Company bankrupcies jump 64.5% in August YoY

Corporate insolvencies in Portugal increased 64.5% in August compared to the same period in the previous year, with an increase of 10.6% in 2020, while the new companies created decreased 10.2% and almost 30%, respectively, Iberinform announced on Friday.

“There is a 64.5% increase in insolvencies in August, with 199 companies going bankrupt, 78 more than in the same period of 2019. Over the year to date, the increase is 10.6%, with a total of 3,342 insolvencies, 319 more than in the same period last year,” said the subsidiary of Crédito y Caución in a statement.

The districts of Porto and Lisbon stand out with the highest number of insolvencies – 836 and 697, respectively – which represents an increase of 13.1% in Lisbon and 9.3% in Porto until August, compared to the previous year.

However, the most significant year-on-year increases were registered in Angra do Heroísmo (+50%), Castelo Branco (+50%), Faro (+43.2%), Viana do Castelo (+39.5%), Évora (+29.6%), Beja (+29.4%), Ponta Delgada (+27.8%), Madeira (+25.4%) and Santarém (+14.7%).

Conversely, there were decreases in insolvencies in the districts of Guarda (-25%), Vila Real (-20%), Coimbra (-19.8%) and Viseu (-1.4%), with Horta maintaining a value identical to 2019: four insolvencies.

By sectors, Iberinform’s data point to ‘construction and public works’ as the only activity that registers a decrease (of 4.4%) in the number of insolvent companies compared to 2019.

The largest increases are in the areas of ‘telecommunications’ (+66.7%), ‘hotels and restaurants’ (+29.2%), ‘other services’ (+20.5%), ‘electricity, gas, water’ (+16.7%), ‘wholesale trade’ (+15.7%) and ‘vehicle trade’ (+12.5%).

In relation to the creation of new companies, it presented in August a year-on-year drop of 10.2%, decreasing from 2,920 in August 2019 to 2,621 in the same month of 2020 (minus 299 new constitutions), and in accumulated terms the decrease was 29.9% (from 34,424 to 24,113 new companies).

The Lisbon area maintained its leadership in this indicator, with 7,558 new companies, but still registered a decrease of 33.6% compared to the first eight months of 2019.

Porto registered 4,334 new incorporations, 30.6% less than last year.

According to Iberform, all districts show a decrease in incorporation, with the most significant decreases in Aveiro (-39.5%), Setúbal (-35.5%), Angra do Heroísmo (-33.3%), Ponta Delgada (-33.2%), Faro (-33%), Madeira (-31.8%), Leiria (-30.2%), Viana do Castelo (-28.2%), Coimbra (-27.2%), Guarda (-24.1%), Braga (-23.3%), Horta (-22.2%), Beja (-21.7%), Évora (-21.5%), Santarém (-20.6%), Viseu (-20.4%) and Castelo Branco (-19.3%).