MOZYR, 31 March (BelTA) – The performance of loss making companies should be analyzed in the context, Belarus' Prime Minister Roman Golovchenko told reporters during his working trip to Mozyr Oil Refinery, BelTA has learned.
The prime minister emphasized that it is necessary to analyze how long a company has been struggling. “There are few companies in Belarus with a long record of poor performance, those are mostly agricultural enterprises. These are small enterprises and decisions on them are being made: some will be shut down, others will merge with larger farms,” he said.
Speaking about other companies, Roman Golovchenko noted that losses are a normal thing in a company's life cycle, even the largest Western companies can work at a loss for years. “It depends on the market situation, on capital expenditures. Of course, if we are constantly investing money, the overall profit will not be high. A company might earn on the sale of products, however heavy investments can generate losses. Therefore, one can end up running a company at a loss or posting zero profit. Each enterprise, especially a big one, carefully analyzes its profitability. In general, we have a fairly high profitability. In particular, in the manufacturing industry the return on sales is close to 10%,” the prime minister emphasized.
He noted that sometimes performance indicators are taken out of context, and information is presented as a financial catastrophe. “This can be viewed as information and economic terrorism. This is designed for an unprepared audience who does not read past the headline. I am quite skeptical about this. I am sure that people who are really interested in economics and want to wrap their head around certain issues, can do it, because there are enough materials for this. You just need to choose reliable sources of information,” he said.
Roman Golovchenko also noted that Belarus' manufacturing sector is doing pretty well financially and economically in the first quarter. “In the first two months, the manufacturing sector grew by 8%. This is a fairly good result. The return on sales is good. Of course, a company can run into a loss for reasons beyond their control. For example, the 20% devaluation of the Belarusian ruble, which occurred in 2020, caused companies to sustain losses. After all, many companies hold debt in foreign currency. Loans raised in foreign currency are immediately revalued in Belarusian rubles - and a loss appears on paper. There are many similar factors, so each case needs to be dealt with separately,” the premier concluded.
