May 7 - Brewer Carlsberg and French bank Societe Generale have said the Ukraine crisis has impacted their results.European shares fell as a result. Hayley Platt asks if they will be the first of many western companies to suffer.
If proof was needed that the Ukraine crisis is hurting some western companies Societe Generale has provided it. The French bank - which owns Rosbank - has taken a 730 million dollar goodwill writedown on its Russian asset. It blamed heightened uncertainty as well as the decline in the Russian rouble, although it still expects satisfactiory returns in 2016. Overall it's first quarter net income fell by 13 percent, despite a 14 percent rise increase in revenue. IG's Alastair McCaig. SOUNDBITE: Alastair McCaig, market analyst, IG, saying (English): "To an extent this will be used by many companies as a tool for explaining any difficult or poor figures that come their way but there will be a number of different businesses that will have exposure." Danish drinks company Carlsberg is also an indirect casualty. It says a weak Russian economy and a ban on alcohol sales from street kiosks led to an 8% slump in the beer market. It's the market leader in Russia and is now predicting a bigger decline than previous guidance. SOUNDBITE: Alastair McCraig, market analyst, IG, saying (English): "The other issue of course to bear in mind is the currency exposure that these companies will have to Russia. Any profits that might be derived inside there. The Russia rouble so far this year is down about sixteen and three quarter percent against the U.S. dollar and certainly at some point in time has been down as much as 20 percent." The results were reflected in weak trading in European shares as markets opened An unexpected near 3% fall in industrial orders in Germany - one of Russia's biggest trading partners - didn't help. SOUNDBITE: Alastair McCraig, market analyst, IG, saying (English): "There will obviously be increased nervousness as far as the business community are concerned as far as future orders might be concerned as well. But I think one of the bigger culprits here again might well be the currency markets. We've seen the euro continue to strenthen, specifically against the U.S. dollar." There's no end in sight yet to the conflict that's tearing Ukraine and its economy apart. And Societe Generale is unlikely to be the last major western firm to be wounded by the crisis.