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Ukraine war impact on Croatian firms hard to predict – poll

Author Annie Tsoneva
Ukraine war impact on Croatian firms hard to predict – poll Podravka

ZAGREB (Croatia), March 1 (SeeNews) - Croatian car parts maker AD Plastik [ZSE:ADPL], food and pharmaceuticals producer Podravka [ZSE:PODR] and port operator Luka Ploce [ZSE:LKPL] find it hard to predict the impact of the Russian invasion of Ukraine on their business, according to a poll of four local listed companies carried out by the Zagreb bourse.

The fourth participant in the poll, civil engineering company Institut IGH [ZSE:IGH], said the operations of its Moscow branch contribute an insignificant portion of its revenue. However, the main bank serving the company's business is the Croatian unit of Russia's Sberbank, which is currently under a moratorium imposed by the Croatian central bank whose outcome it "cannot predict".

The Croatian central bank on Monday imposed a two-day moratorium on local Sberbank following European Central Bank's announcement that Austria-based Sberbank Europe controlled by Russia's Sberbank, and its subsidiaries in Croatia and Slovenia, fail or are going to fail due to worsened liquidity as a result of the reputational impact of Russia's invasion of Ukraine.

“Podravka Group will experience negative consequences of the Russian-Ukrainian crisis, as well as sanctions imposed on Russia. However, the scope and intensity of those consequences cannot be clearly assessed or quantified,” Podravka said in a filing to the bourse late on Monday, on the fourth day of the Russian assault on Ukraine.

The markets of Russia and Ukraine contribute less than 6.5% to Podravka group’s annual sales revenues.

Most of the receivables related to buyers from Russia, incurred until Monday, have been insured.

AD Plastik, which runs two production plants in Russia, said that production in all factories of its group is running smoothly.

“Certain risks are apparent in the business operations of Russian companies, which, given the uncertainties and the accelerated change of circumstances, cannot be precisely quantified,” it said.

The sanctions imposed so far on Russia do not have a direct impact AD Plastic's business, but indirect effects like disruption of logistics flows, weakening of the Russian rouble, and growth of the reference interest rate are noticeable.

Luka Ploce said it has no financial exposure to Russian financial institutions. Last year, shipments of Russian coal contributed less than 20% to its total revenue, and so far in 2022 it has concluded no new transactions related to throughput of Russian coal.

Shares of Podravka traded 0.68% higher at 596 kuna as of Tuesday afternoon on the Zagreb Stock Exchange (ZSE), AD Plastik fell 5.04% to 113 kuna, Luka Ploce was quoted 4.63% lower and Institut IGH lost 3.43%, bourse data showed.

The main equity index of the ZSE, the CROBEX, has lost 5.5% since the beginning of the war in Ukraine on February 24. It stood at 1,985.32 points intraday on Tuesday afternoon, down 0.72% from the closing value on Monday.

(1 euro=7.569 kuna)

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