“Not under this leadership”
EnBW does not want any new Russian gas with Putin in office
03/23/2022, 4:24 p.m
The utility EnBW has currently concluded two gas supply contracts with Russia. And that’s how it should stay as long as President Putin is in the Kremlin. The company is already exploring new sources of supply. Hard coal is also to be procured elsewhere in the future.
The energy company EnBW does not want to conclude any new gas supply contracts with Russia as long as President Vladimir Putin is in power there. “There will be no new supply contracts with Russia under this leadership,” said EnBW boss Frank Mastiaux. He was reacting to Russia’s invasion of Ukraine. Existing contracts would be fulfilled. According to CFO Thomas Kusterer, the Leipzig subsidiary Verbundnetz Gas (VNG) has two supply contracts with Russia. One expires at the end of this year. The second – and larger – will run until 2030.
Since the start of the war in Ukraine around four weeks ago, various German companies, including energy suppliers such as RWE and Uniper, have restricted their business relationships with Russia. EnBW is making increased efforts to place its gas procurement on a broader basis, said Mastiaux. “However, as is well known, a short-term complete replacement procurement in the event of a theoretical loss of Russian gas is not possible for us, as is the case for most market participants.” Germany will still be dependent on gas imports for a longer period of time.
EnBW and its subsidiaries bought a total of around 495 terawatt hours of gas last year. Around 20 percent came from direct supply contracts with Russian suppliers. EnBW is also switching to other suppliers for hard coal. “Therefore, we consider the situation to be controllable even in the event of a potential lack of Russian coal deliveries.”
Higher dividend
After growth in 2021, the Karlsruhe utility wants to break the three billion euro mark for the first time in the new year. The forecast for adjusted Ebitda 2022 is in a range of 3.03 billion to 3.18 billion euros. Last year, EnBW increased its operating profit for the fifth time in a row, climbing by 6.4 percent to 2.96 billion euros. The group benefited from higher profits from the operation of coal and gas-fired power plants and from growth in the trading business. The shareholders are to receive a dividend of EUR 1.10 per share – ten cents more than for 2020.
CEO Mastiaux’s contract expires in September. He had already announced that he would not seek another term. A successor has not yet been appointed. Mastiaux switched from Eon to EnBW in 2012. The previous year, the reactor catastrophe in Fukushima had initiated the nuclear phase-out in Germany. Until then, EnBW had mainly generated electricity in coal and nuclear power plants. Mastiaux has massively expanded the production of green electricity and, in recent years, also the electromobility business.