Siemens brings into light great Russian exist losses
Date
12/20/2023 4:04:48 AM
(MENAFN) In a significant financial revelation, German multinational conglomerate Siemens disclosed losses amounting to EUR600 million (USD650 million) resulting from its strategic decision to exit the Russian market. The move, influenced by Western pressure and sanctions related to the conflict in Ukraine, was outlined in the company's fiscal year 2023 report, where Siemens cited the winding down of business activities in Russia a year earlier as a key factor that burdened prior-year profits with EUR0.6 billion in impairments and other charges.
The brunt of these losses was reportedly borne by Siemens Mobility, a subsidiary of the conglomerate, which had established a network of depots in Russia for the maintenance and repair of the Sapsan and Lastochka trains in collaboration with Russian Railways. Siemens subsidiaries in Russia were also engaged in the production of frequency converters and traction motors.
This announcement follows recent reports in German media revealing that Siemens, alongside corporate giants like Volkswagen Bank, has sought compensation from the German government for financial setbacks incurred due to their withdrawal from the Russian market. These companies are reportedly exploring the utilization of the German government's guarantee mechanism to mitigate the financial impact of their exit.
Siemens, a company with a long history in Russia dating back to 1852 when it was involved in laying telegraph lines, officially announced its exit plans in May 2022. The decision came under pressure from the German government following the imposition of Ukraine-related sanctions by the European Union against Russia. As part of its withdrawal strategy, Siemens declared an end to supplies to both Russia and Belarus and subsequently suspended a contract with Russian Railways for the delivery of Sapsan trains.
Oleg Belozerov, the head of Russian Railways, commented on Siemens' decision, noting that despite the withdrawal, the German company would continue to maintain its trains. The substantial financial losses incurred by Siemens serve as a testament to the complex intersection of geopolitics and corporate strategy, underscoring the challenges faced by multinational entities navigating the intricate landscape of international trade and diplomatic relations.
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