Sweden’s Essity takes $147 million write-down in Q1 on Russia exit

STOCKHOLM (Reuters) -Swedish hygiene products group Essity said on Friday it would exit Russia after taking a write-down of 1.4 billion crowns ($147 million) on its assets in the country, as it posted lower first-quarter earnings.

The world’s second-biggest consumer tissue maker had said in March it would shut down all production and sales in Russia, where it had clocked sales worth 2.8 billion crowns last year, corresponding to about 2% of its total sales.

“Essity’s conditions to pursue business in Russia have worsened,” Essity said in its earnings report, which was released earlier than originally scheduled on April 28.

“Furthermore, work has been initiated to exit the Russian market,” Chief Executive Officer Magnus Groth said in a statement.

Adjusted earnings before interest, tax and ammortisation (EBITA) fell to 2.83 billion crowns in the first quarter ended March 31 from 3.61 billion a year earlier.

Higher raw materials and energy costs weighed on earnings, while higher volumes and selling prices helped boost margins at the group, which sells consumer tissue such as toilet paper and napkins under a large number of brands including Lotus, Tempo and Vinda.

($1 = 9.4957 Swedish crowns)

(Reporting by Helena Soderpalm; Editing by Niklas Pollard and Rashmi Aich)