Information agency Credinform represents an overview of activity trends of the largest companies in the real sector of the economy of the Republic of Dagestan.
The enterprises with the largest volume of annual revenue in the real sector of the economy of the Republic of Dagestan (TOP-10 and TOP-1000) were selected for the analysis, according to the data from the Statistical Register for the latest available periods (for 2012 - 2017). The analysis was made on the basis of the data of the Information and Analytical system Globas.
type of activity
|Net assets value,
|Solvency index Globas|
|1||KIZLYARSKII KONYACHNYI ZAVOD PJSC
Production of distilled drinking alcoholic beverages: vodka, whiskey, brandy, gin, liqueurs, etc.
|2||GAZPOM TRANSGAZ MAKHACHKALA LLC
Transportation of gas and products of its processing through pipelines
|3||DERBENT COGNAC PLANT NJSC
Production of food alcohol
|4||MAKHACHKALINSKII MORSKOI TORGOVYI PORT NJSC
Extraction of natural gas and gas condensate
Distribution of water for drinking and industrial needs
|997||GAZPROM GAZORASPREDELENIE DAGESTAN
Transportation of gas through pipelines
|998||DAGESTANSKAYA SETEVAYA KOMPANIYA NJSC
Transmission of electricity and technological connection to distribution networks
|999||CASPIAN FLAT GLASS NJSC
Production of flat glass
Case on declaring the company bankrupt (insolvent) is proceeding
|1000||DAGESTANSKAYA ENERGOSBYTOVAYA KOMPANIYA PJSC
Sale of electric power
— increase in the indicator to the previous period, — decrease in the indicator to the previous period.
The average values of net assets of TOP-1000 enterprises tend to decrease over the five-year period (Picture 1).
The share of enterprises with insufficiency of assets tend to grow over the five-year period (Picture 2).
The revenue volume of 10 industry leaders made 41% of the total revenue of TOP-1000 companies in 2016. (Picture 3). It points to a relatively high level of capital concentration in the Republic of Dagestan.
In general, there is a trend towards an increase in revenue volume (Picture 4).
Profit and losses
The profit volume of 10 industry leaders made 54% of the total profit of TOP-1000 companies in 2016 (Picture 5).
Average values of net profit’s indicators of TOP-1000 companies do not to increase over the five-year, while the average size of net loss increases (Picture 6).
Key financial ratios
Over the five-year period the industry average indicators of the total liquidity ratio were much higher than the interval of recommended values - from 1.0 up to 2.0, with a tendency to increase (Picture 7).
There is a high level of average values of the return on investment ratio within five years, with a tendency to some decrease return on investment ratio within five years, with a tendency to some decrease (Picture 8).
This ratio of business activity showed a tendency to decrease over the five-year period (Picture 9).
The largest share in the total revenue of TOP-1000 is owned by companies, specializing in provision of electric power, gas and steam, as well as wholesale (Picture 10).
48% of TOP-1000 companies are registered in the Register of small and medium-sized businesses of the Federal Tax Service of the RF (Picture 11).
Financial position score
An assessment of the financial position of TOP-1000 companies shows that their the largest number are in the average financial position (Picture 12).
A comprehensive assessment of activity of the largest companies in the real sector of the economy of the Republic of Dagestan, taking into account the main indices, financial indicators and ratios, points to favorable trends, such as revenue growth, a high level of total liquidity and return on investment ratios. However, alarming and negative factors are: decrease in the average size of net assets and an increase in the share of companies with insufficiency of property, growing net losses, trends in the decline in the return on investment and asset turnover ratios
According to the Federal Service of State Statistics, there is a tendency to increase the industrial production index in the Republic of Dagestan in 2017 – 2018, higher than Russia average. Thus, for 8 months of 2018 the industrial production index increased on average by 7,5%, and in general for the period 2017 - 2018 - by 3% (Picture 14).
According to the same information, the share of the Republic of Dagestan in the amount of proceeds from the sale of goods, products, works, services countrywide made 0,06% for 8 months of 2018.
According to the Bank of Russia, loan debt of the Russian corporate sector by September has reached historical peak of 31,8 trn RUB or 35% of the GDP. Compared to the same period of 2017, debts have increased by 10,5%.
To get funding is one of the key challenges hindering the development of business in Russia. The problem of business funding remains relevant throughout the company’s life.
The situation is that companies take credits while insufficient demand negatively affects the revenue. As a result, there is a need in additional financial resources, which are increasingly difficult to be serviced.
Following the reduction of the key rate to 7,25% by the Bank of Russia this year, loan debt growth has quicken noticeably. Companies began active borrowing of money after the period of 2015-2017 when the average debt was at the level of 28,8 trn RUB (see Picture 1). Processing enterprises have the highest size of indebtedness – 7,1 trn RUB.
In general, companies of all sectors of domestic economy accumulate debts at a fast pace. However due to historically low mortgage rates and deferred housing demand, the construction sector has noticeable increase in the number of real estate buyers, and credit indebtedness is gradually going down.
The highest credit indebtedness is accumulated by companies in Moscow – 12,4 trn RUB or over 40% of total debt. It bears mentioning that only 21% of all active legal entities in Russia are registered in Moscow, that speaks for disproportion in allocation of business. The bulk of business leaders are located in the capital. Significantly less investment, credit and debt in raw numbers fall for the share of regions. Saint Petersburg with loan debts of 2,1 trn RUB is ranked the second.
The highest average amount of credit indebtedness per 1 company is in Yamal-Nenets autonomous district – 35 mln RUB, Tyumen region – 19 mln RUB, and Chukotka autonomous district – 15 mln RUB (see Table 1).
Table 1. Average credit indebtedness per 1 company, as of 01.09.2018
|Rank||Subject||Average amount of credit indebtedness per 1 company, mln RUB|
|1||Yamal-Nenets autonomous district||35|
|3||Chukotka autonomous district||15|
The highest increase in loan debts was recorded for companies of the Republic of Crimea, Tambov and Voronezh regions: by 44%, 41% and 37% respectively. The Republic of Khakassia leads by the rate of debt drawdown – by 45% (see Table 2).
Table 2. The highest increase and decrease in corporate credit indebtedness by regions, according to the Bank of Russia
|Rank||Subject||Increase rate of credit indebtedness, % as of 01.09.2018 to 01.09.2017||Subject||Decrease rate of credit indebtedness, % as of 01.09.2018 to 01.09.2017|
|1||Republic of Crimea||44||Republic of Khakassia||-45|
|2||Tambov region||41||Zabaikalye Territory||-38|
|3||Voronezh region||37||Republic of Sakha (Yakutia)||-19|
|4||Chukotka autonomous district||35||Smolensk region||-18|
|5||Republic of Udmurtia||33||Kabardino-Balkarian Republic||-16|
|6||Tyumen region||32||Arkhangelsk region||-14|
|7||Tula region||31||Kostroma region||-11|
|8||Magadan region||30||Ivanovo region||-11|
|9||Novgorod region||29||Novosibirsk region||-11|
|10||Lipetsk region||27||Samara region||-9|
For the relatively short period not only business community based on market relations was formed in Russia, but also money-and-credit mechanism. Loans help companies to attract additional funds for increase in profits and sales, development of fixed assets and output. However, under adverse circumstances, loans could be crushing burden and one of the reasons of bankruptcy.
Loan growth should be followed by accelerated dynamics in economy, which is unfortunately not observed nowadays. Credits are used for accrued expenses and old debts covering, as well as for sustaining capital.
On September 14, 2018, the Bank of Russia raised the key rate up to 7,5% for the first time since 2014. According to Credinform experts, this will lead to some drawdown of corporate debt growth rate, but not eliminate the debt overburden risk. Balance between own and attracted funds, and reasonable estimate of sectoral macroeconomic indicators by the company’s management are indispensable conditions for sound business and economy in general.