Grodno Tobacco Factory Neman
Open Joint-Stock Company Grodno Tobacco Factory Neman
UNP: 500047627 · 18 Ordzhonikidze St., Grodno 230771
Identification
Financial statements
k BYN
| Line item | Reporting year | Prior year |
|---|---|---|
| Fixed assets | 166 902 | 155 701 |
| Intangible assets | 381 | 411 |
| Investments in long-term assets | 13 026 | 11 181 |
| Long-term financial investments | 32 114 | 32 753 |
| Deferred tax assets | 35 | 53 |
| Long-term receivables | 5 163 | 5 959 |
| Total Section I (long-term assets) | 217 621 | 206 058 |
| Inventories | 344 635 | 208 005 |
| — materials | 241 132 | 193 871 |
| — work in progress | 9 387 | 5 469 |
| — finished goods and merchandise | 93 917 | 8 429 |
| Deferred expenses | 97 | 125 |
| VAT on acquired goods, works, services | 30 | 58 |
| Short-term receivables | 563 551 | 295 866 |
| Short-term financial investments | 276 913 | 172 907 |
| Cash and cash equivalents | 70 080 | 55 417 |
| Total Section II (short-term assets) | 1 255 306 | 732 378 |
| BALANCE (assets) | 1 472 927 | 938 436 |
| Charter capital | 362 260 | 362 260 |
| Reserve capital | 9 514 | 8 539 |
| Additional capital | 44 970 | 38 588 |
| Retained earnings (uncovered loss) | 338 570 | 267 456 |
| Total Section III (equity) | 755 314 | 676 843 |
| Deferred income | 406 | 429 |
| Total Section IV (long-term liabilities) | 406 | 429 |
| Short-term loans and borrowings | 248 432 | — |
| Short-term payables | 468 629 | 261 011 |
| — to suppliers, contractors, providers | 31 401 | 31 155 |
| — on taxes and duties | 431 131 | 224 468 |
| — on payroll | 2 751 | 2 812 |
| Deferred income | 146 | 153 |
| Total Section V (short-term liabilities) | 717 207 | 261 164 |
| BALANCE (equity and liabilities) | 1 472 927 | 938 436 |
Computed metrics
Integrity checks
Checks passed: 6 of 6
Signals
- Negative cash flow from current activity: the F4.040 result is −82,764k BYN despite positive profit — operating cash turned negative versus +10,515 a year earlier. Operating cash margin −14.1% against a net margin of +20.4%: profit is real but was not converted into cash in the reporting year.
- A sharp rise in working capital locked up cash: inventories +65.7% (208,005 → 344,635, including finished goods ×11, from 8,429 to 93,917), short-term receivables +90.5% (295,866 → 563,551). The build-up of finished goods and receivables outpaces revenue growth.
- Short-term debt load appeared: short-term loans and borrowings 248,432k BYN where there were none a year earlier; over the year 1,210,088 was drawn and 962,019 repaid — active short-term funding of the cash gap.
- Declining profitability: sales profitability 36.2% → 29.1% (−7.1 pp), net margin 22.9% → 20.4% (−2.5 pp) amid rising cost of sales and other operating expenses (54,211 → 190,333).
- Liquidity above the norm: current liquidity ratio 1.75 (norm ≥1.25); working-capital ratio 0.43 (norm ≥0.15) — despite a decline on the prior year, both indicators are within the norm.
- Strong growth on real activity: revenue +78.8% (327,394 → 585,204), net profit +59.2% (74,959 → 119,343), gross profit +39.4%. Growth is operational, not from revaluation (revaluation 6,407 on a balance sheet of 1,472,927 — under 0.5%).
- Capital grows on real retained earnings (267,456 → 338,570); equity 755,314 — over half the balance sheet. Long-term debt is practically nil (406k BYN).
- High operating profitability holds in absolute terms: profit on sales 170,239k BYN (up from 118,548); sales profitability 29.1% — high for a manufacturing enterprise.
Recommendation
The enterprise is a manufacturer of tobacco products in full state ownership (state share 100%, managed by a sector-specific food concern), included on the list of town-forming enterprises and a dominant market participant. 2025 was a year of strong growth: revenue grew 78.8% (327,394 → 585,204k BYN), net profit by 59.2% (to 119,343k BYN), and the growth was operational rather than from asset revaluation. Sales profitability remains high (29.1%), although down from the exceptionally high level of the previous year (36.2%).
The main area of attention is the divergence between profit and cash flow: the result of cash flow from current activity is negative (−82,764k BYN) despite positive profit. The cause is not unprofitability but a sharp build-up of working capital amid growth: inventories grew by two thirds (finished goods rose more than tenfold), and short-term receivables almost doubled. Profit is real but in the reporting year remained locked in inventories and receivables, while the cash gap was closed by drawing short-term loans (248,432k BYN where there were none a year earlier). This is the characteristic picture of a rapid-expansion phase rather than financial distress: liquidity remains above the norm (K1 1.75), the working-capital ratio is positive (0.43), there is practically no long-term debt, and capital is accruing on real profit.
Privatization is recommended: the financial position is strong and requires no state investment, and state control over a tobacco-products manufacturer is not strategically necessary — this is a profitable, fiscally significant asset rather than an object of infrastructural or defence importance. In structuring the deal, account should be taken of the high share of tax and excise obligations on the balance sheet (tax and levy liabilities 431,131k BYN) and the enterprise's dominant market position: a sale to a large domestic player that increases market concentration is undesirable; foreign bidders are considered case by case through the relevant asset-valuation mechanism. The negative operating flow requires monitoring over time: as growth stabilizes, working capital should release cash; a sustained negative OCF in subsequent periods would be grounds to revisit the assessment.