McDonald’s said Monday that it has started the process of selling its Russian business, which includes 850 restaurants that employ 62,000 people, making it the latest major Western corporation to exit Russia since it invaded Ukraine in February.
The fast food giant pointed to the humanitarian crisis caused by the war, saying holding on to its business in Russia “is no longer tenable, nor is it consistent with McDonald’s values.”
The Chicago-based company announced in early March that it was temporarily closing its stores in Russia but would continue to pay employees. On Monday, it said it would seek to have a Russian buyer hire those workers and pay them until the sale closes.
It did not identify a prospective buyer.
CEO Chris Kempczinski said the “dedication and loyalty to McDonald’s” of employees and hundreds of Russian suppliers made it a difficult decision to leave.
“However, we have a commitment to our global community and must remain steadfast in our values,” Kempczinski said in a statement, “and our commitment to our values means that we can no longer keep the arches shining there.”
As it tries to sell its restaurants, McDonald’s said it plans to start removing golden arches and other symbols and signs with the company’s name. It said it will keep its trademarks in Russia.
The first McDonald’s in Russia opened in the middle of Moscow more than three decades ago, shortly after the fall of the Berlin Wall. It was a powerful symbol of the easing of Cold War tensions between the United States and Soviet Union.
McDonald’s was the first American fast food restaurant to open in the Soviet Union, which would collapse in 1991.
McDonald’s decision to leave comes as other American food and beverage giants including Coca-Cola, Pepsi and Starbucks have paused or closed operations in Russia in the face of Western sanctions.
Corporations from British energy giants Shell and BP to French carmaker Renault have pulled out of Russia, taking a hit to their bottom lines as they seek to sell their holdings there.
Other companies have stayed at least partially, with some facing blowback.
McDonald’s said it expects to record a charge against earnings of between $1.2 billion and $1.4 billion over leaving Russia.
Its restaurants in Ukraine are closed, but the company said it is continuing to pay full salaries for its employees there.
McDonald’s has more than 39,000 locations across more than 100 countries. Most are owned by franchisees — only about 5 percent are owned and operated by the company.
McDonald’s said exiting Russia will not change its forecast of adding a net 1,300 restaurants this year, which will contribute about 1.5 percent to companywide sales growth.
Last month, McDonald’s reported that it earned $1.1 billion in the first quarter, down from more than $1.5 billion a year earlier.
Revenue was nearly $5.7 billion.
RIYADH: Saudi Arabia’s The Line project, a 170-km long linear urban development in NEOM, is set to receive bids for its main work package to build spine water transmission by June 1, MEED reported.
This package, which will be the latest in a series of tenders for the Line and Spine components, includes design, build, testing and commissioning work for a pressurized permanent water system.
As part of the project, the contractors are required to create the complete design — right from the concept to the detailed design — besides providing supply, construction and installation services for the SWT line.
The water system includes the SWT line within a reinforced concrete box culvert running along the length of NEOM’s Spine.
According to MEED, some bidders have requested an extension of the deadline for the package.
The SWT culvert will run parallel to the Spine’s alignment about 360 meters north of the centreline of the Line alignment. The estimated 35-km SWT line will provide potable water for NEOM’s Spine infrastructure and Line buildings.
Whereas, contractors of the 160-km long rail line are also expecting NEOM to issue requests for prequalification within the next two months for the work on the high-speed rail line that forms the backbone of The Line.
This development stretches from the coast towards Tabuk.
RIYADH: Saudi Arabia’s General Authority for Military Industries has announced the establishment of the National Academy of Military Industries to train national cadres to work in the sector.
The announcement comes as part of an extension of the military industry sector’s strategy that was approved by the council of ministers in April last year, the governor of GAMI said in a statement.
The academy will be the largest supporter of the sector’s strategy that bets on the national human resource, Ahmed Al-Ohali added.
The move aims to achieve the sector’s target of localizing 50 percent of government spending on military equipment and services by 2030.
RIYADH: Nayifat Finance Co. has announced the resignation of its CEO Abdulmohsen Abdulrahman Musaed Al-Sowailem.
Al-Sowailem, who also held the position of managing director, has resigned from his membership in the board of directors and committees due to “his personal circumstances,” it said in a bourse filing
The company said it will announce any further developments relating to the appointment of a new or acting CEO at the earliest opportunity.
RIYADH: Naseej for Communication and Information Technology Co.’s shares will start trading on Saudi Arabia’s parallel Nomu market on May 24.
The Riyadh-based company will join the Kingdom’s stock market as a direct listing with a price guidance of SR70 ($19) per share, according to a statement by the Saudi exchange, Tadawul
Founded in 1989, Naseej is specialized in computer programming, artificial intelligence, virtual reality, and information technology-related activities.
RIYADH: Saudi Arabia’s Knowledge Economic City has widened losses by 41 percent in the first quarter of 2022 due to weak sales and revenues.
The company’s net losses expanded to SR6.7 million ($2 million) during the first quarter, compared to SR4.8 million in the same period last year, according to a bourse filing.
This was accompanied by a 36 percent decline in revenue and sales to SR15.7 million for the same period.
KEC, based in Madinah, is a publicly-traded company that was established to execute Knowledge Economic City projects.