BMK
OJSC "Bereza Meat Canning Plant"
UNP: 200025739 · 1 Sverdlov St., Bereza, Brest Region 225209
Identification
Financial statements
k BYN
| Line item | Reporting year | Prior year |
|---|---|---|
| Fixed assets | 86 555 | 69 485 |
| Intangible assets | 582 | 174 |
| Income-bearing investments in tangible assets | — | — |
| Investments in long-term assets | 9 017 | 6 920 |
| Long-term financial investments | 9 613 | 9 613 |
| Long-term receivables | — | — |
| Other long-term assets | 248 | 19 |
| Total Section I (long-term assets) | 106 015 | 86 211 |
| Inventories | 35 536 | 34 327 |
| — materials | 22 526 | 19 291 |
| — work in progress | 2 737 | 2 463 |
| — finished goods and merchandise | 10 273 | 12 573 |
| — goods shipped | — | — |
| Deferred expenses | 418 | 466 |
| VAT on acquired goods, works, services | 171 | 325 |
| Short-term receivables | 32 488 | 26 438 |
| Short-term financial investments | — | — |
| Cash and cash equivalents | 3 408 | 10 760 |
| Other short-term assets | 24 | 9 |
| Total Section II (short-term assets) | 72 045 | 72 325 |
| BALANCE (assets) | 178 060 | 158 536 |
| Charter capital | 46 826 | 46 826 |
| Reserve capital | — | — |
| Additional capital | 53 388 | 47 670 |
| Retained earnings (uncovered loss) | 46 596 | 36 407 |
| Total Section III (equity) | 146 810 | 130 903 |
| Long-term loans and borrowings | 873 | 1 330 |
| Long-term lease liabilities | 378 | 502 |
| Deferred income | — | — |
| Total Section IV (long-term liabilities) | 1 251 | 1 832 |
| Short-term loans and borrowings | 2 308 | 1 014 |
| Current portion of long-term liabilities | 3 494 | 1 637 |
| Short-term payables | 23 449 | 22 396 |
| — to suppliers, contractors, providers | 15 073 | 14 269 |
| — on payroll | 2 456 | 1 968 |
| — on lease payments | 144 | 356 |
| Deferred income | -2 | 14 |
| Provisions for future payments | 750 | 740 |
| Total Section V (short-term liabilities) | 29 999 | 25 801 |
| BALANCE (equity and liabilities) | 178 060 | 158 536 |
Computed metrics
Integrity checks
Checks passed: 6 of 6
Signals
- Net profit declining: +15,381 → +12,957 (−15.76% YoY). Both years positive, no sign-flip, but a compression trajectory.
- K2 sales compression −0.29pp (8.14 → 7.85). Marginal but consistent with the broad margin pressure across the sector cohort (cost-squeeze).
- K2 net compression −0.73pp (3.98 → 3.25). Net margin for food processing is already low; further compression may become concerning if it continues.
- OCF margin compression −1.25pp (5.97 → 4.72). Cash conversion worsening in parallel with margin compression.
- Revenue real decline: nominal +3.12% with BY inflation 5-7% (NBRB 2025) = real growth −2 to −4%. The volume base is shrinking.
- Capex rising significantly: F4.061 = 27,294 (vs 15,200 prior) = +80%. Long-term assets F1.190 +23% (86,211 → 106,015). An equipment-renewal program is active but funded via earnings retention, which pressures liquidity (F1.270: 10,760 → 3,408 = -68%).
- Cash position falling: F1.270 10,760 → 3,408 (−68%, −7,352k BYN). 31 days of revenue in cash — a low buffer for food processing.
- Receivables F1.250 +23%: 26,438 → 32,488. Cash-conversion days rising (~30 days vs ~25 prior, estimate).
- Additional share issue an active process — 2 disclosures 2026-03 + 2026-05. May change the 97.81% state share and attract new capital. For a pilot pre-recommendation — an open question how the ownership change will affect things.
- Admin expenses F2.040 +40.5%: 8,870 → 12,463. Cost growth substantially outpaces revenue growth (+3.12%) — the enterprise's pricing power is limited against rising costs.
- Real equity substantially positive: F1.410 + F1.460 = +93,422k BYN (current). Accumulated capital is real, not paper revaluation.
- Retained earnings growing: F1.460 +21,694 → +36,407 → +46,596 over 3 years. A trend of steady accumulation.
- Real dividends growing: 921 (2024 fiscal) → 2,964 (2025 fiscal) = +222%. Payout ratio 22.9% of net profit — a healthy reinvestment/distribution balance.
- K1 strong: 2.40 / 2.80 — both periods above the 1.25 norm (~2× the norm).
- K1 SOS strong positive: 0.566 / 0.618 — both periods above the 0.15 norm by 4× (production-sector strong).
- Debt minimal: 873+2,308=3,181 vs revenue 398,431 = debt/revenue 0.8%. A financially independent enterprise.
- Long-term-asset coverage — 1.397 on standard capital (marginal-strong) and 0.893 on real; the funding gap is financed via retained earnings (F1.460 accumulation), not debt. A healthy capital structure.
- Operational profitability stable: F2.060 = 31,268 vs 31,435 (−0.5% YoY). Margin compression is in net, not operating — finance/investment-activity issues, not core business.
- Clean audit ALC 'FORAUDIT' (Smorgon) — unqualified, full 2025.
- Active capex program: 27,294 invested in fixed assets in 2025 (vs 15,200 prior) — a modernization signal. Positive for long-term competitiveness.
Recommendation
OJSC "BMK" is a healthy large meat-processing enterprise in the monotown of Bereza (Brest region), 97.81% state-owned, revenue ~BYN 398m, operationally profitable both periods with positive net profit and real dividend payments. Recommendation — privatization stable MEDIUM with conditions (monotown support, preservation of the production profile).
Key figures of the reasoning. Accumulated profit F1.460 has grown steadily for three years: +21,694 → +36,407 → +46,596 — this is real accumulated wealth (not revaluation). Real equity (without the F1.450 revaluation) is positive: 46,826 + 46,596 = +BYN 93,422k — radically different from structurally distressed enterprises in the sample (e.g. with real equity of around −85,854). Debt is minimal — 873 long-term + 2,308 short-term = 3,181 vs revenue of 398,431 — a ratio of 0.8%, effectively a financially independent enterprise. Current K1 2.40 (>>1.25 norm), K1_OWC +0.566 (>>0.15 norm, 4×), long-term-asset coverage 1.397 on standard capital (marginal-strong) and 0.893 on real with positive real equity — this is no longer a distress signal but an indicator of an active capex program financed through retained earnings (rather than through debt). Dividends grow 3.2× from 921 to 2,964 (payout 22.9% — a healthy balance between distribution and reinvestment).
Operational profitability is stable: F2.060 = 31,268 vs 31,435 (−0.5% YoY) — virtually unchanged. Margin compression is visible in net profit (−15.76% YoY) and in net K2 (−0.73 pp), but this is compression from a high base, not distress — the industry is low-margin (food-processing norm net K2 ~2–5%), and 3.25% remains within the sector norm. Revenue +3.12% against Belarusian inflation of 5–7% gives a real decline of −2 to −4% — this is a yellow signal not red, and should be read in context: the capex program is active (F4.061: 27,294 vs 15,200 prior, +80%), long-term assets F1.190 grew 23% (86,211 → 106,015), equipment modernization is financed through current profit. This means the enterprise is investing in its future competitiveness — a healthy signal in the long term.
An active process of an additional share issue (disclosures 2026-03 + 2026-05) is critical context for the privatization recommendation. The issue may change the state share from 97.81%, attract external investors, and effectively carry out a partial privatization through a market mechanism before a political decision on the pilot. This means: even under the current "privatization" recommendation, the enterprise is already moving in that direction itself. The pilot recommendation supports the existing vector, it does not create a new one.
Conditions for privatization: (1) preservation of the production profile (meat processing is strategically important for the food security of Belarus; the buyer must not be able to repurpose or liquidate the production); (2) obligations toward the monotown of Bereza (~28K people; its inclusion in the list of 441 city-forming enterprises is unverified as of the card, requires checking); (3) preservation of a significant share of jobs (~80% over N years — a standard reform condition); (4) preservation of the existing dividend policy OR its adaptation to the new ownership structure. The buyer is attractive: stable profit, real dividends, minimal debt, an active capex program — this is an investable asset in the EBRD/IFC category.
Confidence MEDIUM — the financials are clean (6/6 sanity, 14/14 F2 arithmetic with the XLSX convention, F3 chain clean, F4 chain clean, long-term-asset coverage in the normal zone), but several open methodological questions remain: (1) sector benchmarks for Belarusian meat processing 2024–2025 (net K2 3.25% — norm or low?); (2) the export profile — F2 does not contain a directly separated export revenue line, but the sector and the F2.121/132 exchange movements of ~2,000 indicate the presence of exports; (3) interpretation of the additional share issue for recommendation timing; (4) verification of the city-forming status in the list of 441; (5) confirmation of the oblast subordination (the meta hints at the Brest regional executive committee, but it is not directly stated in the annual report).