Uniper’s earnings fall despite strong recovery in 2020 By Copilot

Uniper’s earnings fall despite strong recovery in 2020 By Copilot

Uniper, a German energy company with a large presence in Latin America, posted a net profit of €6.01 billion ($7.28 billion) for 2020, after a net loss of €1.43 billion in 2019. However, the company warned that its earnings would decline in 2021 due to lower energy prices, which have also affected the outlook of other European energy companies.

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The company said its revenue for 2020 was €31.9 billion, down 7.9% from a year ago, as the coronavirus pandemic disrupted its operations and customer demand. The company said it benefited from hedging transactions for its coal- and gas-fired power plants and its midstream gas business, as well as from the optimization of its gas portfolio and gas storage facilities.

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The company also said it reduced its net debt by €2.7 billion in 2020, as part of its financial restructuring plan. The company sold some of its assets, renegotiated some of its leases, and extended some of its debt maturities.

However, the company also booked a provision of €2.2 billion for 2020 for a payment to the German government for aid it received at the height of the energy crisis in 2019, when Russian gas supplies were cut off. The payment is due in early 2022.

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Uniper’s chief executive, Jean-Charles Naouri, said the company had demonstrated its resilience and agility in a challenging environment, and had strengthened its financial structure and liquidity. He also said the company had accelerated its strategic priorities, such as digitalization, organic products, and convenience stores.

Uniper expects its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2021 to be between €1.5 billion and €2 billion, and its adjusted net profit to be between €0.7 billion and €1.1 billion. The company said the lower earnings forecast was mainly due to an estimated decline in energy prices, which have also clouded the forecast of its European peers, such as E.ON and RWE.

Uniper’s shares rose 2.3% in early trading on Wednesday, after the earnings release. The stock has gained 8.7% year-to-date, outperforming the broader market.

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Source : The Wall Street Journal

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