The healthy average sector risk in Agrifood is hiding deteriorating credit risk in the wholesale subsector
- Agrifood remains the second least risky sector in Q2 2018 according to the Euler Hermes sector risk ratings
- However, one Agrifood company with a revenue > USD50mn goes out of business every 10 days!
- The wholesale segment is the largest driver of major insolvencies (1 out of 3 insolvent Agrifood companies)
- Wholesale companies have on average higher leverage and worse cash flow (2.2x and USD6mn in 2017, respectively) than the rest of the Agrifood sector (1.8x and USD8mn in 2017)