Information agency Credinform has prepared a review of trends in nonferrous metallurgy.

The largest companies mining nonferrous ores (TOP-1000) in terms of annual revenue were selected for the analysis according to the data from the Statistical Register and the Federal Tax Service for the latest available periods (2014-2019). The analysis was based on the data of the Information and Analytical system Globas.

Net assets are total assets less total liabilities. This indicator reflects the real value of the property of an enterprise. When the company’s debt exceeds the value of its property, the indicator is considered negative (insufficiency of property).

The largest company in term of net assets is JSC POLYUS KRASNOYARSK, INN 2434000335, Krasnoyarsk territory. In 2019, net assets value of the company almost amounted to 313 billion RUB.

The lowest net assets value among TOP-1000 belonged to LLC KUZBASSARM, INN 4205201604, Kemerovo region – Kuzbass. The company is in process of being wound up since August 11, 2015. In 2019, insufficiency of property of the legal entity was indicated in negative value of -102 billion RUB.

Covering the six-year period, the average net assets values of TOP-1000 have a trend to increase with a decreasing growth rate (Picture 1).

Picture 1. Change in industry average net assets value in 2014 – 2019

Over the past six years, the share of companies with insufficient property had a negative trend to increase (Picture 2).

Picture 2. Shares of TOP-1000 companies with negative net assets value in 2014-2019

Sales revenue
In 2019, the revenue volume of 3 largest companies of the industry was 36% of total TOP-1000 revenue (Picture 3). This is indicative of relatively high level of aggregation of capital in the industry.

Picture 3. The share of TOP-10 companies in total 2019 revenue of TOP-1000

In general, there is a trend to increase in revenue with the decreasing growth rate (Picture 4).

Picture 4. Change in industry average net profit in 2014 – 2019

Profit and loss
The largest organization in term of net profit is JSC POLYUS KRASNOYARSK, INN 2434000335, Krasnoyarsk territory. The company’s profit for 2019 almost reached 87 billion RUB.

Covering the six-year period, there is a trend to increase in average net profit with the decreasing growth rate (Picture 5).

Picture 5. Change in industry average net profit (loss) values in 2014 – 2019

For the six-year period, the average net profit values of TOP-50 have the increasing trend with the decreasing net loss (Picture 6).

Picture 6. Change in average net profit and net loss of ТОP-1000 in 2014 – 2019

Key financial ratios
Covering the six-year period, the average values of the current liquidity ratio were above the recommended one - from 1,0 to 2,0 with a trend to increase (Picture 7).

Current liquidity ratio (current assets to short-term liabilities) shows the sufficiency of company’s assets to repay on short-term liabilities.

Picture 7. Change in industry average values of current liquidity ratio in 2014 – 2019

Covering the six-year period, the average values of ROI ratio have a trend to increase (Picture 8).

ROI ratio is calculated as net profit to sum of shareholders equity and long-term liabilities, and shows the return of equity involved in commercial activities and long-term borrowed funds.

Picture 8. Change in industry average values of ROI ratio in 2014 – 2019

Assets turnover ratio is the ratio of sales revenue and company’s average total assets for a period. It characterizes the effectiveness of using of all available resources, regardless the source of their attraction. The ratio shows how many times per year the full cycle of production and circulation is performed, generating the corresponding effect in the form of profit.

Covering the six-year period, business activity ratio demonstrated the increasing trend (Picture 9).

Picture 9. Change in average values of assets turnover ratio in 2014 – 2019

Small business
74% of the TOP-1000 companies are registered in the Register of small and medium-sized enterprises of the Federal Tax Service of the Russian Federation. Their share in total revenue of TOP-1000 is 7,6% that is almost 3 times less than the national average in 2018-2019 (Picture 10).

Picture 10. Shares of revenue of small and medium-sized enterprises in TOP-1000

Main regions of activity
Companies of TOP-1000 are registered in 43 regions of Russia, and unequally located across the country in accordance with the geographic location of natural resources. Almost 45% of companies largest by revenue are located in Krasnoyarsk territory, Magadan region and the Republic of Sakha (Yakutia) (Picture 11).

Picture 11. Distribution of TOP-1000 revenue by regions of Russia

Financial position score
Assessment of the financial position of TOP-1000 companies shows that the majority of them have average financial position (Picture 12).

Picture 12. Distribution of TOP-1000 companies by financial position score

Solvency index Globas
Most of TOP-1000 companies got Adequate / Weak index Globas. This fact shows their limited ability to meet their obligations fully (Picture 13).

Picture 13. Distribution of TOP-50 companies by solvency index Globas

Conclusion
Complex assessment of activity of the companies mining nonferrous ores, taking into account the main indexes, financial ratios and indicators, demonstrates the prevalence of positive trends in 2014 - 2019 (Table 1).

Table 1. Positive and negative trends, evaluation factors

Trends and evaluation factors	Relative share of factors, %
Dynamics of the average net assets value	10
Rate of growth (decrease) in the average size of net assets	-10
Increase (decrease) in the share of enterprises with negative values of net assets	-10
Level of competition / monopolization	-10
Dynamics of the average revenue	10
Rate of growth (decrease) in the average size of revenue	-10
Dynamics of the average profit (loss)	10
Rate of growth (decrease) in the average profit (loss)	-10
Growth / decline in average values of companies’ net profit	10
Growth / decline in average values of companies’ net loss	10
Increase / decrease in average values of total liquidity ratio	10
Increase / decrease in average values of return on investment ratio	10
Increase / decrease in average values of asset turnover ratio, times	10
Share of small and medium-sized businesses in terms of revenue being more than 22%	-10
Regional concentration	-5
Financial position (the largest share)	5
Solvency index Globas (the largest share)	5
Average value of relative share of factors	1,2

positive trend (factor), negative trend (factor)

Information agency Credinform represents a ranking of the largest Russian companies engaged in extraction of non-ferrous metal ores. Companies with the largest volume of annual revenue (TOP-10 and TOP-100) were selected for the ranking, according to the data from the Statistical Register and the Federal Tax Service for the latest available periods (2017 - 2019). They were ranked by asset coverage ratio (Table 1). The selection and analysis of companies were based on the data of the Information and Analytical system Globas.

Asset coverage ratio(x) is calculated as the difference between equity and non-current assets to current assets.

The ratio shows the ability of an enterprise to finance current activities only with its working capital. The recommended value is > 0.1.

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

Table 1. Net profit, revenue, asset turnover ratio, solvency index Globas of the largest Russian companies engaged in extraction of non-ferrous metal ores

Name, INN, region	Revenue, million RUB		Net profit (loss), million RUB		Asset coverage ratio (x), > 0,1		Solvency index Globas
	2018	2019	2018	2019	2018	2019
1	2	3	4	5	6	7	8
JSC SEREBRO MAGADANA INN 4900003918 Magadan region	24 733	25 596	11 094	5 615	0,80	0,85	284 Medium
CHUKOTKA MINING AND GEOLOGICAL COMPANY INN 8709009294 Chukotka autonomous region	30 436	37 516	9 812	12 311	0,62	0,81	305 Adequate
JSC POLYUS MAGADAN INN 4906000960 Magadan region	7 191	37 294	-2 127	15 599	0,19	0,48	292 Medium
JSC BOKSIT TAMANA INN 1117000011 The Republic of Komi	20 761	23 521	1 622	963	0,35	0,31	217 Strong
LLC MEDVEZHIY RUCHEY INN 2457080792 Krasnoyarsk territory	25 681	55 941	5 897	21 254	0,28	0,30	298 Medium
LLC NERYUNGRI-METALLIK INN 1434024359 The Republic of Sakha (Yakutia)	9 278	23 626	3 970	16 631	-3,03	-0,79	275 Medium
LLC GRK BYSTRINSKOE INN 7701568891 Zabaikalye territory	13 137	36 297	-3 672	22 847	-3,83	-1,38	261 Medium
MIKHEEVSKY MINING AND PROCESSING PLANT INN 7428007317 Chelyabinsk region	22 629	23 750	4 418	5 413	-2,52	-1,47	202 Strong
GAISKY MINING AND PROCESSING PLANT INN 5604000700 Orenburg region	25 031	25 382	2 416	1 171	-1,04	-2,09	252 Medium
JSC POLYUS KRASNOYARSK INN 2434000335 Krasnoyarsk territory	135 881	163 654	34 843	86 693	-4,10	-2,58	274 Medium
Average value for TOP-10	31 476	45 258	6 827	18 849	-1,23	-0,56
Average value for TOP-1000	1 109	1 258	180	339	-72,82	-44,72

growth of indicator to the previous period, decrease of indicator to the previous period, colorless – no data for 2017

The average indicator of the asset coverage ratio of TOP-10 has negative value and is above the average one of TOP-1000. In 2019, five companies have values above the recommended one. Eight companies increased the value compared to the previous period.

Picture 1. Asset coverage ratio and revenue of the largest Russian companies engaged in extraction of non-ferrous metal ores (TOP-10)

During six years, the average values of the asset coverage ratio of TOP-1000 were negative with a trend to decrease (Picture 2).

Picture 2. Change in the average values of the asset coverage ratio of the TOP-50 largest Russian companies engaged in extraction of non-ferrous metal ores in 2014 - 2019