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. Last Updated: 07/27/2016

Russia's Crisis Takes Bite Out Of British Company Earnings




LONDON -- Russia's economic decline made itself felt Tuesday on the far side of Europe as a trio of British companies blamed business in the former Soviet Union for adding to their woes.


Many Russians may now be too poor to enjoy the products Western firms want to sell them, but British business officials said many hard-hit consumer-goods makers, like other companies, were persevering in the country.


"People are being more cautious but long-term interest has not declined and most are still actively pursuing their business interests in Russia," said Pauline Shearman, Eastern Europe expert at the Confederation of British Industry.


British publisher Dorling Kindersley, best known for its illustrated children's pop-up and educational books, said Tuesday that it would close its Russian operations, taking a charge of pounds 1 million ($1.6 million) in the second half.


"The situation in Russia has become increasingly difficult, with depressed trading and pounds 750,000 of foreign exchange losses arising as a result of the collapse in the value of the ruble," Dorling said.


Coca-Cola Beverages, a British-based bottler which operates in Eastern Europe but not Russia, said profits slid as its operations in neighboring Ukraine and Belarus plunged because of last year's devaluation of the Russian ruble.


Peter Bishop, director of international trade at the London Chamber of Commerce, said the full effects of turbulence often take time to filter through.


But he said the chamber, which issues certificates for exports to Russia, had seen trade remain surprisingly resilient.


"We've seen no real downturn. We issue thousands of these certificates a year. We would have expected something big to happen," he said.


Also Tuesday, engineering group Charter PLC said its order intake in the preceding quarter fell 4 percent amid tough conditions around the world and especially in Russia.


"Demand in Russia virtually collapsed," the group said.