Economic sanctions both from and against Russia as part of the Ukraine crisis will lead to a dip in WPP profits, CEO Sir Martin Sorrell has admitted.
Countries such as the US, Canada, Australia, Norway and the EU have subjected Russia to economic sanctions, with the belief that capital Moscow helped to fuel the unrest in Ukraine.
Sorrell has said that earnings for Russia have now been downgraded, stating to the Sunday Express: “Events in Ukraine are, of course, worrying. Our media investment arm GroupM has revised down its forecasts for Russia in terms of media spending, but it remains a strong market.
“We did well in Russia in the first half of the year, although we are assuming that the sanctions will have an impact on the Russian economy in due course.”
WPP will announce its half-year profits tomorrow, 26 August. Analysts have predicted that the profits will remain flat at £527.9m.
However, Sorrell stated that it is not just Eastern Europe which is struggling: “Western continental Europe, particularly France and Italy, continues to raise some concerns,” he said. “Recent statistics on GDP growth, or the lack of it, in France, and negative growth in Italy, are troubling.”