E.ON (EONGn.DE), Europe’s largest operator of energy networks, cut the value of its stake in the Nord Stream 1 gas pipeline by around 700 million euros ($715 million) on Wednesday, citing “heightened uncertainty” over the impact of the war in Ukraine.
The pipeline, which is currently pumping gas from Russia to Germany at just a fifth of its capacity, epitomises an energy stand-off that has pitted gas-dependent European states against main supplier Moscow following its Ukraine offensive.
“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,” E.ON Chief Executive Leonhard Birnbaum told reporters.
E.ON had said in March 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 in the participation’s value – but warned of a value adjustment.
Chief Financial Officer Marc Spieker said the stake’s value was now 500 million euros.
Asked if E.ON was considering a sale of its stake, CEO Birnbaum said the company remained committed to the holding and was exercising its rights as a shareholder of the project.
However E.ON said Nord Stream 1’s shareholder committee, which also includes majority owner Gazprom (GAZP.MM), France’s Engie (ENGIE.PA), Wintershall Dea (WINT.UL) and Dutch Gasunie (GSUNI.UL), has not met so far this year, Spieker said.
E.ON had also said in March a value adjustment to the pipeline stake would negatively impact pension provisions and net debt but would not trigger liquidity issues.
E.ON 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 between 7.6 billion and 7.8 billion euros.
($1 = 0.9792 euros)