Konecranes has lost €47m (US$50.7m) in operating profit in the first quarter of 2022 as a result of the war in the Ukraine, having stopped production at its Ukrainian factory and cancelled orders from and sales to Russia.
Production at its crane and component factory in Zaporizhzhia in the south-eastern part of Ukraine was stopped after the war started.
The planned production has been redirected to other Konecranes manufacturing sites and, as the level of uncertainty regarding Konecranes’ operations in Ukraine remains high due to the ongoing war, Konecranes has impaired all Ukraine related assets in the first quarter.
The impact of the impairments on operating profit is approximately €8m (US$8.6m) in the negative.
Konecranes expressed concern for its over 400 Ukrainian employees and their family and has supported them throughout the war as it continues to pay salaries and wages to the Ukrainian employees.
The equipment manufacture condemns Russia’s aggression towards Ukraine and decided in the early days of the invasion to not take any new business from Russia.
It will gradually downscale its Russian business and will do so in accordance with local laws and regulations, with the safety and well being of the company’s Russian employees being prioritised.
In 2021, Konecranes’ sales to Russia totalled €55m (US$59m) and as a result of its decision Konecranes has written off €79m (US$85m) of orders from Russia in the first quarter of 2022.
Additionally, the equipment manufacturer has cancelled €32m (US$34.5m) of sales to Russia as these projects have been discontinued.
These orders had been booked and the project revenues recognised prior to 2022 with the impact of cancelled sales on Q1 operating profit approximately €39m (US$42m).
In total, in the first quarter, the negative impact of the cancelled sales to Russia and the impairments of assets in Ukraine is €44m (US$47.4m) on EBITA.
As the result impact of the sales cancellations and impairments is included in the adjustments, they do not impact Konecranes’ guidance for 2022 as stated on February 3, 2022.
The guidance notes that Konecranes expects net sales to increase in full-year 2022 compared to 2021, and it expects the full-year 2022 adjusted EBITA margin to improve from 2021.
