Page 48 - RusRPTJun21

The majority of the net profit of the corporate sector comes from three segments of the economy. Including crude oil and natural gas production and related services, production of petroleum products, oil and gas pipeline transport, and electricity generation, transmission and distribution, the share of the energy sector in total net profits of the corporate sector has varied between less than 30% and more than 40% in the last couple of years. In the refining industries (excluding the production of petroleum products), 20-30% of net profit has been generated, of which 8-13%age points in metal production. In particular, the fluctuations in profits in the oil and metals industries are largely due to changes in export prices, although part of the increase in export earnings in the oil sector is collected by progressive export duties on the state.
The statistical share of the wholesale and retail trade sector in the net profit of the corporate sector has generally been 17–20%, where the share of wholesale trade has been as much as 13–18%age points. On the other hand, a significant amount of profit and loss data for the retail sector is outside the statistics, as there are a large number of small businesses and sole proprietors. The share of wholesale trade in net profit fell to only 5% in last year's recession, partly because wholesale trade plunged after declining retail trade and corporate production and investment.
The recovery in corporate profits over the past more than six months has largely come from the refining industries (excluding oil refining), and the rapid rise in profits in the metals industry in particular has contributed greatly to the increase in net profits in the corporate sector as a whole. Another key segment is wholesale, whose profitability has pretty much recovered from last year. Profits in the energy sector have remained relatively low since last spring.
In Russia, corporate profits play a moderate role in investment. The share of companies' own funds in the financing of investments has traditionally been high, and last year the share rose to a record high of almost 57% (excluding small companies, for which up-to-date statistics are not compiled in this respect). In Rosstat's annual investment survey, about 60% of responding companies have experienced a lack of own funds as a limiting factor for investment, although other factors, such as uncertainty about the Russian economy and investment risks, top the list each year. In Russia, one tenth of general government revenue comes from tax revenues levied on corporate profits.
48 RUSSIA Country Report June 2021 www.intellinews.com