Tobacco giant Imperial Brands cuts outlook as owner John Player looks to outsource Russian operations to local third party
- Imperial Brands hopes to get rid of Russian assets and operations amid war in Ukraine
- Today, the group issued a warning about its profits and earnings in a crisis.
Imperial Brands has begun negotiations to transfer its Russian operations and assets to a local third party following the country’s invasion of Ukraine.
The Bristol group issued a profit and earnings warning on Tuesday amid its withdrawal from the country.
The company that makes Winston cigarettes and Backwoods cigars said it would continue to pay its 1,000 employees in Russia until the transfer of business is completed.
Negotiations: Imperial Brands has entered into negotiations to transfer its Russian operations and assets to a local third party
The group includes employees working in Russia, including sales and marketing departments, as well as a plant in Volograd. It has already ceased its activities in Ukraine.
Any deal related to Imperial Brands’ Russian business is subject to negotiation, the firm added.
The London-based tobacco group suspended its operations in Russia last week due to international sanctions against the country following its invasion of Ukraine.
Imperial Brands, whose operations in Russia and Ukraine generated about 2% of net revenue last year, forecast revenue growth from zero to 1% in 2022.
Growth was previously expected to be around 1.4% in constant currency.
The group said in a statement: “While there will be some operating costs in Ukraine related to the suspension of operations, we expect a relatively small impact on our constant currency adjusted operating income, reflecting the limited contribution of the two markets to earnings.”
Operations: London-listed tobacco group Imperial Brands suspended operations in Russia last week
He added: “We are also supporting our Ukrainian colleagues and their families, including with transport and accommodation to enable them to leave the areas most affected by the conflict, as well as resettlement assistance for those who have left Ukraine.”
Rival British American Tobacco also cut its forecasts last week as cigarette maker Camel plans to pull out of Russia.
Shares of Imperial Brands fell today and fell 0.9%, or 14.00 pence, to 1536.50 pence just after 9:15 am. A year ago, the group’s share price was 1,420.50 pence, up about 8% over the year.