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. Last Updated: 07/27/2016

Corporate Profits Jump by 64%

The combined pretax profit of all large and medium-sized companies in Russia in the first five months of the year jumped 64 percent year on year to 527.4 billion rubles ($16.8 billion), according to the State Statistics Committee.

Some 44,900 of the companies in this category, which does not include agriculture, banking, insurance and budget-funded sectors, posted a total profit of 646 billion rubles.

Roughly 34,000 companies had combined losses of 118.6 billion rubles, the committee said.

In 2002, total profits for large and medium-sized enterprises in the January-May period rose 63.3 percent over the same period in 2001 and totaled 320.4 billion rubles, or $10.3 billion.

The big winners were the trade and electricity sectors and export-oriented industries such as fuel and oil transportation.

Retail and catering led the way, with profits nearly tripling year on year to 145.4 billion rubles, most of which came from importing and exporting, which grew 400 percent to 117.3 billion rubles.

"We see this as support for our optimistic forecast of 13 percent private consumption growth this year, one of the fundamental reasons underlying the robust economic growth," investment bank United Financial Group said in a note to clients Wednesday.

"We believe that it is obvious that the majority of the surge in profits in [the international trade] sector was caused by higher oil prices this year than last," Renaissance Capital said.

"The other reason why we think corporate profits have increased so much is the much lower and often negative real interest rates that have been seen this year compared to last year."

The electricity sector increased profits by 88.5 percent to 28.6 billion rubles, while the fuel industry earned 73.5 billion rubles, up 52.8 percent on the year.

The percentage of loss-making companies remained constant, increasing by just 0.2 percent to 43.4 percent of the total, led by the housing sector, which posted losses of 2.7 billion rubles.