Activity trends of the companies of real economy sector in Khabarovsk region

trends 16/09/2019

Information agency Credinform has prepared a review of activity trends of the largest companies of the real economy sector in Khabarovsk region.

The largest companies (ТОP-1000) in terms of annual revenue were selected according to the data from the Statistical Register for the latest available periods (2012 - 2017). The analysis was based on data of the Information and Analytical system Globas.

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

The largest company in terms of net assets is Transneft Far East LLC. In 2018 net assets of the company amounted to more than 229 billion RUB.

The smallest size of net assets in TOP-1000 had JSC AMURMETAL, which is in process of being wound up since11.10.2013. The lack of property of the company in 2018 was expressed in negative terms -39,8 billion RUB.

For the last five years, the average values of TOP-1000 net assets showed the growing tendency (Picture 1).

Picture 1. Change in average net assets value of ТОP-1000 companies in 2013 – 2017 Picture 1. Change in average net assets value of ТОP-1000 companies in 2013 – 2017

For the last five years, the share of ТОP-1000 enterprises with lack of property is growing (Picture 2).

Picture 2. The share of enterprises with negative net assets value in ТОP-1000 Picture 2. The share of enterprises with negative net assets value in ТОP-1000

Sales revenue
In 2017, the total revenue of 10 largest companies amounted to almost 43% from ТОP-1000 total revenue (Picture 3). This fact testifies the high level of industrial concentration in Khabarovsk region.

Picture 3. Shares of TOP-10 in TOP-1000 total revenue for 2017 Picture 3. Shares of TOP-10 in TOP-1000 total revenue for 2017

In general, the growing trend in sales revenue is observed (Picture 4).

Picture 4. Change in average revenue of TOP-1000 in 2013 – 2017 Picture 4. Change in average revenue of TOP-1000 in 2013 – 2017

Profit and loss
The largest company in terms of net profit is JSC DALTRANSUGOL. In 2018 the company’s profit amounted to 2,5 billion RUB.

For the last five years, the average profit values of TOP-1000 show the growing tendency (Picture 5).

Picture 5. Change in average profit of TOP-1000 in 2013 – 2017 Picture 5. Change in average profit of TOP-1000 in 2013 – 2017

Over a five-year period, the average net profit values of ТОP-1000 show the growing tendency, along with this the average net loss is decreasing (Picture 6).

Picture 6. Change in average net profit/loss of ТОP-1000 companies in 2013 – 2017 Picture 6. Change in average net profit/loss of ТОP-1000 companies in 2013 – 2017

Main financial ratios
For the last five years, the average values of the current liquidity ratio were higher than the recommended values - from 1,0 to 2,0, with downward trend (Picture 7).

The current liquidity ratio (ratio of total working capital to short-term liabilities) shows the sufficiency of company’s assets to meet short-term obligations.

Picture 7. Change in average values of current liquidity ratio of TOP-1000 companies in 2013 – 2017 Picture 7. Change in average values of current liquidity ratio of TOP-1000 companies in 2013 – 2017

For the last five years, the high level of the average values of ROI ratio with downward trend is observed (Picture 8).

The ROI ratio is calculated as a ratio of net profit to sum of stockholder equity and long-term liabilities and shows the return from equity involved in commercial activities and long-term borrowed funds.

Picture 8. Change in average values of ROI ratio in 2013 – 2017 Picture 8. Change in average values of ROI ratio in 2013 – 2017

Assets turnover ratio is the ratio of sales revenue and company’s average total assets for a period. It characterizes the effectiveness of using of all available resources, regardless the source of their attraction. The ratio shows how many times per year the full cycle of production and circulation is performed, generating the corresponding effect in the form of profit.

For the last five years, this business activity ratio demonstrated the downward trend (Picture 9).

Picture 9. Change in average values of assets turnover ratio of TOP-1000 companies in 2013 – 2017 Picture 9. Change in average values of assets turnover ratio of TOP-1000 companies in 2013 – 2017

Small businesses
77% of ТОP-1000 companies are registered in the Unified register of small and medium-sized enterprises of the Russian Federal Tax Service. Herein, their share in TOP-1000 total revenue amounted to 22%, which is the national average value (Picture 10).

Picture 10. Shares of small and medium-sized enterprises in ТОP-1000 Picture 10. Shares of small and medium-sized enterprises in ТОP-1000

Main regions of activity
ТОP-1000 companies are unequally located across the country and registered in 20 regions of Russia. Almost 75% of the largest enterprises in terms of revenue are located in the regional center – Khabarovsk city (Picture 11).

Picture 11. Distribution of TOP-1000 revenue by the districts of Khabarovsk region Picture 11. Distribution of TOP-1000 revenue by the districts of Khabarovsk region

Financial position score
An assessment of the financial position of TOP-1000 companies shows that the largest part have above 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 got superior/high or strong/medium Solvency index Globas, this fact shows the ability of the companies to meet their obligations 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

Industrial production index
According to the Federal Service of State Statistics, there is a downward trend in the industrial production index in Khabarovsk region during 12 months of 2018 – 2019 (Picture 14). Herewith the average index from month to month amounted to 92,7%.

Picture 14. Industrial production index in Khabarovsk region in 2018-2019, month by month (%) Picture 14. Industrial production index in Khabarovsk region in 2018-2019, month by month (%)

According to the same data, the share of enterprises of Khabarovsk region in the amount of revenue from the sale of goods, works, services made 0,491% countrywide in 2018 and 0,540% for the 6 months of 2019, that is higher than in the 2st quarter 2018 (0,493%).

Conclusion
A complex assessment of activity of the largest companies of Khabarovsk region real economy, taking into account the main indexes, financial ratios and indicators, demonstrates the presence of positive trends (Table 1).

Table 1. Favorable and unfavorable trends, assessment factors
Trends and assessment factors Relative share, %
Growth/drawdown rate of average net assets value up10
Increase / decrease in the share of enterprises with negative net assets down-10
The level of capital concentration down-5
Growth/drawdown rate of average revenue up10
Growth/drawdown rate of average net profit (loss) up10
Increase / decrease in average net profit of companies up10
Increase / decrease in average net loss of companies up10
Increase / decrease in average values of current liquidity ratio down-10
Increase / decrease in average values of ROI ratio down-5
Increase / decrease in average values of assets turnover ratio, times down-10
Share of small and medium-sized businesses by revenue more than 22% up10
Regional concentration down-10
Financial position (the largest share) up10
Solvency index Globas (the largest share) up10
Industrial production index down-10
Dynamics of the share of enterprises in the total amount of revenue from the sale of goods, works, services countrywide up10
Average value of factors up1,9

Up favorable trend (factor), Down unfavorable trend (factor).