European companies have lost €100 billion due to operations in russia – FT

Europe's largest companies have suffered €100 billion in direct losses in russia since the beginning of the full-scale invasion, according to the Financial Times.

The publication analysed reports from 600 companies, of which 176 recorded asset impairments, foreign exchange-related charges and other one-off expenses as a result of the sale, closure or reduction of russian businesses. More than half of the affected companies operate in the oil and gas and energy sectors.

FT emphasises that the overall loss figure does not include indirect macroeconomic consequences of the war, such as the rising cost of energy and goods. The war has also delivered a profit boost for oil and gas groups as well as defence companies.

Only three oil and gas groups: BP, Shell, and TotalEnergies – reported combined losses of €40.6 billion. However, the losses were later offset by much higher oil and gas prices, helping these groups make an unprecedented total profit of around €95 billion.

Companies providing utility services lost €14.7 billion, while industrial companies, including car manufacturers, suffered €13.6 billion losses. Financial companies, including banks, insurance, and investment companies, recorded write-offs and other expenses amounting to €17.5 billion.

KSE researcher Anna Vlasiuk notes that groups still operating in russia are taking risks. According to her, stricter exit rules imposed by moscow since the start of the war have made expropriation likely and obtaining dividends from these enterprises almost impossible.

Background. russian dictator putin has recently nationalised russia's largest dairy company Danone Russia and the Baltika brewery, owned by Danish Carlsberg. This is not the first case during russia's invasion of Ukraine, when russia seizes billion-dollar russian assets from foreigners.

Moreover, the nationalisation actually took place earlier, last autumn when putin prohibited companies from selling their russian assets without the permission of the russian government.

Officially, the nationalisation mechanism in russia was put into action at the end of April by putin's decree and was first applied to the largest foreign investors in russian electricity – German Uniper and Finnish Fortum. The next day after putin's decree was published, the management of the russian subsidiaries of both companies was replaced by people from the orbit of the head of Rosneft Igor Sechin. Fortum announced that it was filing for compensation for several billion euros in international arbitration.