Comparative analysis of trends in the development of finance of large corporations in the metallurgical and coal industries in Russia in the context of global challenges

Introduction to the problematics

Sustainable socio-economic development of RF constituent entities is impossible without growth and stability of the revenue base of regional budgets. In turn, the key taxes in the formation of regional revenues are income tax and personal income tax from large corporations. And while personal income tax deductions from large industrial businesses are increasing due to periodic indexation of company management, the value of profit tax is extremely unstable. We should note that it is influenced by such factors as volume, price and currency of product sales, the level of production cost in revenue, commercial and management expenses, tax benefits and regimes. In addition, all lines of companies’ financial results depend on the presence or absence of sanctions.

We should say that since February 24, throughout 2022, the countries of the European Union and the United States, and their satellites, have imposed various economic restrictions and bans on Russia. The sanctions affected almost all economic spheres: cessation of international trade; withdrawal of foreign companies from the market; arrest of foreign exchange reserves; restrictions in the field of investment, etc. While in November

2021 – February 2022, the average dollar exchange rate was 73–77 rubles, by March 11, the price of the U.S. currency had risen to 120.38 rubles. However, no matter how much the Collective West would have wanted the dollar at 200 rubles¹, by April 9, the dollar had already fallen to 74.85 rubles (-37.8%). The key reasons for the strengthening of the Russian ruble were: the ban on exports of currency from the country of more than 10 thousand dollars; gas trade with unfriendly countries in rubles; the obligation for exporters to sell up to 80% of foreign currency earnings ( Fig. 1 ).

After the April recovery, the ruble began to hit new records. Due to the loss of interest in and demand for the USD, caused by the impossibility to buy anything with it, and also due to the increased risk of holding this currency, because of Russia’s gold reserves arrest2, by June 30 the price of the

Figure 1. Dynamics of the USD/RUB exchange rate from November 2021 till September 2022

Source: USD – exchange rate of the Central Bank of RF. Available at:

USD fell down to 51.16 rubles, which is 57.5% lower than the April maximum. However, such a strong ruble is not profitable not only for exporters and the Russian budget, but also for import-substituting companies, which are afraid of losing market share due to the appearance of cheap goods from foreign countries3. According to Vice-Premier A. Belousov, the optimal dollar exchange rate is in the range of 70–80 rubles4.

The purpose of the article is to determine the prospects and directions of development of large corporations in the metallurgical and coal industries of Russia in the current context of global challenges. Accordingly, it is necessary to solve the following tasks:

• 1)    to analyze the dynamics of financial results of large companies, to evaluate production efficiency, commercial, managerial and tax burden;

• 2)    to determine the contribution of companies in the formation of revenues of the budget system through tax deductions (profit tax, VAT, personal income tax and property tax);

• 3)    to identify key problems of effective combination of private and public interests;

• 4)    to analyze the current situation in the metallurgical and coal industries in the new conditions of restrictions and market conditions;

• 5)    to determine the prospects for the development of major companies in the face of sanctions and restrictions.

Large private corporations PJSC Severstal (ferrous metallurgy, Vologda Oblast), PJSC Nornickel (nonferrous metallurgy, Krasnoyarsk Krai) and JSC CC Kuzbassrazrezugol (coal industry, Kemerovo Oblast) constitute the object of the study.