Companies continue to respond to the crisis of declining costs, and their profit forecasts are less optimistic on …
In the fourth study Impact of economic crisis on the Ukrainian company conducted by Ernst & Young in conjunction with the European Business Association, profitability and sales companies continues to decline, as in previous periods. This opinion was expressed by 73% and 70% of participants, respectively. The study involved 77 leading Ukrainian and foreign companies operating in Ukraine.
five main challenges that companies faced with a crisis, remains the same: the devaluation of the hryvnia, declining sales, the delay of payments from partners /customers, reduce (sometimes substantial) demand for goods /services and the need to reduce operating costs. However, the priority issues unchanged. In September 2009, 82% of respondents said the devaluation of the hryvnia as the most serious problem, followed by sales declines. The importance of reducing the size of the company and dismissal of staff decreased by one third since the previous study, and the lowest since the beginning of the study.
In September, 51% of respondents expect their profits in 2009 will be lower than in the pre-crisis 2008. In June, the figure was 34% of respondents. Perhaps such a significant change in expectations is the result of a better understanding of the performance in 2009. In addition, 27% of respondents expect their profits this year will decrease slightly, and only 8% of companies indicated that they expect to get the same profit as last year. However, both categories are statistically much less than the results of previous studies when 39% indicated a moderate decline and 16% expect to receive similar results. Also, slightly more respondents (14%) expect to increase profits, by comparison with 2008.
results of the second quarter of 2009, the first time since the study began in the third quarter of 2008, record growth in sales volumes. Over 50% of respondents reported an increase in sales at an average of from 1% to 10%, compared with the previous quarter.
decision to lower the volume of production or service delivery still predominates in the current economic conditions, as have 35% of respondents. However, the percentage of companies that have initiated such a solution is reduced. At the same time the growth of production capacity, compared with the previous quarter to 5.10%, 27% of companies said that although only slightly, but were able to increase production volumes.
Alex Kredisov, managing partner of Ernst & Young, said: This trend may indicate the first signs of gradual recovery of companies that are either get used to conduct business in thenew economy, or end up in their business more or less stable improvements. However, a slight increase in sales, noted the results of the study comes amid a significant decline of the Ukrainian economy, which we observed in the 4 square. 2008 There are currently difficult to make any predictions, but if in the near future will not happen of major economic shocks the trend growth in sales is likely to continue.
Anna Derevianko, executive director of the European Business Association, commented: Companies that operate on the Ukrainian market, has already learned to adapt to changing business environment. But a serious economic crisis in Ukraine, the catalyst which made the global financial crisis, once again stressed that business can not pull the economy itself. Ukraine has yet to pass through an impressive number of regulatory changes to make to improve the investment climate is really noticeable.
Companies continue to respond to the economic crisis by reducing costs. All respondents indicated that they plan to take or have taken steps to reduce costs.
Most of the companies confirmed that they have chosen the traditional ways to reduce costs - reduce administrative costs (77%), reducing the cost of marketing and sales (63%), to obtain better terms from landlords /property owners (62%), reduction of staff ( 54%) and obtaining the best conditions in transactions with suppliers (51%). The proportion of respondents who take such measures, has remained virtually unchanged since the last study.
One significant change in the reaction of the companies noted in this study - is a sharp increase in the number of respondents whose efforts are concentrated on improving efficiency: 70% of participants indicated that they are paying attention to improving operating efficiency, and 55% had reassessed the profitability of products Services.
As Adlai Goldberg, director of consulting services on doing business with Ernst & Young in Ukraine: While improving operational efficiency are much harder to achieve compared to a standard lower cost, it definitely helps companies remain competitive and profitable in the long term .
Asked to assess what activities /programs will become more important in the future, in the first place, respondents have put risk management (78% of respondents), in second place - management of working capital and cash (74%).
majority of respondents give a positive assessment of the economic future of Ukraine, but projections for the economic recovery have shifted from 2009 to 2010. In this study, a significant number of respondents (80%) believe that the downturn in the economy of Ukraine will cease in 2010, while in the 1 st quarter of 2009 such a response was given 62% of respondents.
About the study Impact of economic crisis on the Ukrainian companies:
fourth study the impact of economic crisis on the Ukrainian companies was conducted from 10 to 28 September 2009 survey by the leading companies on the Ukrainian market. Of the 77 companies that participated in the study, 27% are Ukrainian business, and the remaining 73% - are foreign companies operating in Ukraine (international, European and regional (CIS)). 42% of companies chastnits review represent a small business (up to 200 employees), 23% - medium business (200-1000 employees) and 35% - large business (more than 1000 employees). Companies responding to the questionnaire, working in the sectors of financial services (17%), retail and consumer goods (14%), real estate and construction (10%) and others.
first study the impact of economic crisis on the Ukrainian companies was held in October 2008, the second - in February 2009, and the third - in May 2009
Irina Сергун
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