Fortum to write off $1.9 billion after Russia seized assets

COPENHAGEN (Reuters) -Finnish energy group Fortum will fully write off the value of its Russian assets that were seized last month by Moscow, the company said while reporting first-quarter earnings that exceeded expectations on Thursday.

The company said it would book impairments of 1.7 billion euros ($1.9 billion) in the second quarter for the Russia exit, but added its financial position would remain solid.

Fortum had been seeking to exit the Russian market since May last year, but its application for permission to sell its operations was unsuccessful, CEO Markus Rauramo said in a statement.

"We are deprived of our shareholder rights and have assessed that we no longer have control over our Russian operations," he said.

The Russian Energy Ministry declined to comment.

Many foreign companies have sought to exit Russia amid Western sanctions following Moscow's invasion of Ukraine in February last year.

While some companies have been able to leave, others have not managed to divest their assets due to legal or financial restrictions.

"Russia has not been part of our future since spring 2022 nor does our exit in any way jeopardise the successful execution of our new strategy," Rauramo said.

The Finnish utility on Thursday reported stronger first-quarter core profits than expected, boosted by high energy prices.

Comparable operating profit stood at 784 million euros ($863 million) against a year-earlier 388 million, beating a 597 million mean estimate in a company-provided poll of analysts.

Shares in Fortum were up 3.53% at 0853 GMT.

($1 = 0.9084 euros)

(Reporting by Louise Breusch Rasmussen and Anastasia LyrchikovaEditing by Terje Solsvik and Mark Potter)