20 September 2021, Monday, 4:47
Sim Sim, Charter 97!
Categories

Debts of Belarusian Agriculture Hit All-Time High

6
Debts of Belarusian Agriculture Hit All-Time High
illustration photo

The flagships of the industry are also unprofitable.

Large and medium-sized farms of Belarus have reported their financial performance in 2021. The agricultural sector is characterized by the growth of debt and the share of loss-making enterprises, banki24.by reports.

Large and medium-sized enterprises provide statistics monthly. These companies are the flagships of the Belarusian economy.

According to the results of the first six months, agricultural production is in the "red zone" - the output of all categories of farms has decreased by 0.3% for 6 months. The July data is unlikely to be positive. Operational reports from the Ministry of Agriculture and Food Industry record a fall in crop yields by 2020.

As for finances, there are five months of data from the industry's flagships. The nominal revenue of large and medium-sized agricultural enterprises is up 14.5% by 2020.

However, prices for agricultural commodities raised by 13.5% over the same period. It means that in real terms (adjusted for price growth), revenues increased by only 0.9%.

Net profits of the flagships rose by 9% in nominal terms over the five months. Hence, when adjusted for industry prices, this figure declined year-on-year.

Net profit (or loss) is the ultimate financial result of any enterprise in the real economy. The average profitability of the industry in terms of the final result was 10.6% with state support and 1% once it was cancelled. Both indicators worsened by 2020: then it was 11.2% and 4% respectively.

If the final financial result of the flagships of the agricultural sector is cleared of state support, there are 57.2% of unprofitable organisations in 2021 (the year before it was 52.3%).

As of June 1, the total debts of the flagships in agriculture exceeded 16 billion BYN. This is a record high for the entire period of assessment under the current methodology. The previous maximum lasted for only one month.

Since early 2021, the amount of debt of agricultural producers has increased by 7.6%. To compare: for the whole of 2020, the total debts of the flagships of agriculture increased by 5.4%, for 2019 - by 9.2%.

Agriculture has a high share of overdue liabilities. As of 1 June, it amounted to 18.2% against 6.1% for the real sector as a whole.

The payables of flagship agricultural enterprises reached 9.736 billion BYN (+11.3% YTD), liabilities on loans and credits - 6.307 billion BYN (+2.4%).