Russian blue chip companies post bad results

RUSSIA / FSU POLITICS - In Brief 18 May 2020 by Alex Teddy
Results for Q1 are out now. They are almost uniformly bad. Energy companies and banks have been hit hard. Airlines are suffering the worst. The worst is yet to come in Q2. It is unlikely that these entities will rebound once coronavirus is beaten. VTB estimates it will take 18 months to recover after lockdown. Sberbank is the biggest bank and profits are down 47% in Q1. It has increased its provision for losses on its loans 800%. Many debtors will be unable to pay. VTB saw profits down 14% in Q1 which is surprisingly good. Overall profits for all companies were down 85% in April year on year. Lenders are likely to suffer most.Government help to banks is less than in 2008 and 2014. Energy companies are hit by low prices and a production cut. Rosneft suffered its first loss in 8 years. It lost USD 2.2 billion in Q1. That is much worse than anticipated. Oil market turmoil in April will make Q2 look grimmer when that comes out. Food delivery companies like Yandex are among the few winners in Q1.

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