BASF plant in Ludwigshafen

In the ongoing business, things were also pretty bad for the chemical company in 2022.

(Photo: AP)

dusseldorf After months of criticism of the compromise in Russia now throw that away too BASFWintershall Dea subsidiary fallout: The oil and gas company announced late Tuesday that it would “completely withdraw from Russia”.

“Wintershall Dea will end its activities in Russia. Continuing our business in Russia is not sustainable,” CEO Mario Mehren said after the relevant Supervisory Board resolution: “Russia’s aggressive war is not compatible with our values. It destroyed the cooperation between Russia and Europe.”
The company will now leave the country in an orderly manner and in compliance with all applicable legal obligations.

mother company BASF surprisingly fell into the red last year as a result of this decision. The final result is that the chemical company has registered a net loss of 1,400 million euros. BASF owns around 70 percent of the shares of Wintershall Dea and had to cancel its stake for 7.3 billion euros.

For the chemical company, things were pretty bad overall last year. Before special effects and before interest and taxes, BASF earned around 6.88 billion euros in 2022, eleven percent less than the previous year. Due to high costs, especially in Europe, there were the daxGroup already announced an austerity program.

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As a result of the Russian attack on the Ukraine, chemical companies had to struggle mainly with the sharp increase in gas prices. Analysts had recently expected slightly more operating profit at BASF. On the other hand, sales grew eleven percent to 87.3 billion euros due to higher prices and currency effects.

Close ties between Wintershall Dea and Russia

Wintershall Dea’s withdrawal is highly symbolic. Hardly any other company represents the close interdependence of the German energy industry with Russian gas production. Wintershall Dea has been closely associated with for decades gazpromproduces gas with the world’s largest gas producer in Siberia and has a stake in the Nord Stream gas pipeline in the Baltic Sea.

Criticism and pressure on the company to pull out has been just as high in recent months. The company’s management froze business relations, but shied away from a complete parting for a long time.

In the meantime, however, Mehren apparently no longer sees any future for working in Russia: “In recent months, the Russian government has restricted the activities of Western companies in the country.” “The mixed companies were economically expropriated de facto.”

>> Read here: Mehren, CEO of Wintershall, in an interview with the Handelsblatt
Wintershall Dea deconsolidates the Russian financial reporting business from Q4 2022. As a result, it is said to make a one-time non-cash charge of €5.3bn. This relates to the Russian joint ventures and the write-downs of investments in Nord Stream AG and WIGA-Transport Beteiligungs-GmbH & Co. KG.

However, according to Mehren, the company has “prepared for this difficult time” and has imposed expense discipline, among other things.

With agency material.

More: Why 60 German companies are still active in Russia

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