Dependence on loans of mining companies

ranking 04/09/2018

Information agency Credinform has prepared a ranking of the largest Russian mining companies. The largest enterprises (TOP-10 and TOP-1000) in terms of annual revenue were selected according to the data from the Statistical Register for the last accounting periods (2014 - 2017). Then the companies were ranged by solvency ratio (Table 1). The analysis was based on the data from the Information and Analytical system Globas.

Solvency ratio (x) is calculated as a ratio of shareholders’ equity to total assets and shows the dependence of the company on external loans. The recommended value of the ratio is >0.5. The ratio value less than minimum limit demostrates strong dependence on external sources of funds; such dependence may lead to liquidity crisis, unstable financial position in case of economic downturn.

The calculation of practical values of financial indicators, which might be considered as normal for a certain industry, has been developed and implemented in the Information and Analytical system Globas by the experts of the Information Agency Credinform, taking into account the actual situation of the economy as a whole and the industries. In 2016 the practical value of solvency ratio for extracting companies is from 0,01 to 0,83 at average (look for details at Table 1).
For the most full and fair opinion about the company’s financial position the whole set of financial indicators and ratios should be taken into account.

Table 1. Net profit, revenue, solvency ratio, solvency index Globas of the largest Russian extracting companies (TOP-10)
Name, INN, region, main activity Revenue, bln RUB Net profit, bln RUB Solvency ratio (x), >0,5 Solvency index Globas 2017-2018
2016 2017 2016 2017 2016 2017
1 2 3 4 5 6 7 8
JSC SURGUTNEFTEGAS  INN 8602060555 Khanty-Mansiysk Autonomous District - Yugra Crude oil mining down993 up1144 down-105 up150 up 0.95 down0.94 182 High
LUKOIL-WEST SIBERIA LIMITED  INN 8608048498 Khanty-Mansiysk Autonomous District - Yugra Crude oil mining down9602 up665 down77 down70 up0.80 down0.78 172 Superior
JSC ALROSA  INN 1433000147 The Sakha (Yakutia) Republic Diamonds mining up250 down200 up149 down17 up0.64 up0.67 200 Strong
ALROSA-NURBA COMPANY  INN 1419003844 The Sakha (Yakutia) Republic Diamonds mining up47 down41 up18 down13 down0.58 down0.51 202 Strong
JSC APATIT  INN 5103070023 Vologda region Mining of mineral raw materials for chemical industry and manufacture of mineral fertilizers up103 up104 up37 down21 up0.53 down0.49 216 Strong
JSC MIKHAILOVSKY GOK  INN 4633001577 Kursk region Open pit mining of iron ores up57 up79 down15 up27 down0.46 up0.51 160 Superior
JSC COAL COMPANY KUZBASSRAZREZUGOL  INN 4205049090 Kemerovo region Open pit coal mining, except for anthracite, close-burning coal and brown coal down69 up86 down3 up10 down0.37 up0.39 212 Strong
JSC SUEK-KUZBASS  INN 4212024138 Kemerovo region Coal mining, except for anthracite, close-burning coal and brown coal by underground method up106 up134 up22 up30 up0.30 down0.25 203 Strong
ROSNEFT OIL COMPANY  INN 7706107510 Moscow Crude oil mining up3930 up4893 down99 up139 up0.15 up0.15 195 High
JSC LEBEDINSKIY MINING AND PROCESSING PLANT INN 3127000014 Belgorod region Open pit coal mining of iron ores up74 up105 up101 down51 down0.12 down0.05 224 Strong
Total for TOP-10 companies up6231 up7451 down416 up527  
Average value for TOP-10 companies up623 up745 down42 up53 up0.49 down0.47  
Average value for TOP-1000 companies up14    down2    up0.27     
Average industry value for coal mining up1.7 up0.2 up0.14  
Average industry value for oil and gas mining up13.1 up1.2 up0.44  
Average industry value for metallic ores mining up1.5 up0.5 up0.46  
Average industry value for other minerals mining up0.128 up0.041 up0.54  
Average industry value for mining industry up4.107 up0.485 up0.40  
Average industry practical value for coal mining from -0.15 to 0.62
Average industry practical value for oil and gas mining from -0.11 to 0.80
Average industry practical value for metallic ores mining from 0.00 to 0.95
Average industry practical value for other minerals mining from -0.05 to 1.00
Average industry practical value for mining industry from -0.08 to 0.84

Up — growth of indicator in comparison with prior period, Up — decline of indicator in comparison with prior period.

Average value of solvency ratio for TOP-10 companies is lower than recommended value and higher than average industry value and is within the interval of practical value.

Picture 1. Solvency ratio and revenue of the largest Russian mining companies (ТОP-10) Picture 1. Solvency ratio and revenue of the largest Russian mining companies (ТОP-10)

For the last 10 years, the average values of solvency ratio in mining industry showed the decreasing tendency in general. Particular growth of indicators is observed only in the sphere of other minerals mining (Picture 2 and 3).

Picture 2. Change in average industry values of solvency ratio of Russian companies engaged in coal, oil and gas mining in 2007 — 2016 Picture 2. Change in average industry values of solvency ratio of Russian companies engaged in coal, oil and gas mining in 2007 — 2016
Picture 3.Change in average industry values of solvency ratio of Russian companies engaged in metallic ores and other minerals mining in 2007 – 2016 Picture 3.Change in average industry values of solvency ratio of Russian companies engaged in metallic ores and other minerals mining in 2007 – 2016