More than a third of state-owned public sector companies in a state of “technical bankruptcy” in 2021

Thirty-two companies in the public business sector (SEE) were still in “technical bankruptcy” at the end of 2021, one less than in 2020, despite the recovery of most economic and financial indicators compared to 2020, indicates CFP.

According to the Public Business Sector 2020-21 report released this Thursday by the Public Finance Council (CFP), in 2020, 2021 is “marked by the recovery of most economic and financial indicators reflected in individual accounts (or consolidated accounts) of 87 non-financial companies (or groups of companies) in SEE”.

However, “despite this recovery, more than a third of these companies (32) continued to show negative equity in 2021, filing a technical bankruptcy situation.”

“The economic performance of non-financial companies in SEE continues to show significant economic imbalances, with a negative EBITDA of €1,000 million and a negative net result of €3,100 million in 2021,” notes the Nazaré da Costa Cabral-led organization.

“Compared to 2020, these figures reflect an improvement in these figures by 290 million euros and 708 million euros, respectively, which, however, is not enough to correct the economic imbalance in the sector,” he adds.

The sum of the net result of TAP SA and TAP SGPS in 2021 was negative by almost 2,100 million euros, while the sum of the rest of SEE non-financial companies reached approximately 1,100 million euros.

If, in relation to 2020, companies from the TAP universe reduced losses by almost 790 million euros, then they increased by 82 million euros for other non-financial companies.

In total, only 27 out of 87 companies (or groups of companies) achieved positive net results in 2021, totaling €207 million (the same number of companies in 2020). The remaining 60 recorded losses of 3,412 million euros (of which 2,081 million euros came from companies from the TAP universe).

After the transport and storage sector, whose companies recorded 1,700 million losses, the healthcare sector was the second to accumulate the largest losses in 2021, with a total of 1,100 million euros, with these two sectors accounting for 90% of SEE’s negative net result. this year.

According to the CFP, the negative economic performance of these companies “necessarily results in the need for capital replenishment by the public shareholder to avoid a deterioration in their financial and capital position”, and the improvement recorded at this level compared to 2020 accurately reflects “the efforts shareholders.”

“In order to avoid a deterioration in the financial and equity position of the 87 non-financial institutions in SEE that could result from negative net results, the public shareholder increased capital by 4,000 million euros through an increase in subscribed capital (2,800 million euros) and the conversion of loans into equity, the last one in TAP SA,” he emphasizes.

As a result, the equity of these companies increased to €5,800 million in 2021 (+€4,000 million compared to 2020), while liabilities decreased by €3,400 million to €54,900 million and assets increased by €500 million , amounting to 60,700 euros. million euros.

Compared to 2020, there was a positive evolution in the indicators of financial autonomy up to 9.6% (+6.5 percentage points) and solvency up to 10.6% (+7.4 percentage points), which increased the debt (+13.6 percentage points ) and the ability to fulfill its obligations.

In operational terms, the total turnover of non-financial companies in SEE amounted to €10,100 million in 2021, which is higher than the €9,200 million calculated in 2020, but still below the €12,200 million achieved in 2019 (pre-pandemic year).