The profit of Russian companies showed the strongest decline in 12 years

The international audit and consulting network FinExpertiza has summed up the performance of large and medium-sized enterprises in Russia (excluding small businesses) in 2020. For many enterprises, the year was financially disastrous.

“Excluding losses at the end of 2020, profit fell by 23.5%, which was the largest drop since 2008, that is, over the past 12 years”, - the analysts said.

Then the fall was 30.4%, but in absolute terms the amount of lost income 12 years ago was twice as low and amounted to 1.74 trillion rubles.

Now, in more than half of the regions of the country, companies have experienced a deterioration in financial performance. The negative trends of the pandemic period were felt by representatives of large and medium-sized enterprises in 48 out of 85 regions of the country.

“In 2020, the most dramatic decline in business income occurred in the spring, when companies faced a sharp decline in global demand due to the closure of national economies after the spread of the coronavirus pandemic around the world”, - the researchers said.

Among the main reasons for the collapse, experts call the shock from the collapse in oil prices, forced by the collapse of the OPEC + deal, and the cheapening of other commodities. A significant factor during the lockdown was also the fact that industries focused on mass consumer demand were forced to restrict their work due to quarantine measures.

Analysts note that enterprises in North Ossetia, the Nenets Autonomous Okrug, Ingushetia, the Amur Region, Sevastopol, Chuvashia, the Kemerovo Region, the Jewish Autonomous Region, Tatarstan and the Komi Republic experienced the maximum decline in business profitability.

Judging by the absolute indicators of the decline in profits, enterprises in Moscow, Yamalo-Nenets Autonomous Okrug, Tatarstan, Sakhalin, Perm Territory, Tyumen Region, Kemerovo Region, Bashkortostan, Krasnodar Territory and the Komi Republic were among the anti-leaders.

Among the industries that were able to win during the lockdown, analysts name business in the field of administrative activities (this is rent and leasing, maintenance of buildings and territories, security, economic support of enterprises and other support services for business). Growth in these industries in 2020 amounted to 91%, up to 230 billion rubles.

In addition, increased profits appeared in agriculture, where profits increased by 86%, to 542.3 billion rubles, in real estate (by 72.3%, to 831 billion rubles), construction (by 53.1%, to 249.6 billion rubles), retail trade (by 34.4%, to 515.8 billion rubles). One of the seriously grown markets was the information and communications market, where profit growth was 30.3%, up to 509 billion rubles.