Activity trends of Russian manufacturers of cement and concrete

trends 23/01/2020

Information agency Credinform has observed trends in the activity of the largest Russian manufacturers of cement and concrete.

Enterprises engaged in manufacture of cement, concrete and construction materials with the largest volume of annual revenue (TOP-1000) were selected for the analysis, according to the data from the Statistical Register for the latest available periods (for 2013-2018). The analysis was made on the basis of the data of the Information and Analytical system Globas.

Net assets is an indicator, reflecting the real value of company's property, is calculated annually as the difference between assets on the enterprise balance and its debt obligations. The indicator of net assets is considered negative (insufficiency of property), if company’s debt exceeds the value of its property.

The largest company in terms of net assets amount is LLC HOLCIM (RUS) CONSTRUCTION MATERIALS, INN 5022050558, Moscow region. In 2018 net assets of the company amounted to more than 24,3 billion RUB.

LLC SENGILEEVSKII CEMENT PLANT, INN 7321004000, Ulyanovsk region, had the smallest amount of net assets in the TOP-1000 group. Insufficiency of property of the company in 2018 was expressed in negative value -8,5 billion RUB.

For a ten-year period average amount of net assets of TOP-1000 companies has increasing tendency (Picture 1).

Picture 1. Change in average indicators of the net asset amount in 2014 – 2018 Picture 1. Change in average indicators of the net asset amount in 2014 – 2018

Share of companies with insufficiency of property in the TOP-1000 demonstrate increasing tendency for the last five years (Picture 2).

Picture 2. Shares of companies with negative values of net assets in TOP-1000 companies Picture 2. Shares of companies with negative values of net assets in TOP-1000 companies

Sales revenue
The revenue volume of 10 leaders of the industry made 21% of the total revenue of TOP-1000 companies in 2018 (Picture 3). It demonstrates high level of competition in the industry.

Picture 3. Shares of participation of TOP-10 companies in the total revenue of TOP-1000 companies for 2018 Picture 3. Shares of participation of TOP-10 companies in the total revenue of TOP-1000 companies for 2018

In general, an increasing tendency in revenue volume is observed (Picture 4).

Picture 4. Change in the average revenue of TOP-1000 in 2014 – 2018 Picture 4. Change in the average revenue of TOP-1000 in 2014 – 2018

Profit and losses
The largest company in terms of net profit amount is AO PO BARRIKADA, INN 7830000578, Leningrad region. Net profit of the company amounted to 2.3 billion RUB for 2018.

For the five-year period average industrial indicators of net profit in TOP-1000 have an increasing tendency (Picture 5).

Picture 5. Change in the average indicators of profit (loss) of TOP-1000 companies in 2014 – 2018 Picture 5. Change in the average indicators of profit (loss) of TOP-1000 companies in 2014 – 2018

Over a five-year period, the average values of net profit indicators of TOP-1000 companies don`t have clearly defined tendency. Besides, the average value of net loss increases (Picture 6).

Picture 6. Change in the average indicators of net profit and loss of TOP-1000 companies in 2014 – 2018 Picture 6. Change in the average indicators of net profit and loss of TOP-1000 companies in 2014 – 2018

Key financial ratios
Over the five-year period the average indicators of the current liquidity ratio were within the range of recommended values – from 1,0 up to 2,0 with increasing tendency (Picture 7).

The current liquidity ratio (the relation of the amount of current assets to short-term liabilities) shows the sufficiency of company’s funds for repayment of its short-term liabilities.

Picture 7. Change in the average values of the current liquidity ratio of TOP-1000 companies in 2014 – 2018 Picture 7. Change in the average values of the current liquidity ratio of TOP-1000 companies in 2014 – 2018

Average values of the indicators of the return on investment ratio have decreasing tendency for five years (Picture 8).

The ratio is calculated as the relation of net profit to the sum of own capital and long-term liabilities and demonstrates the return on the equity involved in the commercial activity of own capital and the long-term borrowed funds of an organization.

Picture 8. Change in the average values of the return on investment ratio of TOP-1000 companies in 2014 – 2018 Picture 8. Change in the average values of the return on investment ratio of TOP-1000 companies in 2014 – 2018

Asset turnover ratio is calculated as the relation of sales revenue to the average value of total assets for a period and characterizes the efficiency of use of all available resources, regardless of the sources of their attraction. The ratio shows how many times a year a complete cycle of production and circulation is made, yielding profit.

This business activity ratio showed a tendency to decrease for a five-year period (Picture 9).

Picture 9. Change in the average values of the assets turnover ratio of TOP-1000 companies in 2014 – 2018 Picture 9. Change in the average values of the assets turnover ratio of TOP-1000 companies in 2014 – 2018

Small business
72% of the TOP-1000 companies are registered in the Register of small and medium enterprises of the Federal Tax Service of the RF. Besides, share of revenue in the total volume is 22,2%, that is higher than the average indicator countrywide (Picture 10).

Picture 10. Change in the average values of the assets turnover ratio of TOP-1000 companies in 2014 – 2018 Picture 10. Change in the average values of the assets turnover ratio of TOP-1000 companies in 2014 – 2018

Main regions of activity
TOP-1000 enterprises are unequally distributed along the territory of Russia and registered in 77 regions. Almost 23% of the largest enterprises in terms of revenue volume is concentrated in Moscow and Moscow region (Picture 11).

Picture 11. Distribution of TOP-1000 companies by regions of Russia Picture 11. Distribution of TOP-1000 companies by regions of Russia

Financial position score
An assessment of the financial position of TOP-1000 companies shows that the largest number is in an average financial position. (Picture 12).

Picture 12. Distribution of TOP-1000 companies by financial position score Picture 12. Distribution of TOP-1000 companies by financial position score

Solvency index Globas
Most of TOP-1000 companies have got from Medium to Superior Solvency index Globas, that points to their ability to repay their debts in time and fully (Picture 13).

Picture 13. Distribution of TOP-1000 companies by solvency index Globas Picture 13. Distribution of TOP-1000 companies by solvency index Globas

Conclusion
Comprehensive assessment of the activity of largest Russian manufacturers of cement and concrete products, taking into account the main indexes, financial indicators and ratios, demonstrates the presence of favorable trends (Table 1).

Table 1. Positive and negative trends, assessment factors of the industry
Trends and assessment factors Share of factor, %
Rate of increase (decrease) of average amount of net assets up10
Increase / decrease of share of companies with negative values of net assets down-10
Level of competition up10
Increase (decrease) rate of average revenue amount up10
Increase (decrease) rate of average net profit (loss) amount up10
Increase / decrease of average net profit amount of TOP-1000 companies up5
Increase / decrease of average net loss amount of TOP-1000 companies up10
Increase / decrease of average industrial values of the current liquidity ratio up5
Increase / decrease of average industrial values of the return on investments ratio down-10
Increase / decrease of average industrial values of the assets turnover ratio, times down-10
Share of small and medium enterprises in the industry in terms of revenue volume more than 22% up10
Regional concentration down-5
Financial position (major share) up5
Solvency index Globas (major share) up10
Average value of factors up3,6

Up positive trend (factor), Down negative trend (factor).