Wintershall Dea on Monday reported that its third-quarter net profit slumped 86% year-on-year due to weaker oil and gas prices, unplanned maintenance outages in Norway and the costly loss of Russian business.
The company's earnings showed that adjusted net income totalled 61 million euros ($64.4 million) in the three months to September, compared with 429 million euros a year earlier.
Excluding the adjustment, it made a third-quarter loss of 535 million due to impairments on assets and restructuring provisions of 587 million euros in total, it said.
The impairments related to assets in the Middle East and North Africa and resulted from a change in planning assumptions.
The loss of Russian production and the ensuing restructuring of the majority BASF BASFn.DE-owned group is forcing the company to make a 223 million euro pre-tax provision in the three months, it said.
Wintershall DEA not only lost access to big Russian production assets following Moscow's invasion of Ukraine last year, but also a stake in the Nord Stream 1 gas pipeline and it wrote off its 1 billion euro financing in Nord Stream 2. Both pipelines are defunct.
Its Russian business had provided much of its income for decades and prior to the 2022 events contributed half its output.
Wintershall is targeting annual cost savings of 200 million euros and is laying off 500 staff, it announced in September after being cut off from its Russian earnings in the wake of Russia's invasion of Ukraine.
"We are adapting Wintershall Dea to strengthen competitiveness, reduce administrative costs and further consolidate the focus on our strategic direction," Chief Financial Officer Paul Smith said in a statement on Monday.
Overall daily production in the third quarter was 324,000 barrels of oil equivalent per day (BOE), down 1%, with the Norwegian Aasta Hansteen and Skarv fields in Norway impacted by unplanned maintenance.
EBITDAX (earnings before interest, tax, depreciation, amortisation and exploration), an oil industry measure, was down 53% at 964 million euros.
But with non-Russian activities in Europe, Latin America and the Middle East and North Africa continuing, the company raised capital expenditure 11% to 243 million euros, due to higher development activity, particularly in Argentina.
Wintershall Dea will hold press calls later on Monday.
BASF shares were up 1% at 41.86 euros at 0906 GMT.
($1 = 0.9469 euros)
(Reuters - Reporting by Vera Eckert and Patricia Weiss,Editing by Miranda Murray, Louise Heavens and Emelia Sithole-Matarise)