Factbox-Companies are counting the cost of abandoning Russia | Investment News


(Reuters) – Multinationals that announced their exit from Russia or the suspension of their activities after the invasion of Ukraine have started calculating the losses associated with their decisions.

Below is a list of companies by sector that have provided cost estimates related to their temporary or permanent cessation of activities in Russia:

The German sportswear company warned in March of a blow to sales following the closure of a business in Russia, without giving an estimate. It operates 500 stores nationwide, a quarter of its total. He also said Ukraine could pose a sales risk of up to 250 million euros ($271 million), or around 1% of the group’s total in 2021.

The fourth-quarter results of LPP, Poland’s largest fashion retailer, were hit by a 335 million zloty ($78.05 million) writedown, covering the closure of its stores in Russia. In 2021/2022, Russia was LPP’s second-largest market after Poland, accounting for 19.2% of the retailer’s annual revenue. The company sees the suspension of its activities in Ukraine and the closure of stores in Russia cost 25% of its income.

TJX US-based fashion retailer TJX has announced that it will sell its 25% stake in Russian chain of discount clothing stores Familia. The stake was valued at $186 million at the end of January, less than the $225 million paid by TJX in 2019. TJX said it may have to record an impairment due to the disposal if the fair value of the investment in Familia decreases below its book value. balance sheet value.

RENAULT Renault said in March it was considering a non-cash write-down of 2.2 billion euros ($2.38 billion) to reflect the potential costs of suspending operations in Russia. Lost sales in Russia accounted for 166 million euros in lost revenue in the first quarter, although the country remained the company’s second largest market after France.

The Swedish truck manufacturer announced on April 8 that it had made provisions amounting to 423 million dollars after suspending activities in Russia which represented 3% of the group’s sales.

CITIGROUP The US bank said as part of its quarterly report that it expects a loss of up to $3.0 billion from its Russian exposures in an extremely adverse scenario. The company said it has reduced its total exposure to the country since December 2021 from $2.0 billion to $7.8 billion. The most global of U.S. banks added $1.9 billion to its reserves in the first quarter to prepare for losses from direct exposures in Russia and the economic impact of war in Ukraine.

CREDIT SUISSE The Swiss bank estimated on April 20 that the impact of the Russian war in Ukraine will cost it 200 million Swiss francs ($209.10 million) in the first quarter of 2022.

SOCIETE GENERALE The French bank said it would leave Russia and cancel 3.1 billion euros ($3.35 billion) from the sale of its Rosbank unit to Interros Capital. The amount includes a EUR 2 billion impact on Rosbank’s book value and the remainder related to the reversal of ruble translation reserves.

ESSITY The Swedish hygiene products group said it would record a write-down of 1.4 billion crowns ($147.66 million) after halting all production and sales in Russia in March. The company generated around 2% of its total sales in the country last year, amounting to 2.8 billion crowns ($295.32 million).

The tobacco giant took a 3-cent-a-share charge related to the war in Ukraine in the first quarter after halting sales of a number of Marlboro and Parliament cigarettes in Russia. Philip Morris’ first-quarter profit fell 3.6% to $2.32 billion, or $1.50 a share, including the 3-cent charge. Russia generated more than $1.8 billion in revenue last year for the company, or about 6% of its global sales.

The oil giant’s decision to leave Russia and halt oil and gas operations will affect profits, oil production between 1% and 2%, the company’s chief financial officer said. Exxon Mobil’s Russian oil and gas operations were valued at more than $4 billion.

The Austrian energy group said on April 8 that it would suffer a 2 billion euro hit in the first quarter of its withdrawal from Russia, divided equally between its connection with the Nord Stream 2 gas pipeline project and adjustments of the method of consolidation of two Russian entities.

The world’s largest liquefied natural gas trader will write down up to $5 billion following its decision to leave Russia, above the previously disclosed $3.4 billion, the company announced on April 7. The increase was due to additional potential impacts on contracts, receivables impairments, and credit losses.

The global streaming giant said on April 19 that its decision to suspend services in Russia resulted in the loss of 700,000 members as the company lost subscribers for the first time in more than a decade.

The Belgian brewer announced on April 22 that it would sell its minority stake in its Russian joint venture AB InBev Efes. The disposal will result in an impairment charge of $1.1 billion in the first quarter. The joint venture has 11 breweries in Russia and three in Ukraine.

The Danish brewer said the decision to sell its Russian business would result in a writedown of around 9.5 billion crowns ($1.4 billion). The company generated 10% of its revenue and 6% of its operating profit in Russia in 2021. It also said it expected 300 million crowns in impairment charges in Ukraine, as well as to goodwill impairments of 700 million crowns for the Central and Eastern Europe region, which includes Ukraine.

HEINEKEN NV The Amsterdam-based brewer decided in late March to leave Russia, concluding that ownership of any business there is no longer sustainable or viable in the current environment. Heineken added that it will not benefit from any transfer of ownership and expects impairment and other one-off non-cash charges of approximately 0.4 billion euros ($432.96 million) in total. .

McDonald’s said in March that closing its Russian restaurants would cost it about $50 million a month. The company operates 847 locations – out of a global total of more than 38,000 – in Russia. Broker Piper Sandler expects the restaurant chain’s shutdown of operations in Russia to result in earnings per share of $1.19 in 2022.

The US toymaker warned on April 19 of potential revenue of around $100 million this year due to its decision to suspend toy shipments to Russia.

The Swedish gardening equipment maker said on April 21 that it recorded write-downs of 119 million crowns ($12.6 million) in the first quarter of 2022 following a halt to all exports and investments in Russia. In 2021, Russia accounted for 1.5% of group sales.

The Finnish engineering group said it wrote down 79 million euros of orders from Russia in the first quarter. It also canceled 32 million euros ($34.62 million) of sales in the country, which negatively impacted operating profit for the quarter by approximately 39 million euros.

The Finnish mining solutions provider, which halted deliveries to Russia in March, said on April 21 that operational assets linked to Russian customers of around 100 million euros ($109 million) could be at risk s is unable to terminate existing contracts in a controlled manner. way. The company, which generated 10% of its turnover from Russian sales in 2021, added that it had 269 million euros in advance payment guarantees linked to deliveries in Russia at the end of March.

The Swedish bearing and seal maker said on April 22 that it would cease all operations in Russia and planned to divest its Russian business in a controlled manner. The decision triggers an impairment of around 500 million Swedish kronor ($52.70 million) in the second quarter. Russian sales accounted for around 2% of the group’s total sales in 2021.

STORA ENSO The Finnish forestry company said on April 25 that it had sold its two sawmills and forestry operations in Russia to local management, resulting in a 70 million euro ($75 million) writedown in the first quarter and triggering a additional loss on the transaction under IFRS accounting. rules of approximately 60 million euros at closing.

The company previously said it would halt all production and sales in the country. Its Russian revenue was about 3% of the group’s total revenue.

($1 = 9.4870 Swedish kronor)

($1 = 6.8341 Danish kroner)

($1 = 0.9565 Swiss francs)

(Compiled by Padraic Halpin, Marie Mannes, Agata Rybska, Antonis Triantafyllou, Izabela Niemiec, Patrycja Zaras and Tristan Chabba; Editing by Mark Potter and Matthew Lewis)

Copyright 2022 Thomson Reuters.


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