Siemens Is Leaving Russia After 170 Years

Siemens is set to face a €600m (£512m) hit in the second quarter after announcing its full exit from the Russian market after 170 years.

Following the invasion of Ukraine in late February, Siemens Chief Executive Roland Busch said the conflict was a “turning point in history”, and has decided to pull all services from the region.

“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.”

The company said in a statement: “Siemens will exit the Russian market due to the Ukraine war. The company has started proceedings to wind down its industrial operations and all industrial business activities.”

The decision has already started to chip at profits. Not only has Siemens’ net income halved to 1.21 billion euros in its quarterly results, missing analysts’ forecasts of 1.73 billion, but sanctions in Russia have also already cost the company €600m.

These hefty losses were driven by impairment and other charges recorded in the Munich firm’s train-making mobility business as a result of sanctions on Russia.

Whilst the Russian market contributes about one percent of Siemens’ annual revenue,  Busch warned that further costs would be incurred, including legal entities, revaluation of financial assets and restructuring costs. The German firm employs around 3,000 people in Russia.

“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 said.

Shares fell nearly five percent this morning.

By City AM

More Top Reads from Oilprice.com:

• Kuwait Follows Saudis In Slashing Oil Prices For Asia
• China’s COVID Lockdowns Force Aramco To Slash Oil Export Prices
• Saudi Energy Minister: Insufficient Investment To Blame For High Fuel Prices