Wärtsilä writes off €200 million related to Russian business
By Jack Burke20 April 2022
Current environment in Russia ‘not viable’ for company
Wärtsilä said it will write off around €200 million ($215.7 million) related to assets and business operations in Russia in its first-quarter 2022 earnings report.
“Wärtsilä strongly condemns the war in Ukraine. Human rights, safety and prosperity are very important for Wärtsilä, and we value a peaceful and stable business environment wherever we operate,” the company stated in a news release. “After Russia’s attack on Ukraine, Wärtsilä immediately suspended all deliveries, sales, orders, and bidding to Russia. We are complying with all current and will comply with all future trade sanctions applicable to our operations.
In the current environment, it is not viable for Wärtsilä to maintain activities in Russia and therefore has decided to further downscale its Russian operations. Adjusting the operations will be done in accordance with local regulations. During this process, our priority continues to be the safety and wellbeing of our employees.”
The write off includes approximately €75 million of impairment of Voyage related goodwill and intangible assets, approximately ¢50 million of impairment related to assets in Russia and approximately € 75 million write-offs related to trade-sanctioned projects and receivables. The provisions will be included in items affecting comparability and therefore, do not impact comparable operating profit.
The company said the actions in Russia will also have a negative impact on Wärtsilä’s operational financials. Russia-related activities accounted for approximately 5% of Wärtsilä’s net sales in 2021, of which service net sales was approximately €40 million.
Wärtsilä will publish its Q1/2022 report on April 28.