HELSINKI, Aug. 25 (Xinhua) -- Finnish energy giant Fortum reported a 9.14 billion euros (9.14 billion U.S. dollars) loss for the second quarter of this year (Q2), mainly impacted by Russian gas curtailments in the Uniper segment, the company said on Thursday.
The overall operating loss of the company reached 11.5 billion euros in the first half of this year, it said in its financial report.
Following curtailments of natural gas deliveries from Russia, Uniper had to purchase gas from alternative sources at a higher price and could not pass the additional cost to its customers, explained the company.
In July this year, a deal was reached between Fortum, Uniper and the German government, according to which, the German government will take a 30 percent share of Uniper and the ownership of Finnish Fortum in Uniper will decline to 56 percent from the earlier 80 percent.
Fortum CEO Markus Rauramo said in the release that the details of the stabilization package would be worked out during the coming weeks and acceptance from the European Commission obtained. Rauramo noted that the comparable operating profit in Q2 was 574 million euros, "which indicates that the electricity business is sound."
Fortum does not expect the loss-incurring situation of Uniper to ease until the beginning of October, when a change of legislation in Germany allows 90 percent of the gas purchase costs transferred to customers, it said.
On the Finnish political scene, the opposition Finns party demanded that the cabinet reports to parliament on how it handled the Uniper case. Chairman of the Finns parliamentary group Ville Tavio said the Finnish taxpayers had been compelled to pay for the losses of the German Uniper.
Juha Matti Mantyla, an economics analyst at Yle, said that the result does not mean that Finnish taxpayers have suddenly lost nine billion euros. But dividends that Fortum will pay to the Finnish government in the years to come will be only a fraction of the half a billion obtained in recent years.
Mantyla noted that the basic business of Fortum has gone well as electricity prices have gone up.
"Fortum will survive, but there are still many questions around the deal with Germany. The future value of Fortum depends much on how much the German government will be willing to assist Uniper and will the Finnish ownership in Uniper be diluted in the end."
Analysts quoted by the Finnish business daily Kauppalehti had expected the loss to be bigger.
Juha Varis, a portfolio manager at Fenno funds, said that situation of Fortum is unique in Finnish business stock market history. "It's crucial that the deal with Germany will be completed," he added.
According to Uniper, Fortum become Uniper's major shareholder in June 2018. (1 euro = 1 U.S. dollar) ■