Sugar sales hit record highs in Belarus, yet profit margins diminish for prominent sugar companies
Revamped Report:
Sugar factories in Belarus saw a significant increase in total revenue by 15.8% in 2024, raking in 1.59 billion rubles. However, the net profit took a hit, plummeting by a quarter.
For instance, OAO "Slutsk Sugar Refinery" bumped up its revenue by 15.85% to 484 million rubles, while the Zhabinka Sugar Factory reported a 16.9% surge in revenue to 339.3 million. Despite the boost in income, their net profit took a nose dive - 8.75% for Slutsk and a substantial 34.8% for Zhabinka, landing at 82.7 million and 23.1 million rubles respectively.
The Grodno Sugar Combine managed to pump up its revenue by almost 26% compared to the previous year, reaching 455.4 million rubles. Regrettably, its net profit also saw a dip of 23.9% to 41 million rubles.
The revenue of OAO "Skidel Sugar Factory" climbed a modest 2.8% to 312.4 million, but its net profit cratered by almost 3.5 times, from 27.5 million to 7.9 million rubles.
Notwithstanding these losses, the enterprise declared dividend payments amounting to 6.1 rubles per share. Meanwhile, Slutsk Combine and Zhabinka Sugar Factory doled out 37.515 rubles and 0.86 rubles per share in dividends.
It's worth highlighting that, according to the Eurasian Sugar Association, a staggering 6.85 million tons of sugar were produced in the EAEU countries in the last season, with Russia accounting for 6.05 million tons, Belarus producing 614 thousand tons, Kazakhstan contributing 67 thousand tons, and Kyrgyzstan chipping in 120.5 thousand tons.
Belarusian sugar factories may have faced challenges such as increased production costs, depreciation and amortization, operational expenses, market and export factors, and non-monetary adjustments like provisions and impairments that could have led to the decline in net profit despite higher sales.
- Consumer loans
- Auto loans
- Business loans
- Mortgages
- Deposits
- Loans
- Banking products
- Credit cards
- Debit cards
- Leasing services for new cars
- Leasing services for used cars
- Leasing services for business cars
Sources:- Eurasian Sugar Association- Belarusian Ministry of Agriculture and Food- Belarusian National Statistics Committee
Potential explanations for the decreased net profit:
- Increased production costs (input costs, energy prices, etc.)
- Depreciation and amortization (capital expenditures, infrastructure maintenance)
- Operating expenses and overheads (transportation, logistics, administration)
- Market and export factors (export restrictions, tariffs, currency exchange rates, reduced market access)
- Non-monetary adjustments (provisions and impairments)
Supporting evidence from Belarusian agriculture:- Agricultural profitability fluctuated, reaching a high of 9.3% but dropping to 6.4% in the latest reported period- Average monthly salaries in agriculture have been rising- Significant investments in capital assets may have increased short-term depreciation.
Overall, the decrease in net profit of Belarusian sugar factories in 2024, despite an increase in revenue, was likely due to a mix of rising costs, increased capital expenditures, and potential market or regulatory challenges that eroded profit margins. For a more precise answer, official reports or statements from Belarus’s agricultural authorities or sugar industry associations would be required.
The revenue growth in the finance sector might have been influenced by the boost in profits from sugar factories in Belarus, as industries such as sugar witnessed a significant increase in total revenue. However, these businesses may have encountered challenges in maintaining their net profit, with factors such as increased production costs, depreciation and amortization, and non-monetary adjustments potentially contributing to the decline.
