BASF to Suffer Loss Due to Russia-Related Impairment in Germany

The German Chemical Corporation BASF Has Seen a 3.51% Decrease In Their Stock Value. This Company Is Based in Berlin, Germany.

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SE announced that it would incur a 7.3-billion-euro loss, which is equivalent to approximately $7.9 billion, due to the withdrawal of its energy division from Russia. This is expected to result in a net loss for the company in 2022, making it one of the latest major corporations to be affected by the conflict in Ukraine.
Wintershall Dea AG, a majority shareholder of BASF, has announced that it will be completely exiting Russia after halting all new projects in the country since the beginning of the invasion last year.

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BASF experienced negative effects due to the removal of Wintershall Dea's Russian exploration and production activities from its consolidated financial statements.
BASF has recently experienced a significant setback due to the invasion of Ukraine. This follows the losses incurred by BP PLC in the previous year.
A pretax accounting charge of $25.5 billion was incurred due to the decision to leave its investments in Russia. Uniper SE, a utility company based in Germany, was affected by this.

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Last year, one of the largest losses in German corporate history was reported by a company that had been heavily dependent on Russian gas. This company posted a net loss of approximately $39.3 billion after Russia reduced gas supplies, leading the German government to take control of the company.
BASF announced on Tuesday that it anticipates recording €5.4 billion in impairments during the fourth quarter of 2022, resulting in a net loss of €1.38 billion for the year. This is a stark contrast to the €5.5 billion profit the company saw in 2021. The impairments are related to Wintershall Dea's Russian joint ventures and other businesses.
On Wednesday, there was no significant change in the value of BASF's stock.

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Mario Mehren, Chief Executive of Wintershall Dea, declared that it is not feasible to keep doing business in Russia. He noted that Russia's offensive in Ukraine is in opposition to their values and has caused a breakdown in relations between Russia and Europe.

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Mr. Mehren noted that the restrictions placed on Western companies by Russia had made it impossible to do business in the country. He added that the company had taken steps to prepare for this eventuality, such as creating financial reserves and exercising fiscal restraint.
Wintershall Dea holds a 15.5% interest in the company that operates the Nord Stream natural-gas pipeline, which links Russia and Germany beneath the Baltic Sea. This company is majority-owned by Russia's energy giant Gazprom PJSC.

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At the end of August, Moscow ceased the flow of gas through a pipeline, which European officials have attributed to economic retaliation for their backing of Kyiv. In the following month, blasts, which Western governments have labeled as sabotage, damaged the pipeline and the Nord Stream 2 pipeline that runs alongside it.

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BASF reported that their earnings before interest and taxes before special items for 2022 decreased to €6.88 billion from €7.77 billion, while their sales increased by 11% in 2022 to €87.33 billion.