# Coca-Cola HBC flags one-time $195 million hit from Russian operations
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-11
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Coca-Cola HBC AG Takes 190 Million Euro Hit from Russian
Meta Description: Coca-Cola HBC AG announces a one-time hit of 190 million euros in the first half due to exiting the Russian market, surpassing profit expectations.
URL: https://financedigest.com/coca-cola-hbc-flags-one-time-195-million-hit-from-russian-operationshtml

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By Amna Karimi

(Reuters) -Coca-Cola HBC AG said on Thursday it took a one-time hit of 190 million euros ($195.4 million) in the first half from costs related to its Russian business after it stopped selling Coke and other Coca-Cola Co products in the country.

The soft drinks bottler also reinstated its forecast for the year, expecting annual comparable operating profit between 740 million and 820 million euros, above market expectations.

Its shares rose 6% to 2,100 pence.

HBC is one of Coca-Cola’s many bottlers worldwide and holds local Coca-Cola franchises to [bottle and sell drinks](https://www.financedigest.com/russias-ochakovo-ups-soft-drink-bottling-capacity-as-western-rivals-leave.html "Russia’s Ochakovo ups soft drink bottling capacity as Western rivals leave") produced by the U.S. beverage giant. Coca-Cola holds a more than 20% stake in HBC.

Atlanta-based Coca-Cola Co in March joined an exodus of companies from Russia in the wake of the Ukraine invasion, which Moscow [terms a “special military operation”](https://www.financedigest.com/ubisoft-vows-to-get-back-to-operating-margin-above-20-in-medium-term.html "Ubisoft vows to get back to operating margin above 20% in medium term").

HBC said it has depleted its stock and stopped producing and [selling Coca-Cola products in Russia](https://www.financedigest.com/mcdonalds-to-sell-russia-restaurants-to-local-operator-rebrand.html "McDonald’s to sell Russia restaurants to local operator, rebrand"), once its largest market, and would now have a smaller presence there.

Chief Executive Officer Zoran Bogdanovic told Reuters that local brands like Dobry, Rich and Moya Semya remain [profitable and are self-sufficient as it does not partner with Coca-Cola](https://www.financedigest.com/coca-cola-hbcs-annual-profit-beats-warns-of-price-increases.html "Coca-Cola HBC’s annual profit beats, warns of price increases") Co for any of its sales in the Russian market.

HBC’s net sales revenue grew nearly 30% for the six months to July 1, [beating a company-compiled consensus of analysts estimate](https://www.financedigest.com/ibm-beats-first-quarter-profit-estimates-signals-demand-holding-up.html "IBM beats first-quarter profit estimates, signals demand holding up") of 3.95 billion euros, as emerging markets remained strong. Comparable operating [profit also beat expectations](https://www.financedigest.com/portuguese-airline-tap-swings-to-profit-earlier-than-expected.html "Portuguese airline TAP swings to profit earlier than expected"), but net profit came in below estimates due to the charge in the first half.

It expects financial charges of about 82 [million euros](https://www.financedigest.com/germanys-merck-to-invest-300-million-euros-in-us-gas-plant.html "Germany’s Merck to invest 300 million euros in US gas plant") in the second-half related to its Russian operations.

Bogdanovic said the company has had to lay off [employees in Russia as it downsized its business](https://www.financedigest.com/why-investing-in-employee-health-can-be-good-for-business.html "Why investing in employee health can be good for business") there.

Switzerland-headquartered HBC’s diverse portfolio ranges from [alcoholic beverages](https://www.financedigest.com/the-rtd-alcoholic-beverages-market-to-grow-beyond-the-odds-of-mediocrity.html "The RTD Alcoholic Beverages Market To Grow Beyond The Odds Of Mediocrity") such as The Macallan and Jack Daniel’s to carbonated drinks Sprite and Monster Energy to Bambi biscuits and wafers.

($1 = 0.9726 euros)

(Reporting by Amna Karimi in Bengaluru; editing by Uttaresh.V and Emelia Sithole-Matarise)


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