Germany’s Uniper cuts dividend by 95% to help weather volatility

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) -German utility Uniper proposed a 95% year-on-year dividend cut to preserve cash on Monday, pointing to energy price swings and risks for the gas market should Russia invade Ukraine.

The cut comes after Uniper last month secured credit facilities worth up to 10 billion euros ($11.36 billion) to cope with volatility in energy markets, triggered partly by uncertainty around Russian gas deliveries.

“Given the continued high volatility on the energy markets, the geopolitical situation and the increasing momentum of the European energy transition, Uniper is placing a stronger focus on liquidity and investment capacity,” it said in a statement.

Uniper, which is one of the largest foreign investors in Russia’s energy sector, said it would propose a dividend of 7 euro cents per share for 2021, down from 1.37 euros per share it paid for 2020.

This would represent a total payout of 26 million euros, down from half a billion for 2020.

Finland’s Fortum, which owns 76% of Uniper, supports the move, the German company said, adding it would present the proposal to its supervisory board on Feb. 22, the day before its annual news conference.

Uniper, which owns a majority stake in Russian utility Unipro, said it was not planning at present to decide on a dividend policy.

But the company said it expects adjusted earnings before interest and tax (EBIT) of 1.0 billion to 1.3 billion euros and adjusted net profit of 0.8 billion to 1.1 billion euros in 2022.

This is almost unchanged from the forecast for 2021 for 1.05 billion to 1.3 billion euros in adjusted EBIT and 0.85 billion to 1.05 billion in adjusted net profit.

($1 = 0.8801 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Maria Sheahan and Alexander Smith)