Perm figures do not necessarily cast light on its performance

Published: 6/8/1999

The Russian financial agency, AK&M"s release of the Perm Motor 1998 financial results are reproduced below. While they are quite inscrutable, they at least illustrate the difficulty of working with Russian accounting practice. 1997 1998 1998/ 1998 1997 1998 1998 $ mn $ mn 1997 $ mn Rb mn Rb mn Rb mn cash cash cash accrual cash cash accrual Sales 64.69 23.03 -64% 38.55 374.37 225.2 377.04 Operating costs 55.89 22.09 -60% 36.99 323.45 216.08 361.77 Operating profit 3.23 -0.48 n/m -0.81 18.7 -4.71 7.88 Pre-tax profit -2.47 -0.91 -63% -0.4 -14.27 -8.89 -3.93 Income tax 0 0 n/m 0 0 0 0 After-tax profit -2.47 -0.91 -63% -0.4 -14.27 -8.89 3.93 Adjustments 4.77 0 n/m 0 27.59 0 0 Adjusted profit -7.23 -0.91 -87% -0.4 -41.87 -8.89 -3.93 As is apparent, the differences between money paid ‘cash" and cash plus other revenues ‘acrual" are quite significant. The lack of year-on-year figures for accruals also make the comparison exercise difficult. Obviously, there are exchange differences, although the lack of an average exchange rate or, indeed, any exchange rate, makes it difficult to assess the impact of the rouble devaluation figures. They do appear to be significant. The revenue fall in roubles seems to be considerable, given that the last four months 1998 saw a 70% decline in the value of the rouble. Concise"s guess is that the results don"t look good. It hopes that those assessing risk at Pratt & Whitney have access to the IAS figures.

Article ID: 564