A survey of annual reports and 2023 financial statements has revealed European companies have suffered a staggering €100bn in direct losses from their operations in Russia following the invasion of Ukraine.

The Financial Times analysis shows 176 companies have recorded asset impairments, foreign exchange-related charges and other one-off expenses as a result of the sale, closure or reduction of Russian businesses.

More than 50 per cent of the 1,871 European-owned entities in Russia before the war are still operating in the country, according to data compiled by the Kyiv School of Economics (KSE).  The situation for major companies still in Russia has been made more complicated by tighter exit rules introduced by Moscow and extracting any dividends out of those businesses is now very difficult.

Last year a list compiled by Jeffrey Sonnenfeld, a professor at the Yale School of Management, revealed more than 400 companies had withdrawn from Russia following the launch of its attack on Ukraine, leaving behind assets worth hundreds of billions of dollars.

Nabi Abdullaev, partner at strategic consultancy Control Risks, said: “Even if a company lost a lot of money leaving Russia, those who stay risk much bigger losses. It turns out that cut and run was the best strategy for companies deciding what to do at the start of the war. The faster you left, the lower your loss.”

BP, Shell and TotalEnergies reported combined charges of €40.6bn as this sector deals with the impact of the war, although the losses were outweighed by higher oil and gas prices allowing aggregate profits of about €95bn ($104bn) to be amassed last year.

The analysis also showed that:

· Defence companies’ shares have been buoyed by the conflict.

· Utilities took a direct hit of €14.7bn, while industrial companies, including carmakers, have suffered a €13.6bn blow.

· Financial companies including banks, insurers and investment firms, have recorded €17.5bn in write-downs and other charges.

Simon Evenett, economics professor at University of St Gallen, said: “You have a small number of companies which have taken a big hit. Once you get away from big ticket charges, the average write-down is probably fairly manageable given the limited Russian footprint.

“Even if Europeans were the only investors there, which they are not, the country would account for just 3.5 per cent of their total outward investments.”

The groups still operating in Russia are taking a high-risk gamble, according to Anna Vlasiuk, a research fellow at KSE and member of the sanctions team, who explained: “Companies still there would be better off just writing the business off. I don’t think anyone is secure. What was the pretext for appropriating Carlsberg? Is it really a national security issue? I don’t think so.”

W Denis is a specialist broker to multinational businesses, not just covering property, casualty and financial lines, but also insuring specialist political violence and other risks such as confiscation, nationalization, currency inconvertibility and non-payment insurance. For Eastern European enquiries contact Vida.jarasiunaite@wdenis.eu or for Rest of World enquiries contact mark.dutton@wdenis.com