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26 Apr 2021
Set to deliver solid Q1; focus on portfolio and alignment
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Set to deliver solid Q1; focus on portfolio and alignment
- Published:
26 Apr 2021 -
Author:
Savvantidou Sofia SS -
Pages:
12
Good midstream gas performance to support Uniper''s Q1 (due on 6th May)
In addition to frontloading of midstream margins in Q1, market conditions have been very robust ytd and we therefore increase our annual estimates for the Global Commodities business. We forecast EUR880m group EBITDA and EUR722m group EBIT in Q1 ''21 and for the FY ''21 we are now at the upper end of group guidance at EUR952m EBIT. We also tweak our achieved power price assumptions. Our higher Uniper estimates filter through to our Fortum forecasts.
Focus on new Uniper management and dividend policy
This will be the first presentation of the new CEO and CFO of the group, who were appointed by the board to foster faster and better collaboration with majority (75%+) shareholder Fortum. We would be looking for an update on exactly what that entails and if it involves additional portfolio or cost shifts. We would also be looking for an update on the dividend policy with the traditional FY''20 communication previously suspended due to ''pending alignment'' with Fortum.
Focus of Fortum equity story on disposal execution
Based on the assets that Fortum has under strategic review, 2021 should be a big year for portfolio restructuring, which will eventually see Uniper becoming an even bigger contributor to group earnings. The recent managerial changes suggest that Fortum is already in control of Uniper''s journey and therefore a domination agreement or full squeeze out are not needed in our view. However, successful disposal execution could create some headroom to be used in that direction, followed by additional disposals. In total, we include EUR3.8bn in proceeds in our 2021 estimates and we value Consumer Solutions, which is also under strategic review, at EUR1.1bn.
Reiterate Underperform
In a sector that is increasingly offering defensive capex-driven growth, both Uniper and Fortum are overly exposed to fossil fuel prices. The uniqueness of that exposure appears to attract a...