A record number of insolvencies has been set

Last year the number of insolvent entities reached 2125, according to a report by Coface. It is as much as 71% more than a year before.

The group of insolvent companies is dominated by the smallest ones. However, big and well-known companies also got into serious financial trouble. All this despite the fact that generally the condition of business in Poland last year was good. Companies recorded high profits, as well as good profitability and financial liquidity. Their sales and margins grew.

According to Coface experts, the high number of insolvencies is a result of the pandemic and the introduction of simplified restructuring proceedings.

The most frequent insolvency problems last year were experienced by service companies. There were 589 such entities, which is a 74 percent increase compared to 2020. The decline in demand for many services is the result of remote working and learning. The hotel and catering industry also had a hard time. Another industry hit hard by insolvency was agriculture. As many as 414 entities from this sector struggled with financial problems. The profitability of their operations has fallen due to rising production and labour costs.

This year, operating conditions for many companies will also be difficult. A big problem is, among others, inflation and increases in energy prices. Therefore, a large number of insolvencies can be expected, although the growth dynamics may somewhat slow down.

Source: https://www.rp.pl/biznes/art19266521-padl-rekord-w-upadlosciach-firm-covid-zarazil-biznes