Business news from Ukraine


Ukraine’s losses from destruction due to a full-scale war against Russia amount to at least $100 billion, the war has led to a complete shutdown of half of Ukrainian enterprises, Oleh Ustenko, adviser to the President of Ukraine, said.
“Currently, about 50% of our business is not working. The rest of the enterprises are operating at the limit of their capabilities,” Ustenko said during an online discussion hosted by the Peterson Institute for International Economics on Thursday.
According to preliminary estimates, the cost of destruction, including infrastructure, hospitals, residential buildings, has reached $100 billion, but this is a rough estimate, he said. According to Ustenko, Russian assets frozen in various countries, including the reserves of the Russian central bank, should be used to finance the restoration of these destructions in Ukraine.
The adviser to the President of Ukraine also noted that the possibility of using the arrested assets of Russian oligarchs for these purposes is being calculated.
Earlier, deputy head of the NBU Serhiy Nikolaychuk, in an interview with Bloomberg, also estimated the fall in the country’s GDP in the days after the war started by Russia on February 24 at 50%.
According to head of the NBU Kyrylo Shevchenko, in an interview with Dzerkalo Tyzhnia on Thursday, the territories of more than 10 regions, as well as the city of Kyiv, which accounted for more than half of the country’s GDP, are currently covered by hostilities and massive shelling.
“An accurate forecast of GDP can only be made after the end of hostilities,” he said.
Shevchenko pointed out that the impact of the war across sectors is uneven: the service sector suffered the most, while some sectors reoriented production under martial law to the production of products for the needs of the country’s defense (food and textile industries, engineering, production of building materials). In his opinion, this can to a certain extent reduce the impact of the war on the economy.
As reported, Ukraine’s GDP in 2021 for the first time amounted to about $200 billion.


Ukrzaliznytsia by the end of 2020 expects to see a loss of UAH 12-14 billion.
“My personal vision: we will end this year with a loss of UAH 12-14 billion,” Head of Ukrzaliznytsia JSC Volodymyr Zhmak said at a briefing in Kyiv on Thursday.
At the same time, he said that the company counts on the support of international financial institutions.
“We are counting on our partners from the financial sector, first of all, international financial institutions,” he added.
In January-June 2020, Ukrzaliznytsia saw a net loss of UAH 8.792 billion, while for the same period in 2019 its net profit amounted to UAH 1.065 billion. At the same time, Ukrzaliznytsia’s net income from the sale of products (goods and services) in January-June 2020 amounted to UAH 35.623 billion (a decrease of 19.42% compared to the same period in 2019).



The losses of winter crops due to drought in Ukraine in the entire country are estimated at 234,000 ha, which is 2.6% of all areas with winter crops, the Ministry for Economic Development, Trade and Agriculture has told Interfax-Ukraine. According to the ministry, the most affected by the drought are winter rape crops – 103,000 ha, wheat – 74,000 ha, barley – 53,000 ha, and peas – 1,300 0 ha.
Potential crop losses in 2020/2021 agri-year for winter wheat are 216,650 tonnes, winter rape – 211,890 tonnes, winter barley – 150,820 tonnes, sugar beets – 50,030 tonnes, peas – 3,050 tonnes, winter rye – 539 tonnes.
At the same time, the Economy Ministry estimates the possible loss of revenue for winter rape at UAH 2.14 billion (19% of the possible income from crops), winter wheat – UAH 0.99 billion (3%), winter barley – UAH 0.63 billion (12%), and sugar beets – UAH 0.03 billion (2%).
“In March-April this year, there was rainfall deficit throughout Ukraine. As a result, spring air drought developed and deepened, which combined with soil drought in many areas of the southern regions,” the ministry said.

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The introduction of quarantine measures to combat the spread of COVID-19 dealt a significant blow to the retail real estate market in Kyiv, as in the first month of quarantine it suffered significant financial and reputation losses, loss of human capital and competitive advantages. “The Kyiv retail real estate market in the first month of quarantine suffered losses of about $50 million,” NAI Ukraine consulting company told the Interfax-Ukraine agency.
The head of the Cushman & Wakefield Ukraine retail property department, Yekateryna Vesna, noted several categories of losses for owners of shopping centers: monetary, reputational, human capital and competitive advantages.
The financial ones include loss of rental income from stores that cannot work, income from the commercialization of common areas and sale of advertising space, a decrease in turnover in stores that are allowed to operate, which leads to a decrease or absence of rental payments from sales.
In addition, according to Vesna, costs for protection and disinfection grew.
“Shopping centers now predict an increase in vacancy. The less popular the facility is, the higher the share of free space will be at the end of quarantine,” the expert predicts.
The owners of the trade malls also suffer loss of human capital, as they had to cut employees or send them on vacation at their own expense. Not all workers will be able to return after trade centers resume their work.



Astarta in the first quarter of 2019 received a net loss of EUR4.43 million compared to a net profit of EUR3.7 million in the first quarter of last year, linking the deterioration of financial indicators with unfavorable sugar market conditions and higher financial expenses.
According to a company report on the Warsaw Stock Exchange, its revenue, due to good results of soybeans processing and crop production, rose by 27.8% compared to January-March 2018, to EUR115.79 million, and EBITDA by 2%, to EUR13.61 million.
Astarta’s net debt declined slightly in the first quarter, from EUR295.45 million to EUR292.99 million, which, however, was significantly more than a year before, EUR201.5 million.
Mainly due to low prices for sugar and other commodities, Astarta broke a number of financial covenants on bank loans at the end of the first quarter, and therefore reclassified loans worth EUR121 million as current ones, but the management expects that lenders will not require early repayment.
According to the report, the investment program of the company for 2019 will be limited by capital expenditures for maintenance, completion of the program of elevators infrastructure and the acquisition of grain wagons.



JKX Oil&Gas Plc with assets in Ukraine saw a 52.3% fall in net loss in 2017, to $17.7 million. According to an annual report of the company posted on the website of the London Stock Exchange (LSE), revenue last year grew by 3.5%, to $76.4 million, and operating profit stood at $7.8 million compared with $3.9 million of loss a year ago.
In 2017 group average production was 8,658 barrels of oil equivalent per day (boepd, 14.1% down year-over-year).
Production in Ukraine fell by 12%. Gas production fell by 10%, to 16.7 million cubic feet per day (MMcfd). Oil and gas condensate output decreased 20%, to 719 boepd.
As reported, in Ukraine JKX owns Poltava Petroleum Company.
The largest shareholders of JKX are Eclairs Group of Ihor Kolomoisky and Hennadiy Boholiubov with 27.47% of the shares, Keyhall Holding with 11.42% of the shares, Neptune Invest & Finance Corp with 12.95%, and Russia’s Proxima Capital Group with 19.92% and Interneft Ltd. with 6.6%.

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