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Ivolga Capital company blog | The profitability of agriculture and construction during the crisis has grown by more than 50%



The dynamics of the profitability of the real sector branches Source: NKR

The research of the NKR rating agency showed that the most profitable industries in ten months of 2020 were agriculture and construction.

Within the framework of the Russian economy, the net profit of real sector enterprises in January-October 2020 fell by 38.2%. However, in two industries, profitability of companies grew by more than 50% – in agriculture and construction.

Interestingly, the distribution of profits in these sectors was even, without bias towards the largest and most profitable companies. Profitable organizations last year received 20% (in agriculture) and 9% (in construction) more profits this year. Unprofitable firms reduced their losses by 57% and 9%, respectively. In the construction industry, the proportion of profits attributable to the Moscow region also decreased to regional developers – from 37% to 32%.

The fact that a high positive result fell on cyclical industries at the time of the crisis is largely due to external factors. In the case of agriculture – the rise in food prices, and in construction – programs of state support for mortgage lending. In the growth of the profitability of agriculture, the role of state preferential programs is also significant.

The possibilities of the state to help the real sector of the economy are limited, so in times of crisis it is very profitable to be among the government’s favorites.

Author: Ilya Grigoriev



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