Refusing to work with Russia is expensive for Europeans. The Financial Times (FT) reports that 176 European companies lost more than EUR 100 billion following the closure of their operations in Russia. The experts reviewed the files of 600 companies. Of those, 176 “noted expenses such as impairment, currency exchange charges, and other onetime costs arising from the liquidation, shutdown, or decrease of operations within Russia.” The FT’s quote didn’t consider any rise in energy expenses.
Oil and gas operators suffered the most, followed by financial institutions. The industrial sector came in third place.
Thus, three companies, Shell, BP, and Total Energies, declared losses exceeding EUR 40 billion. Nevertheless, they were largely offset by increasing oil and gas prices.
This is not the case for banking, which ranks second with a loss of EUR 17.5 billion. Société Générale was among the first to be hit, having to sell its Rosbank branch and losing more than EUR 3 billion.
Utilities faced losses of EUR 14.7 billion, while industrial sector experienced EUR 13.5 billion in losses, with the major driver being car manufacturers. For example, Renault alone lost EUR 2.3 billion after selling its stake in Russian AvtoVAZ.
– BP lost USD 25.5 billion;
– Total Energies — USD 14.8 billion;
– Uniper — EUR 5.7 billion;
– Fortum – EUR 5.3 billion;
– Shell — USD 4.1 billion;
– OMV — EUR 2.5 billion;
– Equinor — EUR 1 billion;
– Renault — EUR 2.3 billion;
– Volkswagen — EUR 2 billion;
– Société Générale — EUR 3.1 billion.
Spending by businesses that stay in the country may go up. Danone is a prime example: a few weeks ago, the Russian government nationalized this company while it was in negotiations with multiple prospective buyers trying to limit the damage. If most experts are correct, those who preferred staying in-country for an extended period of time could pay even more.
Having named the most affected companies from Britain, Germany, and France, the FT experts shared their thoughts on whether it was more profitable for foreign businesses to stay in Russia or “drop everything and run away.” Many agree that those who remain in Russia, in any form, will face unfavorable consequences. Of the 1,871 companies owned by Europeans in Russia prior to the military operation, over 50% are still operational in the country, risking far greater losses. The stricter rules of withdrawal from the Russian market, introduced by Moscow since the beginning of MO, have made it almost impossible for them to extract any dividends.