Baranovichipromburvod
OJSC "Baranovichipromburvod (Baranovichi Industrial Well-Drilling & Water)"
UNP: 200166886 · 210B Vilchkovsky St., Baranovichi
Identification
Financial statements
k BYN
| Line item | Reporting year | Prior year |
|---|---|---|
| Fixed assets | 4 068 | 3 591 |
| Intangible assets | 5 | 5 |
| Income-bearing investments in tangible assets | — | — |
| Investments in long-term assets | — | — |
| Long-term financial investments | — | — |
| Deferred tax assets | 1 | 9 |
| Long-term receivables | 219 | 232 |
| Other long-term assets | — | — |
| Total Section I (long-term assets) | 4 293 | 3 837 |
| Inventories | 821 | 687 |
| — materials | 672 | 571 |
| — animals being raised and fattened | — | — |
| — work in progress | 134 | 116 |
| — finished goods and merchandise | 15 | — |
| — goods shipped | — | — |
| Deferred expenses | 7 | 6 |
| VAT on acquired goods, works, services | — | — |
| Short-term receivables | 1 062 | 1 549 |
| Short-term financial investments | — | — |
| Cash and cash equivalents | 794 | 837 |
| Other short-term assets | — | — |
| Total Section II (short-term assets) | 2 684 | 3 079 |
| BALANCE (assets) | 6 977 | 6 916 |
| Charter capital | 213 | 213 |
| Reserve capital | — | — |
| Additional capital | 3 515 | 3 142 |
| Retained earnings (uncovered loss) | 2 190 | 2 176 |
| Targeted financing | — | — |
| Total Section III (equity) | 5 918 | 5 531 |
| Long-term loans and borrowings | 0 | 0 |
| Long-term lease liabilities | 0 | 0 |
| Deferred income | 3 | — |
| Other long-term liabilities | — | — |
| Total Section IV (long-term liabilities) | 3 | — |
| Short-term loans and borrowings | 0 | 0 |
| Current portion of long-term liabilities | 0 | 0 |
| Short-term payables | 1 055 | 1 385 |
| — to suppliers, contractors, providers | 380 | 286 |
| — on advances received | 178 | 591 |
| — on taxes and duties | 227 | 200 |
| — on social insurance and security | 49 | 65 |
| — on payroll | 149 | 191 |
| — to the owner of property (founders, participants) | 16 | 12 |
| — to other creditors | 56 | 40 |
| Deferred income | 1 | — |
| Total Section V (short-term liabilities) | 1 056 | 1 385 |
| BALANCE (equity and liabilities) | 6 977 | 6 916 |
Computed metrics
Integrity checks
Checks passed: 6 of 6
Signals
- Margin compression significant YoY: K2_sales -5.28pp (13.91 → 8.63), K2_net -3.77pp (6.16 → 2.39). Driver: cost inflation +10.4% cost of sales + +9.2% admin outpacing revenue +3.82%. If the trend continues in FY+1 — could shift from stable to problematic tier. Monitor.
- OCF margin significant drop -14.09pp (19.24 → 5.15). Absolute F4.040 1,087 → 302 (-72%). Operating cash generation weakened materially. Possible drivers: (a) accelerated payment cycle to suppliers (F4.031 stocks +17%); (b) accelerated wage payments (F4.032 +18%); (c) tax / other cash-outflow growth. Watchpoint — sustainability in FY+1.
- Revenue real decline 1-3%: nominal +3.82% with BY inflation ~5-7% = real -1-3%. Not market expansion. Services-market saturation OR competitive pressure OR pricing constraint. Combined with margin compression — looks like a small services company under market squeeze.
- Long-term-asset coverage: 1.379 on book equity (upper edge of the norm), but only 0.560 excluding revaluation. The revaluation share of equity is 59.4%. This is not a distress signal — the enterprise is operationally profitable and accumulated equity is positive (own-working-capital ratio 0.605, surplus BYN 1,625k). The book figure overstates coverage through fixed-asset revaluation.
- Advances received collapse: F1.632 591 → 178 (-70%). In a services context this could mean (a) end of a prior project that had advance payments (timing artifact), (b) shift to traditional postpaid billing, (c) loss of clients who prepaid projects. Combined with F1.250 receivables -32% (1,549 → 1,062) — overall working capital from the client side is shrinking: less advance-receivable AND less receivable-on-completed. Possibly a reduced project pipeline.
- Work-in-progress F1.213 134 (vs 116) and F1.214 finished goods 15 (vs 0) — a small project-in-progress pipeline. Combined with advances received -70% — may signal a smaller pipeline in FY 2026 (fewer started, fewer completed). For a services company this is a leading indicator of revenue trajectory.
- The enterprise's possible dominant position is unconfirmed by the competition authority — the classification is provisional. If the monopolist status is confirmed, privatization will require antitrust assessment and possibly approval. If it is not confirmed — privatization without additional conditions.
- Operating profitable BOTH years: F2.060 = +506 (2025), +786 (2024). K2_sales 8.63% remains above the 5% benchmark. Sustained operational profitability.
- NO DEBT (zero loans): F1.510 + F1.610 = 0 in both periods. The old loan 299 (2024 prior period) fully repaid. Rare for a district-level enterprise — typical pilot enterprises carry 5-50% debt load. Operationally self-funded growth.
- Real equity positive + accumulating: F1.460 retained earnings 2,176 → 2,190 — POSITIVE (not an accumulated loss). Real equity (ex-revaluation) = 213+2,190 = 2,403 = 40.6% of F1.490 — substantial earned-equity contribution.
- Cash buffer strong: F1.270 794k BYN = 11.4% of the balance. Stable cash position (837 → 794, slight -5%). The enterprise has weeks of operating runway. No payment risk.
- Real dividends growing: F4.092 122 (vs 74 prior, +65%). Dividend coverage from net profit = 122/140 = 87% — a high payout ratio. The state (95.67%) gets a real cash return on capital.
- K1 strong and improving: 2.223 → 2.542 (+14.3%), 2× the norm. Healthy working-capital management.
- K1_SOS positive 0.605 (4× the 0.15 norm) — the opposite of loss-making peers. Permanent capital fully covers long-term assets. Operationally self-sufficient.
- A full-year 2025 audit was performed (opinion dated 17.02.2026, period 01.01.2025–31.12.2025), unqualified ('fairly presented in all material respects').
- Long-term receivables F1.170 -5.6% (232 → 219) — managed long-term receivables. Combined with short-term receivables -32% — overall receivables trajectory improving (collection efficiency).
- Dividends are structurally consistent across the statements: BYN 126k declared (F3.166), BYN 122k paid (F4.092), matching the disclosed payment within rounding. No discrepancy.
- All six control checks and the internal arithmetic of the statements reconcile; the statements passed an external audit. High data quality.
Recommendation
OJSC "Baranovichipromburvod" is a district-level service enterprise in Baranovichi, Brest region, 95.67% state-owned (351 shareholders); the activity profile is pipeline construction (industrial well-drilling + industrial water supply, OKED 42.21). This is services / construction, not production agribusiness — a fundamentally different business model from all previously filled district-level cards (trade, agribusiness production, transport services). By size the enterprise is very small — balance sheet BYN 6,977k, revenue BYN 5,865k, net profit BYN 140k — a small enterprise among pilot 100 (about 10× smaller than typical production cards). The sector tag in meta.json indicates the enterprise may hold a dominant position in well-drilling in the Baranovichi district; this status requires confirmation by the competition authority. Pending such confirmation it is classified at district level.
The financial structure is exceptionally clean: (1) NO DEBT — F1.510 + F1.610 = 0 in both periods (an old loan of 299 was taken in 2024 and fully repaid the same year via F4.091); (2) Real equity positive — F1.460 retained earnings +2,190 (positive, not an accumulated loss); real equity (without revaluation) 40.6% of F1.490; (3) Cash strong — F1.270 = 794 = 11.4% of the balance sheet, weeks of operations runway; (4) Operating-profitable both years — F2.060 = +506 (2025), +786 (2024), sales K2 8.63% and 13.91% — above the 5% benchmark; (5) Real dividends paid — F4.092 = BYN 122k (vs 74 prior, +65%) — an 87% payout ratio of net profit, the state (95.67%) receives a real cash return; (6) K1 strong — 2.542 (2× the norm), improving; (7) K1_OWC positive — 0.605 (4× the norm), unlike loss-making peers; (8) long-term-asset coverage at the upper edge of the norm — 1.379.
At the same time, the trajectory is noticeably deteriorating: sales K2 −5.28 pp (13.91 → 8.63), net K2 −3.77 pp (6.16 → 2.39), OCF margin −14.09 pp (19.24 → 5.15). Net profit −60% YoY (348 → 140), operating profit −36% (786 → 506). The compression drivers — cost inflation (cost of sales +10.4%) outpacing revenue (+3.82%) + opex growth (+9.2% administrative). This is a classic small-services cost squeeze: Belarusian inflation 2025 ~5–7%, input costs rose faster than pricing power. Revenue is nominally +3.82% but real −1 to −3% against Belarusian CPI — this is market saturation or competitive pressure, not expansion. The fall in OCF margin of −14 pp is the most concerning trend signal — operations generate significantly less cash at the same revenue level.
Recommendation privatization / stable / MEDIUM confidence. The logic:
1. Privatization is the right outcome because: (a) operationally profitable both years — no operational fix required before sale; (b) zero debt — the buyer does not inherit financial obligations requiring restructuring; (c) real equity positive + accumulating via retained earnings — value is transferable; (d) state ownership of 95.67% in a service sector is not strategically required — water supply and well-drilling is a competitive sector with many private operators in Belarus; (e) a small enterprise — a natural buyer pool of medium-size construction holdings or private services companies in the region.
2. Stable tier because: positive net profit both years + no debt + real equity positive + strong cash buffer + a real dividend track record + long-term-asset coverage at the upper edge of the norm + healthy K1/K1_OWC. Even with margin compression — the enterprise is NOT distressed.
3. MEDIUM confidence (not HIGH) because: (a) a significant margin-compression trajectory — if it continues, the tier shifts to problematic; (b) OCF −72% absolute decline — the primary watchpoint for FY+1; (c) revenue real decline — a market signal under pressure; (d) the possible dominant status is unconfirmed — could shift the classification; (e) a small enterprise — the magnitude of any single shock is proportionally larger.
Privatization sequencing: an open auction or tender within 6–9 months. The prospective buyer pool is private service companies in water supply, drilling and gas distribution, alongside specialised international operators. A sale to a larger Belarusian player able to consolidate district services under single control is excluded — it would concentrate the market, against the purpose of the reform. Any acquisition that could create a dominant position or raise economic-sovereignty concerns is assessed case-by-case by the National Asset Management Agency. Conditions minimal: workforce protection (a small enterprise, ~30–50 people estimated based on F4.032 payroll of 2,065 at an average wage of BYN 700–1,000/month = 23–29 people); continuation of the operating profile for 3–5 years; retention of the existing client base (likely regional-government client contracts which may require continuity guarantees).