Any minute now, costs will hit companies

In 2021, 71 per cent more companies will report insolvency than the year before. This one should be preparing for a much worse outcome - due to energy, gas or raw material prices.
Last year, more than 2.1 thousand insolvencies of Polish companies were registered in courts, i.e. both bankruptcies and restructuring proceedings, according to a study by Coface. On the other hand, the current year began for companies with a gigantic increase in the cost of energy and gas, which, combined with already high inflation, means big trouble. And this is not the end of it.
- Since January this year, they have also been facing an increase in the minimum wage. This, in turn, indirectly affects the increase of other salaries, which many entrepreneurs simply cannot afford any more,' says Małgorzata Anisimowicz, President of PMR Restructuring and a qualified restructuring advisor.
A long list of challenges
- Such costs can be covered by surpluses or financial stocks that companies are able to accumulate when the economy is good. However, for many industries, including transport, entertainment, cosmetics or catering, among others, the last several months have been extremely difficult, and a large number of companies have used up their cash reserves very quickly, adds Małgorzata Anisimowicz. (...)
There are more industries struggling. Inflation is hitting trade, and the government still wants to inspect shops to see if they are properly meeting the VAT reduction on food that comes into effect on 1 February. Other sectors will be affected by the fifth wave of pandemics, omicron infections and associated quarantine referrals. There will be so many of these that, even without the lockdown announcement, there will be far fewer customers in stationary shops or service outlets. - If inflation does not suddenly slow down and there is no stabilisation in the economy, we can expect another record of proceedings," concludes Małgorzata Anisimowicz.

Published on the website and in the paper edition of Rzeczpospolita with expert commentary by Małgorzata Anisimowicz, CEO of PMR Restructuring and a qualified restructuring advisor.

This article appeared in the daily newspaper Rzeczpospolita, Paper edition: 20/2022(12175), 25 January 2022. We invite you to read the full version:"Any minute now costs will hit companies