Finland-headquartered technology group Wärtsilä has written-off approximately €200 million related to assets and business operations in Russia, in the wake of the ongoing war in Ukraine.
Following Russia’s invasion, Wärtsilä immediately suspended all deliveries, sales, orders and bidding to Russia, advising that it is complying with all current and will comply with all future trade sanctions applicable to its operations.
In a statement, the company said, “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.
It continued, “As a result of these steps Wärtsilä will make provisions of approximately €200 million in the Q1 financial reporting. The €200 million provision 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.
“All these actions regarding our business 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 28 April.
Last month, Wärtsilä secured a contract to supply propulsion solutions to Finnur Fridi, a new state-of-the-art pelagic fishing trawler under construction at the Karstensen shipyard in Denmark. The 88-metre vessel is being built for Faroe Islands-based Krossbrekka P/F, a member of the Vardin group. Wärtsilä’s equipment is scheduled for delivery to the yard in early 2023.
