The German industrial giant took a €600 million hit, according to its annual report
© Global Look Press / Photoagency Interpress
German multinational conglomerate Siemens has revealed it suffered losses of €600 million ($650 million) as a result of its decision to leave the Russian market amid Western pressure and Ukraine-related sanctions on Moscow.
In its report for the fiscal year 2023, the company announced that “the winding down of business activities in Russia a year earlier burdened prior-year profit by €0.6 billion in impairments and other charges.”
The losses were reportedly sustained by the group’s Siemens Mobility subsidiary. The conglomerate had created a network of depots in Russia for the maintenance and repair of the Sapsan and Lastochka trains in cooperation with Russian Railways. Its subsidiaries produced frequency converters and traction motors.
Earlier this month, German media reported that Siemens, Volkswagen Bank, and other corporate giants had requested compensation from Berlin for financial losses related to their withdrawals from Russia. The companies are reportedly planning to use the German government’s guarantee mechanism.
Siemens had been operating in Russia since 1852, when the company was engaged in laying telegraph lines. The group announced its exit plans in May 2022, under pressure from the German government after the EU imposed Ukraine-related sanctions against Russia. Siemens had previously said it would cease supplies to Russia and Belarus, and later suspended a contract with Russian Railways for the delivery of Sapsan trains.
Commenting on the decision, the head of Russian Railways, Oleg Belozerov, noted that the German company would continue to maintain its trains.
Earlier this year, the Arbitration Court of Moscow ruled that Siemens Mobility’s refusal to honor its contract with Russian Railways was illegal, and ordered the German company to deliver high-speed trains.
The chairperson of the Federation Council of the Russian Federation, Valentina Matvienko, had previously stated that Siemens could be replaced by other corporations, including Russia’s Uralvagonzavod and enterprises of the Sinara group.
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