Russia's earnings season: consumer and tech surge while heavy industry stalls

This reporting season in Russia is defined by a sharp split: consumer-facing and financial sectors are racing ahead, while heavy industry—metals, chemicals, and oil—is stuck in reverse. The median revenue growth across fuel retail, medicine, and finance tops 20%, while metallurgy, chemicals, and cable makers see double-digit declines. The standout surprise is the resilience of domestic demand, powering a 42.7% surge in fuel retail and a 27.9% jump in medical revenues, even as export-oriented sectors suffer from weak global prices and sanctions.

Revenue growth by industry (median YoY)

Consumer and finance lead the charge, with fuel retail and medicine at the forefront

Fuel retailer Evrotrans (EUTR) is the star of the season, with revenue up 42.7% year over year and a three-year CAGR of 60.0%, though net profit dipped 13.5%. In medicine, Promomed (PRMD) shines with revenue up 75.2% and net profit soaring 149.3%, while MD Medical (MDMG) grows revenue 32.1%. Financials are broadly strong: MTS Bank (MBNK) revenue jumps 64.9% and net profit +157.9%, Sovcombank (SVCB) revenue more than triples (+225.5%), and VTB (VTBR) revenue grows 121.7%, though its net profit falls 33.6%.

The IT and e-trading segment also impresses: B2B-RTS (BTBR) grows revenue 20.6% with net profit up 17.5%. Among large caps, Sberbank (SBER) delivers revenue growth of 26.7% and net profit +20.9%, while Moscow Exchange (MOEX) grows 16.3% with net profit +32.2%. This is a clear sign that domestic consumption and digitalization are the engines of the Russian economy right now.

Heavy industry stumbles: metallurgy, chemicals, and oil in the red

The worst performers are concentrated in export-oriented sectors. Metallurgy sees a median revenue decline of 13.2%, with Mechel (MTLR) down 25.9% and EBITDA collapsing 149.2%. Severstal (CHMF) revenue falls 14.9% and net profit plunges 112.7%. Chemicals are equally weak: Phosagro (PHOR) revenue drops 17.5% and net profit nearly disappears (-99.5%), while Acron (AKRN) revenue falls 22.5% despite a slight EBITDA gain. Oil and gas are not spared: Lukoil (LKOH) revenue crashes 56.3% and net profit turns deeply negative (-224.4%), while Bashneft (BANE) revenue falls 12.3% and net profit -55.1%.

The plot twist: gold miners and select tech names defy the gloom

While most of heavy industry struggles, gold miners are the surprise winners. Yuzhuralzoloto (UGLD) revenue accelerates from +43.4% to +81.2% net profit, and Seligdar (SELG) grows revenue 48.2% with net profit +20.9%. Even Polyus (PLZL), despite a modest revenue gain of 2.6%, sees net profit +2.8%. In tech, Positive (POSI) is a standout: revenue grows 38.9% and EBITDA surges 211.9%, while OZON (OZON) revenue rises 47.8% and net profit +294.1%. These names are thriving on domestic demand and import substitution, proving that not all is doom and gloom.

Valuation: growth at a discount, but some names are priced for perfection

For value investors, the standout is Evrotrans (EUTR), growing revenue 42.7% yet trading at a P/E of just 1.1x and EV/EBITDA of 2.6x. Similarly, FGC UES (FEES) trades at a P/E of 0.5x despite revenue growth of 21.8% and net profit +274.0%. Among financials, Sberbank (SBER) at 3.3x earnings with 26.7% revenue growth looks compelling. On the expensive side, OZON (OZON) trades at 38.6x earnings despite strong growth, and Diasoft (DIAS) at 24.4x earnings with revenue declining 2.8% looks priced for perfection. Inkab Holding (INCB) at 79.6x earnings with revenue down 17.8% is a warning sign.

Income: high yields in energy and finance, but sustainability varies

Dividend hunters will find rich pickings. Evrotrans (EUTR) offers a yield of 1.1% based on P/E, but more tellingly, Bashneft (BANE) trades at a P/E of 4.3x, suggesting a potential yield above 5% if payout ratios hold. Among utilities, TNS energy (TNSE) trades at a P/E of 2.2x with net profit up 282.0%, implying a high dividend potential. However, caution is warranted: Lukoil (LKOH) has no yield data and its net profit is deeply negative, so income investors should focus on names with stable cash flows.

Looking ahead, the divergence between domestic and export sectors is likely to persist. The three-year revenue CAGRs tell a story: Seligdar (SELG) at 36.3% and Yuzhuralzoloto (UGLD) at 24.0% show sustained growth in gold, while Evrotrans (EUTR) at 60.0% and APRI (APRI) at 157.5% highlight the boom in consumer and development. The key risk is a slowdown in domestic demand if inflation erodes purchasing power. Watch for central bank rate decisions and any shifts in fiscal policy that could tip the balance.

Players: growth & yield (no absolute levels)