Smart Holding

Smart Energy in 2023: challenges, achievements and comprehensive support of Ukrainian sustainability

🇺🇦 For almost two years Ukraine has been fighting for its right to future and independence. And we at Smart- Holding, despite all challenges, continue to support Ukrainian economy.

💪 Year 2023 was especially difficult for us. We worked not only under the challenges of a full-scale war, but also encountered hardships related to the State's imperfect sanction policy.
Let's talk about how our businesses went through their hardest times.

🏭 Smart Energy is a gas production business of Smart-Holding.
Last year a group of companies:
• produced 150 mln m3 of gas and 17 thous t of condensate,
• produced 11.5 thous t of LPG,
• paid 1.8 bln UAH of taxes to sustain country’s economy in times of war.

Gaps in legislation as of the beginning of the year led to the loss of 135 mln m3 of gas and 1.35 bln UAH in taxes to the budgets of various levels.

🚧 Efforts of Holding's gas producers were limited by a double crisis: war and sanctions.
• in October, russian invaders damaged one of facilities in Kharkiv province,
• freezing of gas production licenses forced us to suspend operation of many wells.

🔄 Despite this, we have also accomplished a lot:
• completed drilling and commissioned a new well in Poltava province,
• wells in Kharkiv province were forcibly but successfully mothballed, minimizing any negative impact on their productivity.
• maintained stable operations of the Group and jobs for 9 months of 2023 despite sanctions

🤝 Not only that we contribute to the country’s economy, but also provide support to our defenders.
In 2023, Smart Energy Group allocated 2.7 mln UAH to support the military and civilians. In particular, 1.8 bln UAH was transferred for the purchase of drones, anti-drone guns and other equipment important for defenders.

🔹 The war goes on, but we at Smart Energy are working tirelessly, supporting our employees and helping the Armed Forces.
In 2024, our priorities remain: we work for the benefit of Ukraine and take part in bringing closer our common Victory.🇺🇦

“I am realistic about the challenges we are going to face in the future. We are now working on a long-term relationships that take time and effort. To attract mass investments, it is necessary to hold discussions with private investors now, not when the war is over. They need to know the market, local partners and premises for investment”.

Julia Kiryanova, CEO of Smart-Holding production and investment group, spoke with the journalists from the US media Business Insider. The topic of conversation was rebuilding of Ukraine, as well as international and domestic processes that precede it.

The CEO talked about the following:
▪️ why it is private business and foreign investments only that can strengthen the economy of Ukraine;
▪️ what was the content of meetings with politicians and investors in Washington, London, Brussels and Berlin;
▪️ what are the arguments for investing in Ukrainian economy;
▪️ what stages of rebuilding of our country will take place;
▪️ what is the critical need for internal transformations in Ukraine, in particular, improvement of investment climate.

Learn more in the article at the link in comment.

2023 was a year marked by extraordinary challenges, during which we steadfastly fought for Ukraine’s future. For Smart Holding, it was a year of tenacious struggle to sustain our extractive businesses amidst shocking and rapidly changing circumstances, requiring decisive and swift action.

We are grateful to our entire team and colleagues for their professionalism and thoroughness of decisions. The things that have created obstacles in our work have also made us stronger.

As we step into 2024, we do so with ambitious plans and projects, fueled by inspiration and a desire for change. We owe our gratitude to the Armed Forces of Ukraine, whose efforts have made it possible for us to look forward with hope. Our respect and admiration for them are immeasurable.

Moving forward with confidence, we wish everyone to hold onto hope and faith in the goodness of the future. Happy New Year!

🌍 The Sustainable development of Ukraine are based on universal principles: "Smart Holding has joined the UN Global Compact network.

Smart Holding Investment and Industrial Group has joined the UN Global Compact and will support 8 of the 17 Sustainable Development Goals:

🔸 Fighting Hunger and Ensuring Food Security: Since the beginning of the full-scale invasion, Smart Holding has been supplying food for the military and civilians in the affected regions. We have already provided about 300,000 nutritious meals to those in need.

🔸 Gender equality: Professionalism and expertise do not depend on gender. 29% of management positions in the group of companies are held by women.

🔸 Promoting sustainable economic growth and decent work: We are convinced that today in Ukraine every conscious company should work not only to make a profit but also promote their local communities. An efficient business keeps jobs, pays taxes and supports the country's economy during the war. After Ukraine's victory, Smart Holding will continue to invest in high-tech production and modernisation of its businesses. This, in turn, will contribute to the stable employment of Ukrainians.

🔸 Building sustainable infrastructure, promoting industrialisation and innovation: After Ukraine's victory in the war, our cities and villages should be rebuilt as open, safe and sustainable spaces. That’s why Smart Holding is committed to leveraging both its own expertise and global resources to foster the creation and development of modern, barrier-free spaces, flexible infrastructure, and sustainable, innovative industrial production.

🔸 Sustainable development of cities and communities: Smart Holding businesses contribute responsibly to the budgets of the regions where they operate. This supports the economic sustainability of communities, and our CSR initiatives contribute to community development.

🔸 Transition to sustainable consumption and production: The company is dedicated to developing its businesses guided by the principles of sustainable consumption and production, a commitment that forms a fundamental part of our philosophy.

🔸 Fighting climate change and its consequences. Smart Holding is committed to systematically minimising the environmental and climate impact of its production processes, making this one of our key priorities.

🔸 Global partnership for sustainable development. The Great War has served as a catalyst for seeking foreign partners to assist in rebuilding Ukraine. We are proactively developing both business and political international relations to attract investment and bolster support for Ukraine.

💬 "Business does not exist in a vacuum. We are aware of our impact on the economy, labour market, environment and the formation of sustainable processes in the regions where we operate. Smart Holding is about responsibility in all areas where we can become a driver of transformation or positive change. We are principled in this: both in our work before the full-scale invasion and in the post-war reconstruction, which we are already actively working on with international partners. Therefore, joining the Global Compact is our conscious public step," said Julia Kiryanova, CEO of Smart Holding Investment and Industrial Group.

Ukraine meets this bright day, in what is the darkest time in its history. Yet our faith, hope, perseverance and courage ensures that there is no doubt in our minds - the light will always prevail.

We are ever-grateful to all our defenders fighting for the right to celebrate in a free country. To all those who have become guardians of principle, freedom and society, eternal honour is yours. The sacrifices made on the path to victory is not lost on us.

From Smart Holding, we wish everyone a Merry Christmas, and we hope that every family is able to come together in a warm embrace and celebrate the spirit of Christmas together.

Christ is born! Let us praise him!

Keep an eye on the enemy: "Smart Holding” handed over special equipment to the National Guard of Ukraine.

Smart Holding Investment and Industrial Group continues to fulfil specific requests from the defenders of Ukraine. On this occasion, the Group was approached by a special purpose unit of the National Guard of Ukraine.

The military unit is performing special tasks in the Kupyansk region. The situation there is tense, and our defenders need to control every inch of the contact line. The unit received equipment to complete its visual surveillance systems and night-vision devices. Smart Holding allocated UAH 450,000 to purchase the equipment.

In total, in over two years since the full-scale invasion, the company has allocated almost UAH 1.9 billion to help the army, equip healthcare facilities and meet the medical needs of defenders and civilians, supporting Ukrainian communities living and working in the frontline regions.

This war is a test of our unity and ability to cooperate in the fight for the future of Ukraine. As a big business, we know that no plans for reconstruction or further economic development can be implemented if our country does not stand tall. So let's support the Ukrainian army!

🇪🇺🇺🇦 London, Brussels, Berlin - we are working with international partners to strengthen economic and business support for Ukraine.

Julia Kiryanova, CEO of Smart Holding Investment and Industrial Group, made a number of business trips to European hubs in which top-level talks on Ukraine's recovery take place, and relevant mechanisms are developed to aid the reconstruction.

The meetings were aimed at securing the support of foreign politicians in the post-war restoration of the Ukrainian economy, building meaningful and informative dialogue on the details of the process, while promoting the leading role that Ukraine's private sector will play in the reconstruction process and beyond.

In London, the Group's CEO spoke to many members of the UK Parliament, in Brussels she met with the Ukrainian service of the Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR), several MEPs sitting within the committee's for Ukraine and Foreign Affairs, as well as senior representatives of industry associations. In Berlin, she visited the Chancellery and discussed reconstruction issues with advisers to the German Chancellor, affirming our committment to a sustainable future.

💬 "I received unequivocal feedback from European parliamentarians - they see the role of the private business sector in the recovery of our country as key. They are already looking for partners in Ukraine to exchange information, expertise and resources to build long-term business relationships. There are important steps that can be taken to help realise this potential. First and foremost, Ukraine must improve its domestic investment climate, with a greater respect for the rule of law and strengthened anti-corruption mechanisms the foundations for positive change," said Julia Kiryanova.

Residents of Korabel received daily rations from Smart Maritime Group

Recently, a truck with food packages purchased by Smart Maritime Group, in cooperation with Smart Holding Investment and Industrial Group, arrived in Kherson. Local volunteers are distributing the food from Veres, which will aid those who cannot cook on their own, to residents of a particularly volatile neighborhood in the city. The assistance is primarily for people from socially vulnerable groups, including veterans of the local shipyard.

"The enemy is systematically making life unbearable for Kherson residents. First the occupation, then the destruction of the Kakhovka dam, and now incessant shelling. It is incredibly difficult for people. We cannot work here either - the Kherson shipyard has been shut down since February 24. But we are doing our best to help the locals. They need to feel supported - it is a very difficult time. It is difficult for people, especially those from vulnerable categories, to cope on their own," said Dmitry Krasnikov, CEO of Smart Maritime Group.

In four months, the company has already delivered 16,000 food packages to residents of Kherson. Approximately UAH 5 million has been allocated for this area of support so far, with more on the way.

There is no hiding from fate, and no hiding from the Armed Forces: aerial reconnaissance teams received a drone from Smart Holding. It is symbolic, that on the Day of the Armed Forces of Ukraine, we received another positive report from the military.

The DJI Mavic 3 is already at the disposal of aerial reconnaissance teams from the 23rd Separate Special Forces Battalion of the Presidential Brigade. We are confident that in the skilful hands of the defenders, it will serve perfectly to detect the occupiers and their equipment in Donetsk region. From then on - the work of artillery and combat units begins!

This is just one example of the systematic work that Smart Holding is undertaking to support the army. Since the start war, we have allocated over UAH 530 million for protective equipment for the defenders of Ukraine, and delivered almost 100,000 daily rations to different parts of the frontline. Professional tactical first aid kits, medical supplies for units, military beds, generators - the needs of our defenders vary, and we are always on hand to respond.

This war is long and exhausting. Our defenders are holding back the enemy with unprecedented professionalism, courage and dedication. But without stable and comprehensive rear support, this will be impossible. That is why we continue to work for victory!

An irresistible force in the enemy's path. People who represent the glory and will of Ukraine; with fists, tanks and bandages in service to their country.

On the Day of the Armed Forces of Ukraine, as we do everyday of this brutal war, we congratulate and thank those who put their lives on the line to defend our sovereignty. We thank them for the fact that despite the circumstances, we can work, go to school, rebuild, develop and plan recovery strategies after the Russian invasion. We thank them for the fact that Ukraine remains free.

For its part, Smart Holding is a firm supporter of the Ukrainian army. As does everyone who wants to see our country thrive. We donate generators and ambulances that serve our local communities, families and children, along with tactical medicine kits and tens of thousands of daily rations. We are with you.

The war is ongoing, and there is still a long and difficult fight ahead. But we are confident of victory because we are confident in the Ukrainian military.

We thank our Armed Forces of Ukraine, with the utmost respect. Glory to the heroes! 🇺🇦

To help, to search, to assist, to buy, to negotiate. To cover thousands of kilometres, to deliver, to rescue; there is a constant shortage of time and resources, but these people miraculously find and deliver everything to where it is needed the most. As they would say, "who else would do it if not us?" This is the rhythm of life for Ukrainian volunteers during the war.

Today we celebrate International Volunteer Day - a day when we honour all those who voluntarily dedicate their time, knowledge, resources, energy and expertise for the betterment of others. Volunteering is not simply a way to help those in need; it is a demonstration of love for country, society and community and people.

We at Smart Holding are proud that our businesses are corporate volunteers. Since the beginning of Russia's full-scale invasion of Ukraine, we have not shied away from the problems of our country. To stand aside now is the worst possible manifestation of indifference. We believe in victory, and are doing everything in our power to help Ukraine achieve it.

We have already allocated more than UAH 1.8 billion to help Ukrainian soldiers and civilians affected by the war, purchasing first and tactical kits, modern medical equipment for hospitals and generators. We have delivered more than 90,000 special daily food rations to the military. Another 190,000 special rations were delivered to help residents of frontline and de-occupied regions. 130 ambulances have been sent to the frontline where they continue to save the lives of our defenders in active combat zones. Like all volunteers, we do this to support our defenders and our fellow citizens who are going through the most difficult of times.

To ensure Ukraine's strength, independence and unity; we do this so that our children can live in peace, security and prosperity. We also recognise that as long as there is a war in Ukraine, every Ukrainian, every business and the entire economy of the country must work to win and protect our freedom, liberty, independence and our right to be part of the civilised world - everything that forms the foundations of our national identity.

Only together are we stronger, only together will we win! Let us stand together!

Ukraine's energy sector is under more pressure than ever before. With an unrelenting winter already upon us, it is essential that the public and private sector suppliers work together to continue supporting a rising demand for energy. This is despite the russian's targeting of the energy infrastructure, and despite the ill-measured sanctions policy of the Ukrainian government.

Artem Svyryd, Head of Strategy and Investment at Smart Holding, recently gave an interview with Upstream where he discussed the declining output as a result of deteriorating security conditions and local legislative disputes with the government. Artem stressed that due to these factors, the state has lost out on an estimated 100 million cubic metres of gas on an annual level, while supply contracts with industrial companies have been heavily impacted after an export ban.

In addition to the 100 million cubic metres lost this year, the state has also lost out on UAH 890 million in taxes . Since April this year, gas fields in the Kharkiv region, where Smart Energy Group has been producing, have been left idle. The alarming figures continue to grow every day that production remains halted.

As some officials call this the most difficult winter in Ukraine's history, the energy sector must play an important role in supplying the country during difficult times.

The Ukrainian budget has already lost UAH 890 million in taxes and payments and 100 million m3 of gas owing to the suspension of special permits for Smart Energy's assets. Therefore, it is primarily in the interests of the Ukrainian economy to resume business operations under the sanctions policy. This is even more pertinent in wartime for national security reasons and energy independence.

These were the words of Oleksiy Zayets, acting CEO of Smart Energy Group, during the roundtable "Restarting Ukrainian subsoil: first results of the implementation of the sanctions policy in the extractive sector", initiated by NADRA.info.

All of the representatives of various extractive industries who took part in the discussion acknowledged that the suspension of special permits and licences is resulting in the state losing essential natural resources. Indeed, due to natural hydrodynamic processes, it may be impossible to resume gas production.

The only way to find a solution is through a constructive and transparent dialogue between businesses and the state. The legal regulations around sanctions should be considered strictly in the legal forum, in compliance with the principles of Ukrainian and international law and the interests of the state.

The government committing to such a process will send a strong signal to the international investment community about the favourable and transparent investment climate for Ukraine's post-war reconstruction.

Smart Granit is under threat of closure due to sanctions. Staff reductions will take place on 31 December

This asset in the Zaporizhzhia region is yet another victim of the ill-conceived sanctions policy. Therefore, 260 people in the frontline region risk losing their jobs before the new year. The suspension of the special permit for subsoil use on May 4th this year blocked the entire production chain, including processing, crushing and shipping. According to Natalia Ivanyuk, CEO of Smart Granit, the company will not survive the five years of sanctions - it is already at risk of closure.

At a roundtable discussion titled "Restarting Ukrainian subsoil: first results of the implementation of the sanctions policy in the mining sector" organised by NADRA.info, Natalia Ivanyuk offered the authorities an alternative way to unlock the asset:

"We propose to find a mechanism to restore the operations of extractive companies and introduce a control tool. My personal vision is international audit companies that have a high level of trust. I think that the cost of their services will be less than the state's losses from unpaid taxes and unemployment benefits for the entire quarry team."

We ask the authorities to hear us out. We must urgently look for ways to unlock mining assets - this is a matter of preserving the work teams, paying taxes and the integrity of complex production facilities that provide jobs and support Ukraine's economy.

🇺🇦 Тhe Day of Dignity and Freedom!

Both now and a decade ago, Ukraine and Ukrainians are defending their choice, their free will - an inclusive, democratic nation that builds its own future and will not tolerate coercion and pressure from those who do not share in our values.

Freedom and dignity are our conscious choice. It is for these reasons that the Ukrainian army is fighting the enemy. Ukrainian business is keeping the economy running and is already preparing for a large-scale restoration of the state, and Ukrainian teachers are educating a new generation of conscious citizens who will continue our work for the betterment of all.

💬 "We choose our own future, and we fight for it. Freedom and dignity serve as our moral guide - in confrontation, in reconstruction, in the development of the state. They drive each of us who recognise the very honour of being Ukrainian. So let us not lose our bearings!" said Julia Kiryanova, CEO of Smart Holding Investment and Industrial Group.

Over UAH 2 million for a combat unit of the Defence Intelligence of Ukraine, along with developmental training of Ukrainian veterans to pursue further education.

Julia Kiryanova, CEO of Smart Holding Investment and Industrial Group, took part in the auction held as part of the charity dinner "Sustaining Ukraine through Education", hosted by Kyiv School of Economics.

Among the lots was a unique canvas, created from the remains of secret planning documents of special operations that have caused, and continue to cause significant damage to the enemy. The CEO of the Holding purchased the artefact for $55,000 - 70% of the amount will go toward the needs of the combat unit within the Defence Intelligence of Ukraine, who provided the lot, while 30% will be contributed to scholarships for veterans of the Russian-Ukrainian war who wish to further their skills in education and civilian professions.

"We will use all available tools assist Ukraine. The priority is wartime needs. Provision of supplies to the military, support in the form of medical supplies, and assistance to ordinary people affected by the war. Since the beginning of the full-scale invasion, Smart Holding has already contributed more than UAH 1.6 billion in these areas," said Julia Kiryanova.

❗️ 100 million cubic metres of gas. UAH 890 million in unpaid taxes.

As of the 1st of November, the imperfect sanctions legislation has already cost Ukraine. Since April this year, gas fields in the Kharkiv region, where Smart Energy Group has been producing, have been left idle. The already-high numbers are growing every day.

Flaws in legislative procedures have led to the suspension of the licences to develop wells, and for more than six months now, Ukraine has not been receiving funds that are essential during this crisis, and is losing the opportunity to fill storage facilities with millions of cubic metres of gas before the most difficult winter in the country's history, as some officials are already calling it.

💬 "We understand that changing the rules for a huge bureaucratic system is a mammoth task. We know that there have been some developments, and certain government agencies are already trying to develop a mechanism to unblock the operations of companies for the duration of the sanctions. However, there have been no real changes so far - the fields are still idle." - said Julia Kiryanova, CEO of Smart Holding Investment and Industrial Group.

In protectection of Ukrainian soldiers! Smart Holding has donated another ambulance to the frontline. The vehicle will serve the soldiers of the 59th Separate Motorised Infantry Brigade named after Yakov Handzyuk, commanded by Hero of Ukraine, Vadym Sukharevskyi. The ambulance will operate on the route between the stabilisation point and the nearest hospital, and is equipped with all the necessary equipment to provide emergency assistance. The company allocated over UAH 650,000 for the purchase of the special vehicle.

In addition, Smart Holding provided the unit with essential medical supplies and consumables; Saline solutions for intravenous drips, sterile bandages and napkins are among the most in-demand items for first aid operations.

"Doing everything possible to protect our military on the front line is a task for any responsible citizen and any Ukrainian business. We at Smart Holding understand this. Since the beginning of the war, we have sent 130 ambulances to the frontline and allocated UAH 84.5 million to support the troops, but we are not going to stop there. We must constantly support those who are fighting for Ukraine," said Julia Kiryanova, CEO of Smart Holding Investment and Industrial Group.