The Finnish energy company Fortum announced on Thursday 2 March 2023 a huge loss of more than 10 billion euros in 2022. This loss is largely due to the collapse of its former German subsidiary Uniper, which has since been nationalized by Berlin, as well as its ongoing withdrawal from Russia. The public group, 50.7% owned by the Finnish state, suffered a net loss of 10.3 billion euros last year, multiplying by a hundred its small loss of 2021, according to its annual financial report.
Uniper and the War in Ukraine
Most of this loss is linked to the former subsidiary Uniper, which was brought to its knees by the halt in Russian gas deliveries. The net result from continuing operations, highlighted by Fortum, shows a profit down by 75%, to 1 billion euros. Last year, its revenues increased by 37% to 8.8 billion euros. Weakened by the energy crisis in Europe and the fall of Uniper, Fortum had already announced losses of 9.7 billion euros in the first three quarters, to which 600 million euros were added in the last quarter.
The Finnish group has also suffered the consequences of the war in Ukraine. After suspending its investments in Russia following the invasion of Ukraine in late February, Fortum began a withdrawal from its significant Russian operations in May, which is still ongoing. This withdrawal has already resulted in billions of euros of provisions on the value of its Russian assets.
A major energy crisis
The war in Ukraine has triggered “a major energy crisis in Europe that has drastically changed our operating environment,” CEO Markus Rauramo was quoted in the report as saying. Present in Russia for more than 60 years, Fortum and Uniper had 7,000 employees in the country at the beginning of the conflict, with 12 power and heat production plants, mainly gas-fired. The Finnish group also has a significant stake in the Russian electricity group TGC-1.
In sum, the fall of Uniper and the war in Ukraine were two key factors in Fortum’s loss in 2022.
