Lukoil Warns of Sales Decline Due to Russia's Image

MOSCOW--Russia's largest privately-owned oil company Lukoil Holdings (LUKOY) warned Thursday of a possible decline in sales abroad due to Russia's negative public image.

In its quarterly report under Russian audit standards the company said "a negative perception of Russian Federation's public image in the majority of the company's countries of operations.. may lead to a short-term decline in retail sales' by association.

Lukoil also said the "negative development of the Ukrainian situation may have a negative impact on macroeconomy...including higher exchange rate volatility and business climate degeneration in general."

Lukoil itself isn't under sanctions the West introduced against Russian officials and corporations in response to the annexation of Crimea and support of pro-Russia separatists in eastern Ukraine. However, Lukoil's warning shows that despite the soothing tone of Kremlin officials, the sanctions are denting the whole economy, threatening the companies not directly affected by them.

Write to Alexander Kolyandr at [e-mail]

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