Business news from Ukraine


Ukrainian insurance companies in January-June 2021 received financial income of UAH 1.358 billion, which is 17.3% less than in the same period a year earlier (UAH 1.642 billion), according to the website of the National Bank of Ukraine.
At the same time, it is clarified that income from participation in capital amounted to UAH 17.8 million (2.9 times more), income from bonds – UAH 719.8 million (more by 28.4%), from deposits – UAH 566.3 million (less by 39.7%), dividends on shares – UAH 3 million against UAH 100,000 for the same period a year earlier.
Other revenues of insurers for the first half of the year amounted to UAH 1.972 billion, while a year earlier, UAH 2.863 billion.
The regulator also reports that during the reporting period, insurance companies reduced their net profit to UAH 1.361 billion from UAH 1.918 billion in the first half of 2020.
In addition, income tax from ordinary activities in January-June of this year amounted to UAH 833.2 million, which is 2% more than in the same period a year earlier (UAH 816.2 million). Tax on gross income from activities by types of insurance, other than life insurance, amounted to UAH 534.6 million (more by 10.6%), life insurance – UAH 63.7 million (more by 9.8%), for transactions with non-resident reinsurers – UAH 300,000 (less by 25%), tax on profits from extraordinary events – UAH 200,000, which corresponds to the indicator for the same period a year earlier.
According to the NBU, the total number of insurance companies in Ukraine as of June 30, 2021 is 181, while on the same date a year earlier – 215, including 19 life insurers (20). At the same time, 166 insurance companies submitted reports on their activities to the regulator.

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Minister of Culture and Information Policy Oleksandr Tkachenko initiates a meeting of media representatives with the Ministry of Health and the National Security and Defense Council to discuss a future moratorium on the advertising of medicines and medicines.
“Regarding the moratorium on advertising of drugs and medicines, which should be developed by the Cabinet of Ministers on behalf of the National Security and Defense Council. As an ex-media person, I understand perfectly well that this advertising is 30% of the income of TV and other media. That is why the Ministry of Culture and Information Policy will soon initiate a meeting of media people with the Ministry of Health and the National Security and Defense Council to hear the opinion of the media people themselves,” Tkachenko wrote in the Telegram channel.
The Minister also said that any business, including television, should be socially responsible, and self-medication has nothing to do with responsibility in any civilized country.
According to him, the development of the mechanism will last until the end of the year, and the moratorium itself should be introduced by January 1, 2024.
“There is a transition period and it will be used effectively. In the dialogue with the representatives of media companies we will find a way to implement these changes with minimal losses. First of all, for them,” Tkachenko said.

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The losses of Ukrainian shopping and shopping and entertainment centers (malls) due to the government’s imposition of weekend quarantine during Black Friday ranged from 30% to 40% of turnover, the Ukrainian Council of Shopping Centers and the Epicenter K trading network reported to Interfax-Ukraine.
“Due to the introduction of weekend quarantine, the Epicenter network was visited by 750,000 buyers less than last year, and the losses amounted to about UAH 1 billion. The company planned to use this amount of funds to invest in the Ukrainian economy,” the press service of the Epicenter K told the agency.
The drop in turnover in Ukrainian shopping and entertainment centers during the weekend quarantine period amounted to 30-40%, the Ukrainian Council of Shopping Centers reported.
“We expected that the losses would amount to at least 12 billion per month, but in fact, the weekend flows were partially offset by the growth of flows on Friday, Monday and Tuesday. These days, the flow increased by 10-20%, and the quarantine itself lasted three weeks. As a result, according to our calculations, losses amounted to UAH 6-7 billion in three weeks,” the Council noted.
The Epicenter company stressed that the biggest blow to retail was the ban on trade at weekends after Black Friday, when consumers traditionally plan to buy gifts for the New Year. In particular, this year, due to the weekend quarantine, online sales during the Black Friday period decreased by 30% compared to the same period in 2019.
“The stoppage of trade during the period of the greatest consumer demand has significantly reduced the purchasing power of the population, hit domestic producers and will lead to a decrease in tax payments to the budget,” Deputy Director General, Director of Retail Trade of Epicenter K LLC Volodymyr Honcharov is quoted in the comment.
He added that the network cooperates with 5,000 suppliers, most of which are Ukrainian producers.
“Some of them have already announced the forced reduction or even curtailment of production due to financial problems associated with the lack of sources of sale of goods. In addition, the reduction of tax payments to the budgets of all levels will deal a significant blow to the financial support of local communities, especially in small settlements,” he beleives.

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The mobile communications operator lifecell increased operating income by 14.2% to UAH 1.746 billion in July-September 2020 (compared to UAH 1.529 billion in July-September 2019).
According to the operator’s press service, the net profit amounted to UAH 36.8 million for the specified period (in the third quarter of 2019, the net loss was UAH 338.3 million). EBITDA increased by 12.3% to UAH 909.8 million, EBITDA margin was 52.1% (for the same period in 2019, this indicator was 53%).
The operator lifecell’s active three-month subscriber base increased by 13% to 7.8 million subscribers in the third quarter and by 2.6% compared to the previous quarter.
At the same time, the active three-month base of users of high-speed mobile 4.5G Internet grew by 51% by the end of the third quarter of 2020 compared to last year and accounted for 60% of all users of data services. Accordingly, the average use of data traffic grew by 59% year to year.
The company’s active three-month ARPU increased by 2.1% in the third quarter of 2020 and amounted to UAH 76.3 compared to UAH 74.7 in the previous year. At the same time, the 12-month active MoU grew by 20.5% to 180.8 minutes (150.1 minutes in Q3 2019).
The operator lifecell’s capital investments increased by 57.1% to UAH 860.6 million in the third quarter of 2020 versus UAH 547.7 million in the third quarter of 2019.
“This quarter we achieved net income for the first time since the company had started operating in 2005. Our subscriber base is continuing to grow, smartphone penetration has reached 81%. The company has managed to gain such results despite all challenging circumstances like pandemic environment, uncompetitive market conditions and strong commitments to state related to fast 4G rollout. And I would like to assure you that we will continue to invest in Ukraine and to do everything we can to provide all our subscribers with best products and services,” Chief Executive Officer of lifecell Ismet Yazici said.

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Income from gambling market legalization in 2021 will amount to UAH 5 billion, President of Ukraine Volodymyr Zelensky has said.
“What has existed in the shadows for years, now with the first licenses, should bring UAH 5 billion to the budget already next year,” Zelensky said from the rostrum of the Verkhovna Rada on Tuesday, October 20.
The draft state budget for 2021 does not contain a forecast of income from the sale of the first licenses in the gambling market. The state budget for 2020 assumed income of UAH 4 billion from gambling legalization.

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PJSC Kriukov Car Building Works (KCBW, Kremenchuk, Poltava region) saw a consolidated net income of UAH 74.5 million in January-March 2020, which is 76.2% less than in the same period in 2019 (UAH 310.75 million).
According to the interim reporting of the enterprise in the information disclosure system of the National Securities and Stock Market Commission, the net income from sales of products for that period decreased by 43%, to UAH 1.114 billion.
Consolidated gross profit decreased by almost 77.8%, to UAH 101.06 million, and operating profit decreased almost fivefold, to UAH 78.02 million.
The consolidated financial statements include, in addition to Kriukov Car Building Works (the parent company), its subsidiaries, namely, Instrumental Plant LLC (Kremenchuk) and V.N.V. LLC (Kyiv), in which 100% belongs to Kriukov Car Building Works.
The company said in the financial statements on its website that the current assets of the group by the beginning of April exceed its current liabilities by UAH 2.983 billion.
In the structure of net income from wagon constructing products, some UAH 1.058 billion was received (38.5% less than in the first quarter of 2019), including sales of main products, freight wagons, decreased by 47%, to UAH 871.5 million, while passenger wagons increased by 2.6 times, to UAH 187 million.
However, the sale of wagons in Ukraine significantly decreased by 70% compared with January-March of 2019, to UAH 487 million (the share in total sales decreased to 43.7% compared to 82.5%), and to the countries of Asia, to UAH 1.58 million compared to UAH 70.28 million. The sale of wagons to European countries grew by 2.3 times, to UAH 624.82 million (their share in total sales rose from 13.9% to 56%).
The number of wagons produced and sold in the first quarter is not given in the report.
Kriukov Car Building Works is the only company in the CIS that has established and operating production of passenger and freight rail wagons. It also produces regional diesel trains, high-speed interregional trains of locomotive traction, spare parts and carts for freight wagons.