JB Foods expects its business in Russia to be negatively impacted in the short term due to various factors such as the massive devaluation of the Russian rouble as well as supply chain disruption.
In a business update, JB Foods said it is actively assessing the conflict situation in Russia and Ukraine and would continue to exercise caution as well as adopt remedial measures to mitigate its impact.
While JB Foods does not have any physical assets situated in Russia and Ukraine, both countries jointly accounted for about 17% of its 2021 revenue.
For the year 2022 — based on actual shipments delivered to date and forward orders on hand, the revenue contribution is expected to be about 10% of the group. Of which, the remaining undelivered contracts for year 2022 is about 7% of the JB Foods’ 2022 revenue target.
Despite the current raft of sanctions imposed in Russia, essential industries such as food and beverages that JB Foods operates in are not included in the restrictions and are unlikely to face immediate demand destruction, the company highlighted.
“In Ukraine, the group is concerned for the safety and well-being of our agent and customers. The exposure relating to the outstanding receivables is not expected to have significant impact to the group’s financial performance,” the company said.
See also: Sembcorp issues $350 mil of guaranteed notes due 2036 at 3.65%
In view of the uncertain environment in Ukraine, the group has temporarily halted sales-related activities due to massive damage to public infrastructure and disruption to its supply chain.
“Shareholders and potential investors are advised to exercise caution when dealing with or trading in the company’s shares in the short term,” it added.
Shares in JB Foods closed flat on March 16 at 46 cents.
Photo: Stock photo
