Russian companies post surprisingly low financial results in first half of 2002
Data on Russian companies released on August 27 seems rather exotic besidethe recent economic scandals in the USA and Europe, as major companies wentbankrupt and western investors realized almost all financial giants (andthey are not the only ones) overestimate their profit results. Westernanalysts could even feel jealous about that. In the first half of 2002, theconsolidated financial result (losses extracted from profits) of Russianindustrial enterprises in current prices lost 48.6 percent against thefirst half of 2001. This data was provided by the Macroeconomic ResearchCenter with reference to the State Statistics Committee of the RussianFederation. There is no need to explain that it is a normal thing inRussia, where the accounting system is oriented to paying taxes, tounderestimate profits rather than overestimate them. However, theestimations of the Statistics Committee turned out to be too frightening.In particular, the consolidated financial result lost 55.3 percent in thefuel industry (even though it increased 6.9 times as much in the gasindustry), 63.6 percent - in the energy industry, 11.7 percent - in thetransport industry, 31.8 percent - in the construction industry and 53.4percent - in trade and public food. The only exception here iscommunications companies - their financial results increased by 11.2percent. In an opinion of experts from the Macroeconomic Research Center,the decrease in consolidated financial results was initiated by alarge-scale reevaluation of companies' fixed capital, which led to greateramortization payments and raised profits volumes as well, the NezavisimayaGazeta wrote..