Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Siemens to leave Russia due to Ukraine war, take hefty charge

EconomyMay 12, 2022 09:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. The logo of German industrial group Siemens is seen at an office building in Zug, Switzerland December 1, 2021. REUTERS/Arnd Wiegmann/Files

By John Revill

ZURICH (Reuters) -Siemens will quit the Russian market due to the war in Ukraine, it said on Thursday, taking a 600 million euro ($630 million) hit to its business during the second quarter, with more costs to come.

The German industrial and technology group became the latest multinational to announce losses linked to its decision to leave Russia following the Feb. 24 invasion, which Moscow calls a "special military operation".

Several companies, from brewers Anheuser-Busch InBev and Carlsberg (OTC:CABGY) to sportswear maker Adidas (OTC:ADDYY), carmaker Renault (EPA:RENA) and several banks have been counting the cost of suspending operations in or withdrawing from Russia.

Siemens Chief Executive Roland Busch described the conflict as a "turning point in history."

"We, as a company, have clearly and strongly condemned this war," Busch told reporters.

"We're all moved by the war as human beings. And financial figures must take a back seat in the face of the tragedy. Nevertheless, like many other companies, we’re feeling the impact on our business."

During the second quarter Siemens incurred 600 million euros in impairment and other charges mostly recorded in its train-making mobility business subsequent to sanctions on Russia, Siemens said.

Busch said further impacts were to be expected, mainly from non-cash charges related to the winding-down of legal entities, revaluation of financial assets and restructuring costs.

"From today's perspective, we foresee further potential risks for net income in the low- to mid-triple-digit million range, although we can't define an exact timeframe," he added.

Siemens shares dropped 5% in early trading as the company missed analysts' expectations for second- quarter profit.

The Munich company employs 3,000 people in Russia, where it has been active for 170 years. It first went to Russia in 1851 to deliver devices for the telegraph line between Moscow and St Petersburg.

The country now contributes about 1% of Siemens' annual revenue, with most of the present day business concerned with maintenance and service work on high-speed trains.

Its sites in Moscow and St Petersburg are now being ramped down, Busch said.

The costs weighed on Siemens' second quarter earnings, with net income halved to 1.21 billion euros ($1.27 billion), missing analysts' forecasts of 1.73 billion.

The company posted industrial profit of 1.78 billion euros, down 13% from a year earlier and also missing forecasts.

But demand stayed robust, with orders 22% higher on a comparable basis and revenue 7% higher.

As a result it confirmed its full-year outlook, with revenue comparable revenue growth of 6% to 8% for the full year, with a downturn in mobility expected to be compensated by faster growth in factory automation and digital buildings.

JP Morgan analyst Andreas Willi described the results as "mixed with strong orders, industry leading growth in automation and strong cash conversion."

($1=0.9508 euros)

Siemens to leave Russia due to Ukraine war, take hefty charge
 

Related Articles

Germany stocks mixed at close of trade; DAX up 0.63%
Germany stocks mixed at close of trade; DAX up 0.63% By Investing.com - May 25, 2022

Investing.com – Germany stocks were mixed after the close on Wednesday, as gains in the Retail, Utilities and Transportation & Logistics sectors led shares higher while losses in...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email