Jacob Gronholt Pedersen and Nikolajskydsgaard

COPENHAGEN, (Reuters) – Carlsberg, Western brewer that is most vulnerable to Russian markets, said Thursday that it expects a write-down of approximately 9.5 billion Danish Crowns ($1.39 Billion) as a result.

This company has 8 breweries in Russia and 8.400 workers. It announced late last month it will sell the business. The announcement joins a wave of Western businesses fleeing Ukraine since Russia invaded Ukraine.

Carlsberg said that while the writedown didn’t take into consideration any offers from the outside, it was still subject to “very high volatility and uncertainty”. He also stated that the sale might take as long as 12 months.

Heineken, the Dutch competitor to Heineken (OTC) also stated it would exit Russia. Last month it said that it expects to file related charges in excess of 400 million euros (437 million).

According to its annual report, Carlsberg’s non-current Russian assets were worth 19.2 Billion Danish Crowns at the close of 2021.

Per Fogh, a Sydbank analyst said that the writedown was not as dire as people might fear.

They have determined the fair value for the asset at the moment, although it is still open to question what the potential buyer might pay.

Carlsberg made 10% of Russia’s revenue last year and earned 6% of its operating profits in Russia. It took complete control of Baltika breweries in 2008 when it generated the full 10 percent of that revenue.

It has been struggling to sell in an economy hit by sanctions and is now under Russian regulation.

Carlsberg’s operating profit growth projections for 2012 were lowered to between plus 5% and minus 5%, in contrast with its previous guidance of zero and 7%.

Carlsberg shares lost almost a quarter their value over the past year but gained 1% in 1026 GMT.

It also expects 300 million Ukraine impairment charges and goodwill writingdowns of 700 millions crowns for Central-Eastern Europe. 

($1 = 6.8196 Danish crowns)