Thirty-three of Portuguese public companies were in “technical bankruptcy” at the end of 2020, reflecting “the very negative impact” of the Covid-19 pandemic on companies, particularly in the fields of health and transport and storage.
These are the conclusions of a report published by the Public Finance Council (PFC), the country’s main independent watchdog on the matter, according to Lusa.
Titled ‘State Business Sector 2019-2020’, the report, published today, notes that the financial results of the country’s 88 non-financial public enterprises “have deteriorated very significantly during the two years 2019-2020, reflecting the negative effects of Covid-19”. ”. Their financial situation and assets have also been “seriously affected”.
Overall, this group of companies recorded combined losses of €2.5 billion for 2020, which is €1.7 billion more than in 2019.
Only 27 of the companies (or groups of companies) achieved a positive net result in 2020, with the remaining 61 registering a loss.
The healthcare, transport and warehousing sectors accounted for 99% of these losses, with cumulative values of €775.7 million in healthcare (€25.6 million more than losses in 2019) and €1.7 billion in transport and warehousing (compared to a combined loss of €1.5). billion in 2019).
National airline TAP accounted for more than half of the combined loss, at 1.4 billion euros.
EBITDA (earnings before tax, interest, depreciation and amortization) contracted to 12 million euros in 2020, from 1.5 billion euros in 2019, while operating profit fell into the red of 1 .6 billion euros, compared to a profit of 131 million euros in 2019.
In 2020, non-financial public enterprises had a total of 144,714 employees, a turnover of 9.3 billion euros and a gross value added of 4.7 billion euros, respectively up by 4.5% , down 23.5% and down 38.5% from 2019.
At balance sheet level, while the assets of this group of companies increased by €621.5 million compared to 2019, to €59.4 billion, their liabilities increased further: by €1.2 billion, to €56.2 billion euros, which “has significantly degraded equity”. of these companies” according to the terms of the report, to 3.15 billion euros, down 15% compared to 2019.
“This deterioration in equity reflects the negative results of the 2020 financial year, which absorbed a large part of the capital inflows made by the State that year (+1,500 million euros)”, we read in the report, which adds that, “as a result, 33 public companies had negative equity at the end of 2020 (thus finding themselves in a situation of technical bankruptcy).
Of these 33 companies, five account for nearly 90% of the sector’s overall negative value: Parvalorem (negative equity of €3.997 billion), Metro do Porto (negative €3.456 billion), TAP (negative €2.128 billion). negative euros), rail operator CP (negative €1.872 billion) and PARUPS (negative €913.2 billion).
According to the CFP, the financial structure and profitability ratios of non-financial public enterprises “also experienced a sharp deterioration in 2020, reflecting the worsening of their inability to meet their commitments vis-à-vis of the State and creditors”.
Overall liquidity was 56.7% at the end of 2020 (9.1 percentage points lower than a year earlier), financial autonomy fell to 5.3% (-1.0 point) and solvency fell to 5.6% (-1.1 points). The leverage ratio stood at 94.7% (+1.0 point) and the debt service capacity at 109.9% (-0.9 point).
“The analysis of these results confirms the low capacity of equity to meet the medium and long-term responsibilities of these companies and reinforces the financial dependence of the sector on borrowed capital, which translates into a leverage financially high,” says the CFP report.
In 2020, the return on sales of non-financial public enterprises was 0.1% (down 12.1 percentage points on the year) and the return on assets in 2020 was -2.7% (down of 2.9 points).
These indicators show, “concretely, a deterioration in economic efficiency, which translates into greater direct budgetary pressure”, indicates the CFP, adding that “companies in the sector have been less efficient in the management of their assets, with negative effects on business profitability and the ability to generate profits from these assets.
“Overall, excluding companies with negative equity, we see that the return on equity ratio was -1.2% in 2020”, a result which “demonstrates a poor financial performance of… companies, reflected in an inability to provide a return to state [as] shareholder.”
The report notes, however, that “the results are differentiated by business sector”, with “the real estate and asset management sector posting the best profitability ratios” and “conversely, the health and transport and storage showing the worst results”.