Wintershall Dea, the German oil-and-gas group majority owned by chemicals giant BASF, has reported a net loss for the third quarter of 2020. This loss was primarily attributed to weaker oil and gas prices, unplanned maintenance outages in Norway, and the loss of its business in Russia.
Financial Results
The company recorded a net loss of €546 million ($576.8 million) for Q3 2020, compared to a net profit of €377 million in the same period last year (excluding Russia). Wintershall Dea cited impairments on assets and restructuring provisions totaling €587 million as the main contributors to this result.
Excluding exceptional items, adjusted net profit for the quarter plummeted by 86% year-on-year to €61 million. Additionally, revenue more than halved, reaching €2.11 billion compared to €5.80 billion in Q3 2019.
Operational Highlights
Quarterly production witnessed a slight decrease of 1% compared to the previous year, with 324,000 barrels of oil equivalent produced per day. Meanwhile, earnings before interest, taxes, depreciation, amortization, and exploration decreased by 53% to €964 million.
Separation from Russian Holdings
Wintershall Dea announced its plans to finalize the legal separation of its international business from Russian holdings into two independent entities by mid-2024. The process of a complete exit from Russia is currently underway.
Cost-Cutting Measures
Last month, the company initiated a cost-cutting plan which included the reduction of 500 jobs and aimed for annual savings of €200 million.