John Revill

ZURICH (Reuters). -Siemens has announced that it will leave the Russian market because of the conflict in Ukraine. It said Thursday that the company had taken a 600m euro ($630 million), and more, hit to its operations during the second quarter.

After the February 24th invasion of Russia, the German technology and industrial group was the latest to report losses. Moscow called it a “special military operations”.

Numerous companies are represented, including brewers Anheuser-Busch InBev (OTC) and Carlsberg(OTC), as well as sportswear manufacturer Adidas (OTC). Renault (EPA:), and many banks have been calculating the costs of Russia’s withdrawal or suspension.

Roland Busch, Siemens’ Chief Executive Officer, described the conflict in his words as “a turning point in history.”

Busch said to reporters, “We as a Company have strongly condemned this war.”

“We are all touched by the conflict as individuals. The tragedy demands that financial calculations be humbled. Nevertheless, like many other companies, we’re feeling the impact on our business.”

Siemens reported that Siemens had incurred 600 millions euros of impairment charges and other charges during the second quarter. These were mostly related to its train-making business, which was affected by sanctions against Russia.

Busch indicated that additional impacts could be expected from other non-cash expenses related to liquidation of legal entities, the revaluation and restructuring of assets.

He stated that “from today’s perspective we foresee more potential risks for net earnings in the low to mid-tripledigit million range although we cannot define a precise timeframe.”

Siemens shares plunged 5% early trades after analysts disappointed with the company’s second-quarter profit.

The Munich firm employs over 3,000 Russian workers. This company is present in Russia since 170 years. The company first traveled to Russia in 1851 for delivery of devices to the telegraph lines between Moscow, St Petersburg.

The contribution of China to Siemens’ annual revenues is now about 1%. Most of Siemens’ business today is involved in maintenance work for high-speed trains.

Busch stated that the sites of Moscow and St Petersburg have been reduced.

Siemens reported second-quarter earnings of 1.21 billion euros ($1.27bn) due to the costs. Analysts had forecasted 1.73bn.

Industrial profit was 1.78 billion euro, down 13% compared to a year ago and missing expectations.

However, demand was strong with orders being 22% higher than on a similar basis and revenues being 7% higher.

It confirmed its full-year outlook with revenue comparable revenue growth between 6% and 8%. A decrease in mobility is expected to be offset by faster growth in digital buildings and factory automation.

Andreas Willi, JP Morgan Analyst, described the results as “mixed orders and industry-leading growth in automation. Also strong cash conversion.”

($1=0.9508 euros)