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4.4 Corp dynamics
Business expectations and consumer sentiment worsened in May. The reason was limitations in electricity consumption and availability.
Earnings from Ukrainian enterprises reached a 10-year record of $19.8B. The cumulative financial result of Ukrainian enterprises for 2023 amounted to more than ₴863.8B (about $19.8B). This is the best indicator in the last 10 years, said Danylo Hetmantsev, Head of the parliament's Finance Committee. As he clarified, 71% of economic entities, which earned a total of ₴1.34T, were profitable, and 29% were unprofitable, with losses of ₴476.2B ($12B). A positive financial result was recorded in 14 out of 15 sectors of the economy. Only the education sector was unprofitable. However, Getmantsev emphasized that these indicators should not be overstated. This is because more than 40% of the total profit was generated by financial and insurance activities, primarily the ₴346.5B from the banking sector. The real sector generated ₴410.5B in total annual profit. In addition, there are industries with unprofitable enterprises in the real sector, with total losses reaching ₴386.2B, 81.1% of the total indicator for unprofitable enterprises. In other words, the ten-year record was accomplished mainly by financial institutions, a parliament member said.
Ukrainian small and medium-sized businesses strive to develop abroad to maintain efficiency. Faced with an increasing number of macroeconomic challenges, small and medium-sized businesses (SMEs) in Ukraine are resorting to using artificial intelligence technologies, supplier diversification, and entering into new trade routes, according to a Payoneer study. Thus, 46% of surveyed SMEs already have an international client base, 4% more than last year. In addition, almost 66% of respondents believe that having a diversified, international network of suppliers helps to protect their business from global shocks. Two of five SMEs (40%) choose Europe and Central Asia as a priority for expanding their customer base over the next five years, up from 33% last year. Already, 61% of the Ukrainian SME client base is international, which is one of the highest indicators globally. For comparison, the average share of international customers worldwide is 46%. At the same time, businesses face several barriers on their way to international markets. Among them are local restrictions and sanctions (41%) and external events (41%).
According to a survey, 67% of small and medium-sized businesses in Ukraine plan to scale in 2024. On average, each of these companies plans to hire 11 new employees. 69% of respondents plan to hire local workers. Also, small and medium-sized enterprises plan to increase their income in 2024. 67% of them expect the local economy to improve.
According to AmCham, 81% of companies in Ukraine feel the impact of mobilization on the results of their activities. However, 98% of member companies continue to work in Ukraine. 49% of respondents said that the number of their employees and their company’s revenue decreased during the war compared to pre-war levels. 43% of respondents predict an increase in income in 2024 compared to 2023, 35% do not expect any change, and 22% foresee a decrease in income.
Farmers and lawyers have most often closed their businesses during the war. Agricultural enterprises represent the largest number of closed
59 UKRAINE Country Report July 2024 www.intellinews.com