(Reuters) – Multinationals that announced their exit from Russia, or suspension of activities there, after Moscow’s invasion of Ukraine on Feb. 24, have started to report associated losses.
These are companies, listed by sector, that have provided cost estimates related to a temporary or permanent halt in Russia:
The German sportswear company warned in March of a hit to sales from closing in Russia, without giving an estimate. It operates 500 stores in the country, a quarter of its total.
It also said Ukraine could pose a risk to sales of up to 250 million euros ($264 million), or about 1% of the group total in 2021.
Fourth-quarter results of LPP, Poland’s biggest fashion retailer, were hit with a 335 million zloty ($75.4 million) writedown, covering closure of its stores in Russia.
In 2021/2022, Russia was LPP’s second-biggest market after Poland, constituting 19.2% of its full-year sales revenue. LPP sees the suspension of business in Ukraine and closing stores in Russia costing 25% of revenue.
U.S.-based fashion retailer TJX said it would sell its 25% stake in the Russian low-cost apparel shop chain Familia. The stake was valued at $186 million at the end of January, lower than the $225 million TJX paid for it in 2019.
TJX said it might need to record an impairment due to the divestiture if the fair value of the Familia investment declines below its carrying value on the balance sheet.
Renault said in March it was considering a 2.2 billion euro, non-cash writedown to reflect the potential costs of suspending operations in Russia.
Lost sales accounted for 166 million euros of revenue loss in the first quarter, although Russia remained the company’s second-largest market after France.
The Swedish truckmaker said on April 8 it had set aside provisions worth $423 million after suspending activities in Russia that amounted to 3% of group sales.
The U.S. bank said in connection with its quarterly report that it sees a loss of up to $3.0 billion from its exposures in Russia in a severely adverse scenario.
Citi said it had reduced its total exposure to Russia since December 2021 by $2.0 billion to $7.8 billion.
The most global of the 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 the Ukraine crisis.
Credit Agricole announced it has provisioned more than 500 million euros related to its exposure to Russia as it released its first quarter results.
The Swiss bank estimated on April 20 that the impact of the Russian invasion of Ukraine will cost it 200 million Swiss francs ($203.1 million) in the first quarter of 2022.
The French bank said it would quit Russia and write off 3.1 billion euros from selling its Rosbank unit to Interros Capital.
The amount includes a 2 billion euro hit to Rosbank’s book value, with the rest linked to the reversal of rouble conversion reserves.
Italy’s UniCredit, one of Europe’s banks most exposed to Russia, said it has booked 1.3 billion euros in loan loss provision related to Russia, as it released its first quarter results. UniCredit runs Russia’s 14th biggest lender
The Swiss bank said on April 26 that Russia’s invasion of Ukraine had a cost of about $100 million. UBS also cut its exposure in Russia to $400 million at the end of March, from $600 million.
UTILITIES & CONSUMABLES
The Swedish hygiene products group said it would record a write-down of 1.4 billion Swedish crowns ($141.5 million) after it shut down all production and sales in Russia in March.
The company generated about 2% of its total sales in the country last year, amounting to 2.8 billion crowns.
Finland’s Fortum said it would record a pre-tax impairment of 2.1 billion euros from its Russian operations in the first quarter.
That includes 0.3 billion euros from Fortum’s Russia segment, 0.6 billion from Unipro, a Russian company owned by Fortum’s subsidiary Uniper, and 0.2 billion from Fortum’s ownership in Russian power company TGC-1 and in renewables joint ventures in Russia.
The German chemical and consumer goods company said in its quarterly report it foresees an impact of 1 billion euros on its full-year sales related to the current geopolitical situation.
The maker of Persil washing detergents and Pritt glue announced in mid-April it would exit Russia, adding on Friday it is also exiting Belarus.
The tobacco giant took a charge of 3 cents per share related to the Ukraine crisis in the first quarter, after discontinuing sales of a number of Marlboro and Parliament cigarette products in Russia.
Philip Morris’ first-quarter earnings fell 3.6% to $2.32 billion, or $1.50 per share, including the 3-cent charge. Russia generated revenue of more than $1.8 billion last year, around 6% of its global sales
Oil and gas giant BP recorded a $24 billion writedown in Russia, slightly lower than its initial estimate of $25 billion. BP said the non-cash writedown of its stakes in Rosneft and two other joint ventures pushed the company into a headline loss of $20.4 billion in the quarter.
Norway’s Equinor stopped trading in Russian oil in March, in addition to shutting down its operations in the country. The company recognised net impairments of $1.08 billion related to assets in Russia in the first quarter.
It is also in the process of leaving its joint ventures with Russia’s Rosneft.
EXXON MOBIL CORP
The oil giant’s decision to leave Russia and discontinue oil and gas operations will hit earnings and oil output by 1% to 2%, the chief financial officer said.
Exxon Mobil’s Russian oil and gas operations were valued at more than $4 billion. The company’s first quarter results included a $3.4 billion after-tax hit on its Russia Sakhalin-1 operation.
The Austrian energy group said on April 8 it would take a 2 billion euro hit in the first quarter as a result of its pullback from Russia, split evenly between its connection with the Nord Stream 2 pipeline project and adjustments to the consolidation method of two Russian entities.
The world’s largest liquefied natural gas trader will write down up to $5 billion after its decision to exit Russia, above the $3.4 billion previously disclosed, the company said on April 7. The increase was due to additional potential impacts around contracts, writedowns of receivables and credit losses.
ENGINEERING & CONSTRUCTION
The Swedish engineering company, which has paused all new orders in Russia, said on April 26 that due to sanctions, orders amounting to 602 million Swedish crowns had been cancelled.
In addition, it booked 327 million crowns of provisions to cover various costs related to existing contractual obligations concerning Russia.
The Finnish engineering group said it made a write-down of 79 million euros in orders from Russia in the first quarter. It also cancelled 32 million euros of sales to the country which negatively impacted the quarter’s operating profit by about 39 million euros.
The Swedish heating technology company decided to close its Russian operations, which has negatively impacted its Q1 operating profit with a one-off write-down of about 114 million Swedish crowns ($11.51 million).
The Finnish construction company said on April 28 it had written down most of its Russian assets and sold its holdings in Fennovoima, recording an impairment of 141.2 million euros on its balance sheet.
Its remaining assets in Russia are valued at 2.6 million euros.
As the decrease in asset values will have a significant impact on SRV’s equity and equity ratio, the company said it would reorganize its financing, including a contemplated rights issue and conversion of its unsecured fixed-interest bond.
Germany’s Siemens announced on May 12 that it was leaving Russia after nearly 170 years of activity in the country. Losses have been estimated by the Munich-based engineering and tech company at 600 million euros for the second quarter, with more costs to follow in the upcoming months.
The Finnish engineering group has said several of its projects delivered to Russia no longer meet the criteria of a customer contract for revenue recognition purposes, and so made a reversal of about 70 million euros to its order backlog.
The Finnish engineering group registered a 200 million euro writedown in its first-quarter financial report as it scaled down its business in Russia.
The writedown includes about 75 million euros of impairment of Voyage-related goodwill and intangible assets, 50 million euros of impairment related to assets in Russia and about 75 million euros of writedowns related to trade-sanctioned projects and receivables.
The writedown does not impact the company’s comparable operating result, but the actions regarding the business in Russia have a negative impact on its operational financials.
Russia-related activities accounted for about 5% of Wartsila’s net sales in 2021, of which service net sales was about 40 million euros.
The Finnish construction company recorded an impairment of 133 million euros for the first quarter, after classifying the Russian businesses as held for sale.
YIT announced in April it would sell its business in the country to Etalon Group.
The global streaming giant said on April 19 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.
FOOD & BEVERAGES
The Belgian brewer announced on April 22 it would sell its non-controlling stake in its Russian joint venture AB InBev Efes. The divestiture will result in a $1.1 billion impairment charge 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 about 9.5 billion Danish crowns ($71.1 million). 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 of Ukraine impairment charges, plus goodwill writedowns of 700 million crowns for the Central and Eastern Europe region, which includes Ukraine.
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 current environment.
Heineken said it would not profit from any transfer of ownership and expected an impairment and other non-cash exceptional charges of about 0.4 billion euros in total.
McDonald’s announced its plan to exit Russia and to sell all its restaurants. The world’s largest burger chain will take a related non-cash charge of up to $1.4 billion following its sale.
The U.S. company said in March the closure of its Russian restaurants would cost it about $50 million a month. The company operates 847 sites in Russia, out of a global total of more than 38,000.
Brokerage Piper Sandler expects the restaurant chain’s halt to operations in Russia to result in an earnings per share hit of $1.19 in 2022.
The American toy maker warned on April 19 of a potential revenue hit of about $100 million this year due to its decision to pause toy shipments to Russia.
The Swedish gardening equipment maker said April 21 it had booked writedowns of 119 million Swedish crowns in the first quarter as a result of stopping all exports and investments in Russia. In 2021, Russia accounted for 1.5% of group sales.
The Danish shipping group said it recorded a negative impact of $718 million on its first-quarter earnings before interest and tax. That included $162 million in its Ocean segment, $53 million in Logistics & Services and $485 million in Terminals.
Maersk said in March it would sell all its assets in Russia, including its 30.75% stake in Russian port operator Global Ports Investments.
The Japanese trading house halved its net exposure to Russia as of March 2022 to 12.3 billion yen ($94.4 million) due to a writedown of its stake in Russia’s Sakhalin-1 oil project.
The chief executive said Russia accounted for less than 0.5% of its total overseas exposure of 2.7 trillion yen. In April the company said it would freeze new transactions in Russia, including those not subject to sanctions.
The Finnish provider of mining technology, which halted deliveries to Russia in March, said on April 21 that operative assets related to Russian customers of about 100 million euros could be at risk if it was unable to wind down existing contracts in a controlled way.
The company, which generated 10% of revenue from Russian sales in 2021, added it had 269 million euros of advance payment guarantees tied to deliveries to Russia at end-March.
The Swedish bearings and seal maker said on April 22 it would cease all operations in Russia and planned to divest its Russian business in a controlled manner.
The decision triggered a writedown of about 500 million Swedish crowns in the second quarter. Russian sales accounted for about 2% of the group’s total sales in 2021.
The Swedish steelmaker said on April 26 concerns related to its sales office in Russia had led to asset writedowns of 158 million Swedish crowns in the country.
The war and sanctions also impacted prospects for the Fennovoima project in Finland, the shares of which were written down by 272 million crowns to zero in value.
SSAB has ended direct sales to Russia and Belarus, and discontinued new purchases of ore and coal from Russia, until further notice.
The Finnish forestry company has completed its exit from Russia by divesting its forest operations, two sawmills and packaging plants to local management. The company recorded an impairment of 130 million euros in the first quarter, including 70 million related to the sale of sawmills and forest operations, and 35 million from the sale of the packaging business. The divestitures will also trigger an additional loss on transaction under IFRS accounting rules of about 60 and 55 million euros respectively, to be recorded at the closing date. Its Russian revenue accounted for about 3% of total group revenue in 2021.
The German software company said it had stopped its activities in Russia and Belarus and expected a negative impact on billings of around 1% from halting its business activities in the two countries.
($1 = 0.9457 euros)
($1 = 4.4461 zlotys)
($1 = 0.9849 Swiss francs)
($1 = 9.8961 Swedish crowns)
($1 = 7.0337 Danish crowns)
($1 = 130.3500 yen)
(Compiled by Padraic Halpin, Marie Mannes, Agata Rybska, Antonis Triantafyllou, Patrycja Zaras and Tristan Chabba; Editing by Barbara Lewis, Edmund Blair and Susan Fenton)