Collapse of the Corporate Sector of the russian Economy

russian corporations are massively suspending dividend payments due to the economic crisis. The boards of directors of at least twenty public companies have recommended not to distribute last year’s profits.

The reasons are a decline in export revenues, declining profits, Western sanctions, and high borrowing costs. The total profit of companies in 2024 amounted to 30.4 trillion rubles, which is by 6.9 % less than in the previous year. Taking into account inflation (9.4 %), the decline in real profits reaches about 15 %, which is almost USD 380 billion. At the same time, the losses of these companies increased by 37.7 % to 7.2 trillion rubles, or about $90 billion.

The new companies that have given up paying dividends are dominated by the leaders of the mining and energy sectors, including gazprom, “nornikel”, “nlmk”, “severstal”, en+ group, “rusal”, and “rosseti”. Many companies have no money to pay their shareholders: gazprom has lost export revenues, while “nlmk” has suffered colossal losses this year.

The problems have affected almost all sectors of the economy: retail, real estate, agriculture, logistics, engineering and medicine. Such giants as “magnit”, “lenta”, “m.video”, “united wagon company”, “united aircraft corporation”, “tsian”, “pik”, “samolet”, “promomed”, “rusagro”, “artgen”, “sovcomflot”, globaltruck, “nizhnekamskshina”, kamaz, and “yakovlev” aircraft corporation have refused to pay dividends. “rusgidro”, “alrosa” and “aeroflot” will soon be added to this list.