Wintershall Dea in the red after EUR 1.5bn impairment

The German gas giant exited the first quarter with loss of EUR 1bn attributed to impairment of EUR 1.5bn due to the Ukraine crisis.
Photo: Wintershall DEA - PR
Photo: Wintershall DEA - PR

Over the past couple of months – marked by the Russian invasion of Ukraine – it naturally hasn’t been an advantage to have strong ties to Russia. The sanctions have rained down on the nation with increasing intensity, and the vast majority of Western corporate players have withdrawn completely.

The situation has left a company like German Wintershall Dea in quite a fix, not least because the company was a partner behind the planned gas pipeline Nord Stream 2, which the German government has scrapped completely, but also because Wintershall Dea has been active in Russia for the past 30 years.

Expenses for the Russian ventures runs to EUR 1.5bn in the first quarter. This is therefore an impairment that the company has had to carry out in light of the invasion, as described in Wintershall Dea’s quarterly report released Thursday morning.

This also means that the company has suffered a loss of EUR 1bn in Q1 and opted to reduce dividends to EUR 6m.

”The Russian President’s war of aggression against Ukraine has shaken the foundations of Wintershall Dea’s work in Russia to the core. We have reacted [by, -ed.] saying a clear ’no’ to new projects in Russia, stopping payments into Russia, and writing off our Nord Stream 2 financing,” the company writes in a press release.

Nevertheless, the company has decided to remain in Russia and keep operating existing projects.

Wintershall Dea’s adjusted net income after taxes rose to EUR 669m against EUR 171m in Q1 2021, so the underlying parameters look promising for the company.

Output came to 669,000 barrels of oil equivalent per day against 659,000 barrels in the same period of 2021.

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