Profitability and Efficiency of Forest Contractors in Slovakia—Comparison of Mountain and Lowland Regions

Abstract

The paper deals with analysis of the forest business sector in Slovakia and the evaluation of profitability and efficiency of forest contractors, with special focus on mountain and lowland regions. Evaluation of profitability was done by using selected indicators of financial analyses for a period of five years. Data envelopment analyses (DEA) was used as non-parametric approach for the assessment of efficiency. The sample size was 153 forest contractors. Data for 2012–2016 were processed. Results of the evaluation show that the profitability of Slovak forest contractors in the mountain regions is higher than the profitability of forest contractors in lowland regions. The results of the efficiency analysis were different due to the nature of the method; where relative efficiency was evaluated, the efficiency of single contractors was compared with the most efficient contractors from the lowland regions. Most of the evaluated units were, according to results of the efficiency analysis scale, ineffective, which implies that it may be beneficial for most contractors to reduce their turnover and thereby increase their relative efficiency. The results of the financial analysis also suggests that contractors have obsolete technical and technological equipment.