BERLIN—Germany’s chemicals giant
BASF
BASFY -3.51%
SE said it would take a roughly 7.3-billion-euro hit, equivalent to about $7.9 billion, from the exit of its energy unit from Russia and that it expects a net loss for 2022 in the latest major corporate fallout from the war in Ukraine.
After putting a stop to new projects in Russia following the start of the invasion last year, oil-and-gas producer Wintershall Dea AG, where BASF is a majority shareholder, now plans to fully leave Russia, it said.
The move led to impairments for BASF because of the deconsolidation of the Russian exploration and production activities of Wintershall Dea.
BASF is the latest company to take a large hit after the invasion of Ukraine. Last year,
BP
BP 0.37%
PLC took a $25.5 billion pretax accounting charge related to its decision to exit its Russia holdings. In Germany, utility
Uniper SE,
UN01 3.13%
which had relied heavily on Russian gas for its supplies, posted a net loss of around $39.3 billion for the first nine months of last year—one of the biggest losses in Germany’s corporate history—after Russia cut gas flows, forcing the German government to nationalize it.
BASF said late Tuesday that it expects to book €5.4 billion of the total impairment in the fourth quarter of 2022, swinging to a net loss of €1.38 billion for the year. That compares with a profit of around €5.5 billion in 2021. The impairments relate to Wintershall Dea’s Russian joint ventures and other businesses.
On Wednesday, BASF’s shares were broadly unchanged.
“Continuing to operate in Russia is not tenable,” said Wintershall Dea Chief Executive
Mario Mehren.
“Russia’s war of aggression in Ukraine is incompatible with our values and has destroyed cooperation between Russia and Europe.”
Mr. Mehren said limitations imposed by Russia on operations of Western companies in the country had made it impossible to operate there. He said the company had prepared for this scenario by building up financial buffers and maintaining spending discipline.
Wintershall Dea has a 15.5% stake in the operator of the Nord Stream natural-gas pipeline that connects Russia to Germany under the Baltic Sea, a company that is majority-owned by Russia’s energy giant Gazprom PJSC.
Moscow cut off flows via the pipeline at the end of August in what European officials have called economic retaliation for their support for Kyiv. In September, explosions—labeled as sabotage by Western governments—damaged the pipeline, as well as the Nord Stream 2 pipeline that runs parallel to it.
BASF said earnings before interest and taxes before special items for 2022 fell to €6.88 billion from €7.77 billion, while sales climbed 11% in 2022 to €87.33 billion.
Write to Georgi Kantchev at georgi.kantchev@wsj.com and Mauro Orru at mauro.orru@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
BERLIN—Germany’s chemicals giant
BASF
BASFY -3.51%
SE said it would take a roughly 7.3-billion-euro hit, equivalent to about $7.9 billion, from the exit of its energy unit from Russia and that it expects a net loss for 2022 in the latest major corporate fallout from the war in Ukraine.
After putting a stop to new projects in Russia following the start of the invasion last year, oil-and-gas producer Wintershall Dea AG, where BASF is a majority shareholder, now plans to fully leave Russia, it said.
The move led to impairments for BASF because of the deconsolidation of the Russian exploration and production activities of Wintershall Dea.
BASF is the latest company to take a large hit after the invasion of Ukraine. Last year,
BP
BP 0.37%
PLC took a $25.5 billion pretax accounting charge related to its decision to exit its Russia holdings. In Germany, utility
Uniper SE,
UN01 3.13%
which had relied heavily on Russian gas for its supplies, posted a net loss of around $39.3 billion for the first nine months of last year—one of the biggest losses in Germany’s corporate history—after Russia cut gas flows, forcing the German government to nationalize it.
BASF said late Tuesday that it expects to book €5.4 billion of the total impairment in the fourth quarter of 2022, swinging to a net loss of €1.38 billion for the year. That compares with a profit of around €5.5 billion in 2021. The impairments relate to Wintershall Dea’s Russian joint ventures and other businesses.
On Wednesday, BASF’s shares were broadly unchanged.
“Continuing to operate in Russia is not tenable,” said Wintershall Dea Chief Executive
Mario Mehren.
“Russia’s war of aggression in Ukraine is incompatible with our values and has destroyed cooperation between Russia and Europe.”
Mr. Mehren said limitations imposed by Russia on operations of Western companies in the country had made it impossible to operate there. He said the company had prepared for this scenario by building up financial buffers and maintaining spending discipline.
Wintershall Dea has a 15.5% stake in the operator of the Nord Stream natural-gas pipeline that connects Russia to Germany under the Baltic Sea, a company that is majority-owned by Russia’s energy giant Gazprom PJSC.
Moscow cut off flows via the pipeline at the end of August in what European officials have called economic retaliation for their support for Kyiv. In September, explosions—labeled as sabotage by Western governments—damaged the pipeline, as well as the Nord Stream 2 pipeline that runs parallel to it.
BASF said earnings before interest and taxes before special items for 2022 fell to €6.88 billion from €7.77 billion, while sales climbed 11% in 2022 to €87.33 billion.
Write to Georgi Kantchev at georgi.kantchev@wsj.com and Mauro Orru at mauro.orru@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8