August 4, 2014 / 11:23 AM / 5 years ago

FACTBOX-The effect of Russia sanctions on European businesses

(Adds more company reactions)

Aug 4 (Reuters) - The European Union and the United States are tightening sanctions against Russia, targeting its energy, banking and defence sectors in the strongest international action yet over Moscow’s support for rebels in eastern Ukraine.

Below are recent comments and decisions showing the impact on European companies:

* The European sanctions on Russia have no impact on Austrian energy group OMV, which does not expect gas prices to rise given its long-term contracts with supplier Gazprom, OMV CEO Gerhard Roiss said.

* Germany’s Economy Ministry has confirmed it has halted Rheinmetall’s export of combat simulation gear to Russia, going beyond the recently imposed EU sanctions which block future defence contracts.

* A low-cost airline run by Russian national carrier Aeroflot, Dobrolyot (Good Flight), said it would suspend all flights after its plane lease agreement was cancelled when the EU slapped sanctions on Moscow.

* Daimler has seen booming growth in the Russian auto market weaken due to the Ukraine crisis, Chief Executive Dieter Zetsche told Germany’s Bild am Sonntag newspaper.

* Part-nationalised British lender Royal Bank of Scotland said it had placed restrictions on its lending in Russia following developments in Ukraine.

* Russia’s three largest banks sought to assure clients and investors they had the resources necessary to fulfil obligations despite their inclusion in the EU’s latest round of sanctions.

* Adidas, the world’s No.2 sportswear firm, cut its revenue and profit targets for this year and scrapped them for next year, blaming a plunge in sales at its golf business and its exposure to a weak Russian market.

* The head of Russia’s second-largest oil producer, Lukoil , said Western sanctions would force the company to reduce its investment programme due to limited access to funds.

* Russia’s Megafon said it had converted its foreign currency deposits into roubles and Hong Kong dollars to protect the mobile phone operator against any further Western sanctions.

* Italy’s Enel is not considering the sale of its Russian assets at the moment, the utility’s CEO Francesco Starace said. “It is not wise to sell assets in Russia at this moment,” Starace said in a conference call.

* German retailer Metro AG said conditions are still not right to list a stake in its Russian cash-and-carry business, that was postponed in March due to the Ukraine crisis.

* Safran expects some impact on its Sagem defence electronics business because of the new EU and U.S. sanctions on Russia, but this will not significantly affect the parent company, the head of the French aerospace group said.

* Austrian Airlines, a unit of Lufthansa, is seeing some impact from the crisis in Russia and Ukraine, but there will not be a visible hit at the group level, the group’s chief financial officer said.

* French oil major Total said it had stopped buying shares in Russia’s Novatek when a Malaysian airliner was shot down over Ukraine, but it was still too early to gauge the impact of the sanctions.

* More than 25,000 jobs are at risk in Germany following the fresh sanctions, the German Committee on Eastern European Economic Relations said. “Further damage is looming for the European and especially the German export industry. More than 25,000 jobs are in danger in Germany alone,” it said.

* Swedish cosmetics firm Oriflame plans to sell a lipstick factory in Russia as it moves to consolidate production in one location in the country, a real estate consultant and the company said on Tuesday. Oriflame scrapped third-quarter dividends in May and said it was trying to cut costs to help deal with “very tough conditions” in Russia and Ukraine, its two biggest markets.

* Oil and gas producer BP reported a sharp rise in second-quarter profits but warned further Western sanctions on Russia could harm its business there and its relationship with Russian state oil company Rosneft. (Compiled by Tom Pfeiffer and Mark Potter)

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