State-run company Artyomsol sees 66.7% fall in net revenue since 2013

KYIV. Feb 19 (Interfax-Ukraine) – State-run enterprise Artyomsol saw $40 million of net revenue in 2014, while in 2013 it was $131 million, Head of the Group of Financial Analysts at the Agricultural Policy and Food Ministry of Ukraine Yuriy Tarasenko said at a press conference at Interfax-Ukraine on Thursday.

"The projected annual capacity of the enterprise is 7 million tonnes, and 2013 was a benchmark year. The enterprise was loaded by 50% and produced almost 3.5 million tonnes of salt. If in 2013 net revenue of the enterprise was $131 million, in 2015 it fell by 66.7%, to $40 million," Tarasenko said.

Artyomsol's earnings before interest, tax, depreciation and amortization (EBITDA) in 2013 was $27 million and in 2015 - $6.5 million.

Tarasenko said that managers who have not agreed any financial plan of the enterprise in the past three years could be blamed for this. He said that the main goal today is selection and appointment of effective top managers of the state enterprise.

He said that the ministry sees the development of the enterprise via its privatization and evaluates it at $200-250 million.

Artyomsol acting director Volodymyr Dolia said that the main problems of the enterprise are the fall in production and sales, depletion of working capital and poor choice products.

"The first problem is the decline in production and it is a trend now. If we compare 2013 with 2014, we lost 44% of sales: from 3.4 million tonnes to 2.4 million tonnes, and the enterprise saw a further decline of 20% in 2015 – around 2 million tonnes," Dolia said.

The loss of the Russian market affected the sales, as 75% of the company’s products are exported, and the key importer was Russia. Exports to Russia in 2013 were 1.9 million tonnes, 2014 – 1.3 million tonnes and 2015 – 800,000 tonnes.

Dolia said that the product portfolio of the enterprise does not meet current demand on the market. He said that Artyomsol plans to expand a range of products and bring new products that are in line with European quality requirements to the market, in particular, white table salt.

Commenting on the depletion of working capital, Dolia said that in 2014 the enterprise lost UAH 1784 million at Active-Bank. In 2014 a $1.2 million deposit agreement was signed with bank Finance and Credit, which by late 2015 was on the verge of default.

Director of the government property management department at the ministry Volodymyr Kudinov said that it is unlikely that $1.2 million under the deposit agreement signed when Denys Fomenko was acting director of Artyomsol (from December 2014 to June 2015) will be returned. Several criminal cases against Fomenko have been opened.

Artyomsol is the largest enterprise engaged in the production and sale of salt (NaCl) in Central and Eastern Europe.