OMV AG, Vienna, took a non-cash impairment last quarter that threatens to erode expectations for full-year earnings as Austria’s state-controlled energy major attempts to pivot away from oil, according to a Bloomberg report. The company will write down €1.7 billion (US$1.95 billion) on its exploration, production, and refining and Borealis AG fertilizer business, according to a statement Jan. 13. The news comes as the company saw surging input costs during the quarter.
Most of the items would reportedly be classified as special items in the company’s quarterly earnings.
OMV has been seeking to sell its Borealis fertilizer subsidiary for a while (GM Nov. 5, 2021; Feb. 5, 2021). The company told Reuters on Jan. 13 that those plans are ongoing. OMV owns a 75 percent stake in Vienna-based Borealis, which distributes around 5 million mt/y of fertilizers in Western, Central, and Southeast Europe.
The company reported adjusted net income of about €2.3 billion in the first three quarters of 2021, according to data compiled by Bloomberg. OMV reports fourth-quarter and full-year earnings on Feb. 3.
The impairment follows the appointment of new CEO Alfred Stern in the third quarter. The company is preparing to announce a new strategy this quarter that is expected to accelerate a move toward greater sustainability.