Profitability and Efficiency of Forest Contractors in Slovakia—Comparison of Mountain and Lowland Regions
Abstract
:1. Introduction
2. Materials and Methods
2.1. Data Sources
2.2. Indicators of Financial Analysis
2.3. Efficiency Analysis
3. Results
3.1. Revenues and Cost Structure
3.2. Assets and Liabilities Structure
3.3. Profitability of Forest Contractors
3.4. Efficiency of Forest Contractors
4. Discussion
5. Conclusions
- There are great differences in profitability among contractors from mountain regions and contractors from lowland regions; it is caused by different share of trade activity, different labor costs in lowland and mountain regions and production conditions.
- Profitability of forest contractors in general depends on trade activity. Based on vertical analysis of financial data, we found that 85%, respectively 57% of added value is created by trading activities. In other words, contractors who had a higher share of income from trade activities were more efficient and profitable.
- The results of the financial analysis also point to the fact that contractors have obsolete technical and technological equipment and invest less in their equipment.
- The efficiency analysis showed different results, due to the nature of this method. Most of the evaluated units were according to results of the efficiency analysis scale ineffective, which implies that it would be beneficial for most contractors to reduce their turnover and thereby increase their relative efficiency.
- Contractors from mountain regions have lower share of personal cost on total costs as well as lower share of fixed assets on total assets; this indicates that they use other companies and self-employed persons as sub-contractors.
- Contrariwise contractors from lowland regions have much higher share of personal cost on total costs as well as higher share of fixed assets on total assets; it indicates that they invest more in the equipment and employ more employees.
- The efficiency of forest management in Slovakia is largely dependent on the efficient outsourcing of forestry services. The providing of forestry services at the lowest possible prices and with insufficient technological equipment is probably reflected in the profitability and efficiency of forest contractors and is not long-term sustainable.
- In order to improve the situation of forest contractors, a number of measures need to be implemented, such as support the purchase of new and modern technology, nature-friendly forest management, diversification of activities and others from public funds. The situation is comparable in both mountain and lowland regions of Slovakia. It may also be necessary to change the business model of forest management and to sell wood on the stump to a greater extent.
Funding
Conflicts of Interest
References
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Variable | Mean | Standard Deviation | Min | Max |
---|---|---|---|---|
Mountain Regions | ||||
Total revenues | 734,778 | 1,952,554 | 0 | 16,080,719 |
Production | 431,098 | 952,520 | 0 | 10,057,800 |
Total cost | 720,431 | 1,903,582 | 130 | 15,094,779 |
Production consumption | 415,866 | 977,952 | 130 | 9,473,421 |
Profit/Loss | 14,347 | 86,864 | −482,196 | 1,219,538 |
Total assets | 281,064 | 688,661 | −4779 | 8,199,809 |
Shareholders’ equity | 95,131 | 315,716 | −293,629 | 4,333,601 |
Lowland Regions | ||||
Total revenues | 320,362 | 444,252 | 0 | 2,925,015 |
Production | 247,717 | 373,259 | 0 | 2,876,080 |
Total cost | 315,315 | 439,222 | 42 | 2,877,647 |
Production consumption | 211,099 | 312,972 | 42 | 2,798,480 |
Profit/Loss | 5048 | 21,186 | −89,539 | 94,957 |
Total assets | 179,286 | 268,781 | 0 | 1,758,632 |
Shareholders’ equity | 39,247 | 109,761 | −128,889 | 651,398 |
Variable | Mountain Regions | Lowland Regions | ||
---|---|---|---|---|
€ | % | € | % | |
Total revenues | 87,585,558 | 8,713,885 | ||
Revenue from the sale of merchandise | 37,211,789 | 42.49% | 2,227,143 | 25.56% |
Production | 48,541,612 | 55.42% | 6,242,460 | 71.64% |
Total cost | 85,875,389 | 8,576,578 | ||
Cost of merchandise sold | 30,263,152 | 35.24% | 1,210,311 | 14.11% |
Production consumption | 47,325,507 | 55.11% | 5,488,574 | 63.99% |
Personnel expenses total | 2,951,277 | 3.44% | 1,155,518 | 13.47% |
Depreciation | 2,751,831 | 3.20% | 450,530 | 5.25 |
Interest expense | 234,156 | 0.27% | 64,291 | 0.75% |
Added value | 8,164,742 | 1,770,719 | ||
Added value of sale | 6,948,637 | 85.11% | 1,016,833 | 57.42% |
Added value of production | 1,216,105 | 14.89% | 753,886 | 42.58% |
Variable | Mountain Regions | Lowland Regions | ||
---|---|---|---|---|
€ | % | € | % | |
Total assets | 33,502,810 | 4,876,589 | ||
Fixed assets | 13,238,145 | 39.51% | 2,228,800 | 45.70% |
Current assets | 19,923,250 | 59.47% | 2,568,278 | 52.67% |
Equity | 11,339,662 | 33.85% | 1,067,525 | 21.89% |
Liabilities | 21,574,911 | 64.40% | 3,780,283 | 77.52% |
Indicator | Mountain Regions | Lowland Regions |
---|---|---|
Return on equity | 49.59% | 39.06% |
Return on assets | 3.81% | 2.34% |
Return on capital employed | 36.46% | 30.12% |
Profit margin | 1.27% | 0.76% |
Indicator | Mountain Regions | Lowland Regions | Total |
---|---|---|---|
CCR model | 63.19% | 64.75% | 63.48% |
BCC model | 79.67% | 81.04% | 79.92% |
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Kovalčík, M. Profitability and Efficiency of Forest Contractors in Slovakia—Comparison of Mountain and Lowland Regions. Forests 2020, 11, 370. https://doi.org/10.3390/f11040370
Kovalčík M. Profitability and Efficiency of Forest Contractors in Slovakia—Comparison of Mountain and Lowland Regions. Forests. 2020; 11(4):370. https://doi.org/10.3390/f11040370
Chicago/Turabian StyleKovalčík, Miroslav. 2020. "Profitability and Efficiency of Forest Contractors in Slovakia—Comparison of Mountain and Lowland Regions" Forests 11, no. 4: 370. https://doi.org/10.3390/f11040370
APA StyleKovalčík, M. (2020). Profitability and Efficiency of Forest Contractors in Slovakia—Comparison of Mountain and Lowland Regions. Forests, 11(4), 370. https://doi.org/10.3390/f11040370