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Swedish engineering giant ABB to quit Russia over Ukraine

Swedish-Swiss engineering giant ABB said on Thursday it will quit Russia as a result of the war in Ukraine and the related international sanctions against Moscow.

Swedish engineering giant ABB to quit Russia over Ukraine
A worker at Hitachi ABB Powergrids in Ludvika. Photo: Fredrik Sandberg / TT

Russia accounts for only one or two percent of ABB’s overall annual turnover and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

“ABB has decided to exit the Russian market due to the ongoing war in Ukraine and impact of related international sanctions,” the group said in a statement.

Russia accounts for only one or two percent of ABB’s overall annual sales and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

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A large number of major western companies have pulled out of Russia since Moscow invaded its pro-Western neighbour on February 24.

“When the war broke out, ABB stopped taking new orders in Russia,” the group said.

At the same time, it said it continued to fulfill “a small number of existing contractual obligations with local customers, in compliance with applicable sanctions.”

Most of ABB’s dedicated Russian workforce has been on leave since March “and the company will do its best to support them as it realigns its operations in a controlled manner,” it said.

ABB has about 750 people in Russia and two production sites in the country located in the Moscow region and Lipetsk, as well as several service centres.

Separately, the group said that its net profit fell by 50 percent to $379 million in the second quarter, largely as a result of one-off charges, but also the cost of withdrawing from Russia.

Sales, on the other hand, grew by six percent to $7.2 billion in the period from April to June, ABB said.

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BUSINESS

Swedish retailer H&M sees profits slump after Russia exit

Swedish fashion retailer H&M reported a sizeable drop in third-quarter profit on Thursday following its decision to leave the Russian market.

Swedish retailer H&M sees profits slump after Russia exit

The world’s number two clothing group is among a slew of Western companies that have exited Russia following Moscow’s invasion of Ukraine.

H&M paused all sales in the country in March and announced in July that it would wind down operations, although it would reopen stores for “a limited period of time” to offload its remaining inventory.

The company said Thursday its net profit fell to 531 million kronor ($47 million) in the third quarter, down 89 percent from the same period last year. “The third quarter has largely been impacted by our decision to pause sales and then wind down the business in Russia,” chief executive Helena Helmersson said in a statement.

The group said in its earnings statement that it would launch cost-cutting measures that would result in savings totalling two billion kronor.

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