Which Western Companies Took Biggest Hit From Break With Russia?

Complying with the West’s sanctions targeting Russia has cost over 200 foreign companies more than €100 billion ($107,5bln) in writedowns and lost revenue.

That is according to a Reuters analysis of company filings and statements and research from the Yale School of Management.

The volume of losses racked up by companies that left Russia increased by one third since the last such tally in August 2023.

The previous analysis showed that companies ranging from fast food chains to carmakers, technology and pharmaceutical firms lost over $80 billion while exiting the Russian market.

Sputnik took a look at some of the companies that took the biggest hit from their break with Russia.

ExxonMobil announced its intention to withdraw from the Sakhalin-1 project in Russia's Far East in March 2022, declaring force majeure in April and significantly reducing oil and gas production.

On August 3, the company announced that it was planning to transfer its operating activities on the project to another legal entity in the wake of the Ukraine crisis. Subsequently, President Vladimir Putin issued an instruction to establish a new national operator for the oil and gas project to replace ExxonMobil's subsidiary, Exxon Neftegas Limited, which owned 30 percent of the shares.

On October 17, 2022, the US energy giant fully exited Russia after Putin ordered the effective expropriation of Sakhalin 1 assets from ExxonMobil-led operator Exxon Neftegaz after Western companies pulled out of their Russian investments. Equity interest was transferred to Russian registered operator Sakhalinmorneftegaz-Shelf.

When ExxonMobil ceased operations, it abandoned assets estimated to be worth around $4 billion at the end of 2021.

Shell disclosed in April 2022 that it would be writing off between $4 and $5 billion in the value of its assets after leaving Russia. The British-based multinational oil and gas company had previously estimated that Russia write-downs would reach $3.4 billion. When Shell closed its Russia-based operations, it exited joint ventures with the country’s state-owned gas company Gazprom and ending its then-involvement in the Nord Stream 2 natural-gas pipeline project.

Another British oil and gas 'supermajor', BP dumped a near-20 percent stake in Russian oil producer Rosneft in 2022. At the time it warned that potential losses could amount to as much as $25 billion. In May of that year BP announced that it had lost more than $20 billion in the first quarter of 2022, mostly due its divestment from the Russian energy giant.

"Loss attributable to BP shareholders in the first quarter was $20.4 billion compared with a profit of $4.7 billion in the first quarter of 2021," BP said in its 2022 first-quarter financial report, adding that its decision to exit its 19.75 percent shareholding in Rosneft and other joint projects with Rosneft in Russia resulted in the loss of $1.5 billion and $24 billion in pre-tax charges.

US computer and consumer electronics company Apple closed its headquarters in the country in March 2022. The technology firm was estimated to have lost about $3 million a day in iPhone sales, according to media reports at the time.

Apple also reportedly paid a 1.2 billion-ruble ($13.6 million) antitrust fine to the Russian Federation treasury. In the case with Kaspersky Lab the US tech giant was faulted for abusing its dominant position in the mobile application market. Earlier, the Arbitration Court of the Moscow District, following two lower instances, confirmed the legality of the decision of the Russian Federal Antimonopoly Service (FAS).

French automaker Renault estimated losses from leaving the Russian market at $2.3 billion in May 2022.

Renault had made the decision to sell all its shares in Renault Russia to Moscow City entity and its 67.69 percent majority stake in AVTOVAZ to NAMI (the Central Institute for Research and Development of Automobiles and Engines) — reportedly for just one ruble last year — although reportedly a six-year option to buy it back. Renault’s Russian sales through AVTOVAZ reportedly represented 12 percent of its revenue.

The German car giantr stopped making cars in Russia in 2022. It then sold its assembly plant in Kaluga, the company’s components and leasing divisions to a Moscow-based dealership called Avilon in May 2023. Volkswagen spent €774 million ($835m) building the Kaluga plant, however, Avilon paid about €125 million ($135 million) for it, according to Russia media.

The costs of the German automaker Mercedes-Benz from the suspension of business in Russia in the first half of 2022 reportedly reached €709 million ($706m). In the passenger car and truck segemnts, losses reached €658 million ($710m) and €51 million ($55m) respectively, the company's financial statements detailed. The firm first stopped manufacturing in and exporting to Russia in early March 2022. It fully withdrew from the Russian market and sold shares in its subsidiaries to a local investor in 2023.

The Japanese multinational automobile manufacturer took an estimated $700mln loss in handing over its business on October 2022 to a state-owned entity — for a nominal price of just €1($0.97).

Russia was one of the fast-food giant’s largest international markets. The company reportedly directly owned 84 percent of its 847 restaurants in the country. Its exit from Russia in April 2022 triggered an overall revenue drop by three percent to $5.8 billion in the second quarter of 2022. Profits fell by nearly half due to a $1.2 billion charge related to the sale of the Russian business, the company stated.

McDonald's estimated financial loss after leaving Russia was purportedly about $50 million monthly, stemming from operational costs, including continuing to pay staff, leases, supply chain costs and other expenses. The chain was later bought by Russian businessman Alexander Govor for a "symbolic amount" and rebranded under the name "Vkusno i Tochka."

The multinational automotive manufacturing corporation suspended its operations in April 2022. A Stellantis spokesperson later told Reuters it had “lost control of its entities in Russia” at the start of 2024, recognizing a loss of €144 million ($155.75 million), including €87 million ($94m) of cash and cash equivalents. Stellantis had a Russian factory in Kaluga, established in 2008 as a joint partnership between Citroen and Peugeot.

The UK company ceased its business operations in Russia in March 2022. Previously, the finance and payments firm reportedly generated revenue in the country of $425 million.

The Dutch brewer announced plans to exit its Russian business on March 28. In Russia, the Heineken concern produced beer under the brands 'Three Bears', 'Zhigulevskoye' and Amstel. It had estimated its assets in Russia at €475 million (over $489 million). Heineken completed its exit from the country by selling its operations there to Russia's Arnest Group for a token one euro in 2023. The company had announced that as a result of exiting Russia, it expected “cumulative non-cash exceptional losses amounting to €300m ($323m).”

When the Ukraine crisis escalated, the Danish brewer first suspended production of beer under its brand in Russia, and then announced a halt to investments and exports to the country. In October 2023 it announced it was in the process of selling its Baltika Breweries subsidiary before management was taken over by the Russian state in July, 2023. All shares of the Russian-based breweries, 100 percent-owned by foreign companies, were transferred to the temporary control of the Russian Federal Agency for State Property Management. Carlsberg reportedly took a 9.9 billion Danish crown ($1.41 billion) write-down on Baltika in 2022.

The French yoghurt maker said on March 24 this year that it had received Russian regulatory approvals needed to sell its Russian business to Vamin R LLC. Danone estimated losses from the deal at €1.2 billion (about $1.3bln). In October 2022, Danone announced that it had planned to transfer the effective control of its "Essential Dairy and Planted-based" business in Russia and deconsolidate its operations in the country.

In July 2023, Russian President Vladimir Putin signed a decree that transfers foreign shares of Danone Russia to the temporary management of the Russian Federal Agency for State Property Management. In line with the decree, the agency took control of foreign assets of the Russian subsidiary.