Business news from Ukraine

Business news from Ukraine

NAFTOGAZ REDUCES CAPITAL EXPENDITURES BY 44.5% IN 2020

Naftogaz Group reduced capital expenditures (capex) by 44.5% (or by UAH 12.193 billion) in 2020 compared to 2019, to UAH 15.044 billion.
As indicated in the consolidated statements of the group published on Tuesday, capex of the exploration and production segment was UAH 11.023 billion (a fall of 26.2% to 2019), oil midstream and downstream – UAH 1.185 billion (a fall of 35.4%), Ukrnafta – UAH 1.113 billion (a fall of 23%), gas storage – UAH 0.143 billion (a rise of 3.3 times), commerce – UAH 0.133 billion (a rise of 11.1 times), other – UAH 1.448 billion (a fall of 83.8%).
As reported, the consolidated net loss of NJSC Naftogaz Ukrainy in 2020 amounted to UAH 19.002 billion compared to a net profit of UAH 63.294 billion in 2019. Excluding the results of the discontinued operations, including the Gas Transit Arbitration award of UAH 55.7 billion, the net profit was UAH 2.6 billion.
Naftogaz’s revenues in 2020 grew by 27.1% (by UAH 41.184 billion) compared to 2019, to UAH 193.017 billion, including income from sales being UAH 159.234 billion (a rise of 6.3%), compensation for performing public service obligations totaling UAH 32.205 billion (a rise of 100%), and interest and other income reaching UAH 1.578 billion (a fall of 23.1%).
The net loss of NJSC Naftogaz Ukrainy, as a separate legal entity, in 2020 amounted to UAH 18.002 billion versus UAH 50.658 billion of net profit for 2019. Net income last year decreased 32.1% compared to 2019, to UAH 121.059 billion.

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NEW UKRAINIAN AIRLINE BEES AIRLINE TO FLIGHT FROM KIEV TO LVIV, ODESA, KHERSON

The State Aviation Service of Ukraine has granted the new Ukrainian airline Bees Airline the rights to operate the Kyiv – Lviv – Kyiv, Kyiv – Odesa – Kyiv and Kyiv – Kherson – Kyiv airlines. Order of the State Aviation Service No. 655 dated April 26, 2021 was published on its website.
According to the document, the frequency of these flights and the duration of the rights are not limited.
As reported, the State Aviation Service of Ukraine issued an operator certificate to Bees Airline on March 12, 2021. Later, the regulator allowed the company to operate flights on 31 routes – 15 regular and 16 charter flights.
Bees Airline made its first charter flight from Kyiv to Sharm el-Sheikh (Egypt) by order of the tour operator Tez Tour Ukraine on March 18, 2021.
According to the public register of civil aircraft of Ukraine, Bees Airline registered two aircraft in Ukraine – Boeing 737-800 with registration numbers UR-UBA and UR-UBB. Both aircraft are produced in 2010 and belong to San Clemente Leasing LLC (the United States).
According to Bees Airline CEO Yevhen Khainatsky, by the end of 2021 the fleet will be replenished with two more aircraft. Another two are planned to arrive in 2022.
The base airport of Bees Airline is Kyiv International Airport named after Ihor Sikorsky.
According to the data in the register, the beneficial owners of Bees Airline are Serhiy Smirny (90%) and Khainatsky (10%).
Previously, Khainatsky was CEO of another Ukrainian airline – SkyUp Airlines.

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MAYOR: UKRAINIAN CAPITAL PLANS TO WEAKEN QUARANTINE RESTRICTIONS

From Saturday, May 1, Kyiv plans to weaken quarantine restrictions, said mayor of the capital Vitali Klitschko during a briefing.
“This morning, the State Commission on Environmental Safety, Manmade Disaster and Emergency Response of the city decided to weaken anti-epidemic measures in the capital. We hope that the State Commission will also decide to review the level of epidemic danger and withdraw the capital from the ‘red’ zone,” the mayor’s press service quoted him as saying.
Klitschko noted that from May 1, all ground public transport and the metro will restore passenger transportation in the usual mode.
“In compliance with previously defined anti-epidemic norms and rules. But I urge residents of the capital to use public transport only in case of emergency,” the mayor of Kyiv said.
He noted that from May 1, the operation of trade establishments, shopping and entertainment centers, markets, fairs, catering establishments, gyms and fitness centers will be restored.
“However, the owners of these establishments must understand that they work only in compliance with all safety standards! It is in your interests, because if the situation worsens again, new restrictions cannot be avoided!” stressed Klitschko.
The mayor of the capital also said that Administrative Service Centers will resume their work, however, they will host visitors by appointment through electronic services.
“From next Wednesday, May 5, the city will restore the educational process in general education institutions, preschool and higher educational institutions. Also, the capital will restore the acceptance of documents for enrolling children in the first grade for the next academic year,” the mayor of Kyiv said.

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LARGE CAR-BUILDING ENTERPRISE OF UKRAINE DNIPROVAHONMASH CUTS SALES

JSC Dniprovahonmash (Kamianske, Dnipropetrovsk region), a large car-building enterprise of Ukraine controlled by the TAS financial and industrial group, sold 825 freight cars in 2020, which is 58.3% less than a year earlier (1,944 units).
According to the financial statements of the enterprise published in the National Securities and Stock Market Commission, the production of railcars over the past year decreased even more – by 61.5%, to also 784 units for UAH 957.4 million.
The average selling price of the car was UAH 1.22 million. The plant exported 7.3% of the sold wagons for the amount of UAH 73.1 million.
Among the Ukrainian clients of the plant are TAS-Logistic, OTP-Leasing, Ukrtransleasing.
As reported, in 2019 the plant sold 1,944 freight cars (16% less than a year earlier) and produced 2018 cars (12.7% less) for UAH 2.871 billion.
According to the report, the unconsolidated net income of JSC Dniprovahonmash (excluding subsidiaries) in 2020 decreased 64.3%, to UAH 1.004 billion, the net loss amounted to UAH 110.92 million versus the net profit of UAH 413.62 million a year earlier.
The share of the plant’s cars of the total production of freight cars in Ukraine reached 26%.
Describing the situation on the Ukrainian car building market in 2020, the company noted a continuing trend towards a reduction in car production due to a drop in freight turnover in rail transport, a lack of traction stock at Ukrzaliznytsia due to its deterioration, and the presence of used Russian cars with an expired service life, as well as increasing the period of carriage turnover.

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SKYUP AIRLINES RESUMES FLIGHTS FROM BIGGEST UKRAINIAN CITIES

SkyUp Airlines (Kyiv) on May 28 resumes flights on the route Kyiv – Odesa – Kyiv.
As the press service of the company said on Tuesday, flights will be operated daily, except for May 30. The plane will depart from Kyiv at 08:00 in the morning, and from Odesa at 09:50. The flight duration is one hour.
SkyUp said that it also plans to operate flights to Odesa from Kharkiv, Lviv and Zaporizhia from the end of May.
Domestic flights from Kyiv to Odesa are also operated by Windrose, UIA and Motor Sich airlines.

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PHARMACEUTICAL COMPANY FARMAK INTENSIFYING DIGITALIZATION DEVELOPMENT

The pharmaceutical company Farmak (Kyiv) is intensifying the development of digitalization in order to scale up its business and build up its presence in world markets.
“Farmak is one of the largest exporters of domestic medicines. To scale up the business and build up its presence in the world, the company digitalizes all production and management processes. A transparent IT system for reporting, budgeting, production planning, sales, workflow, personnel assessment and training has been implemented at Farmak,” the company said in a press release.
According to Chief Information Officer at Farmak Denys Krestov, Farmak focuses on deep industrial digitalization processes.
“We are gradually switching to electronic quality certificates, electronic research protocols, electronic dossiers, e-serialization of products, and so on. Every day the system administration department maintains 30 physical platforms and more than 150 virtual ones that support the operation of business applications,” the company’s press service said, citing Krestov.
Farmak is the leader of the Ukrainian pharmaceutical market, produces medicines in all 14 therapeutic groups.
Over the past five years, Farmak’s investments in the scientific and technical complex, production equipment, and research activities amounted to UAH 3.4 billion.
JSC Farmak is a member of the Association of Manufacturers of Medications of Ukraine (AMMU).

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