Tobacco giant Imperial Brands is selling off its Russian business to investors in the country, it has confirmed.
The maker of Davidoff, West and Gauloises Blondes cigarettes said the registration of the transaction still needed to be finalised with local authorities but it expected the transfer to take place “shortly”.
The Bristol-headquarterd company employs 1,000 people in Russia in its sales and marketing operations and in its factory in Volgograd. The business said it estimated a non-cash write off of around £225m for the transaction, which it expects to be treated as an adjusting item.
“The transaction aligns with our previously announced intention to divest our entire Russian operation as a going concern in order to provide the best outcome for our 1,000 Russian colleagues,” Imperial Brands said in a statement.
“We continue to support our Ukrainian colleagues and their families, including with transport and accommodation to enable them to escape the areas most heavily affected by war, and resettlement assistance for those who have left Ukraine.”
Imperial Brands said there was no change to the company’s previous guidance on the financial impact of its exit from Russia and suspension of Ukraine operations. In the financial year 2021, Russia and Ukraine represented in total around 2% of net revenues and 0.5% of adjusted operating profit.
In March, Imperial Brands said it expected full-year constant currency net revenue growth of around 0-1%.
“While there will be some ongoing costs related to the suspension in Ukraine, we expect a relatively small impact on our constant currency adjusted operating profit, reflecting the limited profit contribution of the two markets,” the business said at the time.
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