September 26, 2018

Agriculture and food industry met difficulties with making payment this year

Coface analysis says that in 2012, agri-food companies encountered difficulties in meeting payment deadlines agreed with business partners, 43 % of them paying slowly or irregularly. Out of a total of 11,648 companies analyzed, 17.07 % fell under the very high risk class and 48.23 % – the above-average risk class. Only 30.73 % of the companies analyzed are making their payments on time. In this way, the sector consolidated risk level s 4.34 is indicating an important insolvency risk. Companies operating in agriculture present a high volatility of financial performance, strongly dependent on weather conditions. The input of agriculture to the GDP in the first nine months of the year decreased by 20 % compared to the same period in 2011 and agriculture companies started 2012 with precarious financial reserves, and were therefore more exposed to the risks occurring in the current year. Despite the very good 2011 commercial performance, consolidated net profits were mediocre, the rate being 4 % of the turnover. Also, the analysis shows that agriculture companies’ indebtedness rate has known a significant growth in the last years, reaching 70 % at the end of 2011.

Source: Nine o’clock (read more)

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