By Ed Frankl

 

Shares in Siemens AG fell after the company said it would exit the Russian market after 170 years, taking a roughly 600 million-euro ($630.9 million) charge in its second-quarter earnings.

Shares at 0740 GMT were down 7.1% at EUR108.56.

The German industrial company in March put on hold all new business in Russia, which in 2021 generated around 1% of the company's revenue.

It meant Siemens's net profit in the January-March period was affected as a result, declining on year to EUR1.21 billion from EUR2.39 billion a year earlier.

That was below expectations of EUR1.73 billion, according to analysts' estimates provided by the company, although without the impairment, profits would have come in line, Citi analyst Martin Wilkie said in a research note.

In comments to the media, Chief Executive Roland Busch said Siemens foresees further risks to net income in the "low- to mid-triple-digit million range" from consequences of the Russia exit, though he couldn't give an exact time frame.

Recent Omicron coronavirus outbreaks and lockdowns in the Chinese cities of Shanghai and Shenzhen also pose a risk for the third quarter, Mr. Busch said.

So far, the Munich-based company said it has avoided major disruptions from increased supply-chain risks associated with logistics issues, as well as shortages of electronic components and raw materials.

 

Write to Ed Frankl at edward.frankl@dowjones.com

 

(END) Dow Jones Newswires

May 12, 2022 04:06 ET (08:06 GMT)

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