The net loss of state-owned Ukreximbank (Kyiv) in 2020 amounted to UAH 5.6 billion against a net profit of UAH 63.62 million in 2019, chairman of the bank’s board Yevhen Metsger has said in a column published by the Interfax-Ukraine agency.
According to him, in the fourth quarter of 2020, the bank’s net loss amounted to UAH 3.4 billion, which is 1.5 times more than in the corresponding period of 2019 (UAH 2.21 billion).
Metsger explained that Ukreximbank entered 2020 with a number of problems, in particular, a structural deformation of the balance sheet, a weak foreign exchange position, a significant amount of overdue debt, a pool of expensive borrowings in foreign markets, which led to the formation of a loss.
According to him, these problems were caused by political factors, and in the context of the pandemic, they were intensified by macroeconomic challenges.
In addition, the banker said that the bank’s operating model was set to automatically generate losses, in particular, the volume of loan bookings regularly exceeded operating income by an average of 50%.
“And this accumulated portfolio of toxic assets caused constant pressure on the financial result. Firstly, a sufficient level of reserves was not formed for it, and secondly, it does not generate interest income for the bank. Over 2020, expenses to cover expected losses from the credit risk of non-performing assets amounted to UAH 4.3 billion,” Metsger explained.
The net consolidated loss of the Naftogaz group in January-September 2020 amounted to UAH 17.034 billion compared to a net profit of UAH 21.31 for the same period last year.
“For the nine months, reported loss was UAH 17.0 billion, compared with a profit of UAH 12.9 billion for the same period in 2019, excluding discontinued operations [gas transit transferred from January 1, 2020 to GTSOU], reflecting lower demand and gas prices,” the company said in a statement Thursday.
According to the report, in the third quarter of this year, Naftogaz’s net loss from continuing operations was UAH 5.49 billion, which is 61.8% more than in the third quarter of last year. The group said that if we exclude the profit from transit during this period in 2019, then the increase in loss will not be so significant – 14.6%.
“Operating cash flow for the quarter was UAH 0.5 billion, compared with a negative operating cash flow of UAH 12.6 billion in Q3 2019 (excluding discontinued operations). For the nine months in a challenging environment, operating cash flow was UAH 16.1 billion, almost in line with the operating cash flow of UAH 16.9 billion in the same period last year,” Naftogaz said.
The group said that after abolishment of the Public Service Obligations (PSO) on August 1, 2020, Ukrainian gas consumers can switch freely from gas suppliers and benefit from market-based pricing, whilst gas intermediaries pay for gas supplies. However, payments for deliveries made before 31 July 2020 and under the PSO remain outstanding which results in provisions for bad debts, UAH 3.7 billion in the nine months. “Provisions for bad debts will likely have again a negative impact on profitability in the next quarter,” Naftogaz said.
According to the report, the group expects to receive of compensation from the state in the amount of UAH 32.204 million in 2020 under a law on cross payments with Ukrnafta recently passed, and this could bring the group to profits at the end of the year.
The group reported that adjusted EBITDA in 9M 2020 amounted to “minus” UAH 1.2 billion versus UAH 26 billion in 9M 2019, while in the third quarter the situation was reversed: this year EBITDA was positive – UAH 0.5 billion versus minus UAH 2.8 billion a year ago.
Naftogaz said that the positive contribution of exploration and production to EBITDA in 9M 2020 amounted to UAH 16.3 billion versus UAH 34.5 billion in 9M 2019, while the negative contribution from commerce was UAH 16.3 billion and UAH 9.9 billion respectively.
“Exploration and production result reflected lower gas prices that were partially offset by lower subsoil royalties as compared to the nine months of 2019,” the group said.
The group recalled that 10.7 billion cubic meters were produced and 12 billion cubic meters of natural gas were sold in 9M 2020.
In addition, Ukrnafta, in which Naftogaz owns 51%, increased the negative result of this year by UAH 2.2 billion, while last year its contribution was positive – UAH 1 billion. Ukrnafta’s result were negatively impacted by lower gas selling prices as well as lower volumes of crude oil sold, according to the report.
At the same time, the group managed to increase EBITDA from natural gas storage to UAH 3.8 billion from UAH 0.8 billion and to maintain a positive contribution of EBITDA from transportation, oil refining and sales of oil products – UAH 1.3 billion versus UAH 1.9 billion in 9M 2019.
“Gas storage reflected higher revenues from pumping and storage services due an increased demand. Oil midstream and downstream was primarily attributable to lower selling prices for petroleum products which were not wholly offset by attributable cost savings over the period,” the group said.
The group’s revenue in 9M 2020 fell compared to 9M 2019 by 6.2%, to UAH 103.17 billion, but in the third quarter it grew by 64%, to UAH 31.77 billion.
“Capital expenditure in the first three quarters of 2020 was UAH 11.8 billion, below the full-year target of UAH 20 billion. Free cash flow was resilient at UAH 4.1 billion,” Naftogaz said.
The group said that in the third quarter of this year capital expenditures totaled UAH 4 billion versus UAH 6.3 billion a year ago.
Its net debt fell from UAH 42.6 billion at the end of 2019 to UAH 19.7 billion at the end of the third quarter, and cash and cash equivalents fell from UAH 77.59 billion to UAH 45.81 billion.
In October-November 2020, the group paid off loans for the amount of UAH 3.36 billion and borrowed UAH 2.67 billion from banks.
Naftogaz Ukrainy unites the largest oil and gas companies in the country. The group is a monopolist in the storage of natural gas in underground storage facilities and the transportation of oil by pipeline throughout the country.
Milkiland, a dairy group with assets in Ukraine and the Russian Federation, ended January-September 2020 with a net loss of EUR 29.03 million, which is 2.5 times more than in the same period in 2019.
According to the group’s report on the Warsaw Stock Exchange, Milkiland’s consolidated revenue decreased by 54.6%, to EUR 43.98 million in the nine months of 2020, as a result of a noticeable drop in the Russian segment of the group’s business. Gross profit decreased by 52.4%, to EUR 6.33 million, and operating loss by 50%, to EUR 9.46 million.
In the reporting period, Ukraine was the largest geographic segment for Milkiland, providing 59% of the group’s revenue (an increase of 19 percentage points compared to the same period in 2019). The segment’s revenues decreased by 33% to EUR 26 million, mainly due to lower sales volumes of the Ukrainian subsidiaries and lower export volumes.
The Russian Federation accounted for 41% of the group’s revenue in January-September 2020, compared with 57% for the corresponding period last year. The segment’s revenue decreased by 66.7%, to EUR 17.97 million, mainly due to a drop in sales of the Russian subsidiaries.
Whole-milk dairy was the largest segment in term of revenue, providing for 39% of revenue in the nine months of 2020 (9 percentage points down from the same period last year). The segment’s revenue decreased by 63%, to EUR 17 million, due to lower sales in Russia and Ukraine, partially offset by the appreciation of the main operating currencies against the euro.
Lavina Mall LLC (Kyiv), the owner of Kyiv-based Lavina Mall located at 6, Berkovetska Street, saw a net loss of UAH 248 million in January-September 2020 against a profit of UAH 116.2 million for the same period in 2019.
According to the company’s information disclosure system of the National Securities and Stock Market Commission, its revenue fell by 17.8% to UAH 520 million.
At the same time, gross profit for the reporting period increased by 7.8% and amounted to UAH 307.7 million, while the financial result from operating activities amounted to UAH 20.2 million loss against profit last year.
The uncovered loss of Lavina Mall LLC increased almost threefold – to UAH 375.6 million.
Long-term liabilities of the company increased by 47.2% to UAH 2.37 billion, current liabilities increased by 19.8% to UAH 2.35 billion.
The assets of the enterprise increased by 21.5% – to UAH 5.1 billion.
Lavina Mall LLC was founded in 2013. The main activity is the leasing and operation of own and rented property.
The French group AgroGeneration with assets in Ukraine received EUR 5.46 million of net loss in the first half of 2020, which is 68.8% less than in the same period last year.
According to a report on the group’s website, income decreased by 13% to EUR 9.47 million in the reporting period. AgroGeneration received EUR 2.48 million of gross profit in January-June 2020 against EUR 5.57 million of gross loss in the same period previous year. The company reduced its operating loss from EUR 10.76 million in the first half of 2019 to EUR 340,000 in January-June 2020.
EBITDA was positive in the first half of 2020 and amounted to EUR 2.83 million against EUR 7.77 million negative in January-June 2019.
The group’s net debt as of June 30, 2020 amounted to EUR 37.18 million against EUR 50.78 million on the same date last year.
The company noted that since the beginning of the year, AgroGeneration has sold all the harvest remaining in stocks from the 2019 season. As of the date of the report, the company had completed the 2020 harvest, which included 100% of early crops, mainly winter wheat, and 100% of late crops, represented only by sunflower.
DTEK Energy saw a net loss of UAH 16.522 billion in January-June 2020 compared with UAH 3.342 billion in net profit for the same period in 2019, according to the company’s report released on Monday.
The company’s revenue in January-June this year amounted to UAH 20.447 billion, which is 42.6% less than in the same period last year (UAH 35.626 billion, taking into account the revaluation).
According to the report, the gross loss amounted to UAH 0.732 billion compared with UAH 9.161 billion of gross profit in the first half of 2019.
DTEK Energy told Interfax-Ukraine that the company’s production and financial results continue to be affected by the systemic crisis in the energy sector.
Thus, in the first half of the year, coal production by the company decreased 23% compared to the same period last year, to 8.7 million tonnes, and electricity production decreased 36.2%, to 10.1 billion kWh.
An additional negative effect was caused by the depreciation of the national currency due to the general economic recession. Loss on exchange rate differences amounted to UAH 5 billion compared with a profit of UAH 2.6 billion in the first half of 2019.
“To normalize the operation of the energy market, it is necessary to remove restrictions that distort its operation and lead to an economic imbalance of the entire industry. Compliance with the principles of free pricing will make it possible to ensure financial recovery of both private and public generation,” DTEK Energy said.
