Corporate Accounts Dyed Red
2021-02-27 | by CusiGO
Last year, it was a tough career for companies that few survived. Moreover, when cal and can are shut down for nearly three months around the world, and then the activity is carried out with semi natural gas, it is almost impossible to leave without being scratched. We always look at the statistics of coronavirus infection from the side. In the past month, Spain’s first commercial sword companies announced their results for 2020. His balance sheet is more of a war. “It’s one of the most difficult years in our history,” admits ana BOT í n, Santander’s president. “We’re in an unprecedented situation,” admits josu Jon imaz, Repsol’s chief executive. “2020 is different from anything we know in our 65 year history. It’s not comparable.” Gabriel escarrer, chief executive of Meli á hotels, stressed.
The perfect economic storm triggered by covid-19 hit corporate accounts from both sides. In the past crisis, international activities were the saviors of many groups. In this crisis, international activities have also been impacted globally. As far as domestic enterprises are concerned, obstacles have multiplied: no tourists, consumers feel uneasy about the uncertain economic future, business investment stagnates, waiting for better prospects… As a result of this abnormal cocktail, the Spanish listed group will close in 2020, with a total loss of 8.861 billion euros and a profit of 26.455 billion euros in 2019. This is the second worst result ever, surpassing the red number of nearly 13 billion in 2012 alone. Unlike the great recession, however, when Bankia dragged down its balance sheet (losing $19 billion), the damage was more common: as many as 37 companies had negative net profits last year.
The abnormal renewal of asset value has caused the loss of listed companies, but the impact of the economic crisis caused by covid-19 has emerged from the top of the income statement. Without accounting skills, it has carried out aseptic examination on the health of the company. Sales of oxygen, which enables the company to walk, have fallen. In 2020, the total revenue of listed companies will be 539.723 billion euros, 15.81% lower than that in 2019.
Another good evidence of cotton is operating profit, which is to extract the purest juice from the profit by deducting current expenses (excluding tax, interest or depreciation) from sales. During the reporting period, operating profit decreased by 55.17%, from US $61.433 billion in 2019 to US $27.539 billion in 2020.
The recession caused by the epidemic has had a cross sectoral impact, regardless of the size of listed companies. As of the last fiscal year, the largest company in the market, ibex 35 index (which had accumulated profits of US $25.545 billion as of 2019), lost US $8.296 billion. In the case of SMEs, the rest of the sustainable market will close with a net profit of 564 million euros in 2020, up from 909 million euros a year ago.
The abuse of the word “history” finally distorts its meaning, but this time its use is entirely reasonable. In fact, for the first time, the flagship of some patriotic entrepreneurs entered the “unknown land” on the ancient map, which refers to the undeveloped territory. Santander bank is an obvious example. Since its establishment 164 years ago, Santander bank has suffered an annual loss for the first time. The agency lost 8.771 billion euros in 2020, compared with 6.515 billion euros in 2019, due to the increased allocation to cope with the coronavirus crisis to 12.173 billion euros and the book impairment of its subsidiaries in the United Kingdom, the United States and Poland of 12.6 billion euros. Other listed banks managed to maintain a black figure (although in some cases, such as sabadel bank, the profit margin was very low, only US $2 million), despite the sharp decline in net profit due to the deterioration of the economy and the increase in non-performing loans.
The accounts for 2020 are also historic because they have changed the state of business. For the first time, Iberia is at the top of the list of the most profitable companies. Power companies have a clear commitment to renewable energy, winning 3.61 billion euros. Second was Telef ó Nica, whose profits rose 38% to $1.581 billion. The third company is another one that is usually not ranked high: Endesa. The power company’s profits increased eight fold to $1.304 billion. This significant increase was due to the company’s distorted year-on-year performance in 2019 as it provided substantial reserves to close its coal power generation business.
On the negative side, Banco Santander suffered the biggest loss among the listed companies, with a loss of $8.771 billion. Repsol’s 3.289 billion red numbers were also very large, which was negative in the second year, mainly due to the fall of raw material prices and the adjustment of exploration and production assets. This pandemic also brought a heavy blow to the aviation industry: Airbus suffered a negative impact While IAG lost $6.923 billion.
The case of Iberia clearly demonstrates the damage the epidemic has done to tourism. To be sure, the industry’s weight in the Spanish economy is not reflected, but the few listed companies associated with this activity well explain the terrible year of 2020. AENA, the airport manager, suffered a loss of $126 million for the first time in history, making $1442 million a year ago. The number of passengers passing AENA airport decreased by 70.9%, from 307.1 million to 89.3 million. “Under the current circumstances, due to a new wave of infectious diseases, it is impossible to predict when the recovery will start,” the company explained in its results report to the national securities and Market Commission (cnmv).
Chain hotels are also another reason for huge losses due to the absence of tourists. Meli á hotels lost $595 million in 2020, compared with a profit of $112 million a year ago. NH Hotel Group’s net profit was $437 million, compared with $90 million in 2019. “By 2020, the occupancy rate of the entire portfolio, including closed hotels, will drop to 25%, which is the lowest level in the company’s history, compared with 71.6% in 2019,” NH reported to the securities regulator
Industrial enterprises have also suffered great losses in the past. However, this is a significant improvement in the sector, starting in the summer, offsetting the impact of the strict restrictions on production plants in the second quarter of 2020. The industry value of the Spanish stock exchange includes auto parts manufacturers. “The pandemic resulted in an annual decline in production of more than 20%. However, in the fourth quarter, activity has returned to normal, “CIE automotive said, noting that the company made $185 million, down 35%. Gastap also had a growing financial year, though he could not avoid ending it with a loss of $151 million. The company admitted: “2020 is the second half of the year. In the first half of the year, emergency measures have been taken for covid. In the second half of the year, emphasis has been placed on cost control and output has picked up.”.
Bad results are common, but there are also some industries where 2020 is a good year, as is the case with companies related to commodity consumption. Ebro foods, for example, grew 15% in sales and 36% in profits to $192 million. “The epidemic has seen significant sales improvements throughout the second quarter since the closure began in March. In its accounts, the company admits that demand for rice and pasta has increased by more than 100% in just a few weeks due to concerns about insufficient supply.
Another obvious coronavirus winner is the pharmaceutical industry. Rovi won $61 million, up 55%, and is one of the few companies to dare to make a (good) forecast for 2021: “we expect revenue to grow by 20% to 30%, including the production of modern covid vaccines.” At the end of the day, it’s not just Rowe, it’s all human hope.