Russia moved to seize additional local assets from Japan Tobacco, and the company said it is still assessing the hit. The maker of Winston and Camel is the volume leader in Russia and, as of Sept. 30, held around ¥1.5 trillion tied to that market.
The Ministry of Finance is Japan Tobacco's largest shareholder and was estimated to collect ¥103.5 billion in dividends in the fiscal year that ended in March, equal to about 0.1% of total tax receipts. Only part of that sum is linked to Russia, but those dividends made up roughly 44% of the income expected by a fund that backs industrial and innovation projects. The turmoil lands as Prime Minister Sanae Takaichi faces scrutiny over how to finance wide ranging initiatives, including a sweeping investment plan.
Following the newest seizures in Russia, shares fell again Monday, pushing the two-day drop past 30% and setting a new record for declines. According to S&P Global Ratings, Japan Tobacco is expected to retain strong financial flexibility following the move, and the elevated geopolitical risk is already embedded in its credit rating. Goldman Sachs analysts Takashi Miyazaki and Megumi Taniguchi said investor attention is shifting to possible changes in the dividend policy.
They noted dividends may fall by about 25% if the Russian business were deconsolidated and the current policy maintained, since earnings per share excluding net profit from Russia would become the basis for payouts. They also said dividends since 2023 likely relied heavily on cash flows outside Russia because of restrictions on tapping money held by the Russian subsidiaries.
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