Product profitability of meat products manufacturers

Information agency Credinform prepared a ranking of Russian meat products manufacturers.
The companies with the highest volume of revenue were selected for this ranking according to the data from the Statistical Register for the latest available period (for the year 2012). These enterprises were ranked by decrease in product profitability ratio.

Product profitability (%) is the relation of sales profit (loss) to its total value (amount of expenses for production, business and administrative expenses). It shows the results of current expenditures. If the ratio is negative, it testifies that a company has sales loss, what, surely, can be considered from a negative point of view.

There are no recommended or specified values prescribed for the mentioned ratio, because it varies strongly depending on the branch, where each concrete enterprise conducts business, that is why it should be assessed relying on industry-average indicator of the sector, as well as on indexes of other enterprises of the same industry.

Picture 1. Product profitability, turnover of the largest meat products manufacturer of Russia (TOP-10)

According to the data available in the database GLOBAS-i® of the Information agency Credinform, about 1330 companies act in the market of meat products manufacturers, with the revenue above zero and cumulative turnover 552,7 bln RUB. This points to a high degree of fragmentation of the market. Enterprises from Moscow are in the lead on cumulative turnover.

Judging from the data of the table, Ostankinsky myasopererabatyvayushchy kombinat OJSC was the largest manufacturer with the highest volume of revenue in the market of meat products. Company’s revenue has increased almost by 16% per annum. According to the independent estimation of solvency GLOBAS-i® the company has the index - 191 points, what characterizes the organization as creditworthy, guaranteeing that its credit debts will be pay off in time and fully with minimal risk of default. With the assumption that the index value can be in the range from 100 points – the best value, up to 600 – the worst one.

Also among TOP-10 companies are following Moscow enterprises, having their history and unique technology: Cherkizovsky myasopererabatyvayushchy zavod OJSC, ЗАО Mikoyanovsky masokombinat CJSC, Tsaritsyno OJSC, Dymovskoe kolbasnoe proizvodstvo LLC.

All TOP-10 enterprises got a high and the highest solvency index GLOBAS-i®, what points to sound enough financial standing of the branch.

Cumulative turnover of TOP-10 companies-manufacturers of meat products made 103,4 bln RUB (18,7% of the market) in 2012, went up by 11,8% per annum. From investment point of view, business cooperation with these organizations seems to be the most attractive.

Industry-average product profitability – 3,6%. Thereby the first 6 companies from TOP-10 were able to reach higher value among the largest manufacturers: STARODVORSKIE KOLBASY CJSC (16,1%); ROSTOVSKY KOLBASNY ZAVOD – TAVR LLC (13,4%); AGRO INVEST CJSC (7,6%); CHERKIZOVSKY MYASOPERERABATYVAYUSHCHY ZAVOD OJSC (7,5%); Mikoyanovsky masokombinat CJSC (5,2%); Masokombinat Dubki LLC (4,9%).