E.ON more than halves the value of its Nord Stream 1 stake


E.ON SE

E.ON more than halves the value of its stake in Nord Stream 1 | Photo credits: E.ON

FRANKFURT, Aug 10 (Reuters) – German group E.ON on Wednesday slashed the value of its stake in the Nord Stream 1 gas pipeline by more than half (58%), by about 700 million euros, citing “uncertainty heightened” about the impact of the war in Ukraine.

Europe’s largest energy network and infrastructure operator said in March that the book value of its 15.5% stake, held indirectly through the company’s pension fund, was 1.2 billion euros.

“The current energy crisis finally shows clearly that Europe must transform its energy system. To be independent of Russian gas. To ensure security of supply,” CEO Leonhard Birnbaum said in a statement.

This decline in value has been recognized in equity in other non-operating income, E.ON said, adding that the situation “does not indicate any triggering event that would require impairment charges on non-current assets”.

In March, E.ON warned of an adjustment to the value of its stake in Nord Stream 1, majority-owned by Russian gas giant Gazprom, warning that it could have a negative impact on pension provisions and the net debt, but would not trigger liquidity problems.

The company also released its first-half results, which showed a 15% drop in adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to 4.06 billion euros. E.ON, however, maintains its outlook for 2022, namely an adjusted Ebitda of 7.6-7.8 billion euros. (Report Christoph Steitz; French version Kate Entringer, edited by Jean-Stéphane Brosse)





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