Belarusian Enterprises’ Net Profit Falls Threefold

The main contribution to the fall in industrial profits was made by oil refining and energy.

The authorities have updated information on the state of finances of flagship enterprises. The statistics for the last reporting month came out negative, the website banki24.by writes.

Net profit is the final financial result of the enterprise. This figure consists of profit or loss from current, investing and financing activities, which are adjusted for taxes and fees.

The profit from current activities is strongly influenced by the result from the sale of products. Profits (losses) from investment and financial activities are affected by current debt payments and exchange rate differences.

Net profit data comes out with a lag of 1.5 months to the reporting period. Therefore, in mid-June, the results for April become known.

At the end of April 2021, net profit amounted to BYN 1.661 billion. For comparison: in April 2020, the net profit was three times more - 4.886 billion BYN.

Such a significant difference in the results is associated with exchange rate differences and decrees on a special procedure for their cancellation. As soon as the corresponding decree is adopted, this dramatically changes the picture of net profit in the economy.

So in 2020, the net loss in March reached 4.447 billion BYN, and in April there was a positive adjustment by the amount indicated above. Such adjustments are not very much related to the real state of affairs at enterprises, but they allow stretching the periods of recognition of losses (or profits) and more evenly filling the budget.

The decree #159 on exchange rate differences was signed back in 2020, but in fact will be in effect until the end of 2022. Thus, the results for 2021-2022. will partially include the negative (or positive) effects of the 2020 devaluation period.

Some objects have their own individual write-off procedure. A number of companies in the construction industry have the right to a special order right up to the end of 2030.

The drawdown in April 2021 compared to last year was mainly due to the industry. In this area, net profit decreased fivefold by 2020 - to 779.5 million BYN. In turn, the main contribution to the fall in industrial profits was made by oil refining and energy.

There are also positive examples of the dynamics of net profit. So, in April 2021, the net profit in forestry and logging increased 3.4 times to 34.3 million BYN.

Similarly, in the wholesale trade, net profit increased 2.9 times by 2020 to BYN 112.1 million. Last year, wholesalers were hit hard by the first wave of the crisis, and are now growing well towards the low base of 2020.