Debt ratio of the largest Russian shipbuilding companies

ranking 28.04.2016

Information Agency Credinform has prepared the ranking of the largest Russian shipbuilding companies by debt ratio. The largest enterprises in terms of revenue were selected according to the data from the Statistical Register for the latest available period (for the year 2014). Then, first ten companies (Top-10) were ranged by increase in debt ratio (Table 1).

Debt ratio is one of the financial stability ratios. The ratios of this group are the most interesting in terms of exploring the possibility of granting the long-term loans or investing as it characterizes the possibility of the company to meet its long-term obligations. Thus, the debt ratio is calculated as a ratio of total borrowed funds to equity capital and shows how many units of borrowed funds the company had attracted to each unit of own sources of financing. 

The recommended value of the ratio is less than 1. The debt to assets ratio should not be negative, that’s why the ratio value from 0 to 1 is one of the indicators of company’s high ability to meet its obligations.

The calculation of practical values of financial indicators, which might be considered as normal for a certain industry, has been developed and implemented in Information and analytical system Globas-i® by the experts of Information Agency Credinform. The practical value of debt ratio for shipbuilding industry is from 0 to 4,88.

Table 1. Net profit, revenue, debt ratio and solvency index of the largest shipbuilding companies (Top-10)
Name, INN, region2014 net profit (loss), th RUB2014 revenue, th RUB2014/ 2013 revenue, %Debt ratio, (х)Solvency index Globas-i®
JSC UNITED SHIPBUILDING CORPORATION INN 7838395215, Saint-Petersburg 510 420 23 161 847 583 1,23 283 High
JSC Admiralteiskie Verfi INN 7839395419, Saint-Petersburg 2 575 347 36 386 181 126 3,03 203 High
Almaz Shipbuilding Company INN 7813046950, Saint-Petersburg 269 204 5 955 834 172 3,44 196 The highest
JSC Production Association «Northern machine – building enterprise» INN 2902059091, Arkhangelsk region 3 303 852 51 491 685 118 10,06 189 The highest
JSC SHIPREPAIRING CENTER ZVYOZDOCHKA INN 2902060361, Arkhangelsk region 15 054 37 877 959 139 12,87 263 High
JSC AMUR SHIPBUILDING PLANT INN 2703000015, Khabarovsk region 67 525 8 184 291 215 16,65 272 High
JSC SHIPBUILDING PLANT SEVERNAYA VERF INN 7805034277, Saint-Petersburg -1 101 716 13 494 252 88 36,25 308 Satisfactory
OJSC LENINGRAD SHIPYARD PELLA INN 4706000296, Leningrad region -1 933 811 5 119 557 109 41,40 270 High
JSC Shipyard Yantar INN 3900000111, Kaliningrad region 712 004 27 673 735 227 188,08 228 High
JSC VYBORG SHIPYARD INN 4704012874, Leningrad region 49 5 897 758 136 -25,20 285 High

The analysis of the results shows that none of Top-10 companies has the recommended value of debt ratio. The first three places of the ranking take the companies with debt ratio value in the range of practical standard. Other companies have ratio values from 10,06 to 118,08. The debt ratio of JSC VYBORG SHIPYARD has negative value. This means that total borrowed funds exceed equity capital of the company. 

In 2014 the average value of the indicator within industry amounted to 4,2. All the above testifies about the high level of debt load of Top-10 companies as well as enterprises within industry as a whole. Taking into account the financial and non-financial indicators, 9 out of 10 participants from the Top-10 list have the highest and high solvency index Globas-i®, that characterizes them as financially stable.  JSC SHIPBUILDING PLANT SEVERNAYA VERF has satisfactory solvency index Globas-i® because of loses in 2013-2014 and reduction in revenue.

Picture 1. Debt ratio of the largest shipbuilding companies (Top-10)
Debt ratio of the largest shipbuilding companies

The largest enterprise within the industry by 2014 revenue JSC Production Association «Northern machine – building enterprise» takes the fourth place of the ranking with the debt ratio value 10,06. JSC UNITED SHIPBUILDING CORPORATION has the best ratio value 1,23. In 2014 the enterprise covered the loss, exceeding 300 mln RUB, got a profit of over 500 mln RUB and increased the revenue by more than 5 times in comparison with previous period. 

Total revenue of Top-10 enterprises in 2014 amounted to 209,3 bln RUB, that is 46% more than in 2013.

High concentration of shipbuilding companies in Saint-Petersburg and Leningrad region should be noted. 6 enterprises from the Top-10 list are registered in these regions. Besides, 5 enterprises of the ranking are the part of JSC UNITED SHIPBUILDING CORPORATION structure: JSC Admiralteiskie Verfi, JSC Shipyard Yantar, JSC SHIPBUILDING PLANT SEVERNAYA VERF, JSC VYBORG SHIPYARD and JSC SHIPREPAIRING CENTER ZVYOZDOCHKA. 

For reference
Manufacture of sea and river vessels (except military, recreational and sport vessels) in Russia within 2010 - 2014 (according to the Federal State Statistics Service), (units/items): 
 
 

2010

2011

2012

2013

2014

Cargo and freight-passenger vessels 9 20 9 11 10
Marine tugs (except push tug boats) 8 8 10 10 13
Marine non-self-propelled liquid cargo vessels 1 1   1 1
Marine passenger vessels     1   1
Marine self-propelled catching vessels 7 9 1    
Marine self-propelled dry cargo vessels 1        
River and lake-type passenger vessels 44 67 57 38 24
River and lake-type self-propelled vessels         3
River non-self-propelled dry cargo vessels 8 12 7 11 7
Fishing vessels; fish farm and other vessels for processing or preserving of fishery products 9 9 1 2  
Self-propelled catching vessels (technical and auxiliary type) 2     2  
Total: 89 126 86 75 59

The number of vessels (units) according to the Federal Agency for Sea and Inland Water Transport, supervised by the Russian Maritime Register of Shipping with gross tonnage of more than 100 gross tons, which should be included in the State Register of vessels or shipping book of one of the country’s marine or fishing ports in accordance with the Merchant Shipping Code of the Russian Federation and have vessel's certificate (certificate of navigation or ship's letter), identifying the right of navigation under the State flag of the Russian Federation and ownership or use of the vessel:

Debt ratio of the largest shipbuilding companies