Custom-made industry research, company ratings, competitor analysis
On July 1, 2019, the Federal Law №71-FZ of 01.05.2019, with amendments that improve the contract system of public procurement, enters into force.
The amendments prescribe the following:
Information on all contacts and procurement, including archival one, is available in full for subscribers of the Information and Analytical system Globas.
Information Agency Credinform presents a review of activity trends of the largest buildings construction companies in Russia.
Construction companies with the largest annual revenue (TOP-10 and TOP-1000) have been selected for the analysis, according to the data from the Statistical Register for the latest available accounting periods (2015 — 2017). The analysis was based on the data from the Information and Analytical system Globas.
Net asset value indicates fair value of corporate assets and is calculated annually as assets on balance less company’s liabilities. Net asset value is negative (insufficiency of property) if liabilities are larger than the property value.
Average net assets of TOP-1000 companies tended to decrease during the last decade (Picture 1).
The share of TOP-1000 companies with insufficiency of property tends to increase within the last 3 years (Picture 2).
Sales revenue
In 2017 sales revenue of 10 industry leaders amounted to 18% of total revenue of TOP-1000 companies (Picture 3). This is an indicator of a high level of competition within the industry.
In general, average industry revenue tends to decrease during the decade (Picture 4).
Profit and loss
During the decade average industry net profit tended to decrease (Picture 5).
During the last 3 years average industry net profit of TOP-1000 companies increased, as well as average net loss (Picture 6).
Key financial ratios
During the last decade average values of total liquidity ratio of TOP-1000 companies were below the recommended value — from 1,0 to 2,0, tending to increase (Picture 7).
Total liquidity ratio (a ratio of current assets to current liabilities) reveals the sufficiency of a company’s funds for meeting its short-term liabilities.
During the last decade, average industry values of return on investment ratio tended to decrease (Picture 8).
It is a ratio of net profit to total equity and noncurrent liabilities, and it demonstrates benefit from equity engaged in business activity and long-term raised funds of the company.
Assets turnover ratio is a ratio of sales revenue to average total assets for the period, and it measures resource efficiency regardless of the sources. The ratio indicates the number of profit-bearing complete production and distribution cycles per annum.
During the last decade, this activity ratio tended to decrease (Picture 9).
Small business
46% of TOP-1000 companies are included in the Register of small and medium-sized enterprises of the Federal Tax Service of the Russian Federation. In general, their share in total revenue of TOP-1000 in 2017 amounted to 17% that is lower than the average national value (Picture 10).
Key regions of activity
TOP-1000 companies are unevenly located throughout Russian territory and are registered in 76 regions. Over 66% of their revenue are concentrated in Moscow, St. Petersburg and the Moscow region (Picture 11).
Financial position score
Assessment of financial state of TOP-1000 companies indicates that most of the companies have an above average financial position (Picture 12).
Solvency index Globas
The majority of TOP-1000 companies have got a superior, high, strong or medium Solvency index Globas, that indicates their capability to meet liabilities timely and in full (Picture 13).
According to the Federal Statistics Service, the share of buildings construction companies in the national revenue from sale of goods and services in 2018 amounted to 1,67%.
Conclusion
A comprehensive assessment of the largest buildings construction companies in Russia, that considers key indexes, financial figures and ratios, is indicative of negative trends in the industry (Table 1).
Trends and assessment factors | Relative share of the factor, % |
Rate of growth (decline) of average industry net assets | ![]() |
Increase/ Decrease of share of companies with negative net assets | ![]() |
Rate of growth (decline) of average revenue | ![]() |
Level of competition/ monopolization | ![]() |
Rate of growth (decline) of average net profit (loss) | ![]() |
Increase/ Decrease of average net profit of TOP-1000 companies | ![]() |
Increase/ Decrease of average net loss of TOP-1000 companies | ![]() |
Increase/ Decrease of average total liquidity ratio | ![]() |
Increase/ Decrease of average return on investment ratio | ![]() |
Increase/ Decrease of average assets turnover ratio | ![]() |
Share of small and medium-sized business within the region by revenue over 22% | ![]() |
Regional concentration | ![]() |
Financial standing (majority share) | ![]() |
Solvency index Glogas (majority share) | ![]() |
Average factors' value | ![]() |
positive trend (factor),
negative trend (factor).