Zombie Companies

The "zombie" category includes inefficient, unprofitable organizations that are on the verge of bankruptcy and produce non-competitive products that are practically not in demand. They earn money, which is enough only to service debts.

2020

By the end of 2020, there were 5.92 thousand "zombie companies" in Russia against 2.11 thousand in 2016. Such data at the end of April 2022 were published by experts of the National Credit Ratings Agency (NKR, part of the RBC group) and the Rescue counterparty scoring system.

In 2016-2019, the share of zombie companies remained at about 3% of the total number of companies in the sample, and in 2020 there was a significant increase - up to 8%, which, in our opinion, is due to the influence of the COVID-19 pandemic. The total revenue of zombie companies at the end of 2020 amounted to 6.7 trillion rubles - the study says.

How the number of zombie companies in Russia has changed over the past 5 years

According to analysts, there are no significant differences in the share of zombie companies in the regional context. But very significant differences are observed in the industry section. The largest number of zombie companies is in the field of trade - 42%. In construction and in real estate management, zombies, respectively, include 8 and 7% of legal entities.

Distribution of Russian zombie companies by revenue

It is also noted that the bulk of the "zombie companies" are small enterprises with revenues from 100 to 300 million rubles. In 2020, their share reached a record 64% of the total number of "zombie companies," the minimum was recorded in 2018 - 43%. According to experts, this indicates that small enterprises are less profitable. The fact that lending rates for small and medium-sized enterprises in the sector tend to be higher than those for large companies, which also affects the amount of interest paid on bank loans, also plays a significant role.^[1]

Notes