Coface studied the evolution of local distributors of food, agricultural and various products for over 27,000 companies operating in the wholesale of food, beverages and tobacco, wholesale of agricultural products, plants and animals and non-specialized wholesale trade (various items).
According to the Ministry of Finance data, firms in these segments generated in 2012 a total turnover of EUR100 billion and 120.784 jobs, thereby owning a share of 9.4% of turnover and 3% of employees’ number of all firms in the entire economy.
“Linking the evolution of the turnover and net profits with the liquidity and cash flow of the distributors and intermediaries in the sales of food, agricultural and various items shows that their commercial development in 2011 – 2012 was qualitative in terms of income, presenting volatility and a low degree of monetary persistence,” Coface release reads.
According to Coface, 8 out of 10 distributors with net profit in 2012 have, in the same time, a negative or insufficient cash flow compared to short-term debts, prioritizing the commercial result instead of the prudential one. Meanwhile, only 10% of all companies within these three areas of wholesale that faced losses, had sufficient liquidity to cover current liabilities.
All three categories of distributors faced a deterioration of financial indicators. This negative dynamics are more significant within the distributors of food, beverages and tobacco (which recorded the highest level of debt – 82% and the lowest capitalization – 16%) and various items (which recorded the highest DSO – 124 days), the only positive trend indicator being the rate of net profit obtained by the distributors of agricultural products, which increased from 0.75% in 2011 to 0.87% in 2012), Coface said.
Coface data show that 6.143 out of 27.645 companies considered active at the end of 2012 (22% of the total number) suspended their activity during 2013, being in various stages of insolvency proceedings, dissolution or temporary interruption of activity. The number and size of companies who have suspended their activity was higher than the one of newly opened companies between 2011 – 2012 (5.126 companies),
Although only 3% of the analyzed distributors registered debts within the state budget, not only the total value of these debts, but also the medium value of the debt per company registered significant increases compared to the same period of 2012 (74% and 94%). This trend is against the one registered between all companies in Romania, where we noticed a significant reduction of overdue debts under the efforts’ intensifications of the budget revenues’ collection of the last period.