BASF Reports Q1 Profit Slump Due to Nord Stream 2 Impairments
BERLIN (Reuters) — German chemicals group BASF reported an unexpected drop in first-quarter net income on Monday, citing impairments at its oil and gas unit that had co-funded the abandoned Nord Stream 2 project.
Germany halted the Nord Stream 2 Baltic Sea gas pipeline project, designed to double the flow of Russian gas direct to Germany, after Russia formally recognized two breakaway regions in eastern Ukraine.
BASF said its preliminary first-quarter net income slumped to 1.22 billion euros ($1.33 billion) as it included impairment charges recognized by oil and gas subsidiary Wintershall Dea with around 1.1 billion euros.
Wintershall Dea, which had funded Nord Stream 2 together with Uniper, OMV, Shell and Engie, said Russia's invasion of Ukraine had "shaken the foundations of the company's work in Russia to the core".
The other financiers of Nord Stream 2 also announced writedowns of their contributions, and the French utility Engie said it had a credit risk exposure of up to 987 million euros to Nord Stream.
BASF had reported a net profit of 1.72 billion euros in the first three months of 2021, and analysts had on average expected its net profit to come in at 1.77 billion euros in the same period of 2022 according to a Vara Research poll.
($1 = 0.9184 euros)
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