Russian business profits fell 4 times, Russia’s Federal State Statistics Service says

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Russian companies have been experiencing a plummeting drop in profits since the beginning of the summer of 2024.

Source: The Moscow Times, citing data from Rosstat, Russia’s Federal State Statistics Service 

Details: As of June 2024, the financial result (profits minus losses) of the economy as a whole decreased by 4 times in annual terms to RUB 860 billion (USD 9.3 million). Compared to June last year (RUB 3.27 trillion/USD 35.5 billion), companies lost more than RUB 2.4 trillion (USD 26 billion) in profits. 

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Compared to May, the balanced profit for the economy was 3.4 times lower, or RUB 2.13 trillion (USD 23 billion).

The report adds that the source of the financial disaster was the coal industry, which lost export markets due to sanctions. 

It is reported that in the first half of the year, coal miners lost money: the total loss of the industry amounted to RUB 7.1 billion (USD 77.1 million) against a profit of RUB 282.5 billion (USD 3 billion) in the same period last year.

Steel producers lost 9% of their profits over the six months, as sanctions also cut off their ability to sell metal to the West. 

Profits of oil refineries, which have shut down production at least 10 times, dropped by 22%. Retailers lost more than 26% of their profits, and excluding car dealerships, the decline was almost double – by 46.1%.

Russian businesses are losing profitability as the economy slows and the banking system faces increasing problems with cross-border payments. 

In June, Russian industry declined by 0.8% compared to June, and by 1.5% in June compared to May.

Background:

• In June, the growth rate of industrial production in Russia slowed almost three times and became the lowest in the last 15 months.
• Finance ministers of eight EU countries said that the Kremlin was spreading lies about the Russian economy being unaffected by Western sanctions.

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