Higher carbon allowances weighed on Uniper profits, operational performance is crucial in H2 2019

Following the release of Uniper SE’s first half 2019 results;

Ankit Mathur, Practice Head of Power at GlobalData, a leading data and analytics company, offers his view:

“Uniper SE has revealed that first-half adjusted earnings before interest and tax (EBIT) fell 49% to €308 million (£283.8 million), compared to last year’s figure of €601 million. This is mainly due to the temporary increase in costs for carbon allowances in European generation.

“The European carbon prices touched a 13-year high of EUR 29.95/t at the end of July and are currently trading at EUR 28.5/t in comparison to an average EUA price of EUR 12.30/t in the same period of 2018. The EU carbon prices more than doubled owing to higher natural gas prices, Brexit delay, and new rules that have shrunk the supply of emissions allowances that polluters can buy added to the company’s problems.

“Uniper management has reiterated their confidence of meeting the 2019 outlook goals of adjusted EBIT to lie within a range from 550 to 850 million euros. The management expects that in H2 2019, price and higher volume effect of hydro and nuclear power generation as well additional optimization earnings at gas supply business will help achieve the 2019 goals.

“The outlook for Uniper looks stable, as the company has been making continuous strides to improve the operational performance. With more than 2.3 gigawatts (GW) of project pipelines having hydro and thermal power plants in Germany and UK under various stages of development, Uniper stands to benefit from the rising power prices in European power markets and boosted operating earnings from its Russian power division to provide growth momentum and improvement in the top line.”

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