In 2019, a quarter of Reunionese companies had tenuous cash flow and reduced debt capacity, reveals Iédom in a recent study. Available cash represented on average less than 23 days of turnover for half of the SMEs studied and less than 26 days for Mid-Sized Companies., below the national average. 58% of SMEs and ETIs have an amount of cash less than 30 days of turnover. Likewise, a quarter of SMEs and ETIs with fragile cash flow have reduced debt capacity. “They could see their financial situation become strained with the crisis, leading to fears of a high risk of failure among them”, predicted Iédom. The construction and hotel and catering sectors give rise to more concerns than others, due to high debt levels, low solvency ratios and among the lowest margin rates, in the field of construction. “The challenge of economic recovery will be to best support the exit from aid measures, particularly for structurally more vulnerable companies”, concludes Iédom.
THE IEDOM HIGHLIGHTS THE VULNERABILITY OF CERTAIN REUNION COMPANIES
