https://sputnikglobe.com/20220811/german-energy-giant-projects-to-lose-over-770mln-due-to-sanctions-against-russian-coal-1099472190.html
German Energy Giant Projects to Lose Over $770Mln Due to Sanctions Against Russian Coal
German Energy Giant Projects to Lose Over $770Mln Due to Sanctions Against Russian Coal
Sputnik International
MOSCOW (Sputnik) - German energy producer RWE is slated to incur 748 million euros ($770 million) in losses as a result to the halt of coal deliveries from... 11.08.2022, Sputnik International
2022-08-11T07:21+0000
2022-08-11T07:21+0000
2022-08-11T07:21+0000
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"[In late February], we had contracts for deliveries of Russian hard coal totaling 12 million metric tons (through to 2025). These deliveries have already come to an end. Sanctions imposed by the UK and the EU prohibit such purchases going forward. We estimate that the related financial loss will total €748 million," RWE said in an interim report on H1 2022.Before February 24, the start date of the Russian military operation in Ukraine, RWE inked forward contracts for coal deliveries from Russia, with prices "significantly below" the market average. Now the company is forced to make up for the lost volumes by purchasing commodities at a greater price from third parties to meet the supply obligations.Existing contracts for gas deliveries from Russia could have impacted the company as well, but RWE reduced the associated risk to zero by concluding financial hedges.RWE argues that it fell victim to Russia's special operation in Ukraine despite having no business activity in either country.RWE AG is one of the five largest energy companies in Europe, which supplies and sells electricity and gas to countries of the region.The European Union introduced an import ban on all forms of Russian coal as part of the fifth sanctions package against Moscow in response to the special military operation in Ukraine. The wind-down period for EU member states ended on Wednesday, with no exceptions possible in the future. In May, RWE reported that its estimated losses from the breached contracts for coal supplies from Russia amounted to 847 million euros.
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German Energy Giant Projects to Lose Over $770Mln Due to Sanctions Against Russian Coal
MOSCOW (Sputnik) - German energy producer RWE is slated to incur 748 million euros ($770 million) in losses as a result to the halt of coal deliveries from Russia, nearly 100 million less than expected before, the company said in a fresh financial report.
"[In late February], we had contracts for deliveries of Russian hard coal totaling 12 million metric tons (through to 2025). These deliveries have already come to an end. Sanctions imposed by the UK and the EU prohibit such purchases going forward. We estimate that the related financial loss will total €748 million," RWE said in an interim report on H1 2022.
Before February 24, the start date of the Russian military operation in Ukraine, RWE inked forward contracts for coal deliveries from Russia, with prices "significantly below" the market average. Now the company is forced to make up for the lost volumes by purchasing commodities at a greater price from third parties to meet the supply obligations.
Existing contracts for gas deliveries from Russia could have impacted the company as well, but RWE reduced the associated risk to zero by concluding financial hedges.
RWE argues that it fell victim to Russia's special operation in Ukraine despite having no business activity in either country.
RWE AG is one of the five largest energy companies in Europe, which supplies and sells electricity and gas to countries of the region.
The European Union introduced an import ban on all forms of
Russian coal as part of the fifth sanctions package against Moscow in response to the special military operation in Ukraine. The wind-down period for EU member states ended on Wednesday, with no exceptions possible in the future. In May, RWE reported that its estimated losses from the breached contracts for coal supplies from Russia amounted to 847 million euros.
