Increased revenue, decreased profits:Belarusian sugar conglomerates experience margin loss despite record sales
Titel: Sweet and Sour Sugar Factories: Unraveling Belarusian Sugar Industry
In 2024, the sugar factories in Belarus surprised many with a remarkable 15.8% surge in overall revenue, pushing the total over the 1.59 billion ruble mark. However, the industry's net profit took a tumble, slashing a quarter of its previous figure.
Leading the charge, OAO "Slutsk Sugar Refinery" and Zhabinka Sugar Factory saw their income rise by 15.85% and 16.9%, respectively, with the former raking in 484 million rubles and the latter 339.3 million. But, the profit pie shrunk for both, with Slutsk paying out 82.7 million less and Zhabinka pocketing 23.1 million less than the previous year.
Similarly unsettling was the performance of the Grodno Sugar Combine, which managed to increase its revenue by almost 26% to a whopping 455.4 million rubles. Yet, their net profit also suffered a 23.9% hit, ultimately totaling 41 million rubles.
The Skidel Sugar Factory fared even worse, experiencing a meager 2.8% revenue growth, totaling 312.4 million rubles. Yet, their net profit plummeted almost 3.5 times, reaching a disappointing 7.9 million rubles.
Despite these setbacks, sugar factories maintained their tradition of offering dividends to shareholders. The enterprise announced a dividend of 6.1 rubles per share. The Slutsk Combine outshone the competition with a generous 37.515 rubles per share, while the Zhabinka Sugar Factory offered a mere 0.86 rubles.
It's important to note that, according to the Eurasian Sugar Association, 6.85 million tons of sugar were produced in the EAEU countries in the past season, with Russia leading the pack at 6.05 million tons, followed by Belarus at 614 thousand tons, Kazakhstan at 67 thousand tons, and Kyrgyzstan at 120.5 thousand tons.
The economy of Belarus, however, presents a more intriguing picture. Since 1990, the real GDP has doubled, with manufacturing tripling and agricultural output increasing by 37%. The agricultural sector continues to play a vital role in the country's economy, contributing around 7% to its GDP.
The agricultural sector performance saw fluctuations in 2024, with the gross added value dropping slightly from $5,926.3 million in 2023 to $5,206.9 million. The profitability of agricultural sales increased slightly, with a sales profitability rate of 9.3% in 2023 and 6.4% in 2024. The net profit from agricultural activities totaled $908.5 million in 2023 and $708.9 million in 2024.
The decrease in net profit of sugar factories in 2024, coupled with rising operational costs or market pressures, calls for thorough examination and potential intervention strategies to ensure the long-term sustainability of the sector. Further research could yield insights into broader trends and situational factors affecting the Belarusian sugar industry.
In the realm of Belarusian business, the sugar factories, despite facing a decrease in net profit, still managed to invest significantly in their operations, with OAO "Slutsk Sugar Refinery" and Zhabinka Sugar Factory registering 15.85% and 16.9% revenue surges respectively, in the year 2024. These businesses, however, also experienced a notable drop in their profits, highlighting the need for financial analysis and potential investment strategies to secure the industry's long-term sustainability.
