Arkadiusz Taraszkiewicz Senior Manager RS1,

Transcription

1 Poland and Russia The Biggest Players in CEE The Opportunities, Challenges, Economies, Businesses and People ICTF International Credit Professionals Symposium, Cracow 14-16/05/2017 Arkadiusz Taraszkiewicz Senior Manager RS1,

2 Agenda 2

3 Economy 3

4 Which country spends more for army? Spendings for army / defence as % of GDP (2015) Rosja 6 USA % of GDP 3.3% of GDP Polska 15 Oman 1 2.0% of GDP 16.2% of GDP Source: Stockholm International Peace Research Institute,

5 Russia and Poland in CEE role and weight in the region Share in total GDP ( value) of CEE in 2016 Size of markets does matter! Poland and Russia represent 65% of total population of CEE ( over 347 mio people) GDP per capita POL 10,9k eur, Russia 9k eur Share in total population ( number)) in CEE in 2016 Total value of GDP of CEE in 2016 estimated for 2.325, 01 bn EUR Poland and Russia together constitute 70% of the region GDP 5

6 Economy performance and outlook In Russia oil-and-gas sector accounted for 16% of GDP, 52% of federal budget revenues and over 70% of total exports Observed recovery in Russia ( oil prices). Consumer demnad remain problematic Currency exchange rates. ICTF International Credit Professionals Symposium, Cracow 6

7 Trading with Trade between Poland and Russia can be considered as low, but potential is very high Russia export Poland export 15th 23th Russia import Poland import 22th 19th Source: tradingeconomics.com 7

8 Trading with. Poland - import by category Import from Russia to Poland is in fact limited to oil & gas Poland imports mainly semi finished goods required for the production in electroniic, machinery and automotive indistries as well as finished goods In Russia major import is related to core sectors for Russia ( mining, oil, steel) Russia - import by category Embargo on food imposed by Russia decreased to minimum polish food export. Polish producers quicly adapted to the new conditions increasing export to other markets Anyway, the situation in longer run can be problematic for polish producers, as Russia is developing own food sector to cover domestic needs. Soon we can expect export expansions of the products Source: tradingeconomics.com 8

9 Business & People 9

10 10 Doing business 40th 24th 131st 29th Source: transparency.org

11 Infrastructure and logistics Russia is the biggest country in the world ( 50 times bigger then Poland) UK Poland Russia km railways 16,512 20,228 87,157 km roads ( expressways) 394,428 (3,497) 423,997 (3,050) 1,145,000 (806) km rivers tracks 3,199 3, ,000 Country area km2 243, ,575 17,075,400 11

12 Infrastructure in capital cities subway Warsaw Metro

13 Business in Russia 13

14 Business in Poland AWT 100 PZL Świdnik KGHM Rosomak 14

15 People Pelorus Abramowicz 100m US-$ Ship s crew: 40 Forbes: 9 bn EUR w 2015 Phoenix 2 Steel, mining Owner of Chelsea London Kulczyk Forbes : 3,5 bn EUR w 2016 Kulczyk Investments, Oil, Highways.. 90m lenght 15

16 Risk assessment 16

17 Payment practices barometer 17

18 Insolvencies - Russia From 2010 upward trend of insolvencies. However in 2016 the number decreased by 3,8%, but it is still 15% above pre crisis Retail and wholesale trade, Construction and Commercial services these sectors brings 70% of all insolvencies Location wise the highest number of insolvencies was recorded in Amur, Kemerovo, and Volgograd regions. Consumer demand is still weak ( real personal incomes are declining 9 quarters in row) Credit risk overdue credits are growing, Jan-Dec 2016 increase by 13,6% vs 2015, reaching 43bn eur ( 6,3% of all trade credits). Highest growth recorded in Construction +37%; Paper production +15%, mining +20% sectors. 18

19 Insolvencies - Poland Source: Kuke, Upadłości 03/2017 There is positive trend in insolvencies observed in Poland; 807 (2014), 750 (2015) and 606 (2016). However 2016 was the first year of new restructuring law. Registries show that for such solution applied 212 companies. The highest number of insolvencies was recorded in Masovian, Malopolska and Zachodniopomorskie regions. Almost half of all insolvencies are in Construction ( 135, drop vs 2015 by - 16%) and Retail and Wholesale trade (192, increase vs 2015 by +13%) From the legal type perspective, majority of insolvencies declared by Ltd ( Sp. z o.o.) 53% and private enterpreneurship ( PTY) 29% 19

20 Underwritting in Russia - sanctions UE - regulations UE-Firms Financial services Dual use goods Specialistic technologies Military goods Financing of specific banks Sanctions related to persons Local regulations Exporters Financial Institutions Insurers Local companies Companies: Ban on export of goods and services under sanctions Application for licence Insurer: Monitoring of buyers databases Consultations with customers Local sanctions Food embargo Companies covered by sanctions Agri products Fruits and vegetables Food products Machinery and equipment 20

21 Underwritting in Russia financial data and ownership structure Example part of attachmenets and basic explanations regarding Group results and structure of the Group We can sign the financial data, but we can not reveal the identities of persons who signed it! Usually Group consists from large number of entities like ZAOs i OOOs. Shareholders (persons) indicated in Trading Report very often are so called nominated sharholders. Very often there are so called off shore companies (BVI, Bahamas, Cyprus, Delaware w US). Usually trade reports do not contain full picture of sharholders and grou structurue. There is only one way to get more info and reliable insight. Visit the company 21

22 Underwritting in Russia analysis of financials Profits are minimized; XXXX YYYY Assets transferred to off shore companies. No consolidated tax accounts. Thus tax accounts not sufficient. Audited / consolidated accounts hardly available. Management consolidated accounts Risk element Example commentary of CFO This is what you need? We can change results if there is such necessity! 22

23 Underwritting in Russia visiting companies Chemical Automotive Shipyards Wood Air Agriculture Steel Electronics Railways Roads Atradius credit expousure Kaliningrad St. Petersburg Moscow Nizhniy Novgorod Perm Volgograd Kazan Yekaterinburg Samara Chelyabinsk Omsk Novosibirsk Karsnojarsk Ust -Kurt Ulan- Ude Chita Tynda Skovorodino Belogorsk Konsomolsk - on -Amur Kabarovsk Sovetskaya Gavan km km Irkutsk Vladivostok 23

24 Underwritting in Poland visiting companies In practice within one day you can reach any company in Poland by public transport or car. Expousure of Atradius reflects industralisation of Poland

25 Underwritting in Poland payments

26 Underwritting in Poland VAT in focus Action SA top 3 IT distributor in Poland, listed on WSE starts restructuring procedure mid 2016 in order to protect itself against Tax Office decisions ( return ca 80 mio PLN of VAT) MGM, middle sized IT distributor declares insolvency in 04/2017. As the reason indicates freezing by Tax Office 23 mio PLN VAT return due to ongoing controls. Company losses liquidity. Belastingdienst (Dutch Tax and Customs Administration Reverse VAT - Implementation of reverse VAT in construction materials from > potentially negative impacy on liquidity of subcontractors 26

27 Where to look for information Info Russia Poland Ready credit reports Spark Interfax, IGK Bisnode, Creditreform Financial Data Rosstat ( Federal State Statistics Service); Federal Taxation Service, Central Bank, KRS ( Court Registry) Payment information n/a Paydex ( Bisnode) - Legal data Debt Info / Court cases / Other related Rosstat, The Chamber of Commerce and Industry; The Bulletin of State Registration Federal Arbitration Courts; Federal Baillifs Service Ceidg.pl online check of private enterpreneurships Ems.ms.gov.pl; ekrs.pl Insolvencies Rosstat COIG ( Centralny Ośrodek Informacji Gospodarczej) BIK It is estimated that both in Russia ad Poland 20-30% of oblidged companies do not publish financial data ( penalties size and execution of them supports such behaviour. Planned more restrictive legislation. Although during last years big progress in digitalisation of databases, still not all data are easy accessible. Necessity to use other sources for the risk assessment ( monitoring industies formus, blogs, using geolocations or web sentiments ratings) 27

28 Summary of challenges in risk analysis Russia Financial data reliability and investigation on group structure Lack of financials in registries warning signal Ongoing consolidations in some sectors analyse potential impact ( pharmaceutical, electronics, IT sectors) Sanctions impact Volatile RUB against USD/EUR Weak consumer demand Problems with financing Sanctions still in place Poland Access to financial data Politics, politics, politics Agressive actions of Tax authorities New restructuring law Intensification of fraud transactions in certain sectors Personal data protection law Payment morality of polish companies Not all securities are efficient 28

29 If something is not possible to be done, give it to Poles Thank you