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Coface: HoReCa sector most affected in 2020 – 77% profit drop
Measures for company subsidy in 2020 helped HoReCa companies cope with unprecedented challenges but did not solve problems of vulnerable companies. HoReCa sector was the most affected recording a drop of 77% profit reduction, said Alina Popa, Coface commercial manager at a specialized conference.
“In 2020, measures meant to save companies helped them get over a year with unprecedented challenges, but did not solve problems of vulnerable companies, but just helped them gain time. Companies have debts, have a reduced capacity, commercial credit went up and we must bear in mind that 2021 support measures were 10-11 times smaller than in 2020 and gradually they will be withdrawn,” said Alina Popa.
She added that an increase of the average invoice payment term to suppliers took place and reached 117 days in 2020, which is double the term of ten years ago when it was 60 days.
“All these vulnerabilities are higher when companies are smaller and have a lower negotiation power. Small companies are more affected than what this global image shows,” Popa added.
The Coface official pointed out that if we look at sectors in which those companies carry out their activities we see less affected sectors like constructions, where debt increase is accompanied by a business figure increase, but we also see sectors with higher debts and lower business figure, like transports, HoReCa, extraction industry and and recreation activity area.
“Practically, HoReCa sector was most affected in 2020. It recorded an income contraction of 39% and a 77% profit drop,” Popa pointed out.
She participated in the conference “IMM Prepare to get out of crisis”, second edition , organized by the inline publication Profit.ro, next to Team Innovation Media.