What industry has most debt?

A study conducted by CredInform experts has shown that companies within two industries have greatest payable and receivable accounts. Those companies are retail and wholesale traders and repair service providers. The total amount of their A/P in 2011 is as large as 9,2 billion rubles and the total A/R is 9,8 billion rubles. 

According to the study, construction business is in second place with 5,1 billion rubles in loans, which is 1.8 times less than the amount owned by leaders. Their receivables however are in the average range and are 3,4 billion rubles. The third and largest group is manufacturing companies that own almost a half less than the first group. Their amount to pay is 4,9 billion and these companies are to receive 4,7 billion rubles from their debtors. It is worth mentioning that the ability to maintain positive correlation between these two amounts is very important for a company's financial stability. If payables significantly exceed receivables, a company has to raise bank loans. An opposite situation, when a company has a large credit that cannot be covered with money from debtors, leads to reduction of revenues, part of which has to be paid as an interest on loan. 

All the industries in 2011 were experiencing increase in debt compared to 2010 except of one. Only companies providing house cleaning services and small households that are hiring individuals for such work could lower their A/P from 10,350 million rubles in 2010 to 1,109 million in 2011, or for almost 9 times. A/R has also dropped down from 66.007 million rubles to 1,409 million, that is about 2% from amount owned in 2010. 

In order to obtain most reliable results, CredInform experts have defined 17 types of industries in accordance with OKVED (Classifier of economic activities). After that all the companies operating within Russian Federation were classified by its activity and listed in one of 17 categories, from companies with greatest debt to companies with least. 

For better understanding of industries debt CredInform experts also studied debt ratio information. First CredInform experts defined a total amount of net debt, which the sum of current liabilities and long-term liabilities. Then the debt ratio was defined as a sum of net debt and total assets. 

As shown in Chart 2, manufacturing companies had largest debt in 2011. However, their debt ratio was 2.95, which means that these companies will not have problems meeting their debt obligations. It is the opposite for companies doing financial operations. Despite the fact that with their net debt they are only on the 4th place, their debt ratio is 36.53, which is highest among the others. The higher the ratio, the greater the debt burden on companies and the lower the likelihood that they will be able to meet their obligations in time. 

Public administration and defense companies with compulsory social security business and education industry are at the end of the list. Negative net debt indicates greater amount of funds that debt and negative debt ratio means no loss in this type of business. 

You may request information on current financial status of a company from our daily updated CredInform Information Database Globas-i®. Analytic reports on Russian market sectors are also available. 

Industry in Russia

According to the Federal State Statistics Service data, Industrial production in January-July 2012 increased to 103.2% compared to the same period in 2011. In July of 2012 the industrial output was 3.4% above its year-earlier level. 

The total of goods and services produced during seven months of this year was 3.2% more than in the same period of the last year. An additional business day in July might have slightly advanced  industrial growth rates, but even after seasonal and calendar recalculation, the industrial output made up 0.9% more than in the previous month. 

The annual growth in manufacturing industries in July increased 5.7% against 3.4% in June, which was the most significant contribution to the total rates of growth. For instance, an annual production of crude sunflower oil for the last seven months jumped up to 93.9%. Considerable increase has indicated for production of fuel pumps (54.6%) and desktop computers (45.7%). But the production of passenger vehicles and trucks in July has fallen to 9.5% and 7.9% respectively. However, there is an annual rise in passenger vehicles production (17.5%) and truck production (2.2%). 

Production of electric energy, gas and water has grown 1.1% monthly (2.1% in June) and  0.8% annually. This industry is driven by electric energy production (1.4% annual growth) with most energy produced by nuclear plants (9.1% annual growth). 

In July, mining output advanced 0.9% (0.2% in June), with most gains in coal mining (5.9% annually and 6.4 monthly in June). Such increase is strongly related to the rapid growth in coal export, while domestic consumption remains stable with no evidence for future growth. Production of liquefied natural gas has grown to 4% annually and 25.4% monthly. However, natural gas extraction decreased to -3.6% to seven month of the last year and 7.9% to July, 2012. This decline should be correlated to relatively high output of the last year, especially because of the trends in export trade. It is worth mentioning that domestic consumption made up 94.7% from the last year period, when export rates were 85.2%. 

The following is a percentage distribution of growth by industry: manufacturing – 4.9%, energy, gas and water production and distribution – 0.9%, mining – 1.7%. 

There is an evidence of the economic growth slowdown in June, which is seen in industry stagnation and in decline in agriculture production. Seasonal changes affected demand and consumption in July, and even with stagnation in investing, production and international trade, there is a economic growth registered. However, it is not possible yet to calculate  the precise dynamic of economic trends of this year. The Federal State Statistics Service might change the Index after new data is obtained. 

You may request analytic reports on Russian market sectors from our specialists. 

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