The auditor of AVTOVAZ warned about the possibility of shutdown


AVTOVAZ auditor Ernst&Young in the conclusion to published in the morning reporting automobile in accordance with IFRS for the year 2015 expressed doubt that the company will be able to continue as a going concern. As at 31 December current liabilities of AVTOVAZ exceeded current assets at 67,78 bln RUB, said in the report. “These conditions, along with other circumstances, indicate the presence of material uncertainties that may cast significant doubt in the ability of JSC AVTOVAZ and its subsidiaries to continue its operations continuously”, — emphasized in EY.

Director General of audit company “2K” Tamara Kasyanova explains that disclaimer EY refers to the existence of a risk that creditors of the company may simultaneously present debt to be paid, and the society, in turn, will not be able in a short period of time to repay. Further, the company can be sued for the outstanding debt, says Kasyanov. Considering the current situation on the market, this is not a unique story: after the collapse of the “Transaero” auditors began to play it safe, says the auditor.

Net loss of AVTOVAZ in 2015, according to the report, amounted to $ 73,851 bn, thereby he increased to 2.94% compared with 2014. This is the biggest loss of the automobile in its history. The most unprofitable for AVTOVAZ was 2009, when it lost to 49.2 billion rubles.

Operating loss of the group “AVTOVAZ” in 2015 amounted to 66.8 billion roubles, excluding impairment of assets and restructuring costs of business 24.7 billion rubles against a loss in the amount of 10 billion rubles a year earlier. Reasons for the growth of loss in the company called “the continuing decline in the Russian automotive market and the rising cost of materials and components”.

Revenue of AVTOVAZ by the end of 2015 decreased by 8% to 176,5 billion rubles, With the market share of Lada has increased from 16.4% to 17.9 per cent, were sold during the year 269 thousand cars. Total production of four car brands (Lada, Renault, Nissan, Datsun) and Assembly sets in 2015 amounted 468,5 thousand pieces — 19% less than in 2014.

The company recognizes in the financial statements, to continue the work she needs help shareholders. “Without the support of our shareholders, aimed at refinancing the debt obligations of the group and provision of loans, financial and market conditions give rise to substantial uncertainty, which causes significant doubt about the group’s ability to continue its operations continuously,” — said in the document. The group “AVTOVAZ” talks about the attraction of different funding sources, including additional loans from shareholders, delayed payments of suppliers and the conclusion of additional contracts of factoring accounts receivable is added to statements.

In turn, Renault announced that the company’s loss from participation in AVTOVAZ by the end of 2015 increased 3.4 times, up to €620 million. “as for AVTOVAZ, exceptionally weak economic situation in Russia (a decrease of 35% of the volume of the car market, reducing the average annual exchange rate of the ruble by 33% and the increase in interest rates) was worse than our initial expectations, so Renault has incurred a loss of €620 million”, — quotes the message of “RIA Novosti”. As at 31 December Renault’s share in AVTOVAZ with €91 million

A year earlier net loss of AVTOVAZ grew by 3.2 times, up to 25.05 bn 7,897 against bn Operating loss of the group then decreased by RUB 2.2 billion, amounting to 8 billion rubles.

As follows from the statements of AVTOVAZ for the first nine months of 2015, each assembled machine brings the plant to a loss of 43 thousand rbl. the largest loss on one collected the car at AVTOVAZ were in 2009 170,6 thousand (including the sale of stock 2008 — 143,8 thousand).

In the statements added that in 2016, AVTOVAZ will intensify the implementation of anti-crisis plan aimed at improving financial performance. It includes optimization of pricing, production payments, labour and administrative costs, as well as a four-day working week for all staff on 15 February. In addition, the plan provides for the restructuring of subsidiary companies, the intensification of export sales and further development of the product portfolio.