Page 32 - RusRPTMay19

4.3.2 Corporate profits dynamics
Russia’s corporates put in strong profits in the first quarter of this year
as they add to the momentum built up in 2018, according Rosstat data.
Russian aggregate corporate profits rose to RUB2,472bn in February, adding RUB1,208bn to the profits they made in January, the latest data available. That brings the cumulative profits Russian companies earned in February well ahead of the RUB1,740bn they earned in the same period in 2018, which was already a strong year compared to 2017 and 2016.
The month-on-month profits in February were also nearly double the corporate profits of RUB687bn earned in February a year earlier, according to Rosstat.
The various crises of recent years have caused a consolidation with the result that profits have become increasingly concentrated in the biggest companies and are growing.
There were a number of extremely strong individual reports of profits soaring in 2018 as Russia is in the midst of the earnings reporting season.
Amongst the more remarkable results announced in recent weeks were Russia’s leading internet company Yandex’s report of a 49% US GAAP net profit jump in the first quarter of 2019 to RUB6.2bn ($95.5mn)
But the increases are not universal. Russian internet major Mail.ru reported net profit drop of 47% year-on-year to RUB1.6bn under IFRS due to a heavy investment programme. And net IFRS profit of Russian Railways (RZD) dropped four-fold year-on-year in 2018 to RUB35.4bn ($529mn). Banks have also been doing very well with sector profits trebling in the first quarter. The sector as a whole has been reporting the highest level of profits in five years, with most of them increasing their dividend pay-outs as a result.
In general companies that reported “surprise” earnings larger than management guidance was in the majority in the forth quarter of 2018, according to BCS Global Markets. A total of 38% of listed companies reported results that were 2% or more higher than expected in the last quarter of last year, against the 27% that reported results that were we 2% or more less than expected.
32 RUSSIA Country Report May 2019 www.intellinews.com