Information agency Credinform prepared a ranking of profitability of services of the Russian debt collection agencies.

The Russian debt collection agencies (Top-10) with the highest volume of revenue were selected for this ranking according to the data from the Statistical Register for the latest available periods (2015 and 2014). The enterprises were ranked by decrease in profitability of services (see table 1).

Profitability of services or goods is sales profit to expenses from ordinary activities. Profitability in general indicates production efficiency. The analyses of profitability of services allows to conclude about expediency of one or another kind of services. There is no standard value for profitability indicators, because they change in accordance with the industry the company operates in.

For the most complete and objective view of the financial condition of the enterprise it is necessary to pay attention to the complex of presented ratios, financial and other indicators of the company.

Average value of profitability of services for the Top-10 companies amounted to 17,0% in 2015. Average value in Top-25 amounted to 32,2% at industry average value of 6,7%.

Seven companies in the Top got high solvency index Globas-i indicating their ability to timely and fully fulfill their debt liabilities.

Three companies got satisfactory index. LLC FIRST RUSSIAN RECOVERY has active writs of execution and loss in key figures; there are also cases of delays in payments. LLC CENTER FOR SETTLEMENT OF DEBT has loss in key figures. LLC NATIONAL DEBT AGENCY has insufficient amount of working assets for funding debt.

Total revenue of the TOP-10 in 2015 amounted to 1,4 bln RUB that is by 13% higher than in 2014. At the same time total net profit of the same group decreased in 7,6 times.

Five companies in the Top (marked with red in Table 1) have decrease in net profit or loss in comparison with the previous period, or decrease in revenue.

Total revenue of TOP-25 companies for the same period increased by almost 14% at increase in total net profit by 66%.

In general, the Russian market of debt collection services is not fully-formed yet. The Federal law regulating debt collection is coming into force since January 1, 2017.

In case of orderly formation of these services’ market within the frameworks of the law, debt collection agencies will have quite good development prospects considering the potential volume of debt collection services. This is shown by estimated data on debts growth rates (Picture 2) based on information of the Federal state statistics service and the Central Bank of Russia on nominal debts values (Table 2).

For the whole six years from 2010 to 2015, the significant growth of debts in nominal values is observed from 1,6 to 3,6 times in dependence of the industry. At the same time growth rates of debts has significantly decreased in the last two years (Picture 2, decrease in nominal value is marked with green in Table 2).

*) – Data for 9 months of 2016 is presented to the relevant period of 2015.

There is no strongly marked concentration of debt collection agencies in the regions of Russia. According to the Information and analytical system Globas-i 25 of companies in the sector with the highest volume of revenue for 2015 are located in 17 regions of Russia (Picture 3).

The year of 2016, unclear for the Russian economy, has gone: following the results for 11 months of 2016, at negative GDP dynamics and consumer market fall, the industry demonstrated growth by 0,8% compared to the same period in 2015; stabilization of real income of the population is also observed.

Trends by key indicators of the largest companies’ activity form multidirectional. The Russian business is quite diversified and not concentrated on oil extraction alone. Thesis of “raw-exports role” is disproved with analyses of real economy enterprises’ financial accounts: hi-tech production demonstrates not only significant turnover volumes, but also huge numbers of its growth.

According to the last available accounting reports of companies with revenue over 10 bln RUB for Q3 2016, Russian Нelicopters JSC having increased revenue in more than 11 times in comparison with the relevant period of 2015 and became a turnover growth leader. Manufacture of heavy helicopters is a complex and science-driven process which can be supported by only the largest and economically powerful states.

PJSC Mechel is ranked the second: it appears the corporation has overcome all financial difficulties and demonstrated impressive results: the group’s turnover in Q3 2016 amounted to 11 263 mln RUB opposite to 2 028 mln RUB in Q3 2015.

PJSC Rosseti, key energy networks operator and one of the leading power grid company in the world, closes top three: turnover for Q3 2016 has increased by 382% (see Table 1).

(1) Information in tables 1 and 2 is presented in accordance with selection of real economy companies with quarter revenue for the examined period over 10 bln RUB, provided accounting reports for Q3 2016.
(2) Business scope in tables 1 and 2 is given according to the companies’ own data.

Along with the leaders, every business has companies with negative dynamics of figures. Negative external environment on products and commodity markets, movement of national currency, unstable domestic demand and lack of investment lead to decline in turnover. It should be noted that decrease in percentage is lower than growth. Among companies with turnover exceeding 10 bln RUB the following companies stand apart: JSC RUSAL BRATSK ALUMINIUM SMELTER with -72%, PJSC Kazan helicopter plant and PJSC Irkut Corporation have -50% and -45% relatively (see Table 2).

Despite of structural problems of the economy, business environment in Russia develops positively. Gross revenue of real economy companies (taking into account the price deflator) grows together with balanced net profit: according to the Federal State Statistics Service data for January-September 2016, the share of companies with net profit over 71% in the country. Positive quarter GDP values and revival of demand on products of the Russian manufacturers are expected in 2017, and the new year could be dealt with optimism.