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Financial situation of woodworking enterprises remains tangled in spite of growth in output and exports

Companies and Markets
18:22 | 09.08.2017 | Business-News

The output of the pulp and paper and woodworking industry grew by 17.5% following the results of Q2 2017.

 

Minsk Region (it accounts for 18.7% of the total output), Grodno Region (18.7%), and Mogilev Region (17.5%) became the leaders by the output in the regional context.

 

The stocks decreased following the results of H1 as compared to the same period of 2016 and as of July 1, 2017 amounted to 94.6% of the average monthly output. The stocks exceeded 100% of the average monthly output over the previous periods since the beginning of 2017.

 

The biggest growth in output over H1 2017 was demonstrated by fiberboard and plywood. They grew by 61.9% and 59.6% as compared to the same period of 2016.

 

Bellesbumprom companies increased the output of all kinds of both board and furniture products. The plywood products rose by 164.9% following the results of H1 2017 as against 2016, chipboard – by about 138%, fiberboard by – 173-187% (depending on the category of the products). The output of furniture products did not change. The growth rate amounted to 100.1%.

 

There were positive dynamics of sales in Q2. They were positive mainly at the expense of the export sales because the domestic demand continued stagnating.

 

Russia, Poland, Ukraine, and the Baltic States are the main export markets for the Belarusian manufacturers. At the same time, the enterprises are going to expand the sales geography. The enterprises increased exports to Kazakhstan and established new contacts with the Rumanian customers.

 

The Russian ruble strengthened in H1. The European currency began to grow. It results in the decreased imports by almost all kinds of products.

 

However, the favorable foreign market environment does not improve the financial performance of the enterprises and branch as a whole. According to the information of BUSINESS NEWS, only 35% of the enterprises demonstrated a positive profitability of sales in Q1 2017. The others have a zero profitability of sales at the best case.

 

The working capital of most manufacturers does not allow them to cover their current payment liabilities. Therefore, their financial standing cannot be considered as strong. It is mainly connected with a high loan debt and low paying capacity of the national contractors.

 

See the detailed analysis of the branch state in the review "Woodworking and furniture – Q2 2017" prepared by the research center of BUSINESS NEWS.

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