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Uniper, the power company spun out of German utility Eon, said it made a net loss of €3.2bn last year, on the back of big writedowns of its generation and gas-storage assets.
Germany’s utilities have been hit hard by the country’s green revolution, which has resulted in power generated from coal and gas being squeezed out of the market by abundant, subsidised wind and solar energy.
The huge volumes of green power have also depressed the wholesale price of electricity, which was so low last year that conventional power plants struggled to make a profit. RWE and Eon have also been hit by Germany’s decision to switch off all its nuclear reactors by 2022.
Both companies responded to the crisis by splitting themselves up. Eon put its conventional power stations into Uniper, which listed in Frankfurt last September, while RWE hived its green energy and grid businesses into a newly-created subsidiary, Innogy, which floated a month later.
Despite the net loss, Uniper said it had delivered a “solid” operating performance and strengthened its balance sheet in what was its first financial year as an independent company.
It said its adjusted earnings before interest, taxes, depreciation and amortisation stood at EUR2.1bn, a 24 per cent increase on 2015. Uniper said a big reason for the increase was the renegotiation of gas-supply contracts with the Russian gas giant Gazprom. But ebitda from its European generation division fell 42 per cent to EUR654m, due to lower power prices and higher nuclear provisions in Sweden.
Klaus Schaefer, chief executive, said the solid performance in 2016 “gives us good momentum for 2017″. He reaffirmed the proposed dividend of 55 euro cents per share for 2016.
Uniper made a big step in reducing its debt this year by agreeing to sell its 25 per cent stake in Yuzhno-Russkoye, a big Russian natural gas field, to the Austrian oil and gas group OMV for EUR1.75bn. The company said the deal helped it to “fully reach its debt-reduction target well ahead of schedule”.
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