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Finnish utility Fortum plans to quit Russia
Global Banking & Finance Review®
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COPENHAGEN (Reuters) – Finnish utility Fortum said on Thursday it was looking to sell its assets in Russia and exit the country, where it earned a fifth of its operating profit last year.
COPENHAGEN (Reuters) – Finnish utility Fortum said on Thursday it was looking to sell its assets in Russia and exit the country, where it earned a fifth of its operating profit last year.
Fortum’s Russian division operates seven thermal power plants for district heating. Germany’s Uniper, in which Fortum owns 78%, also has five power plants across Russia through its Unipro subsidiary.
Fortum, which in March said it would continue its existing operations in Russia, but freeze new investments, said it had now decided to “pursue a controlled exit” from the country – joining a long list of Western companies to pull out following Moscow’s invasion of Ukraine.
“As the preferred path, this decision includes a potential divestment of Fortum’s Russian operations,” the Finnish firm said on Thursday, as it also posted a first-quarter operating loss, dragged down by a loss Uniper.
A divestment process for Unipro, which had been halted after what Russia calls its “special military operation” in Ukraine, is expected to resume as soon as possible, it added.
Fortum, owned 51% by the Finnish state, posted a first-quarter comparable operating loss of 438 million euros ($460 million), down from a 1.2 billion euros profit a year earlier and broadly in line with the 436 million euros loss expected by analysts in a poll provided by the company.
($1 = 0.9520 euros)
(Reporting by Stine Jacobsen; Editing by Mark Potter)
Divestment is the process of selling off subsidiary business interests or investments. Companies may choose to divest for various reasons, including financial performance, ethical considerations, or strategic realignment.
Operating profit is the profit a company makes from its regular business operations, excluding any income derived from non-operational activities such as investments or sales of assets.
A power plant is an industrial facility that generates electricity by converting various forms of energy, such as thermal, hydro, or renewable sources, into electrical power.
A controlled exit refers to a planned and managed process of withdrawing from a market or business operation, ensuring minimal disruption and financial loss.
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