Information agency Credinform has prepared a review of activity trends of the largest Russian companies engaged in geological exploration.

The largest companies (ТОP-100) engaged in exploration, geophysical and geochemical works, as well as in the field of subsoil exploration and reproduction of mineral resources in terms of annual revenue were selected according to the data from the Statistical Register for the latest available periods (2013 - 2018). The analysis was based on data of the Information and Analytical system Глобас.

Net assets is a ratio reflecting the real value of company's property. It is calculated annually as the difference between assets on the enterprise balance and its debt obligations. The ratio is considered negative (insufficiency of property), if company’s debt exceeds the value of its property.

The largest company in terms of net assets is LLC RN-EXPLORATION, INN 7706230432, Moscow. In 2018 net assets of the company amounted to almost 194 billion RUB.

The smallest size of net assets in ТОP-1000 had JSC ELVARY NEFTEGAZ, INN 6501143635, Sakhalin region. The lack of property of the company in 2018 was expressed in negative terms -15 billion RUB.

For the last ten years, the average values of net assets showed the growing tendency (Picture 1).

Picture 1. Change in average net assets value in 2009 – 2018

For the last five years, the shares of ТОP-1000 enterprises with lack of property represent significant values and showed the growing tendency (Picture 2).

Picture 2. The share of enterprises with negative net assets value in ТОP-1000

Sales revenue
In 2018, the total revenue of 10 largest companies amounted to more than 61% from ТОP-1000 total revenue. (Picture 3).This fact testifies the high level of monopolization within the industry.

Picture 3. Shares of TOP-10 in TOP-1000 total revenue for 2018

In general, the growing trend in sales revenue is observed (Picture 4).

Picture 4. Change in average revenue in 2009 – 2018

Profit and loss
The largest company in terms of net profit is JSC ROSPAN INTERNATIONAL, INN 7727004530, Yamalo-Nenets Autonomous region. In 2018, the company’s profit amounted to more than 16 billion RUB.

For the last ten years, the average profit values showed the increasing tendency. Thus, the profit was observed only in 2014 and 2016 (Picture 5).

Picture 5. Change in average profit (loss) in 2009 – 2018

Over a five-year period, the average net profit values of ТОP-1000 show the increasing tendency, along with this the average net loss is decreasing (Picture 6).

Picture 6. Change in average net profit/loss in 2014 – 2018

Main financial ratios
For the last ten years, the average values of the current liquidity ratio were beyond the recommended values - from 1,0 to 2,0, with decreasing tendency (Picture 7).

The current liquidity ratio (ratio of total working capital to short-term liabilities) shows the sufficiency of company’s assets to meet short-term obligations.

Picture 7. Change in average values of current liquidity ratio in 2009 – 2018

Within the last five years, the negative values of ROI ratio with slight growing tendency are observed (Picture 8).

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

Picture 8. Change in average values of ROI ratio in 2009 – 2018

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.

For the last ten years, this business activity ratio demonstrated the growing trend (Picture 9).

Picture 9. Change in average values of assets turnover ratio in 2009 – 2018

Small businesses
72% of ТОP-1000 companies are registered in the Unified register of small and medium-sized enterprises of the Russian Federal Tax Service. Herein, their share in TOP-1000 total revenue amounted to 8,4%, which is significantly lower than national average value (Picture 10).

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

Main regions of activity
ТОP-1000 companies are registered in 74 regions and unequally located across the country, mainly in accordance with the geographical location of natural resource reserves. Almost 51% of the largest enterprises in terms of revenue are located in Tyumen region, Yamalo-Nenets Autonomous region and Moscow (Picture 11).

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

Financial position score
An assessment of the financial position of TOP-1000 companies shows that the largest part have the 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 superior/high or strong/medium Solvency index Globas, this fact shows the ability of the companies to meet their obligations in time and fully (Picture 13).

Picture 13. Distribution of TOP-1000 companies by Solvency index Globas

Conclusion
A complex assessment of the largest Russian companies engaged in geological exploration, taking into account the main indexes, financial ratios and indicators, demonstrates the presence of positive trends (Table 1).

Table 1. Favorable and unfavorable trends, assessment factors

Trends and assessment factors	Relative share, %
Growth/drawdown rate of average net assets value	10
Increase / decrease in the share of enterprises with negative net assets	-10
The level of competition / monopolization	-10
Growth/drawdown rate of average revenue	10
Growth/drawdown rate of average net profit (loss)	5
Increase / decrease in average net profit	10
Increase / decrease in average net loss	10
Increase / decrease in average values of current liquidity ratio	-5
Increase / decrease in average values of ROI ratio	5
Increase / decrease in average values of assets turnover ratio, times	10
Share of small and medium-sized businesses by revenue more than 21%	-10
Regional concentration	5
Financial position (the largest share)	5
Solvency index Globas (the largest share)	10
Average value of factors	3,2

favorable trend (factor) , unfavorable trend (factor).

Information agency Credinform represents a ranking of the largest Russian exploration companies. The companies with the largest volume of annual revenue (TOP-10) were selected for the ranking, according to the data from the Statistical Register for the latest available periods (2016 - 2018). They were ranked by the ratio of assets and liabilities (Table 1). The analysis was based on the data of the Information and Analytical System Globas

The ratio of liabilities and assets indicates the share of assets funded with borrowing. The standard value for the ratio is from 0,2 to 0,5.

Sales revenue and net profit show the scale of the company and the efficiency of its business, and the ratio of liabilities and assets indicates the risk of insolvency of the company. It is especially important to consider the structure of short-term and long-term liabilities. It is not recommended to finance long-term projects through short-term loans, loans with repayment period is up to 12 months. Unforeseen circumstances can significantly affect the solvency of the company.

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.

Таблица 1. Net profit, revenue, ratio of liabilities and assets, solvency index Globas of the largest Russian exploration companies (TOP-10)

Name, INN, region	Revenue, million RUB		Net profit (loss), million RUB		Ratio of liabilities and assets (x), from 0,2 to 0,5		Solvency index Globas
	2017	2018	2017	2018	2017	2018
1	2	3	4	5	6	7	8
LLC GAZPROM NEDRA INN 7709769582 Moscow	9 345,8	8 941,2	9,3	14,2	0,18	0,17	256 Medium
LLC SLADKOVSKO-ZARECHNOE INN 5611037405 Orenburg region	5 513,8	26 848,9	1 183,2	6 571,3	0,26	0,26	196 High
JSC BASHNEFTEGEOFIZIKA INN 0275009544 Republic of Bashkortostan	12 899,0	14 229,1	765,9	1 850,5	0,52	0,43	172 Superior
LLC GAZPROMNEFT SCIENCE & TECHNOLOGY CENTRE INN 7838395487 Saint Petersburg	5 630,1	7 256,3	56,0	758,9	0,58	0,63	216 Strong
JSC ROSPAN INTERNATIONAL INN 7727004530 Yamal-Nenets autonomous district	38 231,5	51 739,0	7 166,0	16 158,6	0,75	0,73	220 Strong
JSC MARINE ARCTIC GEOLOGICAL EXPEDITION INN 5190100088 Murmansk region	5 567,0	8 928,4	147,5	151,3	0,87	0,91	179 High
JSC GEOTECH SEISMIC SERVICES INN 7203215460 Tyumen region	13 914,3	14 055,0	-2 018,7	80,9	0,90	0,92	262 Medium
LLC GAZPROM GEOLOGORAZVEDKA INN 2460066149 Tyumen region	47 443,4	44 940,3	89,4	135,8	0,97	0,96	235 Strong
LLC ZARNESTSERVICE INN 7717108843 Moscow	17 372,0	17 372,0	-140,8	223,0	1,01	0,99	252 Medium
LLC VOSTOKGEOLOGIA INN 7536076678 Zabaikalye territory	19 705,2	9 466,3	-498,4	-831,0	0,88	0,99	311 Adequate
Average value for TOP-10	17 562,2	22 418,6	675,9	2 511,4	0,69	0,70
Industry average value	164,9	202,9	-1,6	-5,4	0,85	0,81

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

Over the past 10 years, the industry average values of the ratio of liabilities and assets have a trend to decrease toward the standard value (Picture 2).

Picture 1. Ratio of liabilities and assets, and revenue of the largest Russian exploration companies (TOP-10)

Over the past 10 years, the industry average values of the ratio of liabilities and assets have a trend to decrease toward the standard value (Picture 2).

Picture 2. Change in the industry average values of the ratio of liabilities and assets of the largest Russian exploration companies in 2009 – 2018