/ world today news/ More than a quadrillion rubles – such an amount with 15 zeros – was declared by Russian companies to the Federal Tax Service in 2022. The companies’ revenues exceeded the threshold of one quadrillion for the first time in the history of Russia. How did you manage to achieve such an unusual figure and what could this mean?
Revenues of companies in 2022 have almost doubled compared to 2021 – from 655 trillion rubles to 1.27 quadrillion, according to the Federal Tax Service. The organizations revenue exceeded a quadrillion in the first nine months of last year. Interestingly, company profits grew not so significantly – only by 5.9%, from 29.4 trillion in 2021 to 31.1 trillion rubles. Companies have paid profit tax for almost 5.6 trillion rubles. According to the Federal Tax Service, since 2015, the taxable profit of companies has been continuously growing, except for 2020. In the year of the beginning of the pandemic, the profit decreased by 8% compared to 2019.
As for company revenues, in 2018-2020 they averaged 260 billion rubles. A sharp increase in revenue began right in 2021 – an increase to 655 billion rubles, respectively, in 2022. Again a record growth.
What explains such an interesting number with 15 zeros? “The sharp increase in the revenues of Russian companies in 2022 occurred against the background of rising global energy prices and an increase in exports of Russian energy resources to EU countries in the run-up to the embargo. In particular, in 2022, Russia increased its exports of oil, petroleum products and mineral fuels by 42.8%, to 383.7 billion dollars, LNG exports by 7.9%, to 45.7 billion cubic meters, and for Europe with 20%. At the same time, European natural gas prices rose by hundreds of percent, and average annual world oil prices by about 30% year-on-year. It turns out that the main contribution to the growth of revenues is made by Gazprom, which increased revenues in 2022 by 14.7% to 11.7 trillion rubles, and operating profit amounted to 3.6 trillion rubles, and other representatives of the oil and gas industry – “Rosneft”, “Novatek”, “Lukoil”, “Tatneft”, “Surgutneftegaz”, explains analyst Vladimir Chernov.
Last year, prices also rose for other Russian export goods. In particular, fertilizers showed high growth in world prices, due to which PhosAgro’s revenue in 2022 grew by 35.4% to 569.5 billion rubles. Another large taxpayer is RusAgro, which has increased its revenue in 2022 by 10% compared to 2021 to 258.6 billion rubles, Chernov notes.
Not only the high energy prices, but also the acceleration of inflation contributed to the growth of the revenues of Russian companies, believes Vladimir Evstifeev, head of the analytical department of the Zenit bank.
Interestingly, revenues have almost doubled, and corporate profits by only a few percent. Experts attribute this to rising costs.
“The dissonance with the rate of profit growth is explained by the costs of business transformation and foreign trade activity – the increase in logistics and equipment costs, the search for new suppliers, the purchase of projects of foreign companies in the Russian Federation,” says Evstifeev.
First of all, the small increase in net profit is related precisely to the increase in the costs of companies, which happened against the background of external pressure and high rates of global inflation, not only in Russia. “The largest increase in costs is in logistics, as due to the redirection of export flows, logistics routes have become longer, and due to the growth of world energy prices, the fuel for these deliveries has become more expensive and led to additional costs,” says Chernov. Previously, Russian oil went to European ports, but now it is mainly Indian and Chinese, as well as other countries. At the same time, it was necessary to pay extra for the transportation of Russian oil even before the official embargo, because it had already become toxic during the discussion of the sanctions.
As for importers, last year they suddenly lost the ability to buy many Western goods and services, equipment and machinery. And it took a lot of effort and money to find a replacement and new delivery channels. At the same time, imported products also rose in price significantly. “Against the background of high levels of global inflation, the purchase of raw materials, equipment, spare parts and components rose in price, so companies were forced not only to increase the cost of their supply, but also the purchase itself,” says Chernov.
Experts do not expect a repeat of the company’s two-fold increase in revenue this year.
“It will be difficult for companies to show such statistics this year, as energy exports do not have such high expectations. But low inflation and the absence of shocks in the currency market can keep the profits of companies at the level of the average for the last five years,” said Evstifeev.
Chernov even expects a decline in revenues and net profit of Russian companies. First, exports of Russian natural gas collapsed, and it was this commodity that provided the largest increase in revenue last year. Second, seaborne oil shipments were embargoed and are now being sold at a discount.
“If last year the EU countries were still trying to buy Russian energy resources for the future, this year they have to send energy resources to the East, which is much more expensive from the point of view of logistics and cheaper from the point of view of the final commodity price amid falling global energy prices. Fertilizer prices also fell sharply this year, as well as grain exports, but growth is still expected here,” Chernov notes.
The expert calls the ruble exchange rate the only plus for Russian exporters in 2023, as it is now 50% higher than June last year, which means export earnings in rubles will also be higher by the same amount , if you don’t take the discount into account. According to Chernov, in the best case scenario, in 2023 the companies’ revenues will increase compared to 2021. However, it will not be possible to surpass the revenues of 2022, as world oil prices and natural gas exports from Russia have fallen sharply, concludes the expert.
Translation: V. Sergeev
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