Cherven District Agro-Service
OJSC "Cherven District Agro-Service"
UNP: 600011816 · 8 Tsentralny Lane, Ostrovy village, Cherven District, Minsk Region 223232
Identification
Financial statements
k BYN
| Line item | Reporting year | Prior year |
|---|---|---|
| Fixed assets | 42 148 | 39 497 |
| Intangible assets | — | — |
| Income-bearing investments in tangible assets | — | — |
| Investments in long-term assets | 11 572 | 1 103 |
| Long-term financial investments | 1 | 1 |
| Long-term receivables | — | — |
| Other long-term assets | 1 | 212 |
| Total Section I (long-term assets) | 53 722 | 40 813 |
| Inventories | 15 322 | 12 268 |
| — materials | 4 907 | 3 669 |
| — animals being raised and fattened | 6 461 | 6 693 |
| — work in progress | 3 223 | 1 048 |
| — finished goods and merchandise | 731 | 858 |
| — goods shipped | — | — |
| Deferred expenses | — | 134 |
| VAT on acquired goods, works, services | 511 | 172 |
| Short-term receivables | 6 142 | 2 930 |
| Short-term financial investments | — | — |
| Cash and cash equivalents | 98 | 20 |
| Other short-term assets | 1 | 3 |
| Total Section II (short-term assets) | 22 074 | 15 527 |
| BALANCE (assets) | 75 796 | 56 340 |
| Charter capital | 8 231 | 8 231 |
| Reserve capital | — | — |
| Additional capital | 27 084 | 26 286 |
| Retained earnings (uncovered loss) | -3 642 | -3 740 |
| Targeted financing | — | — |
| Total Section III (equity) | 31 673 | 30 777 |
| Long-term loans and borrowings | 18 946 | 1 494 |
| Long-term lease liabilities | 4 547 | 3 058 |
| Deferred income | — | — |
| Other long-term liabilities | 6 963 | 7 785 |
| Total Section IV (long-term liabilities) | 30 456 | 12 337 |
| Short-term loans and borrowings | 1 062 | 815 |
| Current portion of long-term liabilities | 345 | 470 |
| Short-term payables | 12 260 | 11 791 |
| — to suppliers, contractors, providers | 11 570 | 11 014 |
| — on taxes and duties | 39 | 91 |
| — on social insurance and security | 70 | 69 |
| — on payroll | 165 | 169 |
| — on lease payments | 414 | 438 |
| — to other creditors | 2 | 10 |
| Deferred income | — | 150 |
| Total Section V (short-term liabilities) | 13 667 | 13 226 |
| BALANCE (equity and liabilities) | 75 796 | 56 340 |
Computed metrics
Integrity checks
Checks passed: 6 of 6
Signals
- Chronic operating losses for two consecutive years: loss from sales of −1,381k BYN (2025) and −1,491 (2024); the gross level is also negative (−140 and −372) — cost of sales exceeds revenue, the operating model is not self-sustaining.F2.060 · F2.030 · F2.010 · F2.020
- Equity is mostly paper: 85.5% of equity is revaluation (additional capital of 27,084 out of 31,673k BYN); real equity of 4,589 (authorized 8,231 minus accumulated loss 3,642) — 6.1% of the balance-sheet total of 75,796. Financing runs through long-term liabilities of 30,456 and accounts payable of 12,260.F1.450 · F1.490 · F1.410 · F1.460 · F1.300 · F1.590 · F1.630
- Massive new debt: long-term loans 1,494 → 18,946k BYN; total debt 2,309 → 20,008 (×8.7). Debt to operating cash flow is 27 years: unrealistic to service out of the current flow of 739.F1.510 · F1.610 · F4.040
- Revenue is declining: −4.45% year on year (15,806 → 15,102k BYN).F2.010
- Profitability depends on other income: net profit of 3k BYN = operating loss of −1,381 + net other income of +1,689 + the investing and financing balance of −305. Without other income of 2,840 the result would be −2,837 (net margin −18.8%); its content is not disclosed in the statements.F2.210 · F2.060 · F2.070 · F2.080 · F2.140 · F2.010
- No own working capital: provision ratio −0.999 — equity of 31,673k BYN does not cover long-term assets of 53,722; the 22,049 gap is financed by liabilities.F1.490 · F1.190 · F1.290
- Cash position of 0.13% of the balance sheet: 98k BYN against a total of 75,796 (recovering from 20 a year earlier), with debt of 20,008 and interest payments of 223 a year — any operating shock leads to a cash gap.F1.270 · F1.300 · F1.510 · F1.610 · F4.093
- Coverage of long-term assets rests on revaluation: permanent capital of 62,129k BYN (equity 31,673 + long-term liabilities 30,456) against long-term assets of 53,722 — a margin of 8,407; but the 27,084 of revaluation within the coverage is three times that margin — without it, long-term assets are not covered.F1.190 · F1.490 · F1.590 · F1.450
- Short-term receivables grew 110% (2,930 → 6,142k BYN) with cash of 98 — a substantial collection-cycle risk.F1.250 · F1.270
- Accounts payable to suppliers of 11,570k BYN — 76% of annual revenue: substantial financing by stretching payments; a demand for payment means an immediate cash gap.F1.631 · F2.010
- An investment programme of 17,330k BYN (acquisition of fixed assets) with investments in long-term assets of 1,103 → 11,572 — the credit load went into modernization, the effect is invisible until commissioning.F4.061 · F1.140
- Interest payable grew 5.5-fold (81 → 448k BYN) while total debt grew 8.7-fold — the interest burden is catching up with the debt with a lag.F2.131 · F1.510 · F1.610
- Inventories grew 24.9% (12,268 → 15,322k BYN) on declining revenue.F1.210 · F2.010
- Operating cash flow is positive: 739k BYN (down from 1,371, −46%) — operations still generate cash despite the operating loss.F4.040
- Current ratio of 1.615 versus 1.174 a year earlier — short-term assets cover liabilities with a margin.F1.290 · F1.690
- The accumulated loss shrank by 98k BYN (−3,740 → −3,642) — the direction is right, the scale is minimal.F1.460
- Other long-term liabilities declined by 10.6% (7,785 → 6,963k BYN).F1.560
- The livestock on the balance sheet is preserved: animals being raised and fattened at 6,461k BYN versus 6,693 (−3.5%) — the productive assets are intact.F1.212
Recommendation
OJSC "Cherven Rayagroservis" is a district-level agricultural producer with a state share of 97.65% (466 shareholders), located in the village of Ostrovy, Cherven district, Minsk region; the activity profile is mixed agribusiness (crop farming — materials F1.211 4,907 and work in progress F1.213 3,223; livestock — F1.212 "animals being raised and fattened" 6,461). The name "rayagroservis" with such a profile is misleading: the OKED is declared as "agriculture" (production), not a service activity. Unlike trade-profile rayagroservis entities (wholesale trade in chemical products), this is production — the profile is closer to production agribusiness peers, but the financial situation is substantially heavier.
Recommendation: Restructuring.
- Not privatization: the operating model is broken at the cost-structure level; in the current state a private buyer will not earn returns without a significant operational fix (debt restructuring + cost discipline + capex-effectiveness validation). The sale of a loss-making agribusiness with accumulated debt of 20,008 against OCF of 739 makes no market sense.
- Not liquidation: the capex program is underway (17,330 already invested), production assets are active (livestock + agricultural facilities), and positive OCF shows a viable operating core. Liquidation destroys value that can recover through modernization.
- Not state investment (a close call): state investment implies a prospective injection of new capital into a strategically important, actively loss-making asset. Here capex is ALREADY committed (new long-term loans likely with a state-supported rate — an implied rate of 2.4% on the new debt suggests subsidization). New state investment on top of this debt does not resolve the underlying cost structure. However, in a restructuring framing the state may become a participant in a debt-to-equity conversion.
- Restructuring is the right outcome because: (a) cost-structure repair — cost of sales > revenue requires operational restructuring (procurement discipline, productivity improvements, possibly a headcount review); (b) debt restructuring — the current debt of 20,008 is not sustainable from OCF of 739; either the rate must be kept concessional (debt-to-equity for state-owned bank lenders), or part of the debt must be written off/converted; (c) capex-effectiveness validation — the modernization program of 17,330 gives a hypothesis of cost-structure improvement through efficiency gains; the restructuring frame allows attaching commissioning milestones + cost-reduction targets as conditions; (d) subsidy continuity — a possible channel of targeted state support (F2.070 2,840 ≡ F4.024) — implies structural state support; the restructuring framework formalizes the subsidy intent or transforms it into a one-off capex injection.
Why restructuring. The 2025 financial profile shows chronic structural distress: (1) operating loss two years running — F2.060 = −1,381 (2025) and −1,491 (2024), cost of sales structurally above revenue even at the gross level (F2.030 = −140 and −372); (2) accumulated loss F1.460 = −BYN 3,642k historical — real (non-revaluation) equity of only BYN 4,589k; (3) massive debt growth in 2025 — long-term loans grew from 1,494 to 18,946 (+1,168%), directed to an investment program of 17,330 (F4.061 acquisition of fixed assets, F1.140 capex-in-progress 1,103 → 11,572); (4) revenue declining −4.45% YoY (15,806 → 15,102) against Belarusian inflation of 5–7% = a real decline of ~10–12%; (5) dependency on F2.070 "other income from current activities" of BYN 2,840k, which close out the operating loss to a symbolic net profit of BYN 3k — without this "other income," net profit would be −2,837 (net profitability −18.8%). The nature of F2.070 is not disclosed in the main reporting — a possible channel of targeted state support (income-channel subsidy). In parallel, F4.024 "other receipts" = 2,840 — this coincidence with F2.070 confirms the cash-basis subsidy nature.
At the same time, several structural properties prevent classification as a liquidation candidate: (1) OCF positive F4.040 = 739 (down −46% from 1,371 prior, but still positive) — the operating engine is not fully broken; (2) modernization investment in progress — capex 17,330 is already placed, new fixed assets in the commissioning stage (F1.140 11,572 unfinished); (3) production assets intact — the animal-husbandry book is preserved (F1.212 6,461), livestock and agricultural facilities continue to function; (4) accumulated loss on a slight positive trajectory −3,740 → −3,642 (+98 over the year); (5) strategic context — district-level agribusiness in the Belarusian context is an element of food security, a sector in which the state has a structural rationale to be present.
Confidence: MEDIUM. Grounds: (1) 1-year visibility on the capex effect (new fixed assets not commissioned); (2) F2.070 nature unverified without the Notes — the targeted-support vs commercial-revenue classification is critical; (3) debt-service feasibility depends on the sustainability of the concessional rate; (4) the declining revenue trend (−4.45%) requires multi-year context (FY-2 2024 is the only data point); (5) the audit for the full year 2025 is missing — verification of accuracy not yet through the standard channel.