July 25, 2018 / 8:45 AM / 4 months ago

Sulzer shrugs off U.S. sanctions on Russian oligarchs, raises forecasts

ZURICH (Reuters) - Swiss pumpmaker Sulzer (SUN.S), in which Russian businessman Viktor Vekselberg owns a stake, lifted its full-year sales and order forecasts on and shrugged off the temporary freezing of its assets following the U.S. crackdown on oligarchs linked to Russian President Vladimir Putin.

FILE PHOTO: Viktor Vekselberg attends a session during the Week of Russian Business, held by the Russian Union of Industrialists and Entrepreneurs (RSPP), in Moscow, Russia February 7, 2018. REUTERS/Sergei Karpukhin/File Photo

The engineering company said its U.S. orders had increased 15 percent during its second quarter “confirming that Sulzer has not been impacted by the sanctions placed in April 2018 on its former majority shareholder.”

Sulzer bought back 5 million of its own shares from Vekselberg, cutting his stake to less than 50 percent from 63 percent after he was hit by U.S. sanctions earlier this year.

Billionaire Veskselberg, who now owns 48.8 percent of the company, was one of 24 Russians sanctioned by Washington to punish Moscow for its alleged meddling in the 2016 U.S. presidential election and other “malign activity.”

As a result Sulzer’s U.S. bank accounts were frozen for certain transactions by the U.S Office of Foreign Assets Control, but the block was later lifted.

“While this issue disrupted the company’s business, it was resolved within three working days and operations were back to normal within a week,” the company said. It estimated the one-off costs to be less than 10 million francs, adding it expected no long-term consequences.

Its comments came as Sulzer reported first half sales of 1.6 billion Swiss francs ($1.61 billion), beating estimates in a Reuters poll of analysts.

Net profit increased by nearly 50 percent to 54.6 million francs helped by higher sales and greater efficiencies.

As a result Sulzer lifted its forecast for order intake and sales for 2018.

It now expects new orders to rise by 7 to 10 percent, up from its previous 5 to 7 per cent range, and sales to increase by 6 to 8 percent, two percentage points higher than its previous outlook.

($1 = 0.9926 Swiss francs)

Reporting by John Revill, editing by Louise Heavens

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