Thus, according to the analysis, the level of investments in fixed assets dropped by up to 33 percent, confirming the lack of long-term predictability and the decrease of public spending. Deadlines for collection remained at a very high level, which reflected in the significant increase of the average duration of payment to the suppliers. Thus, the sector of construction works for roads and highways registered the highest level of insolvencies in the economy. It also registered a revenue decline by -22 percent in 2013.


According to the financial statements published by the Ministry of Finance, the companies whose main scope of business is “Construction works for roads and highways” generated a total turnover of RON 11.7 billion (EUR 16.2 billion) during 2013, down by 22 percent compared to the previous year, reads a Coface release.


Only 282 companies, representing 15 percent of all active firms, register an annual turnover of more than EUR 1 million and generate about 94 percent of the revenue of the entire sector.


Half of the companies operating in this sector reported a decrease of the net result during 2013 compared to the previous year and 34 percent of the companies registered a net loss at the end of 2013. Despite this fact, the consolidated net result at the sectorial level registered an increasing dynamics, which indicates the fact that the large profits were mainly registered among the leading companies in the sector.


During 2013, the companies in the analyzed sector registered a huge disinvestment policy, in the context of the decrease of sales and the humble perspectives for re-launching the construction projects. Thus, the investments in fixed assets dropped by 33 percent, the main cause being the reduction of revenue by 22 percent in the context of the reduction of public spending in this sector. Moreover, the decrease in the share of fixed assets of the total assets confirms the lack of long-term predictability.


The companies in the analyzed sector registered a significant financing from the suppliers whereas the average duration for the collection of receivables remained at a very high level and the average deadline for the payment of suppliers increased by more than three months. The share of short-term debts in the total borrowed capital increased to over 80 percent and their degree of coverage by net cash decreased to 13 percent.


In the context where the sector analyzed registered a modest liquidity, the ratio between the expenditure at maturity and the revenues collected being very close to 1, it can be exposed to shocks due to the decrease of revenues or non-collection of receivables. This thing also reflects in the conclusions obtained by Coface after the analysis of a representative sample of companies related to the insolvency risk in this sector: only 2 of 10 companies show a low insolvency risk. (sourceȘ