(Yicai Global) April 15 -- Shares of Beiken Energy Engineering, a Chinese petroleum engineering company, slumped after the firm said it expects to have lost as much as CNY219 million (USD34.4 million) in the first quarter due to its stalled business in Ukraine.

Beiken's stock price [SHE: 002828] dropped as much as 6.6 percent to CNY7.71 (USD1.20) intraday. The shares have declined more than 10 percent in the past 12 months.

The non-state-owned natural gas drilling service provider predicts its net loss could range between CNY190 million and CNY219 million in the first quarter due to the situation in Ukraine, the firm headquartered in the Xinjiang Uygur Autonomous Region said in a statement yesterday. In the first three months of 2021, its net profit tallied CNY2.2 million (USD337,408).

Beiken's business in Ukraine has been suspended since Feb. 26, the firm said in early March. However, local fixed assets with a book value of about CNY188 million were deemed to be relatively safe at that point.

In March, Beiken's unit in Ukraine made impairment provisions between CNY192 million and CNY218 million. Consequently, it can be assumed that the firm would have made a small profit in the first quarter without the Russia-Ukraine conflict.

The asset value decrease includes labor, depreciation, amortization, leasing, and maintenance costs in Ukraine this year. It also involves impairment losses due to idle assets, possible future transportation costs to retrieve equipment, and accounts receivable in the Eastern European country.

The Chinese engineering firm entered the Ukrainian market in 2017. In the first half of 2021, its business in the European country made up almost 36 percent of Beiken's total revenue.

In 2021, Beiken expects to have made CNY20 million (USD3.1 million) in net profit, declining by 20 percent from 2020, because of shrinking earnings in Xinjiang and Ukraine, according to the firm's performance estimate. Revenue may have climbed 22 percent to CNY1.1 billion (USD180 million), mainly due to asset acquisition.

Editor: Emmi Laine, Xiao Yi