Imperial Brands sells Russian business

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Imperial Brands, formerly Imperial Tobacco Group, announced the transfer of its Russian operations to Russian-based investors.

The deal is subject to finalizing the registration of the transaction with local authorities, which is expected to take place soon, the company added.

The transaction aligns with the group’s previously announced intention to divest all of its Russian operations in order to deliver the best outcome to its 1,000 Russian employees.

Imperial Brands estimated a non-cash write-off of approximately £225 million for this transaction, which should be treated as an adjusting item.

Earlier, the group said it expected “a relatively small impact” on its constant currency adjusted operating profit, reflecting the limited contribution to earnings from both markets.

Imperial Brands leaves Russia

The tobacco giant’s operations in Russia include a sales and marketing business and a factory in Volgograd.

The company has pledged to “continue to support” its Ukrainian colleagues and their families, including transportation and accommodation to enable them to flee areas heavily affected by war, and resettlement assistance for those who left Ukraine.

The tobacco group announced no change from its previous forecast due to its exit from Russia and the suspension of its operations in Ukraine.

In 2021, Russia and Ukraine together accounted for around 2% of net sales and 0.5% of the group’s adjusted operating profit.

In November last year, Imperial Brands announced a 0.7% increase in revenue over the full year to September 30, with CEO Stefan Bomhard saying the company is looking forward to s ‘building on what has been a year of “significant progress and significant change” to group it.

© 2022 European supermarket magazine – your source for the latest A-Brands news. Article by Conor Farrelly. Click on subscribe register for ESM: European Supermarket Magazine.

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