The French food giant Danone suffered a €200m loss (£170m), after Vladimir Putin seized its Russian factories.
The company that owns Evian, Actimel and other brands has announced it will “deconsolidate its operations” in the country.
This month, the Kremlin took control of Danone’s Essential Dairy and Plant-Based (EDP), as well as Carlsberg’s stake in a local brewery.
The company claimed that this process occurred without its knowledge or consent, and added that it did not have control over its Russian operation even though it was still the legal owner.
Danone will be hit with a €200m charge from the seizure. It will also incur a €500m accounting charge linked to exchange rates.
The company stated: “Danone is continuing to investigate this situation in order to better understand the impact of the Russian authorities’ decisions on the EDP operations that Danone continues to run in Russia as well as the sale process.”
Early trading in Paris saw shares fall 3pc.
Danone was founded in 1921 and announced in October last year that it was searching for a buyer to take over its Russian food business. It said the deal would allow it to write off up €1bn of value.
The largest yoghurt producer in the world said that it would continue to share information about any developments relating to its Russian operations. It also added that it was investigating ways to protect its assets, rights and as a shareholder. A priority for it is to ensure the safety of people.
Danone is among a few Western companies that still have operations in Russia after the invasion of Ukraine .
Danone, for example, argues that it is their duty to feed the Russian masses.
Unilever, a rival company, said earlier this week that deciding to stay in Russia is the “least-bad option”.
Danone’s second-quarter sales rose by a higher-than-expected 6.4%.
Price increases offset increased costs and a decrease in volume sold.
Danone expects to achieve revenue growth in the range of 4pc to 6pc for the full year as sales volumes increase throughout the year.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.