15:05 09.07.2021

Production at Ukroboronprom enterprises increases by 19.5% in H1 2021

5 min read

KYIV. July 9 (Interfax-Ukraine) – The volume of production at the enterprises of state concern Ukroboronprom increased by 19.5%, to UAH 16.6 billion in January-June 2021 compared to the first half of 2020, Director of the concern Yuriy Husev has said.

"The production volumes in the first half of the year exceeded the planned indicators by almost 5%, and by almost 20% the figure for the same period in 2020, despite the fact that the possibility of contracting within the state defense procurement order in 2021 is still complicated due to the implementation of the law on defense procurement," he said at a press conference at Interfax-Ukraine on Friday.

He said that such an increase was also achieved despite the lockdown and "other events that complicated the implementation of the production plans of the enterprises of the state concern."

According to him, in the first half of 2021, the concern's enterprises produced, modernized and repaired aircraft and equipment by 44.6% more than in the same period of 2020, in the amount of UAH 7.8 billion, high-precision weapons and ammunition by 33.6% more, by UAH 3.1 billion, radar systems, radio communication and special devices almost 24% more, by UAH 1.5 billion, armored vehicles by 0.7% more, in the amount of UAH 2.9 billion.

At the same time, Husev said, although the enterprises of naval equipment exceeded the plan by 18.6%, the production volumes in comparison with January-June 2020 amounted to 62%, or UAH 1.3 billion.

"On behalf of the president, we are working together with the Ukrainian shipbuilding industry association to develop a strategy for the development of shipbuilding and in the near future we plan to present our developments to the MPs, since they [developments] will also relate to changes in legislation," the head of the state concern said.

He said the planned indicators in the first half of the year were exceeded in all directions, including by aircraft and equipment enterprises by 3.4%, or by UAH 261 million, high-precision weapons and ammunition by 5%, or by UAH 148 million, radio communications and special devices by almost 5%, or more than UAH 60 million, armored vehicles by 2.1%, or almost 60 million.

Husev also said that according to the results of the first half of 2021, the projected net profit of the state concern will amount to UAH 620 million, 3.4 times more than in the same period of 2020, and the projected net income will grow by 17%, to UAH 16.8 billion.

"We are now awaiting final reporting," he said.

According to the data provided by the Ukroboronprom head, the volume of contracts concluded by special exporters in the first half of 2021 increased by more than 2.5 times (or by $239 million), amounting to $393 million.

The proceeds from the fulfillment of contracts by special exporters increased by 75%, or by $136 million, to $317.5 million.

"This figure for the first half of 2021 has become a record since 2014," Husev said.

According to the given graphical data, in 2014, the receipt of funds from contracts of special exporters amounted to $274.6 million, some $153.1 million in 2015, some $220.7 million in 2016, some $222.5 million in 2017, some $171.4 million in 2018, some $272.4 million in 2019, some $181.8 million in 2020.

Special exporters shipped products and services for $252 million in January-June 2021, which is 36% more.

"This year we have set a condition to significantly increase the export of products and services and return Ukraine to the top ten countries in the world in the arms market," the head of the state concern said.

He also said that in the electronic public procurement system ProZorro, Ukroboronprom saved UAH 437 million in the first half of 2021, which is 35% more than in January-June 2020, and in general, the concern and its enterprises made about 12,000 purchases (23% more) with an expected budget of more than UAH 6 billion.

"The expected budget has more than doubled, which indicates the transfer of all multimillion-dollar tenders to ProZorro," he said.

The head of Ukrobronprom said a big problem for the concern is the overdue debt of individual enterprises, which amounts to UAH 13.4 billion, and part of it is wage arrears.

"But we are actively working to reduce it and develop anti-crisis plans for such enterprises, for example, for Malyshev Plant, Zirka Shostka plant and others," Husev said.

He also said that today 13 enterprises of the concern provide 70% of income, and 28 enterprises more than 90% of income in the Ukroboronprom system, while 32 enterprises have lost their importance for the needs of the defense complex.

Husev also said that on July 2, a meeting of the updated supervisory board of Ukroboronprom was held, at which the issue of the development strategy and transformation of the concern into a joint-stock company with the creation of appropriate holding structures was considered, and expressed the hope that the Verkhovna Rada would consider at second reading bill No. 3822 on the specifics of reforming enterprises of the state-owned military-industrial complex.