Twenty of the biggest private companies in Romania started the year of the crisis with significant debt in the balance sheets, more than 8.3 billion euros, while cumulated turnover amounted to almost 24 billion euros, according to the 2008 data on the Finance Ministry’s website.
Most debtors operate in the energy and food retail sectors, which needed massive investments in modernisation and expansion. In turn, experts say that it is perfectly normal to accumulate debts, which are not a problem for those companies that make enough profit. However, those likely to get into trouble are the companies with high short-term debt and low profitability.
The biggest private debtor is also the biggest local company, Petrom, whose debt exceeded 1.3 billion euros at the end of last year, while turnover stood at 4.5 billion euros and net profit at 277.8 million euros. In Petrom’s case, most of the debt, that is 936.4 million euros, matures in one year, and less than 10% of it is owed to lending institutions. The rest is long-term debt. Even though short-term debt is high, Petrom is protected because of its significant profit. Other companies to have accumulated hundreds of millions of euros in debt besides Petrom, which is controlled by the Austrians at OMV, are Rompetrol Rafinare (Petromidia), now in the hands of KazMunaiGaz, Petrotel Lukoil and Lukoil Romania, controlled by the Russians at Lukoil. Also among the top private companies in terms of debt are the food retail companies that have expanded aggressively.
Analysts say that, unlike foreign companies whose debt is long term, the local firms most often accumulate short-term debt, which may cause problems in case the profit is low.
As far as the debt of public sector companies is concerned, the energy sector is again at the top of the ranking. Companies like Compania Nationala a Huilei (National Bituminous Coal Company) and Termoelectrica (thermoelectric power company) are struggling with hundreds of millions of euros in debt, much higher than their revenues and are posting losses of tens of millions of euros.
According to the Finance Ministry website, Compania Nationala a Huilei has reached 971.9 million-euro debt, while having posted 217.4 million-euro turnover and 95.4 million-euro net losses in 2008. In turn, Termoelectrica’s debt amounts to 836.3 million euros, while turnover stood at 173.7 million euros and losses reached 93.6 million euros.
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