World News
Engineering Firms Pay Heavy Price for Russia Boycotts
Engineering firms Wärtsilä and Alfa Laval have both lost significant sums of money by avoiding new business in Russia since the country's invasion of Ukraine.
Alfa Laval has seen orders amounting to SEK 602 million ($61 million) cancelled, of which most was from its marine division, after pausing all new orders in the Russian market, it said in a results statement this week. It has also booked provisions amounting to SEK 327 million to cover costs related to existing contractual obligation concerning Russia.
Meanwhile Wärtsilä has made provisions of about EUR 200 million ($211 million) in its Q1 financial reporting related to its withdrawal from Russia, it said earlier this month. This includes about EUR 75 million of impairment of voyage-related goodwill and intangible assets, about EUR 50 million of impairment related to assets in Russia and about EUR 75 million in write-offs related to trade-sanctioned projects and receivables.
"After Russia's attack on Ukraine, Wärtsilä immediately suspended all deliveries, sales, orders, and bidding to Russia," the company said in the statement.
"We are complying with all current and will comply with all future trade sanctions applicable to our operations.
"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.
"Adjusting the operations will be done in accordance with local regulations."
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