Imperial owns cigarette brand Davidoff
(Picture: Getty Images)Imperial Brands is to offload its Russian operations to a local operator as the conflict with Ukraine continues.
The tobacco company said that it had begun negotiations to transfer its assets and operations in Russia, having last week suspended its trading in the country.
“We believe that, in the current circumstances, an orderly transfer of our business as a going concern would be in the best interests of our Russian colleagues,” the company said on Tuesday.
Imperial Brands employs around 1,000 people in its Russian sales and marketing operations and in its factory in Volgograd, a city in the south west of the country.
“Their safety and wellbeing is our key priority in this process. We will also continue to pay their salaries until any transfer is concluded,” Imperial Brands said.
The decision to transfer, rather than sell, the division implies that Imperial Brands won’t benefit financially from the deal.
“Any transaction relating to our Russian business is subject to agreement being reached,” it added.
Imperial Brands also has a small operation in Ukraine where it employs around 600 people, including in a factory in Kyiv.
It said it is providing transport and accommodation for its employees to enable them to leave the areas most severely hit by conflict, as well as resettlement assistance for those who have left Ukraine.
Together, the Russian and Ukraine operations account for around 2% of Imperial Brand’s net revenues, and 0.5% of its operating profits. The suspension of operations would have a “relatively small impact” on the company’s performance this year, it said.
As a result, constant currency net revenue growth for the current year is expected to be around 0-1%. Analysts had previous forecast growth of between 1% and 2%.
