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 loss two years running: F2.060 = -1,381 (2025) and -1,491 (2024). Cost of sales > revenue at the gross level (F2.030 = -140 and -372). Cost structure structurally broken — the operating model is not self-sustaining.
- Accumulated loss F1.460 = -3,642 (2025), -3,740 (2024). A history of chronic loss-making. Real equity (ex-revaluation) = 8,231-3,642 = 4,589k BYN vs balance 75,796 = 6.1%. Capital is mostly paper revaluation (27,084 additional).
- Massive new debt: long-term loans 1,494 → 18,946 (+17,452, +1,168%). Total debt 2,309 → 20,008. Debt/OCF = 27 years — unrealistic to service from current operating cash flow.
- Revenue DECLINING -4.45% YoY (15,806 → 15,102) with BY inflation ~5-7% = real decline ~10-12%. In agriculture, production is usually supported via state procurement quotas — a revenue decline signals either lost volumes or lower procurement prices.
- Capital-structure dependency: 85.5% of capital (27,084/31,673) is revaluation reserve (F1.450), not earned capital. Real equity contribution to operations is minimal — most capital relates to fixed-asset revaluation. Production is financed through long-term liabilities F1.590 30,456 + short-term payables 12,260.
- Operating profitability dependent on F2.070 'other income': net profit 3 = operating loss -1,381 + 'other current-activity income' +1,689 net + investment-finance flips. Without F2.070, net profit = -2,837 (K2_net -18.8%). The content of 'other income' 2,840 is undisclosed in the main reporting — a possible channel of targeted state support.
- Cash position 0.13% of the balance: F1.270 = 98k BYN against a balance of 75,796. Recovery from 20k BYN prior, but the absolute level is a minimum for an enterprise with debt 20,008 and mandatory interest payments 223 a year. Any operational shock causes a cash gap.
- Long-term-asset coverage 1.156 — close to the norm boundary 1.0. Caveat: 85.5% of F1.490 is revaluation reserve — the real equity contribution to coverage is near zero, the main support is F1.590 30,456 (long-term debt). The coverage here gives an overly optimistic signal — the structural concern is really closer to 0.65 (without revaluation in the numerator).
- K1_SOS = -0.999 (catastrophically negative). F1.490 31,673 does not cover F1.190 53,722 — a -22,049 gap funded through F1.590 30,456 + working-capital obligations. The standard production-sector formula shows structural distress.
- Short-term receivables +110%: F1.250 2,930 → 6,142 (+3,212). Customers not paying on time OR accumulation from increased shipments without timely collection. Combined with cash 98 — significant collection-cycle risk.
- Short-term payables to suppliers F1.631 = 11,570 — that is 76% of F2.010 revenue. Stretch-financing via suppliers at a significant level. If suppliers demand payment — an immediate cash gap.
- Capex program of 17,330 (F4.061) — a large modernization investment. The debt load went into this capex (new fixed assets or construction). Risk: the effect on operations is not visible until commissioning (F1.140 capex-in-progress = 11,572, unfinished). FY 2026/2027 data needed to validate the modernization impact.
- A full-year 2025 audit is ABSENT from the available documents: the latest available is for 2024. The November 2025 half-year audit (info-table) covered only the first half of 2025. The full-FY 2025 audit is either in progress or not required — pending verification.
- Interest payable F2.131 grew x5.5 (81 → 448) on debt growth x8.7 — implied rate similar (~2.4%), implying a concessional character. If refinanced at market rates (8-12%) — annual interest expense would be 1,600-2,400k BYN = exceeding OCF 739.
- OCF positive (despite the drop): F4.040 = 739 (down from 1,371, -46%). Operations still generate positive cash flow — the operating engine is not fully broken despite the operating-P&L loss. An important differentiator from a liquidation candidate.
- K1 current ratio 1.615 (vs norm 1.25 — above norm). Improvement from 1.174 (below norm in 2024), driven largely by accumulation of stocks and receivables. Surface-positive — but understanding the underlying: receivables accumulation may be collection failure rather than active sales growth.
- Accumulated loss slight improvement: -3,740 → -3,642 (+98k BYN). Direction correct, but magnitude tiny — ~35 years to full recovery to zero retained earnings at the current pace.
- Capital program active: F1.140 'investment in long-term assets' 1,103 → 11,572 — new construction / equipment in progress. Indicates modernization intent (state initiative or management response). Effect unknown until commissioned.
- Auditor — an established firm: LLC 'Kapital-audit' (Minsk, registered 2007). Not an individual auditor (as at some district enterprises) — adds credibility to internal accounting reporting. A first-half-2025 audit opinion is present in the info-table.
- Long-term other liabilities F1.560 -10.6% (7,785 → 6,963): a single positive item in the debt dynamics. Possibly a gradual paydown of lease obligations or historical commitments.
- Animal-husbandry book preserved: F1.212 'animals being raised and fattened' 6,461 (slightly down from 6,693, -3.5%). Production capacity preserved — the core 'production assets' as livestock are intact.
- State share 97.65% (very high): state coordination is possible directly without widespread minority-shareholder negotiations. For a restructuring decision this simplifies governance — the only significant stakeholder is the state (via the district executive committee).
- Sanity 6/6 + 11/11 internal arithmetic clean: data internally consistent despite a source typo in F3 row 140 (template error, isolated). Confidence in numeric inputs HIGH.
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.
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 K2 −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.
Recommendation restructuring / problematic / MEDIUM-LOW confidence. The logic:
1. 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.
2. 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.
3. 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.
4. 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.
Confidence MEDIUM-LOW (not MEDIUM) on 5 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.