Page 33 - RUSRptSept18

4.3.2 Corporate profits dynamics
Corporates had a good month for profits in June, with the cumulative profits for the year reaching RUB6,371bn and the month on month profits up by RUB1,486bn -- well ahead of the RUB940bn Russian companies made in June a year earlier, according to Rosstat.
The profitability of Russian firms is recovering well , having earned RUB6,371bn of cumulative profits this year by June, passing the nadir of RUB4,965 in 2017 and ahead of the RUB5,571bn they earned by June of 2016.
Companies have been more active in raising money from bond markets, while corporate demand for bank credit has remained modest, but was also starting to recover this summer.
Even with fairly high interest rates and Western sanctions limiting access to international lenders, the biggest factors depressing investment demand are the uncertain economic outlook and difficult business environment.
Russia’s corporate sector net profit was down 8.5% in 2017 y/y , according to Rosstat. The trend runs counter to GDP growth, which hit 1.5% last year after contracting by 0.2% in 2016.
In nominal terms, net profit reached RUB10.3 trillion ($180bn) in 2017:
some 34.8 thousand organizations brought in profits of RUB12.3 trillion, while another 12.4 thousand faced losses of RUB1.96 trillion. This data does not include small businesses, insurance companies, state institutions, or banks.
On a sectoral level, extractive industries led the pack , where net profit was up 17.9% in 2017, and a staggering 40% for hydrocarbons. Agriculture, meanwhile, saw worse performance despite overall sector growth, with net profit down 22.3% largely due to decreasing grain prices
33 RUSSIA Country Report September 2018 www.intellinews.com