Greek companies under pressure in Russia – Ukraine

After 89 days of war, the blows to the Greek companies that had export, trade or even productive activity in Russia and Ukraine are multiplying, while at the same time the crisis in the supply chain puts pressure on companies which, although not directly exposed to these areas, are beginning to experience the era of great shortages.

All scenarios remain open for Coca-Cola HBC‘s presence in Russia, whose management said it was “evaluating all options” and “working closely” with The Coca-Cola Company to implement the US soft drinks giant’s decision, received on March 8, to stop the production and sale in the country of Coca-Cola and the other brands of the company, such as Fanta, Coke Zero and Schweppes.

Having stopped ordering concentrated raw materials, the company says it maintains a much smaller presence in the Russian market, focusing on local brands. Among other things, Coca-Cola HBC produces Dobry, Rich and Moya juices in Russia. Its decisions on its Russian future will be announced in the near future, as well as what will be the implications for its financial results that will result from these decisions.

The company, which, with the exception of Russia and Ukraine, recorded an organic revenue growth of 25.9% in the first quarter of the year, may be able to give guidance again for 2022 after the end of the first half, said Zoran Bogdanovic, CEO of Coca-Cola HBC, informing analysts.

Uncertainty for Frigoglass

Frigoglass is also in the process of considering its strategic options, with Nikos Mamoulis, CEO of the company, stating that the current geopolitical environment has caused significant uncertainty regarding the operational and financial performance of the year.

The management of the company stated that the demand in Western Europe continues to be subject to restrictions due to the significant difficulties in the transportation of finished and semi-finished products from Russia as well as the difficulties in supplying raw materials for its factory in the same country. Following a devastating fire at its plant in Timisoara, Romania last June, the Russian plant is Frigoglass’s main commercial refrigeration plant in Europe. The plant in Romania is expected to be operational in early 2023.

“Out of stock” headache for Fourlis

Even those unrelated to the war zone, such as the Fourlis group, are experiencing the effects of Russia’s invasion of Ukraine. The shortages in IKEA stores, which were estimated at 5% -6% due to the pandemic, have now almost tripled due to the war, reaching 12% -15%. The delays in the replenishment of the products and the intensity of the inflationary pressures result in the performance of the first quarter, although positive, to be lower than those set by the management internally. The target for the first quarter of this year was set 10% higher. It is characteristic that the head of the group, Vassilis Fourlis, estimates that from the deficiencies on the shelves of the Swedish chain stores in Greece and in the other markets where the Swedish furniture chain has the rights, it loses sales of 15% -20% in the home items category.

Creta Plastics

A warning for declining profitability, as a result of the general increase in raw material prices as well as energy and transport costs, caused by the Russian invasion of Ukraine and Western sanctions, was given by the publication of the annual Financial Report for 2021 by Creta Plastics.

It is estimated that will not be possible to pass on, in full, the above cost increases in selling prices. Moreover, the large increase in prices has negatively affected demand in some markets, resulting in some reduction in sales volume, it is noted. The group’s plant in Russia operates but with reduced production and sales, due to the effects of the war on demand and the difficulties of securing imported raw materials.

Sarantis is reopening in Ukraine

Having the “luck” of the factory in Ukraine being located on the west side of the country, Sarantis continues to count on revenues from this market, which is the third largest for the group. Ergopack’s plant in Kaniv, Ukraine, has been operating again for a few weeks now, despite the challenges and “…if Mr. Putin wants it,” Costas Rozakeas, the group’s deputy chief executive and chief financial officer, told analysts. Sarantis will maintain in 2022 gross profit margins at the levels of 2021.