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E.ON cuts value of Nord Stream 1 stake by more than half

Reuters logo Reuters 8/10/2022
Empty seats are seen before the annual meeting of German utility giant E.ON in Essen © Reuters/Ina Fassbender Empty seats are seen before the annual meeting of German utility giant E.ON in Essen

FRANKFURT (Reuters) -E.ON, Europe's largest operator of energy networks, on Wednesday cut the value of its stake in the Nord Stream 1 gas pipeline by around 700 million euros ($715 million), citing "heightened uncertainty" over the impact of Russia's war on Ukraine.

E.ON in March said that the 15.5% stake, held indirectly via the firm's pension fund, has a book value of 1.2 billion euros, translating into a 58% decline of the participation's value.

"The current energy crisis finally makes clear that Europe needs to transform its energy system. To be independent of Russian gas. To ensure supply security," Chief Executive Leonhard Birnbaum said in a statement.

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The value decrease was recognised in equity in other non-operating income, E.ON said, adding that the situation "indicated no triggering events that would necessitate impairment charges on non current assets".

E.ON had in March warned of a value adjustment of the stake in Nord Stream 1, which is majority-owned by Gazprom, saying it would negatively impact pension provisions and net debt but not trigger liquidity issues.

The company also reported first-half results which showed a 15% decline in first-half adjusted core profit (EBITDA) to 4.06 billion euros, sticking to its 2022 outlook for adjusted EBITDA of 7.6 billion to 7.8 billion euros.

($1 = 0.9792 euros)

(Reporting by Christoph SteitzEditing by Paul Carrel)


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