Tuesday, 30 May, 2023

Finland’s Fortum energy firm posts big losses

HELSINKI: Finnish utility Fortum announced losses Thursday of more than 10 billion euros ($10.6 billion) in 2022 due to the "shock-like" impact of the Ukraine war and the nationalisation of its Uniper subsidiary by Germany.
Fortum posted a net loss of 10.3 billion euros for last year, compared to a 114-million-euro loss in 2021, reports AFP.
"Russia attacked Ukraine, marking the beginning of shock-like effects of the war and a full-blown energy crisis in Europe that drastically changed our operating environment," Fortum's chief executive Markus Rauramo said in a statement.
Fortum's decision to exit from Russia in May led to impairments of around 1.7 billion euros for the year, the company said.
In the summer, Russia cut pipeline gas exports to Germany, causing massive losses to Fortum's former subsidiary Uniper, which was at the time one of Germany's largest importers of Russian gas.
To fulfil its contractual obligations, the German energy giant had to source replacements for the curtailed Russian gas at significantly higher prices.
This resulted in the German government signing a deal to nationalise the troubled Uniper in September.
Fortum said it booked a loss of just under six billion euros from its Uniper investment.
"This outcome clearly is not what we wanted," Rauramo said.
Net profit from continuing operations in 2022 slumped to one billion euros, down from four billion in 2021, the company said.
Before the war in Ukraine, Fortum had 12 power plants and 7,000 employees in Russia, representing around 20 percent of the company's total comparable operating profit in 2021.