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Lower gas prices help bailed-out Uniper halve net loss to $21 billion

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FRANKFURT/DUESSELDORF, Feb 1 (Reuters) by Christoph Steitz and Tom Kaeckenhoff – Uniper (UN01.DE), Germany’s biggest gas trader which was rescued by the government last year, expects a much smaller annual net loss than it feared in November after lower gas prices reduced the cost of replacing Russian supplies.

The company, which nearly collapsed after Moscow cut and then stopped gas supplies to Germany, now sees a net loss of 19.1 billion euros ($21 billion) for 2022, it said on Wednesday.

Uniper reported in November a net loss of 40 billion euros for the first nine months of 2022, saying at the time a chunk of that was based on forward price projections of purchases of gas it no longer gets from Russia’s Gazprom (GAZP.MM).

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It said on Wednesday that losses caused by costs to replace Russian gas volumes reached 13.2 billion euros in 2022.

“The development of the gas price has a major impact on Uniper’s losses for realized and future gas replacement procurement. As is well known, Uniper has to procure the missing supply volumes from Russia elsewhere,” Chief Financial Officer Tiina Tuomela said.

She said the significant decrease in gas prices at the end of 2022 meant expected losses for future gas replacement costs were reduced to 5.9 billion euros from 30 billion euros.

Shares in Uniper, which is scheduled to report full-year results on Feb. 17, rose more than 5% after its statement.

Uniper has to price forward costs for gas procurement at the end of each quarter for its earnings reports, which is partly reflected in its derivative positions that are tied to the market price of energy.

As gas prices more than halved between the end of September and the end of December, the value of derivatives tied to forward gas purchases has also come down. In turn, rising prices could cause them to rise again.

“The actual losses and anticipation of losses from gas replacement cost in the future will continue to significantly fluctuate with changing gas prices,” Uniper said.

Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Matthias Williams and Mark Potter

Source - Lower gas prices help bailed-out Uniper halve net loss to $21 billion

(c) Thompson Reuters