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9 Feb, 2023 13:56

Consumer goods giant warns of exit from Russia

Unilever was among the first major Western firms to curb operations amid sanctions
Consumer goods giant warns of exit from Russia

British multinational consumer goods titan Unilever may have to cease doing business in Russia, the company said in an earnings statement on Thursday.

According to the maker of products such as Knorr soups, Dove soap and Fairy washing-up liquid, the move could lead to a loss of turnover, profits, and a write-down of the company’s Russian assets.

We will continue to review and disclose the financial implications from the [Russia-Ukraine] conflict… While the potential impacts remain uncertain, there is a risk that the operations in Russia are unable to continue,” the statement read.

According to CEO Alan Jope, Unilever has not yet started write-downs of its business in Russia, but wanted to warn shareholders and regulators of the possibility.

I hope we can protect the people we have on the ground for quite some time. The war has triggered inflation in Russia, which is the scourge of an economy. And the volumes in our Russian business are down significantly, by double digits,” Jope stated on a media call, as cited by Reuters. He noted that “exiting is not straightforward,” and that the company does not wish to abandon the roughly 3,000 staff it currently employs in Russia.

Unilever stopped exports to Russia and imports from the country in March last year, shortly after the start of Moscow’s military operation in Ukraine. It also halted investment, advertising, and further projects in the country. However, the company continued to supply “vital food and hygiene products” produced locally to Russian citizens, but specified that any profit from those sales will remain in Russia.

As of December 31, Unilever’s Russian assets amounted to about $968.6 million, including four factories. Business in Russia contributed 1.4% of Unilever’s total turnover and 2% of its net profit in 2022.

For more stories on economy & finance visit RT's business section

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