Profitability of services of the Russian debt collection agencies

ranking 12/01/2017

Information agency Credinform prepared a ranking of profitability of services of the Russian debt collection agencies.

The Russian debt collection agencies (Top-10) with the highest volume of revenue were selected for this ranking according to the data from the Statistical Register for the latest available periods (2015 and 2014). The enterprises were ranked by decrease in profitability of services (see table 1).

Profitability of services or goods is sales profit to expenses from ordinary activities. Profitability in general indicates production efficiency. The analyses of profitability of services allows to conclude about expediency of one or another kind of services. There is no standard value for profitability indicators, because they change in accordance with the industry the company operates in.

For the most complete and objective view of the financial condition of the enterprise it is necessary to pay attention to the complex of presented ratios, financial and other indicators of the company.

Table 1. Net profit, revenue, profitability of services and solvency index Globas-I of the Russian debt collection agencies (Top10)
NameNet profit 2015, bln RUBReveue 2015, bln RUBReveue 2015 to 2014, +/- %Profitability of services, %Solvency index Globas-i
LLC ZHILKOMINKASSO-NIZHNIY NOVGOROD
INN 5257119624 Nizhniy Novgorod region
15,32 64,75 78,4 55,36 191
The highest
LLC FIRST RUSSIAN RECOVERY
INN 5402573988 Novosibirsk region
-5,47 33,86 -12,3 49,45 403
Satisfactory
LLC IRKUTSKENERGO-AKTIV
INN 3811095792 Irkutsk region
2,59 9,11 201,6 24,47 189
The highest
LLC NATIONAL AGENCY ON DEBT COLLECTION
INN 7728718713 Moscow
12,47 33,49 2,6 21,34 262
High
LLC ARGUMENT
INN 0276114446 Republic of Bashkortostan
3,48 66,16 316,6 16,01 175
The highest
LLC CREDITEXPRESS FINANCE
INN 7707790885 Moscow
4,30 916,88 11,3 7,94 244
High
LLC NOVATOR-SERVIS
INN 6829029316 Tambov region
0,23 7,84 44,1 7,04 213
High
LLC CENTER FOR SETTLEMENT OF DEBT
INN 0264067752 Republic of Bashkortostan
-0,19 6,48 59,6 2,63 331
Satisfactory
LLC NATIONAL DEBT AGENCY
INN 3255516816 Bryansk region
0,69 168,08 -8,9 0,53 308
Satisfactory
LLC UNIFIED CASH PROCESSING CENTER OF NIZHNIY NOVGOROD REGION
INN 5249089687 Nizhniy Novgorod region
-9,12 65,95 -9,9 -14,81 298
High

Average value of profitability of services for the Top-10 companies amounted to 17,0% in 2015. Average value in Top-25 amounted to 32,2% at industry average value of 6,7%.

Seven companies in the Top got high solvency index Globas-i indicating their ability to timely and fully fulfill their debt liabilities.

Three companies got satisfactory index. LLC FIRST RUSSIAN RECOVERY has active writs of execution and loss in key figures; there are also cases of delays in payments. LLC CENTER FOR SETTLEMENT OF DEBT has loss in key figures. LLC NATIONAL DEBT AGENCY has insufficient amount of working assets for funding debt.

Profitability of services and revenue of the Russian debt collection agencies (TOP-10)
Picture 1. Profitability of services and revenue of the Russian debt collection agencies (TOP-10)

Total revenue of the TOP-10 in 2015 amounted to 1,4 bln RUB that is by 13% higher than in 2014. At the same time total net profit of the same group decreased in 7,6 times.

Five companies in the Top (marked with red in Table 1) have decrease in net profit or loss in comparison with the previous period, or decrease in revenue.

Total revenue of TOP-25 companies for the same period increased by almost 14% at increase in total net profit by 66%.

In general, the Russian market of debt collection services is not fully-formed yet. The Federal law regulating debt collection is coming into force since January 1, 2017.

In case of orderly formation of these services’ market within the frameworks of the law, debt collection agencies will have quite good development prospects considering the potential volume of debt collection services. This is shown by estimated data on debts growth rates (Picture 2) based on information of the Federal state statistics service and the Central Bank of Russia on nominal debts values (Table 2).

Table 2. Nominal debt values, mln RUB
 2010201120122013201420159 months of 2016
Trade payables for goods, works and services 8 791 247 10 667 130 12 510 870 14 947 143 16 744 745 18 044 549 18 126 867
Accounts receivable of organizations providing housing services 579 380 649 154 773 561 875 444 952 440 1 064 746 1 081 464
Outstanding loans granted by credit institutions to resident individuals 3 715 266 5 218 029 7 474 220 9 698 950 11 005 289 10 366 829 10 538 916
Debt on housing loans granted by credit institutions to resident individuals in rubles 1 050 901 1 356 057 1 860 892 2 476 273 3 360 775 3 782 381 4 329 775
Debt on loans granted to small and medium-sized businesses and individual entrepreneurs as of 1 October 3 455 844 4 130 651 4 925 291 5 755 001 5 784 212 5 385 111 4 926 069

For the whole six years from 2010 to 2015, the significant growth of debts in nominal values is observed from 1,6 to 3,6 times in dependence of the industry. At the same time growth rates of debts has significantly decreased in the last two years (Picture 2, decrease in nominal value is marked with green in Table 2).

Rates of growth (decrease) of debts by categories from year to year, %
Picture 2. Rates of growth (decrease) of debts by categories from year to year, %

*) – Data for 9 months of 2016 is presented to the relevant period of 2015.

There is no strongly marked concentration of debt collection agencies in the regions of Russia. According to the Information and analytical system Globas-i 25 of companies in the sector with the highest volume of revenue for 2015 are located in 17 regions of Russia (Picture 3).

Regional distribution of 25 debt collection agencies of Russia
Picture 3. Regional distribution of 25 debt collection agencies of Russia