Efacec recorded losses of over €60 million

Efacec’s deteriorating financial situation in 2021 is a fact. Amid a reprivatisation process that is dragging on – and threatening to drag on Banco de Fomento – the numbers are worst than expected. The company headed by Ângelo Ramalho reported a net loss of €62.7 million and a negative EBITDA of €31.8 million (when the target was set for €22 million). The figures are provisional.

The reprivatisation operation of over 71% of Efacec has already been suspended by António Costa during the electoral campaign, but the minister of economy, Pedro Siza Vieira, is still trying to find a financial engineering solution, now with financing from Banco de Fomento of around €100 million for 25 years, convertible into capital. And with the buyer, DST, being compensated with the reinforcement of Efacec’s capitalisation as a counterpart to pay interest on that operation. The objective results from a requirement by DST to reduce the company’s debt to €90 million. Officially, no one is making any comment, but the government continues to expect to sell the company.

The problem is that Efacec’s accounts have deteriorated compared to the figures presented in the sale process. According to the figures that ECO had access to, the company justifies the worsening of the financial situation compared to what was expected with “the lower volume of activity in the last six months (impact of 26 million)” and by the “failure to fully implement the planned downsizing programme (impact of 25 million).”

This “lower volume of activity” naturally translates into a drop in turnover, which in December was 28% below the predicted level, that is, the company turnover was €90 million less than the target. In year-on-year terms, this indicator fell 10% (€25 million less). The situation is also explained by “difficulties in the supply chain”, a problem that affects all companies worldwide due to the impact of the pandemic and the shortage of some raw materials, namely semiconductors.

The quarterly analysis of this indicator mirrors the sharp deterioration of the company. If in the first quarter the drop in turnover was €200,000, in the second quarter it was €6.3 million, in the third quarter less €34 million and in the fourth quarter less €49.8 million.

Less revenue equals less income, which was 30% below the set target (minus €96 million) and 5% below that recorded in December 2020.

And the prospects are not positive because, as Público newspaper reported, the company started the year practically inactive, despite having secured a €45 million loan, with state guarantees.

On the other hand, Efacec’s debt has been on an upward trend since March 2021, having reached €195 million in December, a figure that compares with €152 million a year earlier. Debt to suppliers has been falling. The company owed €103 million in December, after peaking at €123 million in July.

It is with these data that the Ministry of Economy and Parpública have to continue negotiations to try to re-privatise the company. The Prime Minister, in an interview with Observador, announced that DST’s proposal, the only one on the table, was unacceptable, thus confirming ECO’s news that the Portuguese government opted to drop, for now, the sale of the company. However, this Monday, the Minister of Economy, quoted by the newspaper Jornal Económico, assured that negotiations are continuing and that “no decision has been taken yet”.