Wärtsilä Corp., announced today that it will write-off approximately 200 million euros (US $217 million) related to assets and business operations in Russia.
Helsinki, Finland-based Wärtsilä said that it "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."
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," 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, the company said. Adjusting the operations will be done in accordance with local regulations. During this process Wärtsilä said its priority continues to be the safety and well being of its employees.
As a result of these steps Wärtsilä will make provisions of approximately 200 million euros in the first quarter financial reporting. The 200 million euros includes approximately 75 million euros of impairment of Voyage related goodwill and intangible assets, approximately 50 million euros of impairment related to assets in Russia and approximately 75 million euros in 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 Wärtsilä's business in Russia will also have a negative impact on the company’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 euros.
Wärtsilä will publish its first quarter 2022 report on April 28.