Ukrainian business community sums up effects of Russian missile attacks
Consequences of the Russian missile strike on Kyiv, October 10, 2022 (Photo:REUTERS/Vladyslav Musiienko)
Russian missile attacks have affected the work of almost half of the businesses belonging to the European Business Association, with 47% of its members reporting restrictions on work, the EBA said in a report posted on Oct. 21
Russian missile attacks have affected the work of almost half of the businesses belonging to the European Business Association, with 47% of its members reporting restrictions on work, the EBA said in a report posted on Oct. 21
In particular, some companies were forced to suspend their work due to a lack of electricity and Internet or for security reasons, which led to a partial loss of orders, the suspension of projects, and downtime.
"Businesses understand the seriousness of the challenges in winter, so they are getting prepared," the EBA reported.
“Thus, 82% of companies are preparing for interruptions in the supply of water, gas, and electricity, 56% of companies are preparing for attacks on critical infrastructure, transport networks, and enterprises, and 53% for interruptions in communications and the Internet.”
What kind of preparatory measures is business taking?
Companies are preparing backup equipment and stocks of raw materials, fuel, materials, developing security programs and business continuity plans, producing monitoring and analytical reports on the development of the security situation in Ukraine, and conducting cybersecurity measures.
"Such preparatory measures are critical for the normal functioning of companies," the EBA added.
“Among the EBA members, 44% are currently working in full, 53% are working with restrictions, and only 3% are not working. It should be recalled that in July, 49% were fully operational and the statistics did not have any non-operational companies at all. Among the businesses that work partially, half have limited the geography of their activities, one-third have closed some offices/outlets/branches, and a quarter has transferred their activities online.”
At the same time, the vast majority of companies, namely 79% continue to pay salaries to employees in full, and 18% do it with advance or additional payments. This is more than in July, when 61% of companies paid full salaries. Another 15% of EBA businesses have reduced salaries, and 8% were forced to send employees on unpaid leave. Another 7% are reducing staff, compared to 10% in the previous wave of the survey.
In 85% of companies, some employees currently enjoy the status of temporary protection abroad. In particular, 61% of our surveyed companies have up to 10% of their staff abroad, 20% of companies - 10-40%, and another 4% of CEOs report that they have more than 40% of their team abroad.
At the same time, 73% of businesses claim that they have enough financial resources for functioning and development, 61% estimate the period of financial stability at a year or more (previously - 46%), another 26% at six months, and only 6% — at several months. Businesses have significantly increased financial reserves since March, although the number of companies that do not have them has slightly increased — up to 5% in October compared to 2% in July.
According to companies, the main sources of financing for them are currently working capital — for 63% of companies, another 17% use international lending, 13% resort to bank loans, and 3% use commercial lending.
Almost half of the respondents, namely 47%, have lost property or assets as a direct result of hostilities. At the same time, 40% report losses of up to $1 million, another 35% — losses in the range of $1-10 million, and 15% — losses exceeding $10 million. Only 5% of businesses did not suffer any losses.
The total documented losses to date amount to at least 437.5 million euros, according to information from EBA member companies.
The survey was conducted on Oct. 12-19, 2022; 118 CEOs of EBA member companies took part in it.
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