On November 16, 2020, the People's Deputy of Ukraine Bogdan Torokhtiy published another appeal regarding JSC “Turboatom” on his Facebook page.
In view of such attention to the enterprise, we suggest that Mr. Torokhtiy visit the flagship of the Ukrainian machine-building JSC “Turboatom” (Kharkiv) and see with his own eyes how the enterprise works: get acquainted with the production of turbines, design, technological and financial processes, the staff of the enterprise, which will help to form an objective assessment and no longer express a one-sided and unreasonable position.
“Turboatom” has contracts, the term of which is more than five years, since the enterprise produces its equipment in a full cycle, from design to installation at the station. This is a unique, one-off production, and it is impossible to transfer the model of a serial manufacturer's work to “Turboatom”.
At the end of 2019, the net profit of JSC “Turboatom” amounted to 314,065 million UAH, for 9 months of 2020 – 207,483 million UAH. These are the actual indicators of the results of the company's activities.
Please note that a financial plan is a document that is developed by an enterprise to plan financial indicators for the next year and does not take into account possible force majeure circumstances.
Since March 2020, a quarantine regime has been introduced in Ukraine, and the enterprise has been working on a reduced work schedule for more than 5 months. In addition, in 2019-2020, energy prices increased significantly, which affected the cost of production; there were significant fluctuations in the exchange rate, which influenced the financial result of the company towards both an increase and a decrease in income; at the legislative level, the minimum wage was raised.
The financial result is the profit or loss that an economic entity receives as a result of its economic activity and it is determined for the reporting period, namely the year.
JSC “Turboatom” is profitable according to the results of its many years of activity. During 2010-2019, the company received a net income of 6,63 billion UAH, transferred to the state and local budgets 6,93 billion UAH, including dividends and part of the net profit for the state share in the total amount of 2,94 billion UAH, for 9 months of 2020 - more than 207,4 million UAH.
As for the provision of funds of JSC “Turboatom” as collateral placed on deposit accounts with JSC “Megabank”, they are directly related to the validity period of guarantees issued by the bank in favor of PJSC “Ukrhydroenergo”.
Guarantee agreements are mandatory requirements of the contract, according to which the European Bank for Reconstruction and Development and the European Investment Bank make payments under the contracts concluded between JSC “Turboatom” and PJSC “Ukrhydroenergo”.
Warranties are governed by the Uniform Rules for Demand Warranties, “International Chamber of Commerce Publication No. 758”.
In addition, the terms of the contracts stipulate that only cash is the pledge of guarantees issued by international banks. If “Turboatom” had not met these requirements, the company would not have been allowed to participate in the tender.
The terms of the pledge of property rights depend on the timing of the provision of bank guarantees, which, in turn, depend on the timing of the fulfillment of the terms of the contract. Taking into account the long production cycle of products, the term of execution of contracts already exceeds 5 years.
For clarification regarding the above terms of the contract, Mr. Torokhtiy has the right to contact the EBRD office in London (England).
The statement regarding direct losses incurred by JSC “Turboatom” as a result of the existing difference between interest rates on deposit and credit agreements is unfounded.
The interest rate on the loans provided to “Turboatom” was determined by the banks that provided them. The company is constantly working to reduce the interest rate for the use of credit funds.
The interest rate on placing funds on deposit accounts of “Megabank” was carried out on market conditions and has always been and is higher than on the banking (financial) market.
During 2007-2019, the financial and economic activities of the company were repeatedly checked by the regulatory authorities, that is documented in the relevant acts.
With regard to accounts payable: as of 30.09.2020, debt is taken into account for settlements with the budget in the amount of 16,6 million UAH, for insurance settlements in the amount of 3,4 million UAH, for payments for wages in the amount of 14,0 million UAH. The specified debt is current; its maturity date in the reporting period has not come. It was repaid by the enterprise according to the terms of payment. The debt on the received advances in the amount of 697 million UAH will be repaid when the products are shipped on time in accordance with the terms of the agreements, that is, the funds have already been used by the company to fulfill its obligations under the contracts.
Accounts payable for goods, work, services according to the financial statements were:
Accounts receivable for goods, works, services were:
The above dynamics of the growth of accounts receivable, along with a slight increase in accounts payable, indicates that the company paid wages, purchased materials, paid utility bills and taxes upon shipment of products at its own expense.
In order to receive accounts receivable, the company carried out and is constantly working with counterparties.