Page 32 - RusRPTDec18

A stronger upturn in new business received by Russian service providers was generally linked to more robust customer demand and new client acquisitions. Moreover, the rate of growth quickened and was well above the long-run series average. The pace of expansion was the second-fastest in six years. Goods producers also recorded a quicker rise in new orders, with the rate of growth the second-fastest in 2018 so far.
4.3.2 Corporate profits dynamics
September was the most profitable month of the year for Russian companies with earnings for the month coming in at RUB1,580 — the best result in the last three years.
The cumulative profits for the year to date were RUB10151.7bn, against the RUB7385.8bn earned in September 2017 and RUB8099.4bn earned in 2016.
Companies have been struggling to grow in the lacklustre economy and depressed growth of real incomes in Russia this year. However, the pick up in profits is reflected in the improved manufacturing results in the last two months and it seems that economic activity has built up a little momentum as the summer comes to an end.
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): 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%, and a staggering 40% for hydrocarbons. Agriculture, meanwhile, saw worse performance despite overall sector growth, with net profit down
32 RUSSIA Country Report December 2018 www.intellinews.com