Information Agency Credinform presents a review of activity trends of the largest buildings construction companies in Russia.

Construction companies with the largest annual revenue (TOP-10 and TOP-1000) have been selected for the analysis, according to the data from the Statistical Register for the latest available accounting periods (2015 — 2017). The analysis was based on the data from the Information and Analytical system Globas.

Net asset value indicates fair value of corporate assets and is calculated annually as assets on balance less company’s liabilities. Net asset value is negative (insufficiency of property) if liabilities are larger than the property value.

Average net assets of TOP-1000 companies tended to decrease during the last decade (Picture 1).

Picture 1. Change in average net assets of buildings construction companies in 2008 – 2017

The share of TOP-1000 companies with insufficiency of property tends to increase within the last 3 years (Picture 2).

Picture 2. Share of TOP-1000 companies with negative value of net assets in 2015-2017

Sales revenue
In 2017 sales revenue of 10 industry leaders amounted to 18% of total revenue of TOP-1000 companies (Picture 3). This is an indicator of a high level of competition within the industry.

Picture 3. TOP-10 companies by their share in 2017 total revenue of TOP-1000 companies

In general, average industry revenue tends to decrease during the decade (Picture 4).

Picture 4. Change of average industry revenue of TOP-1000 buildings construction companies in 2008 – 2017

Profit and loss
During the decade average industry net profit tended to decrease (Picture 5).

Picture 5. Change in average industry net profit of buildings construction companies in 2008 — 2017

During the last 3 years average industry net profit of TOP-1000 companies increased, as well as average net loss (Picture 6).

Picture 6. Change in average net profit and loss of TOP-1000 companies in 2015 — 2017

Key financial ratios
During the last decade average values of total liquidity ratio of TOP-1000 companies were below the recommended value — from 1,0 to 2,0, tending to increase (Picture 7).

Total liquidity ratio (a ratio of current assets to current liabilities) reveals the sufficiency of a company’s funds for meeting its short-term liabilities.

Picture 7. Change in average values of total liquidity ratio of TOP-1000 buildings construction companies in 2008 — 2017

During the last decade, average industry values of return on investment ratio tended to decrease (Picture 8).

It is a ratio of net profit to total equity and noncurrent liabilities, and it demonstrates benefit from equity engaged in business activity and long-term raised funds of the company.

Picture 8. Change in average values of return on investment ratio of TOP-1000 buildings construction companies in 2008 — 2017

Assets turnover ratio is a ratio of sales revenue to average total assets for the period, and it measures resource efficiency regardless of the sources. The ratio indicates the number of profit-bearing complete production and distribution cycles per annum.

During the last decade, this activity ratio tended to decrease (Picture 9).

Picture 9. Change in average values of assets turnover ratio of TOP-1000 buildings construction companies in 2008 — 2017

Small business
46% of TOP-1000 companies are included in the Register of small and medium-sized enterprises of the Federal Tax Service of the Russian Federation. In general, their share in total revenue of TOP-1000 in 2017 amounted to 17% that is lower than the average national value (Picture 10).

Picture 10. Shares of small and medium-sized enterprises in TOP-1000 companies' revenue, %

Key regions of activity
TOP-1000 companies are unevenly located throughout Russian territory and are registered in 76 regions. Over 66% of their revenue are concentrated in Moscow, St. Petersburg and the Moscow region (Picture 11).

Picture 11. Revenue of TOP-1000 companies by Russian regions

Financial position score
Assessment of financial state of TOP-1000 companies indicates that most of the companies have an above average financial position (Picture 12).

Picture 12. TOP-1000 companies by their financial position score

Solvency index Globas
The majority of TOP-1000 companies have got a superior, high, strong or medium Solvency index Globas, that indicates their capability to meet liabilities timely and in full (Picture 13).

Picture 13. TOP-1000 companies by Solvency index Globas

According to the Federal Statistics Service, the share of buildings construction companies in the national revenue from sale of goods and services in 2018 amounted to 1,67%.

Conclusion
A comprehensive assessment of the largest buildings construction companies in Russia, that considers key indexes, financial figures and ratios, is indicative of negative trends in the industry (Table 1).

Table 1. Positive and negative trends, industry assessment factors

Trends and assessment factors	Relative share of the factor, %
Rate of growth (decline) of average industry net assets	-10
Increase/ Decrease of share of companies with negative net assets	-10
Rate of growth (decline) of average revenue	-10
Level of competition/ monopolization	10
Rate of growth (decline) of average net profit (loss)	-10
Increase/ Decrease of average net profit of TOP-1000 companies	10
Increase/ Decrease of average net loss of TOP-1000 companies	-10
Increase/ Decrease of average total liquidity ratio	5
Increase/ Decrease of average return on investment ratio	-10
Increase/ Decrease of average assets turnover ratio	-10
Share of small and medium-sized business within the region by revenue over 22%	-10
Regional concentration	-10
Financial standing (majority share)	10
Solvency index Glogas (majority share)	10
Average factors' value	-2,7

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

Information agency Credinform presents ranking of the largest companies engaged in construction of buildings. Enterprises with the largest volume of annual revenue (TOP-10), were selected for the analysis, according to the data from the Statistical Register for the latest available periods (for 2015-2017). Then they were ranked by working capital to current assets ratio (Table 1).The analysis was made on the basis of the data of the Information and Analytical system Globas.

Working capital to current assets ratio (x) is calculated as diminution of equity and intangible assets to current assets. The indicator shows ability of a company to finance current activities with the help of own working capital. Recommended value is > 0,1.

Table 1. Net profit, revenue, working capital to current assets ratio, solvency index Globas of the largest construction companies (TOP-10)

Name, INN, region	Revenue, million RUB		Net profit (loss), million RUB		Working capital to current assets ratio (x), > 0,1		Solvency Index Globas
	2016	2017	2016	2017	2016	2017
1	2	3	4	5	6	7	8
LLC LSR. Real Estate-SZ INN 7826090547 Saint-Petersburg	33947,0	37868,0	6777,1	8394,8	0,12	0,14	199 High
JSC TEK MOSENERGO INN 7721604869 Moscow Bankruptcy claims	24183,0	34357,0	783,1	920,9	-0,09	0,07	400 Weak
JSC METROSTROY INN 7813046910 Saint-Petersburg Bankruptcy claims	24449,4	31919,7	497,8	436,7	0,05	0,06	350 Adequate
LLC VELESSTROY INN 7709787790 Moscow	88231,4	73780,8	2218,9	1651,7	0,05	0,05	209 Strong
JSC RENAISSANSE CONSTRUCTION INN 7814017341 Saint-Petersburg	18124,2	34862,3	597,8	629,6	0,02	0,01	201 Strong
LLC MIP-STROI №1 INN 7701394860 Moscow	28858,8	46025,3	284,5	424,7	-0,04	-0,03	296 Medium
JSC Armed forces infrastructure development directorate general INN 7703702341 Moscow Bankruptcy claims	61923,8	80570,3	84,1	56,0	0,00	-0,05	400 Weak
JSC STROYTRANSGAZ INN 5700000164 Moscow Bankruptcy claims	25741,0	36382,6	643,1	717,6	-0,06	-0,06	189 High
LLC STROYGAZCONSULTING INN 7703266053 Saint-Petersburg Bankruptcy claims	153019,2	153789,1	-6566,9	-7008,8	-0,05	-0,13	400 Weak
FGUP GVSU №14 INN 5047054473 Moscow Bankruptcy proceedings	56977,7	38089,7	-905,7	-4978,9	-0,05	-0,22	550 Insufficient
Total for TOP-10	515455,4	567645,0	4413,7	1244,2
Average for TOP-10 companies	51545,5	56764,5	441,4	124,4	-0,01	-0,02
Average industrial value	58,36	58,0	0,2	-0,4	-0,29	-0,25

— growth of indicator to the previous period, — decrease of indicator to the previous period.

The average indicator of the working capital to current assets ratio of TOP-10 companies is characterized with negative value and above the average industrial value. Only one company of the group showed result above the recommended value in 2017.

Picture 1. Working capital to current assets ratio and revenue of the largest construction companies (TOP-10)

During 10 years average industrial indicators of the working capital to current assets ratio have negative values with increasing tendency. (Picture 2).

Picture 2. Change of average industrial indicators of the working capital to current assets ratio of the Russian construction companies in 2008 – 2017