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SAS to lose profits over Spanair bankruptcy

Scandinavian airline SAS warned late Friday its former subsidiary Spanair's decision to file for bankruptcy would hit its results to the tune of 1.7 billion kronor ($252 million).

“Due to the situation in Spanair, SAS has decided to make a write down of the outstanding debt and receivables on Spanair (which will) affect the SAS Group’s result as a non-recurring item and equity negatively by 1.7 billion kronor in total,” the Scandinavian airline said in a statement.

The company said however that the effect on its “liquid assets” would amount to between 200 and 300 million kronor.

SAS, which sold off most of its once wholly owned subsidiary Spanair in 2009, said it still owned 10.9 percent of the Spanish airline.

But it stressed “the value of these shares has already been written down and are booked at zero value.”

SAS said it would be a creditor in Spanair’s bankruptcy process, and pointed to the 10.6 billion kronor “financial preparedness” it listed in its third quarter earnings report. The write-down would “have a limited effect on SAS liquidity”, it said.

SAS, which posted a slim profit in the third quarter, is scheduled to announce its results for the fourth quarter and full-year 2011 on February 8.

The company said Friday that, not including the write-down and other non-recurring items, it expected the full year result to be positive.

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ABB

Swedish engineering giant ABB to quit Russia over Ukraine

Swedish-Swiss engineering giant ABB said on Thursday it will quit Russia as a result of the war in Ukraine and the related international sanctions against Moscow.

Swedish engineering giant ABB to quit Russia over Ukraine

Russia accounts for only one or two percent of ABB’s overall annual turnover and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

“ABB has decided to exit the Russian market due to the ongoing war in Ukraine and impact of related international sanctions,” the group said in a statement.

Russia accounts for only one or two percent of ABB’s overall annual sales and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

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A large number of major western companies have pulled out of Russia since Moscow invaded its pro-Western neighbour on February 24.

“When the war broke out, ABB stopped taking new orders in Russia,” the group said.

At the same time, it said it continued to fulfill “a small number of existing contractual obligations with local customers, in compliance with applicable sanctions.”

Most of ABB’s dedicated Russian workforce has been on leave since March “and the company will do its best to support them as it realigns its operations in a controlled manner,” it said.

ABB has about 750 people in Russia and two production sites in the country located in the Moscow region and Lipetsk, as well as several service centres.

Separately, the group said that its net profit fell by 50 percent to $379 million in the second quarter, largely as a result of one-off charges, but also the cost of withdrawing from Russia.

Sales, on the other hand, grew by six percent to $7.2 billion in the period from April to June, ABB said.

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