International logistics firm Gefco has described how its global business became “exceedingly difficult” following the invasion of Ukraine by Russia, due to its association and links with state-owned rail firm Russian Railways.
In its latest set of financial results, the haulage and shipping giant said its ultimate parent undertaking was placed under sanction controls on 24 March by the US, EU and UK authorities after the illegal invasion.
Gefco UK said the authorities agreed that these sanctions should not impact upon its business, because it is an independently run company registered in France and so the UK government’s Treasury issued it with a “licence for continuation of business”.
But in its accounts for the year ending 31 December 2021, the company said: “Despite this clarification, conducting our daily business with our worldwide customers and business partners became exceedingly difficult due to our shareholding structure.
“As a result of these difficulties, Gefco’s management board and Gefco’s supervisory board decided to buy back Russian Railways' 75% stake in the group. The buyback was completed on 6 April 2022.”
Its report added that its immediate parent company, Gefco SA, then sold these shares to Ceva Logistics parent company CMA CGM Group and it went on to acquire the remaining 25% on 8 April.
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The report said that following this move, the continuation of business licence was revoked on 12 April as Gefco was no longer deemed sanctioned by association.
“All business operations resumed back to normal after this date,” it added.
Prior to this upheaval, Gefco UK said it had managed to grow its warehousing activities in 2021, specifically with Jaguar Land Rover in Liverpool.
The company said it had also continued to manage “a significant market share” in its two-wheeler activity and maintained a market leader position.
For the year ending 31 December 2021, Gefco UK began its climb back from the effects of the pandemic, reporting a 9.6% increase in turnover to £139.3m.
Pre-tax profit increased by 23.6% to £11.7m.
