EnBW says compensation deal for VNG gas division imminent By Reuters
Economy 44 minutes ago (Nov 11, 2022 11:16)
© Reuters. FILE PHOTO: Flags of German power supplier EnBW Energie Baden-Wuertemberg AG are pictured at the company’s headquarters in Karlsruhe, March 17, 2015. REUTERS/Ralph Orlowski
By Christoph Steitz and Tom Käckenhoff
FRANKFURT/DUESSELDORF (Reuters) -EnBW and Berlin are finalising a deal to compensate the utility’s VNG unit for billions of euros in losses caused by the halt of Russian gas supplies, its CFO said, adding this would not include a partial nationalisation.
Thomas Kusterer, speaking to reporters after presenting EnBW’s nine-month results, said a solution was likely within days, not weeks, and that the company expected a negative impact of 1.2 billion euros ($1.23 billion) in 2022 as a result.
VNG, of which EnBW owns 74%, is one of Germany’s biggest gas importers. Following the halt of Russian supplies, it had to buy replacement volumes at much higher prices elsewhere.
The crisis led larger rival Uniper to seek a deal with the German government for full nationalisation.
When asked whether partial nationalisation was likely for VNG, Kusterer said: “That is not our assumption at the moment. And the indications we’re seeing in the talks we are having and in the contractual agreements we are in the process of concluding also support this statement.”
VNG, which applied in September for state aid, last month reached a settlement with SEFE, formerly known as Gazprom (MCX:GAZP) Germania, effectively ridding it of any losses related to a 65 terawatt hour (TWh) contract that will expire at the end of this year.
That still leaves VNG exposed to a 35 TWh contract with Gazprom, which is incurring billions of euros of losses and was a factor behind EnBW’s decision to cut its 2022 outlook.
EnBW expects adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to fall by 2%-9% to 2.7 billion euros to 2.9 billion euros ($2.75-$2.95 billion). It had previously expected a rise of 2%-7%.
The lowered outlook was also due to uncertainty around outstanding details of a planned windfall tax in Germany that will skim off profits at companies that have benefited from this year’s surge in wholesale power and gas prices, EnBW said.
($1 = 0.9742 euros)
EnBW says compensation deal for VNG gas division imminent
By Jesús Aguado MADRID (Reuters) – Spanish banks need to preserve capital to cope with a potential deterioration of the economic outlook, the Bank of Spain warned on Friday. The…
KYIV (Reuters) – The International Monetary Fund said it was starting “policy discussions” with Ukraine on Friday, building on meetings held in Vienna last month as Kyiv grapples…
BRUSSELS (Reuters) – The euro zone economy will grow more than previously expected in 2022, the European Commission forecast on Friday, and decelerate more than previously thought…
Terms And Conditions
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.