Shares of Japan Tobacco fell by the daily allowable limit for a second consecutive trading session Monday (Nov. 9) after Russia placed all of the company’s local entities under temporary administration, raising uncertainty about earnings from one of its most profitable overseas markets. The Tokyo Stock Exchange quadrupled the stock’s daily trading limit to 4,000 yen ($25.20), potentially allowing shares to fall as low as 1,269 yen ($8) Tuesday. The stock closed at 7,769 yen ($48.94) Thursday before Russian President Vladimir Putin signed the initial decree.
Russia accounts for about 25% of Japan Tobacco’s adjusted operating profit and 10% of revenue. The company said its Russian business continues to operate but that it is assessing the potential impact of the measures on its financial results. Putin expanded the original order over the weekend to include additional Japan Tobacco International subsidiaries.
The Japanese government, which owns about 37% of Japan Tobacco, received 156 billion yen ($982.8 million) in dividends for the fiscal year ended in March.
