The construction sector and HORECA, the highest level of insolvencies.
The number of companies filing for insolvency in the first quarter of the year dropped by over 10 per cent compared to the same period of 2012, to 6,381, but the average turnover of defaulting companies in the same interval is three times higher, according to a Coface study, a press release informs. The average turnover of companies filing for insolvency in the first quarter of 2013 is almost RON 3 M, compared to an average of RON 930,000 in Q1 2012, and RON 1.4 M in Q1 2011. The average turnover was pushed up by three companies with turnovers of over EUR 100 M that became insolvent in Q1 this year compared to just one in Q1 2012. In Q1 2013 four other companies with turnovers from EUR 50 to 100 M and 15 with turnovers from EUR 10 to 50 M filed for insolvency. For comparison, only one company with a turnover between EUR 50 and 100 M and only six with turnovers from EUR 10 to 50 M became insolvent in Q1 2012. In other words, one could draw the conclusion that, as far as small companies are concerned, the crisis and insolvency wave have moved past the critical point. On the other hand, the big companies that have agonised through the last five years are beginning to give in. While in the Centre and Western Romania the number of insolvencies continued to grow by approximately 10 per cent in Q1, Bucharest reports the most important decrease of the number of defaulting companies, by almost 32 per cent.
The construction sector, HORECA and the metallurgic industry are the sectors with the highest level of insolvencies opened in Q1 this year, compared to the number of active companies. Worth mentioning, the same sectors were included in top 5 sectors with the highest values for this indicator in 2012 as well, which hints to the persistence of systemic structural problems. The only regions where the number of insolvencies registered in Q1 this year increased year-on-year are Center, N-E and S-E.
“From the Coface perspective, 2013 will be the year of large and very large insolvencies, and the fact that they increased 2.5 times compared to the similar interval of last year is a certainty. It is a concerning sign, given the economic and social impact. Many medium and large companies that tried to expand in the past years now are confronted by business sustainability issues, as they became commercial banks for their customers. It is not the number of insolvencies that will matter in 2013, but the magnitude of the companies that enter this procedure of insolvency,” said Constantin Coman, Country Manager, Coface Romania.