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COFACE: African swine fever wipes 1 bln lei off the meat processing industry's turnover
Revenues of Romania's meat processing and canning industry in 2018 were about 19 percent lower compared to the previous year, as the African swine fever (ASF) has wiped more than 1 billion lei off the turnover of the companies in the sector, reveals a new survey by Coface Romania.
Thus, the sector's aggregate revenues plunged from 6.13 billion lei in 2017 to just 4.96 billion lei in 2018, a five-year low.
According to data from the National Sanitary Veterinary and Food Safety Authority (ANSVSA), with just two months to go until Christmas, Romania has almost 1,000 outbreaks of African swine fever. The Coface survey looked at the aggregated data from 507 companies that submitted financial statements for 2018 and which generated a consolidated turnover of 4.96 billion lei.
"The current ratio of the companies operating in this sector was 0.96 in 2018, while the working capital was slightly negative, as it was relatively exposed to negative shocks and volatility (lower revenues or failure to collect receivables). The average receivables collection time increased to 64 days in 2018 compared to 55 days in 2017, highlighting a significant use of the commercial credit from suppliers. Due to the growing financial difficulties, the companies in this sector pay their suppliers almost 3 weeks later, increasing the latter's dependence on their business partners," notes the Coface survey.
In 2018 the sector's net consolidated result was 3.5 percent, up from 1.2 percent in 2017. However, 35 percent of the companies closed 2018 with a net loss, with 17 percent of the businesses posting a loss of more than 20 percent; 7 percent of the companies had more than 20 percent profit.
The authors of the survey said that the outstanding fiscal debts reported by the companies operating in this sector have skyrocketed past the 500 million lei threshold between 2017 - 2018, which is threefold the average of the last decade. According to ANSVSA, "since the first report on the presence of the ASF virus in Romania, on July 31, 2017 till to date, 524,590 pigs affected by the disease have been destroyed and there are also 2,208 wild boar cases".