JB Foods says business in Russia affected by conflict, sales in Ukraine temporarily halted

JB FOODS BEW on Wednesday (Mar 16) said that it 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 and supply chain disruption from the ongoing conflict.

The company, however, noted that it operates in the food and beverage sector, which is considered an essential industry and is not impacted by the current raft of sanctions that is sweeping across Russia, and is hence unlikely to face any immediate demand destruction.

Over in Ukraine, JB Foods said its exposure to outstanding receivables there is not expected to have a significant impact on its financial performance. However, in light of the uncertain environment, the company has temporarily halted sales-related activities due to massive damage to public infrastructure and disruptions to its supply chain.

JB Foods revealed that Russia and Ukraine jointly accounted for about 17 per cent of its revenue in 2021. The company does not have any physical assets in either country.

For the year 2022 and based on actual shipments delivered to-date and forward orders on hand, the company estimated that the revenue contribution from both countries is expected to be around 10 per cent. Of this, the remaining undelivered contracts for 2022 stand at about 7 per cent of the group's revenue target for the year.

Singapore's sanctions on Russia should not have any direct financial impact on JB Foods as these sanctions cover the financial measures targeting Russian banks, entities and activities in Russia, as well as export controls measures covering electronics, computers and defence-related equipment, said the company.

The company also confirmed that it has put in place adequate and effective internal controls to monitor, address and mitigate sanctions-related risks, barring any unforeseen turn of events in the volatile and constantly evolving situation.

"The group 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," added the firm.

Shares of JB Foods ended Wednesday flat at S$0.46.