12 May 2022 09:22

EPAM mulls selling or liquidating Russian assets

MOSCOW. May 12 (Interfax) - EPAM Systems Inc. is considering various options for its strategy regarding its Russian assets, including their possible sale or liquidation, the software company said.

EPAM announced in April that it had decided to suspend operations in Russia due to the military operation in Ukraine. The company said in its financial statement that it expects to conclude this process by the end of the second quarter of 2022.

The company also expects that it might incur significant additional costs in the second quarter related to the suspension of its business in Russia, including, but not limited to expenditures on restructuring and losses from sales.

Given the curtailment of its business in Russia, the company has slashed its long-term forecast for cash flow from operations in Russia.

In the first quarter of 2022, EPAM reported impairment charges for assets in Russia, including $15.1 million associated with property and equipment, $3.8 million associated with right-of-use assets and $0.7 million associated with goodwill. These charges are included in selling, general and administrative expenses in the company's financial statement.

The company still plans to continue to work in Belarus. A substantial number of EPAM employees have already moved from Russia and Belarus to other countries, and the company expects significantly more employees to relocate out of these countries.

EPAM's selling, general and administrative expenses jumped 74.0% year-on-year to $237.3 million in the first quarter, including $18.7 million in expenditures related to relocation of employees.