Imperial Brands has started talks to transfer its Russian business to a local third party following the Ukraine crisis, the tobacco company noted on Tuesday, while flagging a small hit to annual revenue and profit due to the exit.
The maker of Winston cigarettes and Backwoods cigars said it would continue to pay its 1,000 staff in Russia until the transfer of its business is complete.
Last week the company announced it will scale down manufacturing operations in the country following Moscow's invasion of Ukraine.
The London-listed tobacco group suspended operations in Russia last week, following international sanctions against the country after its invasion of Ukraine.
Imperial Brands, whose operations in Russia and Ukraine accounted for just 2% of its net revenue last year, forecast revenue growth in 2022 to be flat to up 1%.
It had previously expected a growth rate of about 1.4% on constant currency basis.
"While there will be some ongoing costs related to the suspension in Ukraine, we expect a relatively small impact on our constant currency adjusted operating profit, reflecting the limited profit contribution of the two markets," Imperial noted in a statement.
Rival British American Tobacco last week also cut its outlook as the Camel cigarette maker plans to leave Russia.
The company, which has 2,500 workers in Russia, also added it was 'scaling our business activities appropriate to the current situation, including rationalising our marketing activities.'