Most enterprises see financial results deteriorate

Last year was a loss-making one for the private sector, reversing gains in the previous year, as the processing of company financial reports by the ICAP Group has shown.

In total, six out of every 10 firms showed a deterioration in their figures for 2011 compared with 2010, according to the analysis of the reports of 943 enterprises, i.e. all those submitting reports for financial years that start in July and end in June.

Based on this data, the picture that emerges from the figures provided by the sample confirms that private sector companies have suffered heavy losses for another consecutive year. Turnover continued to decrease, while the net figure of profits was reversed to net losses.

ICAP found that sales declined by 3.5 percent on an annual basis but without a simultaneous decrease in costs, resulting in a drop in gross earnings (down by 13 percent). These negative developments, combined with high operating costs (mostly administrative and supply costs), led to the shrinking of operating results by 71.6 percent.

Consequently, from net profits of 44.2 million euros in total for the aforementioned companies in 2009-10, they reported total losses of 45.8 million euros in 2010-11. Earnings before interest, tax, depreciation and amortization (EBITDA) contracted by about 13.2 percent.

Out of all enterprises in the sample, 45 percent were loss-making while 62 percent showed a deterioration in their results in 2010-11 compared with 2009-10.

The service sector suffered the biggest losses, in comparison with industry and commerce. In fact industry was the only sector to register a moderate improvement in 2011. Total sales for the 256 industrial companies in the sample showed an increase of 13.1 percent but this positive development was offset by the fact that manufacturing companies faced an ever greater increase in sales costs.

Nevertheless, considerable reductions in other operating costs resulted in the creation of a positive operating result for 2011, unlike in the year before, with marginal profits against small losses in the previous financial year. The industrial sector was also satisfied to see a significant growth on EBITDA level, by 32.4 percent.

In the commerce sector the results of the 266 enterprises in the sample fully confirm the recession doldrums in the market. As Chief Executive Officer of the ICAP Group Nikitas Constantellos said, “the constant decline in economic activity and the recession that continues for yet another year have had a direct impact on the performance of the country’s enterprises.

“More than six out of 10 companies showed worse results in 2011 than they had done in 2010, but at least it is cause for optimism that the remaining share, just under 40 percent, secured an improvement in their results despite the strongly negative financial conjunction,” added the ICAP Group CEO.

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