The number of companies that went bankrupt in April this year was 37, down 21.3% compared to March, but grew by 23.3% y/o/y, the Export Credit Insurance Corporation (KUKE) reported.
The number of announced restructurings amounted to 167, recording a decrease by 4% per month, while compared to April 2020 there was an increase by as much as 568%. The number of insolvencies (bankruptcy and restructuring proceedings) reached 204, ie it was 7.7% lower than in March and 264.3% higher than a year ago. The sum of insolvencies in the last 12 months rose to 1,703 at the end of April – 149 more cases (9.6%) than a month earlier, the press release said.
“The April data from Monitor Sądowy i Gospodarczy make it possible to summarize the impact of the pandemic that has already lasted a full year on the Polish economy and the resilience of the business sector to a shock change in the operating conditions during several lockdowns. Over the last 12 months, over 1,700 insolvent companies have been registered, 72% of them undertook the debt restructuring process.In April alone, there were over 200 bankruptcy and restructuring proceedings for the second consecutive month, but compared to March this year, the number of cases in both categories slightly decreased. because then, due to the first lockdown, there were significant difficulties in the operation of the courts and administration. As for the court-approved bankruptcies of commercial companies, most of them concerned the service and trade sector over the past year – 101 and 93 cases, respectively,” said Tomasz Ślagórski.
In his words, similar trends are occurring in other European countries, where business has so far benefited from extraordinary solutions introduced during the pandemic, which made it possible to postpone the notification of insolvency or to take restructuring measures. Gradually, however, these regulations will be withdrawn, which will certainly translate into an increase in the number of bankruptcies, including companies that are contractors to Polish exporters.
“There are still no major changes in the loss ratio in KUKE’s portfolio. The industrial and construction production indices published by the Central Statistical Office show an optimistic situation in these industries, and the order ratios, especially exports, are at very high levels. The opening of European economies due to the ongoing vaccination campaign heralds good economic situation for transport. The most difficult situation is still in the service sector, although here also loosening the pandemic restrictions and shifting consumer spending to this segment may bring a noticeable improvement and reduce the pressure on declaring insolvency by entities operating in it,” he added.
The industrial bankruptcy index prepared by KUKE and PFR remained in April at the level of 0.62% from the previous month (the same value was used a year earlier). The restructuring commenced index increased to 0.79 from 0.74% a month earlier (it amounted to 0.60% a year ago).
The bankruptcy rate in construction fell to 0.77% from 0.79 in March (0.72% a year before). As for the index of initiated restructuring, April brought an increase in the index from 1.45 to 1.52%, and in the previous year it was 0.67%
In the retail sector, the bankruptcy index after April increased from 0.66% to 0.72%. A year ago it amounted to 0.72%. In the case of the restructuring initiated index it amounted to 0.64% (0.58% a month ago), while a year ago it was is 0.28%
In transport and logistics, the bankruptcy index slightly increased from 0.63% to 0.64%. In April 2020, it reached 0.86%. The index of initiated restructuring continued to increase – to 1.22% compared to 1.19% a month earlier and 0.2 % a year ago.
The service industry insolvency index rose to 0.95 from 0.92% in March. A year ago, it was at a similar level of 0.87%. In the case of the initiated restructuring, March saw a further significant increase to 1.52% from 1.39% in March, while a year ago the ratio was only 0.36%, calculates KUKE.
The Export Credit Insurance Corporation (KUKE) insures the commercial transactions of Polish entrepreneurs. As the only company in Poland, it also provides insurance for long-term export investment projects and products with guarantees from the State Treasury. It belongs to the PFR Group.
Source: KUKE and ISBnews
