The FBRK editorial team continues its series of publications dedicated to the analysis of the financial statements of Kazakhstan's social-entrepreneurial corporations (SECs). Today we will examine the financial statements of SEC "Almaty" for 2023, which demonstrate sustained growth in net profit alongside a reduction in total assets and cash, as well as significant investments in subsidiaries and construction projects.
In 2023, SEC "Almaty" showed positive dynamics in key financial indicators. According to consolidated financial statements, the company's revenue amounted to 5.97 billion tenge, which is 52.5% higher than the 2022 figure (3.91 billion tenge). Net profit reached 11.13 billion tenge, whereas in 2022 the company recorded a loss of 8.58 billion tenge.
Non-consolidated reporting shows a similar picture: revenue of 3.87 billion tenge (a 54.9% increase compared to 2.5 billion tenge in 2022), net profit — 11.44 billion tenge (a 10.7% increase compared to 10.34 billion tenge in 2022).
The revenue structure of SEC "Almaty" according to non-consolidated statements includes several sources: sale of apartments and parking spaces (3.32 billion tenge), income from the sale of food products (214.18 million tenge), gratuitous transfer of apartments (140.19 million tenge) and income from renting out investment property (196.23 million tenge).
Notably, despite the positive dynamics of revenue and profit, the company's total assets decreased in both consolidated and non-consolidated reporting. According to consolidated data, they fell from 208.45 billion tenge in 2022 to 189.47 billion tenge in 2023 (a decrease of 9.1%), and according to non-consolidated data — from 257.15 billion tenge to 230.68 billion tenge (a decrease of 10.3%).
Particular attention is drawn to the significant reduction in cash and cash equivalents. According to consolidated reporting, they decreased from 103.5 billion tenge in 2022 to 69.73 billion tenge in 2023 (a decrease of 32.6%), and according to non-consolidated reporting — from 76.31 billion tenge to 50.6 billion tenge (a decrease of 33.7%).
The structure of cash has also changed. Funds in deposit accounts decreased significantly: according to consolidated data — from 36.61 billion tenge to 18.1 billion tenge, according to non-consolidated data — from 10.59 billion tenge to 1.81 billion tenge. Funds in treasury accounts also decreased — from 65.1 billion tenge to 48.8 billion tenge.
At the same time, SEC "Almaty" placed 11.73 billion tenge in REPO assets, which may indicate a change in liquidity management strategy or a search for more profitable short-term investment instruments.
The investment portfolio of SEC "Almaty" is concentrated in subsidiaries: Almaty Capital Construction Enterprise LLP (100% stake, 76.8 billion tenge), Almaty Finance LLP (100% stake, 25.63 billion tenge), Industrial Zone - Almaty LLP (100% stake, 10.94 billion tenge), as well as minority stakes in Innovation Safety Center LLP (49%, 151 million tenge) and KX "Sunkar" (49%, 70.82 million tenge). The total value of investments amounted to 110.96 billion tenge.
SEC "Almaty" is actively involved in financing construction projects. In 2020-2023, the company entered into several investment agreements for the development of residential construction in the city. These include: the construction of a multi-apartment residential complex with Rusalding Line LLP (5.26 billion tenge at 12% per annum until June 2024), the Altyn City residential complex with Star Land LLP (2 billion tenge at 12% per annum), the Medeu City residential complex with Domus Qazaqstan LLP (5 billion tenge at 14% per annum, the debt was fully repaid in 2023), the Four Seasons Villa cottage village with RBest Home LLP (1.2 billion tenge at 16% per annum).
In 2023, project agreements were concluded with Ask Prestige LLP, Sensata Construction LLP and KazSpetsEnergoService LLP for the development of polycentric infrastructure in Almaty and the construction of the new "Eastern Gate" district in the Turksib district (Kairat microdistrict). The project implementation period is until 2027-2028. Under these agreements, SEC transferred land plots, and the counterparties ensure the project's implementation.
The company's staff costs show moderate growth. According to consolidated reporting, the annual payroll for administrative expenses increased from 1.75 billion tenge in 2022 to 2.28 billion tenge in 2023 (an increase of 30.3%).
According to non-consolidated reporting, this figure increased from 866.57 million tenge to 1.01 billion tenge (an increase of 16.5%).
Remuneration for management personnel in 2023 amounted to 191.13 million tenge, which is 71.4% higher than the 2022 figure (111.5 million tenge).
It should be noted that in 2023, as in 2022, no dividends were paid, and the company's share capital increased from 185.36 billion tenge to 193.35 billion tenge due to a share issuance worth 7.99 billion tenge.
Analysing the financial statements of SEC "Almaty" for 2023, one can conclude that the company demonstrates a stable financial position with positive dynamics in revenue and net profit. However, the reduction in assets and cash alongside an increase in staff costs requires careful monitoring from the perspective of resource utilisation efficiency.
The corporation's investment activities are focused on the development of residential construction and infrastructure in Almaty, which aligns with the main goals of an SEC as a regional development institution. The absence of dividend payments indicates a policy of reinvesting profits into the development of the company and the region.
Overall, SEC "Almaty" performs both commercial and social functions, contributing to the development of urban infrastructure and residential construction. The company's long-term effectiveness will depend on the successful implementation of current investment projects and the rational use of available financial resources.
Earlier we analysed the financial statements of SEC "Shymkent" for 2023. In future publications, the FBRK editorial team plans to continue analysing the financial statements of other regional SECs, which will make it possible to form a comprehensive picture of the effectiveness of these development institutions and their contribution to the economy of Kazakhstan.
To be continued...