DUESSELDORF, Aug 1 (Reuters) – German utility Uniper (UN01.DE) mapped out plans to diversify its portfolio 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.
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.
In May, the company, in which the German government owns a 99% stake, flagged a profit of more than 2 billion euros expected from hedging its gas supply commitments.
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.
PATH TO INDEPENDENCE
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.
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.
The new strategy 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.
($1 = 0.9098 euros)
Reporting by Vera Eckert and Rachel More, Editing by Friederike Heine, Muralikumar Anantharaman and David Evans
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