31 Jul 2023 11:55

Heineken says more challenging for businesses to exit Russia

MOSCOW. July 31 (Interfax) - Heineken said it was becoming more challenging for businesses to exit Russia.

"Recent developments in Russia demonstrate that it is even more challenging for businesses to secure exit approval. In April we announced that an application had been submitted for approval [of the sale of assets] and we continue to work hard to secure a transaction," the brewer said in a half-year report.

Heineken recognized an impairment loss from the Russia business of 201 million euros to date, including 88 million euros in December 2022 and 113 million euros in June 2023.

The company said in March last year that it was suspending new investments and exports to Russia and ending production, sales and advertising of its flagship Heineken brand. In addition, the company waived income from Russian business - all payments, royalties and dividends were suspended.

Baltika Breweries, which belonged to Carlsberg, was transferred to the temporary administration of the Federal Property Management Agency, by Russian presidential decree in mid-July. Carlsberg said in June that it had signed an agreement to sell the Russian company, but it did not name the buyer.

Russian President Vladimir Putin at a press conference on Saturday described the transfer to state management of the assets of some companies from unfriendly countries as special cases. He said no new cases like this were being planned.

Heineken's Russian subsidiary, LLC United Heineken Breweries, owns seven breweries and is one of Russia's top three beer makers.

Its net profit grew to 2.606 billion rubles in 2022 from 878.9 million in 2021. Sales revenue rose to 41.978 billion rubles from 36.924 billion rubles.

The Kommersant newspaper has quoted market participants as saying the company raised output 0.4% to 93.65 million decaliters in 2022.

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