Nearly a Third of Russian Companies in the Red: Corporate Losses Hit 7.5 Trillion Rubles

Why losses grew faster than the economy slowed

The surge in aggregate losses across Russian businesses—from 4 trillion rubles in 2023 to 7.5 trillion rubles in 2025—reflects a systemic erosion of margins: costs are rising faster than revenues, while the ability to raise prices is constrained by demand. Credit contraction adds further pressure: in the first quarter of 2025, lending to the economy shrank by roughly 680 billion rubles, and in November, disbursements to legal entities and individual entrepreneurs plunged nearly 29% month-on-month. Over the opening months of the year, the corporate loan portfolio grew by just 1%—effectively stagnant. Limited access to financing prevents companies from scaling and achieving cost efficiencies through volume, intensifying the squeeze on profitability.

Manufacturing proved most vulnerable. Industrial output growth slowed markedly in 2025 compared to 2024, even as firms faced simultaneous increases across key expense categories. High borrowing costs weigh on profits, logistics and imported components have become more expensive, and labor shortages have intensified. According to Rosstat, nominal wages rose by more than 12% in 2025. To attract and retain workers, companies were forced into a wage race, driving up payroll costs. That meant a portion of profits was diverted to personnel expenses, further eroding margins. As a result, even major players posted losses—including KamAZ, T Plus, and DVMP. These are capital-intensive businesses: factories, equipment, railcars, vessels, maintenance, fuel, infrastructure—everything is expensive and demands constant investment. Such costs cannot be cut quickly, even when demand falls. And when credit is dear and revenues decline, profit swiftly turns to loss.

In the extractive sector, energy exports are the main revenue source. In 2025, shipments of crude oil and petroleum products fell by several percentage points, while Russia's overall exports declined roughly 3.7% year-on-year. Prices delivered an additional blow: throughout 2025, Brent crude averaged around $68–72 per barrel, falling to $62–64 by year-end—roughly 15% below the prior year. Russian Urals crude traded at a widening discount to Brent: by late 2025 the discount reached $20–25 per barrel, and at times Urals prices at export terminals dropped to $36–40 per barrel, according to Argus. This further squeezed the hard-currency revenues of Russian oil companies.