Nesvizh Pharmaceutical Plant
OJSC "Nesvizh Pharmaceutical Plant"
UNP: 600031159 · 8 Sovetskaya St., Alba settlement, Nesvizh District, Minsk Region 222603, Republic of Belarus
Identification
Financial statements
k BYN
| Line item | Reporting year | Prior year |
|---|---|---|
| Fixed assets | 52 728 | 50 052 |
| Intangible assets | 52 | 28 |
| Income-bearing investments in tangible assets | — | — |
| Investments in long-term assets | 2 434 | 1 581 |
| Long-term financial investments | — | — |
| Long-term receivables | — | — |
| Total Section I (long-term assets) | 55 214 | 51 661 |
| Inventories | 14 912 | 11 454 |
| — materials | 8 774 | 6 729 |
| — work in progress | 954 | 1 127 |
| — finished goods and merchandise | 5 093 | 3 598 |
| — goods shipped | — | — |
| — other inventories | 91 | — |
| Deferred expenses | 28 | 24 |
| VAT on acquired goods, works, services | 38 | 2 |
| Short-term receivables | 11 958 | 8 183 |
| Short-term financial investments | — | — |
| Cash and cash equivalents | 9 503 | 13 303 |
| Other short-term assets | — | — |
| Total Section II (short-term assets) | 36 439 | 32 966 |
| BALANCE (assets) | 91 653 | 84 627 |
| Charter capital | 6 395 | 6 395 |
| Reserve capital | 3 248 | 2 723 |
| Additional capital | 47 619 | 43 737 |
| Retained earnings (uncovered loss) | 30 288 | 29 122 |
| Total Section III (equity) | 87 550 | 81 977 |
| Long-term loans and borrowings | — | — |
| Long-term lease liabilities | — | — |
| Deferred income | 2 | 6 |
| Provisions for future payments | 29 | 21 |
| Total Section IV (long-term liabilities) | 31 | 27 |
| Short-term loans and borrowings | 703 | 174 |
| Current portion of long-term liabilities | — | — |
| Short-term payables | 3 369 | 2 449 |
| — to suppliers, contractors, providers | 2 246 | 560 |
| — on advances received | 130 | 28 |
| — on taxes and duties | 208 | 312 |
| — on social insurance and security | 152 | 152 |
| — on payroll | 514 | 496 |
| — on lease payments | — | — |
| — to the owner of property (founders, participants) | — | — |
| — to other creditors | 119 | 901 |
| Deferred income | — | — |
| Total Section V (short-term liabilities) | 4 072 | 2 623 |
| BALANCE (equity and liabilities) | 91 653 | 84 627 |
Computed metrics
Integrity checks
Checks passed: 6 of 6
Signals
- OCF FLIP into negative (F4.040 -545 vs +11,893 prior, magnitude 12,438 swing): operating cash flow went negative despite positive operating profit (F2.060 = +5,185). The gap = working-capital absorption: stocks +30% (F1.210 11,454→14,912), receivables +46% (F1.250 8,183→11,958), finished goods +42% (3,598→5,093). Cash turned into inventory + receivables, not cash. A structural concern: if working-capital growth does not reverse — operations cannot self-fund in 2026.
- Short-term bank loan +304% (F1.610 174→703): for the first time the enterprise depends on bank short-term funding to cover the working-capital gap. With zero long-term debt this is a shift in financial structure — historically standalone funding now needs external bank support.
- Revenue declining -6.9% (44,324→41,266): nominally, with inflation 7-9% a real decline of 13-15%. Pharmaceutical production in Belarus is regulated (procurement prices via OrgTender, market access via the regulator); revenue decline may mean (a) loss of contracts, (b) regulatory price compression, (c) export restrictions (sanction-related impact on eastern markets). The specific driver is undetermined without reading the Notes.
- K2_sales -4.25pp (16.82%→12.56%): significant margin compression. Cost of sales fell -7.8% (faster than revenue -6.9%) — relatively positive cost discipline, but admin expenses +10.5% (10,702→11,826) grow despite the volume decline. An operational scaling problem.
- K2_net -3.95pp (9.70%→5.75%): net profit -44.8% (4,299→2,374) — almost halving. Added to this are increased dividend / National-Fund outflows = a double drain on retained earnings.
- Cash -28.6% (F1.270 13,303→9,503): cash position under pressure, though the absolute level is still solid (10% of revenue). Driven by: a massive dividend payment 1,506 (8× prior), increased capex 3,252, working-capital absorption.
- State extraction via the National Development Fund — F3.168 = 1,121k BYN: the state extracts value via a special fund on top of dividends (430). Total state flow = 430 + 1,121 = 1,551k BYN — 65% of net profit (2,374). A government extraction mechanism on strategic state enterprises — pharmaceuticals as a priority sector subject to these contributions. There is also F3.158 = 297 (receipt from the centralized fund) — a bidirectional channel, net outflow = 1,121 - 297 = 824.
- Holding subsidiary of 'Belfarmprom' — limited standalone analysis: trade pricing, drug prices via the regulator, intercompany transactions with other holding subsidiaries. All these factors may influence operating P&L. Group-level analysis recommended.
- Receivables +46% on revenue -6.9%: F1.250 8,183→11,958, growth driver — collection slowdown or more shipments without immediate collection. Linked to the OCF FLIP — cash inflow from sales slowed. Recommended check: F1.250 breakdowns for counterparty types and aging — was there concentration risk or small balances across many clients.
- Stocks +30% on revenue -6.9% (for the whole section). Materials +30% (6,729→8,774), finished goods +42% (3,598→5,093). Storage 241% of monthly average (per page 20) — a serious over-stocking signal. Either customers refused deliveries (warehoused product), or production opacity, or provider lock-in for a long supply chain (pharma inputs impacted by sanctions).
- Permanent capital confidently covers long-term assets — coverage 1.586 (>1.5): permanent capital (87,550 + 31 = 87,581) covers long-term assets (55,214) at 1.586 (vs 1.587 prior — stable). A structurally healthy profile — capex funded through equity, not debt. A self-funded production base.
- K1 current ratio = 8.949 — extreme (norm 1.25): current assets 36,439 cover current liabilities 4,072 by 8.95x. A huge buffer. Cash + receivables + inventory > 36m against short-term liabilities 4m — a rare structural strength in the pilot.
- K1 SOS = 0.887 (norm ≥0.15): own working capital is 88.7% of F1.290 (32,336 / 36,439). A very strong working-capital base — the enterprise could survive a year without revenue and not go bust.
- Long-term liabilities = 31 (F1.540+550, no loans / lease). An almost zero-debt structure. Outstanding financial discipline — pharma production is traditionally capex-heavy, but Nesvizh funds fixed assets (F1.110 = 52,728) through revaluation + retained earnings.
- Equity growing: 81,977→87,550 (+6.8%). Quality: revaluation net +4,453 (F2.220), net profit +2,374, retained→reserve allocation +525. A steadily growing capital base.
- Dividend outflow 1,506 (F4.092, 8× prior 164): proof of real profitability — a profitable enterprise generating a real return on capital. To the state via dividends + National Fund = ~1,551k BYN annual cash return — substantial.
- Audit unqualified opinion (LLP 'MaiC Konsalt Belbud', Minsk): a professional audit firm (not an individual auditor as at smaller enterprises) gave a clean opinion. Professional validation of the statements' integrity.
- Capex sustained: F4.061 = 3,252k BYN (vs 3,539 prior) — a stable level of capital investment. Per page 38 — a 'Technical modernization of building 7' project worth 6,000k BYN — a forward-looking investment in production infrastructure.
- Exports USD 49.6k (page 19): a relatively small volume (~120k BYN), but the existence of export operations means (a) currency diversification, (b) market reach beyond domestic, (c) a potential growth direction. Pharma exports are regulated by importers' sanitary-epidemiological norms — the presence of exports = achieved compliance with external standards.
- Strategic sector: pharmaceutical production = national security (drug availability), especially given the sanctions impact on drug imports. Retaining state control in this sector is justified regardless of financial metrics.
Recommendation
Pharmaceutical production — a national-security sector (availability of medicines, especially under sanctions pressure on imports). Removing the sector from state control is inexpedient, which rules out privatization. The trajectory is worsening (revenue −6.9%, weakening cash flow) — proactive state investment in modernization and market-share retention is required. The state already extracts value via the National Development Fund (65% of net profit) — the enterprise is within the orbit of state priority.
OJSC "Nesvizh Plant of Medical Preparations" — manufacture of pharmaceutical preparations (revenue BYN 41,266k, balance sheet BYN 91,653k) within RUE "UKH of the 'Belfarmprom' holding" (a republican pharma holding). Location: Minsk region, Nesvizh district, Alba settlement. The financial fundamentals are strong: long-term-asset coverage by permanent capital 1.586 (strong category), liquidity K1 8.949 (extreme — nearly 9× above norm), K1 OWC 0.887 (88.7% of working capital is own), long-term liabilities ~zero (BYN 31k), capital BYN 87,550k — a structurally healthy production base. Net K2 5.75% (profitable), sales K2 12.56% (operationally profitable), real dividends (1,506 paid).
HOWEVER: all indicators are trending deteriorating:
- Revenue −6.9% (44,324→41,266) — real decline ~13–15% adjusting for inflation
- Sales K2 −4.25pp (16.82→12.56)
- Net K2 −3.95pp (9.70→5.75)
- OCF FLIPPED to negative (−545 vs +11,893 prior): operations absorbing cash through working-capital growth (inventories +30%, receivables +46%, finished goods +42%)
- Cash position −28.6%
- Short-term bank loan +304% (174→703) — first-time reliance on bank short-term funding
- State value extraction (F3.168 = BYN 1,121k contributions to the National Development Fund + 430 dividends = 1,551 into the state — 65% of net profit extracted)
The state_investment outcome was chosen on a combination of strategic and financial grounds:
1. Strategic sector: manufacture of pharmaceutical preparations — Belarus's national security (availability of medicines, especially in the context of the sanctions impact on imports). The state should not withdraw this sector from state control (rules out privatization).
2. Financial health fundamentally strong: capital 87.5M, long-term-asset coverage 1.586, zero long-term liabilities, K1 8.95 — this is not a distressed enterprise, restructuring is unwarranted (rules out restructuring).
3. Not liquidation: profitability is preserved (net K2 5.75%), dividends are real, capex sustained — the enterprise generates value (rules out liquidation).
4. Deteriorating trajectory calls for state_investment: revenue −6.9%, OCF FLIP, working capital absorbing cash — what is needed is strategic investment in: (a) market expansion (export to Russia, CIS, EAEU), (b) technological modernization (the R&D project of building 7 at BYN 6,000k is already planned), (c) marketing to retake market share, (d) holding-level consolidation of related pharma producers.
If there is no intervention, the predicted trajectory: revenue continues declining → OCF stays negative → working capital becomes funded by bank debt → predictable distress in 2–3 years. State_investment should be proactive to restore the growth path.
Confidence MEDIUM-HIGH: a FULL+FY-1 source with an extensive audit + 23 pages of notes + 10 pages of breakdowns — the most qualitative source in the pilot to date. Confidence baseline HIGH per matrix v2.1. Downgraded to MEDIUM-HIGH (not HIGH polished) because of:
- the state-extraction channel reveals a government extraction mechanism that shifts the interpretation of operating profitability
- The 1-year deterioration trend requires 2–3 years to confirm direction (recovery or sustained decline)
- Holding context limits standalone fidelity — group-level intercompany transactions may account for part of the decline
Recommended next steps for a partnered session: open the Notes to understand the drivers of the revenue decline + working-capital absorption. If export contracts are disrupted (sanctions) — the state_investment scope shifts to diversification; if domestic price compression — to regulatory engagement; if internal inefficiency — to operational reform.