According to the results of 2022, at least 109 large and medium-sized enterprises suffered direct losses as a result of the full-scale invasion launched by Russia on February 24, 2022, according to the experts of the analytical center at Kyiv School of Economics.
The total amount of direct losses of enterprises, including state ones, and private entrepreneurs is estimated at $13 billion. Of them, $9 billion is the share of losses of large and medium-sized enterprises. Total indirect losses amount to $33,1 billion. And the amount needed to restore enterprises is $24,9 billion.
"The majority of destroyed and damaged enterprises are concentrated in six regions - Kyiv and Donetsk (17% of the total), Zaporizhzhia (14%), Kharkiv (13%), Luhansk (10%) and Mykolaiv (8%). Usually the area of registration of the enterprise coincides with the area in which the enterprise received direct losses, but there are exceptions." — says Dmytro Goryunov, head of the economic loss direction of the "Russia will pay" project, senior economist of the Center for Economic Strategy.
Mariupol Metallurgical Plant named after Ilyich, Azovstal, Nibulon, and Motor Sich were among the largest enterprises in terms of assets that suffered direct losses from Russia's armed aggression in 2022. According to the assessment of project experts, 19 private and state-owned enterprises (17%) among large and medium ones were completely destroyed, another 90 (83%) were partially damaged.
The last among the large enterprises recorded to have been damaged were: JSC "Motor Sich" as a result of a missile strike in October 2022, as well as "Ukrhimtransamiak", PJSC "Glyny Donbasu", "Konti" and "Nibulon".
"With the stabilization of the front, the amount of damage to new enterprises also decreases. In addition, the number of new cases of looting or theft of merchandise remains is decreasing. It should be noted that information about damaged objects arrives with some delay." Dmytro Goryunov explains.
The largest damaged enterprises as of December 2022, according to the KSE Institute project "Russia will pay"
These calculations are made mainly on the basis of open data and using analytical valuation methods and will differ from an individual independent assessment of damages. The presented data are used for the general assessment of damages caused to Ukraine, its infrastructure in general and the economy, and not for individual assessment of individual companies or objects. Given the ongoing nature of the conflict and the lack of access in temporarily non-government-controlled areas, data collection on the nature of damage is mostly done remotely, but is verified using available information.
Methodology for assessing losses of Ukrainian business:
1. The source of information for the analysis of data on damaged and destroyed large and medium-sized enterprises was 1) Information on damaged objects from local administrations, and 2) monitoring of Internet resources on large enterprises in regions where the presence of Russian occupation troops was recorded.
2. In order to prevent duplication of direct losses, enterprises belonging to other industries were excluded from the list. For example, losses of energy-generating enterprises are classified under the "Energy" section.
3. According to the data, enterprises were classified as medium and large according to their volume of sold products YouControl (average — ≥ €10 million per year).
4. To estimate the direct losses of micro and small enterprises, the assumption that the share of damaged assets is equal to the share of damaged housing in this region was used. Data on the value of the assets of such enterprises are published by regional statistical offices. This approach is also used in the determination of direct losses of private entrepreneurs: it is assumed that the ratio of the size of assets and the volume of income (sales) is the same as that of micro-enterprises.
5. Exact data on the amount of direct losses of enterprises are mostly unavailable. In this case, the amount of damages was determined as 40% of the amount of the company's assets in case of damage and 100% in case of destruction.
6. For the assessment of indirect losses, the decrease in the income of enterprises and individual industries was taken into account. To calculate the needs for restoration, the amount of direct damages is increased by the "build back better" coefficient (implementation of higher quality standards: improvement of energy efficiency, inclusiveness, safety, etc.). The restoration of the activity of enterprises involves working capital.
Detailed data on the destruction and damage caused to Ukrainian business was collected by the Institute of the Kyiv School of Economics (KSE Institute) as part of the project to develop independent methodologies for the analytical assessment of infrastructure damage and economic losses caused by Russia's aggression, which is implemented by the KSE Institute in cooperation with the USAID Project "Economic Support of Ukraine".
