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German Company Uniper Reports A Record-Breaking Net Loss Of 40 Billion Euros

German Company Uniper Reports A Record-Breaking Net Loss Of 40 Billion Euros
After Russia cut off its supplies, the soon-to-be-nationalized gas importer Uniper reported a record 40 billion euro ($39.3 billion) net loss in the first nine months of this year, the largest in German corporate history.
By making Uniper the largest corporate casualty of the crisis thus far, Russia's decision to end a decade-long supply relationship with Europe, particularly Germany, is further highlighted by the loss.
According to Mark Spoerer, who holds the chair for economic and social history at the University of Regensburg, it also represents the largest loss in German corporate history, dwarfing more recent outliers like the 25 billion euros Deutsche Telekom disclosed for 2002.
Shares of Uniper have lost 93% of their value since the beginning of the year, bringing its market value down to 1.1 billion euros as of today from 15.2 billion euros on January 3.
"Our half-year numbers already indicated that this has left massive scars in our financial results," Chief Financial Officer Tiina Tuomela said, adding that an agreed stabilisation package that will see Germany take over Uniper was currently being finalised.
According to Uniper, the net loss took into account losses realized by the company of 10 billion euros from replacing Russian gas volumes on the spot market at much higher prices.
When gas prices spiked over the summer, this resulted in daily losses of more than 100 million euros; however, as markets began to cool off at the end of October, this number decreased to less than 10 million euros per day.
Future losses associated with the same problem totaling 31 billion euros are also included in the net loss.
The company's shares decreased by 3%.
A planned gas levy that was supposed to take effect on October 1 but was canceled at the last minute, according to Tuomela, is being replaced in talks with a measure that will effectively transfer the enormous losses to Uniper's future owner, the German government.
In order to seek billions of euros in compensation, Uniper has threatened legal action against its former principal supplier Gazprom and is considering filing a case before a Swedish arbitration court.
"We are also working intensively to restructure our gas portfolio in order to minimise risks and to end by 2024 the losses resulting from suspended Russian gas deliveries," Tuomela said.
A planned exit from the Russian market, where the group has an 83.7% stake in Unipro, is one of the group's top priorities, it said, adding that the recent success of the Russian division had sparked more interest from potential buyers.
According to the agreement with Berlin, KfW has granted Uniper credit lines totaling 18 billion euros, 14 billion of which had already been used as of the end of October, the company reported.

Christopher J. Mitchell

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