A new study by Coface Romania on the sector of `Dairy products and cheese manufacturing” indicates a negative evolution of revenues in 2018, which decreased with approximately 18% compared to 2017, with a slightly increased profitability.
The study aggregated the data of 448 companies that submitted their financial situation for 2018 and generated a consolidated turnover of RON 3.8 billion.
The weight of the cumulative market share held by the most important 10 players is 58%, which indicates a high degree of concentration.
The companies operating in this sector registered a current liquidity of 0.97 during 2018, the working capital being exposed to negative shocks and volatility (lower revenues or non-collection of receivables).
The average duration of debt collection in the analyzed sector decreased from 68 days, the level registered in 2014, to 51 days in 2018, while the national average over the same period decreased from 104 days to 90 days.
The consolidated net result at sectorial level for 2018 was 4.3%, higher compared to the level of 2017 (3.3%). However, 44% of the companies had a net loss at the end of 2018, 26% of the companies registered losses of more than -20% and 5% of the companies generated more than 20% profit. The 55% level of indebtedness in the sector is decreasing compared to the previous years (62% in 2017, 63% in 2016, 67% in 2015 and 69% in 2014). It is worth mentioning that 39% of companies have a negative capitalization degree (equivalent to a debt level of over 100%), and for 17% of the companies the debt level exceeds 80%.
“During 2018, the companies in the analyzed sector have allocated significant investments for the expansion of fixed assets. The ratio between capital expenditures (CAPEX) and depreciation ratio was 120% in 2018, which means that investments in fixed assets covered the depreciated fixed assets. Almost half of the companies (46%) made investments in 2018, with a supraunitary Capex/ Amortization report”, stated Nicoleta Marin, Senior Financial Analyst, Coface Romania.
Regarding the payment behavior, respectively, the debts to the State Budget, according to the data published by ANAF, once with the decrease of the number of companies that have registered the debts, the value of the debts has not decreased, reaching the maximum of the period in 2018.
According to Eurostat, in the European Union the first three countries for milk production and processing are Germany, France and the United Kingdom. Poland ranks 5th in terms of quantity produced and 6th in processing (10 times larger than Romania, although it only produces 3 times more milk).
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