Weir Group has revealed it will wind down its business in Russia this year following the country’s invasion of Ukraine, warning that it could result in an “exceptional write-off” in 2022.
The Glasgow-based engineering giant, which employs 267 people in Russia, said the move will hit underlying profits by up to £20 million this year.
Shares were down more than five per cent in early trading.
The decision to exit Russia comes after Weir said in early March that it had suspended operations in Ukraine and Russia following the start of the Russian invasion.
Weir said this morning: “In March the group announced the full suspension of business and operations in Russia. Given the evolution of the situation in Ukraine and Russia, the group has since taken the decision to wind down its Russian business during 2022. The loss of sales in 2022 is expected to have an impact on group underlying operating profit of up to £20m in the year.
"The group’s assets in Russia comprise primarily of inventory and receivables and represent c.2% of the group’s net assets. While a review of the recoverability remains ongoing, this could result in an exceptional write-off during 2022.”
Shortly after the invasion began, Weir chief executive Jon Stanton told The Herald in early March that the company had moved its 30 employees in Ukraine to safety. Weir stated that there was “significant uncertainty” over its operations in both Ukraine and Russia while decisions were taken on the future of the divisions.
Weir supports the iron ore mining industries in the two countries, and is also involved in copper, gold and diamond mining in Siberia.
The company, which this morning reported strong order momentum for the first quarter amid "highly favourable" conditions in mining markets, said it is focused on the welfare of its staff in Ukraine and Russia.
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