The Baltiysky Zavod (Baltic Plant) is facing significant financial challenges, as outlined in its 2024 financial reporting note, signed by General Director Alexander Konovalov. Despite achieving a record revenue of 31.4 billion rubles in 2023, the company’s net assets remain negative at -2.9 billion rubles, falling below the charter capital and marking over three years of persistent negative cash flow from operations, totaling 6.4 billion rubles for the past year. The situation is attributed to a dependency on borrowed funds, high operational costs, substantial purchases of ship equipment and materials, and lengthy production cycles inherent to shipbuilding. Elevated interest rates and unresolved pricing issues on state defense orders further exacerbate the financial strain. Though the plant reported a net profit of 3.7 billion rubles for the reporting period, it contends with a net loss of 18.9 billion rubles from the comparable year and a sales loss of 6 billion rubles. With US sanctions imposed since 2014 and renewed in 2022, the company’s long-term outlook is uncertain, compounded by potential impacts of fluctuations in the global economy. However, management emphasizes ongoing construction of universal nuclear icebreakers and related vessels, maintaining workloads through 2031 and projecting a return to profitability by 2025. The situation is compounded by recent investigations into alleged bribery linked to management practices, underscoring operational and ethical challenges that could influence future stability and production capabilities.
