216 million BYN of loss, 665 million BYN of debt. Is it possible to get Belshina out of the financial hole?
The auditors raise doubts about the company’s further continuous operation. However, the state cannot allow the bankruptcy of the tire plant.
Belshina’s revenue for 2020 decreased from 735.5 million BYN to 700.5 million BYN. This follows from the reporting of the company for the past year under IFRS. The cost of goods sold decreased to 621.3 million BYN.
In 2020, the tire plant received a net loss of 216.3 million BYN which is three times more than in 2019. It was based on the cost of financial activities. In particular, the state-owned company wrote off 128.8 million BYN in exchange rate differences from the remeasurement of assets.
Long-term borrowings increased to 665.1 million BYN, short-term – to 297.7 million BYN. At the same time, short-term liabilities exceeded short-term assets by 119.5 million BYN. The net assets of Belshina are negative and amounted to 336.4 million BYN, the auditors summarize.
In 2020, Belshina made a netting of accounts receivable and payable in the amount of 43.3 million BYN, the report says.
On August 4, the Prime Minister Roman Golovchenko during his visit to Bobruisk said:
– We are not talking about new state support in the form of any financial injections. We agreed that under the implementation of the strategy [development until 2025] we will consider the possibility of partial restructuring of the debt and the use of more favorable conditions for its repayment. However, it will be strictly linked to the implementation of those measures outlined in the strategy.
Golovchenko admitted that Belshina’s debt burden is quite large both to the budget and to commercial banks. To restore the business, the authorities hired an international consulting company that developed a long-term strategy for the Bobruisk enterprise.
“Because it is probably impossible to find another way out of a rather difficult financial situation in which Belshina has found itself for a number of reasons”, – Golovchenko said.
He set before the management of the tire plant the task “to add 150-200 million BYN to the revenue every year in the five-year plan”. The government thinks that the implementation of this plan will help Belshina repay its debts.
Belshina’s director general Andrey Bunakov assured the Prime Minister that the plant has prospects for further development.
“For this purpose we are implementing a number of investment projects that relate primarily to large and extra large-size tires. In this case, it is necessary to work on quality, and the most important thing is the foundation for the further development of our enterprise. We have developed a strategy, we know where to move, and we know which markets are waiting for us. We have orders for the second half of the year”, – Bunakov emphasized.
Belshina’s priority sales market in Belarus includes the conveyors of such enterprises as MTZ (Minsk Tractor Works), MAZ (Minsk Automobile Plant), BELAZ (Belarusian Automobile Plant), Gomselmash, BobruiskAgromash, Amkodor, BelGee. So, in 2020, 46,537 tires manufactured in Bobruisk and worth about 4 million BYN were sent to the plant near Borisov to complete Geely.
“After all, the uninterrupted supply of tires to domestic car manufacturing companies ensures the continuity of the production process at these enterprises and the stable sale of automotive products, it serves as a support for the production of Belshina, forms the market for secondary equipment and has a positive effect on the country’s economy as a whole” – Bunakov said earlier.
The share of supplies to the automotive industry is 44.3%, and to the secondary market of Belarus – 55.7%.
In 2020, Belshina produced 4 million tires, including about 3 million tires for light vehicles and almost 600 thousand tires for trucks and buses. Almost half a million more tires were produced in other sizes, including extra large-size tires.
Over the past few years, Russia, Ukraine, the countries of the Caucasus and Central Asia have become traditional external markets for Belshina. The state-owned company is also exploring new markets for the supply of its products. However, the possibilities are limited. It is possible to effectively sell a passenger tire within a radius of 3 thousand km, truck and agricultural tires – 4.5-5 thousand km, large-size and extra large-size tires – all over the world. But the point is that since June 3, Belshina has been under US sanctions again.