Imperial Brands has started talks to transfer its Russian business to a local third party following the Ukraine crisis, the tobacco company said, while flagging a small hit to annual revenue and profit due to the exit.
The maker of Winston cigarettes and Backwoods cigars said it would continue to pay its 1,000 staff in Russia until the transfer of its business is complete.
Last week, Imperial Brand stopped all sales and marketing activity in Russia and halted production at its factory in Volgograd, citing challenges arising from sanctions on Moscow.
Revenue Growth Forecast
Imperial Brands, whose operations in Russia and Ukraine accounted for just 2% of its net revenue last year, forecast revenue growth in 2022 to be flat to up 1%. It had previously expected a growth rate of about 1.4% on constant currency basis.
'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,' Imperial Brands said in a statement.
Rival British American Tobacco last week also cut its outlook as the Camel cigarette maker plans to leave Russia.
In November of last year, Imperial Brands reported a 0.7% increase in revenue in its full year to 30 September, with CEO Stefan Bomhard saying the group is eager to build on what has been a year of "important progress and significant change" for the group.