Experts forecast increase of competitive ability of domestic shipbuilding

In 2012, according to analytical survey of Credinform “Civil vessels market”, Russia floated off over 80 civil vessels that include 22 tankers, 8 dry-cargo carriers, 4 passenger motor vessels, 25 motor boats, etc. Steamship lines, FSUE Rosmorport and Federal Agency of Sea and River Transport were the main customers.

Last year, 32 shipbuilding companies accomplished their projects in the sphere of civil shipbuilding. At the same time, the biggest share in the number of launched vessels was occupied by motor boats of various designs. They took 30.9% of all sold vessel projects. The second place went to tankers – 27.2%, and the third – to vessels of different purpose with total share of 13.6%.

As was noted by experts from Credinform, the domestic shipbuilding industry is considered by the state to be one of strategic and priority spheres; therefore, for rehabilitation of shipbuilding industry, in 2007, Russia established a Joint Shipbuilding Corporation (JSC) OJSC with 100% of shares being in federal ownership.

JSC OJSC is a scientific and production complex uniting industrial and design and construction enterprises of shipbuilding industry, as well as ship-repairing plants. According to GLOBAS-i system, it includes 16 design and construction bureaus and 39 shipbuilding and ship-repairing enterprises.

Establishment of JSC holding contributed to a rapid acceleration of corporatizing of enterprises of the industry, its definite stimulation, start for rehabilitation of assets which used to be in difficult financial and economic situation. JSC is currently expected to increase competitive ability of enterprises and to created modern production capacities.

At the end of 2012, the Government of Russia decided to adopt a state programme “Development of shipbuilding for 2013-2030”. The programme is aimed at recovery of Russia’s positions on the world shipbuilding market. The programme will be implemented in 2013-2030 in three stages. The stage is planned to be implemented between 2013 and 2016, the second – between 2017 and 2025, and the third one – between 2026 and 2030.

Debt/equity ratio of perfumery and cosmetics producers in the Russian Federation


Credinform Information Agency prepared a ranking “Debt/equity ratio of perfumery and cosmetics producers in the Russian Federation”. For this ranking, the Russian producers of perfumery and cosmetics with highest revenues were selected. Then, these companies were rated by debt/equity ratio.

Debt/equity ratio is the index that characterizes the proportion between borrowed funds and equity, which are used for funding the company’s activities, i.e. how much borrowed funds was attracted by company for 1 ruble of equity. This index is calculated as a ratio of liabilities of the company to equity. Its target value, according to the order of the Ministry of Economy of Russia, shall be not less than 0.7. The economic literature provides the recommended value of ≤ 1. The excess of this indicator means dependence of the enterprise on external funding sources (credits and loans) and, consequently, the loss of financial stability. At the same time, the debt and equity ratio should not be negative.

The investors use debt/equity ratio first of all for determination of risks related to purchase of shares or bonds. The higher is the ratio, the higher are the risks related to investment of funds in this company. Therefore, the companies with high debt/equity ratio will have to offer the investors with a higher interest rate on bonds and to suffer problems with sale of its shares.

Debt/equity ratio and solvency index of the biggest producers of perfumery and cosmetics
NNameINNTurnover in 2011, ml rub.D/EratioGLOBAS-i® SolvencyIndex
1 NevskycosmeticsOJSC 7811038047 6,871.91 0.21 148 (highest)
2 Unicosmetics LLC 7826704356 2,441.45 0.23 170 (highest)
3 L’Oreal CJSC 7726059896 29,224.68 0.78 187 (highest)
4 Arnest OJSC 2631006752 5,155.38 0.83 201 (high)
5 SvobodaCosmeticCompany OJSC 7714078157 2,547.69 1.02 187 (highest)
6 Faberlic OJSC 5001026970 4,857.79 1.14 192 (highest)
7 Kalina Concern LLC 6685018127 12,519.74 1.87 173 (highest)
8 Vesna Perfumery and Cosmetics Company OJSC 6311064600 2,091.86 2.91 262 (high)
9 Mezoplast CJSC 7721025967 2,601.13 3.10 232 (high)
10 Oriflame Cosmetics LLC 7704270172 19,114.80 9.55 306 (satisfactory)

Analysis of the table shows that only four companies among ten biggest perfumery and cosmetics producers - Nevsky cosmetics OJSC, Unicosmetics LLC, L’Oreal CJSC and Arnest OJSC – have the debt/equity ratio not exceeding the target indicator. Svoboda Cosmetic Company OJSC and Faberlic OJSC have slight ratio deviation.

High value of short term liabilities and accounts payable resulted in excess of target debt/equity ratio of Svoboda Cosmetic Company OJSC, Faberlic OJSC, Kalina Concern LLC, Vesna Perfumery and Cosmetics Company OJSC and Mezoplast CJSC.

Presence of uncovered loss, according to the results of 2011, prevented Oriflame Cosmetics LLC from retaining of the ratio within the target index value, therefore, it achieved the rate of 9.55. Negative result of this coefficient along with uncovered loss in the structure of financial indicators of the company affected the evaluation of financial situation of the company; thereby, Credinform Agency assigned this enterprise with satisfactory solvency index.

Therefore, when having high ratio value, the organization looses its financial independence and its financial position becomes extremely unsustainable. Fore these organizations, it appears more difficult to attract additional loans. Accordingly, the companies should pay higher attention to their debt burden.