Resolving financial uncertainty remains the priority of CFOs in Croatia
CFO Survey 2012
Juraj Moravek, Partner at Deloitte Croatia: “As estimated by the majority of independent analysts, Croatia will see further GDP decline in 2012, which will be the fourth consecutive year of no significant economic recovery”
In the light of the economic and financial developments, Deloitte's new CFO Survey shows a reduced level of optimism among CFOs in Croatia compared to June 2011. Chief financial officers in Croatia consider financial uncertainty as their major concern. Improving liquidity is one of the CFOs key tasks although 12 percent of the respondents do not regard it as a priority.
CFOs in Croatia expect the Government to take decisive steps in several areas, mostly in terms of preserving the country's credit rating, the stability of the national currency, controlling inflation and ensuring fiscal security. In addition, the CFOs are focusing on export support, as well as the need to implement EU regulations before joining the Union in 2013.
"As estimated by the majority of independent analysts, Croatia will see further GDP decline in 2012, which will be the fourth consecutive year of no significant economic recovery. Almost 70 percent of CFOs in Croatia do not expect GDP to grow during 2012, whereas only 9 percent anticipate a moderate growth," emphasises Juraj Moravek, Partner at Deloitte Croatia.
The majority of Croatian executives (76 percent) expect to see the unemployment rate to increase slightly, while only 15 percent estimate that the number of unemployed will fall.
"In assessing the level of external financial and economic uncertainty, CFOs in Croatia are more pessimistic than their peers in Central Europe. The survey has shown that as many as 39 percent of them assess the level of external financial and economic uncertainty as being high, with 39 percent of the surveyed CFOs describing it as being higher than usual. Czech Republic and Slovakia are more optimistic, with 20 percent of their CFOs expecting the uncertainty level to be normal," so Alen Ambirnac, Senior Audit Manager at Deloitte.
Alen Ambrinac, Senior Audit Manager at Deloitte: “In assessing the level of external financial and economic uncertainty, CFOs in Croatia are more pessimistic than their peers in Central Europe. ”
Croatian companies do not have a higher risk appetite in plan, but rather intend to increase their revenue on existing (39 percent of the respondents) and new markets (34 percent of the respondents) and improve their liquidity (36 percent of the respondents). Cost-cutting remains a priority in the financial planning process of Croatian CFOs.
Most of them (64 percent) consider loan availability to be normal. However, 33 percent of the surveyed CFOs expect a reduced loan availability considering increasingly stringent conditions imposed by the banks. In addition, 79 percent of the CFOs believe that the cost of financing in Croatia will increase over the next 12 months.
The survey has shown that CFOs in Croatia are satisfied with the current debt coverage ratio. Thirty percent of the respondents expect their overall on-balance sheet debt to increase slightly in the next three years, while 61 percent envisage their debt servicing ability to remain at the same level.
As regards restructuring measures contemplated for Croatian companies, 33 percent of the respondents are confident that significant measures will be introduced over the next 12 months, whereas only 12 percent believe that no such measures will take place.
According to 64 percent of the CFOs, merger and acquisition prospects for the firms in Croatia over the next 12 months will remain the same as in the previous period. Only 30 percent of Croatian CEOs expect the level of mergers and acquisitions to increase slightly in the following year.