7th Sep 2023 08:35
(Alliance News) - British American Tobacco PLC announced on Thursday it had formally entered into an agreement to sell its Russian and Belarusian businesses following West-led sanctions aimed at punishing Moscow for invading Ukraine.
The London-based cigarettes, tobacco and other nicotine products maker said it remains confident of delivering its full-year guidance, despite turning its back on Russia and Belarus.
For 2023, BAT expects organic constant currency revenue growth of 3%-5%. It estimates adjusted earnings per share growth at mid-single figure, constant currency.
As at June 30, on a constant currency basis, Russia and Belarus accounted for about 2.7% of group revenue, and around 2.5% of group adjusted profit from operations. Group revenue was GBP13.34 billion and group adjusted profit from operations stood at GBP5.85 billion for the six months that ended June 30.
BAT said on Thursday the buyer is a consortium led by members of BAT Russia's management team which, upon completion, will wholly own both businesses.
Post completion of the deal, these businesses will be known as the ITMS Group.
Scores of multinational companies have either exited or announced plans to leave Russia since it launched its invasion of Ukraine on February 24, 2022. The US and other Western allies have slapped Russia with numerous sanctions.
BAT said it expects the transaction will complete within the next month, once certain conditions
have been satisfied. It said it was abandoning its Russian and Belarusian operations to comply with international and local laws.
Upon completion, BAT said it will no longer have a presence in Russia or Belarus, and will receive no financial gain from ongoing sales in these markets.
Back in March 2022, BAT concluded after a review that its ownership of the business in Russia was no longer sustainable in the current environment.
Shares in BAT were 1.3% lower at ZAR615.62 on Thursday morning in Johannesburg. In London, they lost 0.7% to 2,567.00 pence.
By Artwell Dlamini, Alliance News reporter
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