been losing every day since the company warned last week it is “uncertain
having its Russian gas supply cut off. what financing amounts Uniper will need from
“The size of the support package relative to KfW and for how long.”
Uniper’s market cap before the war shows its The company’s economic net debt expanded
unique exposure to Russian gas cuts and we don’t to €10.9bn over the first nine months of this year,
expect to see other companies struggle nearly as as cash flow evaporated as a result of soaring gas
much as Uniper as it struggles to replace these prices.
supplies with non-Russian sources,” Bloomberg “Our daily gas curtailment losses have
Intelligence analyst Patricio Alvarez commented. come to zero last month,” company CFO Tiina
Details of that support package are being Tuomela said. That compares with daily losses
finalised, Uniper said. But analysts are concerned of more than €100mn when prices reached new
that the bailout, which includes a €8bn capital heights in August. “This is positive, but we know
increase, is not enough. But the government has it is only momentary.”
insisted that the government will make sure Uni- Uniper noted it expected “significantly neg-
per has enough funding to keep itself operating, ative” net earnings for the full year, and said it
suggesting that the support will be ramped up. could not provide more details on the outlook,
European gas futures have seen a fairly “given the high degree of uncertainty regarding
steady decline since late August, with the TTF gas volumes actually received in the future and
December contract currently trading at €283 the relevant price levels for purchases.”
per MWh. But the January and February con- As for state support, the rescue package will
tracts are priced at above €325, signalling trader need government approval in various jurisdic-
concern that the gas supply crunch will worsen tions, including state-aid and merger-control
towards the end of winter. The price of gas over greenlights from the European Commission,
the coming months is highly uncertain and will which are likely to be received but could take
depend on temperatures, the economic outlook time. Shareholders in the company are due to
globally, the post-COVID economic recovery in vote on the equity issuance in an extraordinary
China and further potential cuts in Russian gas meeting scheduled to take place in the second
supply. And the price will determine how well half of December. ™

With Nord Stream
rendered inoperable,
there is limited prospect
of Uniper getting its gas
supply back.

Week 44 07•November•2022 www. NEWSBASE .com P7