Number of companies ‘at potential risk’ increased in 2020 with 44.5% making losses
according to the Bank of Portugal's new 'Regional economic and financial indicators of non-financial companies', the percentage of companies with losses "increased in all regions."
The percentage of companies “at potential risk” increased in all regions in 2020, with 44.5% of companies showing negative net results, compared to 36.9% in 2019, the Bank of Portugal (BoP) disclosed Tuesday.
According to the BoP’s new ‘Regional economic and financial indicators of non-financial companies’, the percentage of companies with losses “increased in all regions,” with “more than half of the companies in the Algarve and Madeira posting negative net results (52.2% and 52.5% of companies, respectively).”
Amongst companies based in the Lisbon Metropolitan Area, 49.1% had the same situation.
The central bank’s data also pointed out that the return on assets of companies fell from 7.6% to 5.9% between 2019 and 2020, in a decrease “across all regions,” but “more expressive” in the Algarve and Madeira, whose business fabric depends more on accommodation and restaurants.
According to the BoP, the reduction in profitability “was less pronounced in the North and Centre regions,” and “in 2020, these regions also had the highest profitability figures.”
In 2020, it adds, “all of the country’s regions registered expressive reductions in the return on assets of the accommodation and catering sector and, in 15 of the country’s 25 regions, this was negative”.
“On the contrary, the return on assets of the construction sector, which recorded a slight increase in 2020, was positive in all regions of the country, and even recorded increases in 10 regions”.
Even so, in the year under review, the financial autonomy of companies increased in most regions: “Overall, companies continued to strengthen their equity and financial autonomy (measured by the weight of equity in the balance sheet) increased to 38.1% in 2020 (36.5% in 2019)”.
“It was the companies headquartered in the Lisbon Metropolitan Area that most strengthened their equity in 2020. In this region, the financial autonomy of companies increased from 32.5% to 34.8%.”
On the other hand, the weight of equity in the assets of companies was 34.0% in the Algarve, 35.7% in the Azores and 43.1% in Madeira.
