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Business accounts turn red

2021-02-28T11:22:19.521Z

Spanish listed companies lost 8,861 million euros in 2020, their second worst record in history, due to the impact of the coronavirus



Last year was an obstacle course for companies from which few came out unscathed and it is almost impossible to get out without scratches when the world closes up and down for almost three months and then the activity runs at half throttle, always looking sideways the statistics of infections by coronavirus.

During the last month, the first Spanish business swords have presented the results of 2020. And their balance is more like a part of the war than anything else.

"It has been one of the most difficult years in our history," acknowledged Ana Botín, president of Banco Santander;

“We have faced an unprecedented scenario”, admitted Josu Jon Imaz, Repsol's CEO;

“2020 is unlike anything we have known in our 65-year history;

there is no comparable possible ”, underlined Gabriel Escarrer, CEO of Meliá Hotels.

The perfect economic storm caused by covid-19 attacked corporate accounts from a double flank.

International activity, which in previous crises was the lifeline of many groups, this time also punctured as it was a

planetary

shock

.

In the case of the domestic business, the obstacles multiplied: absence of tourists, timid consumers due to an uncertain economic future, business investments paralyzed waiting for better prospects ... The result of this perverse cocktail is that the Spanish groups listed on the Stock Market They closed 2020 with aggregate losses of 8,861 million euros compared to profits of 26,455 million in 2019. It is the second worst mark in history, only surpassed by the red numbers of almost 13,000 million that were registered in 2012. However Unlike the Great Recession, when the balance sheet was dragged down by Bankia (it recorded losses of 19,000 million), this time the damage has been much more general: up to 37 companies had a negative net result last year.

The extraordinary ones for the updating of the value of the assets have triggered the losses of the listed groups, but the blow of the economic crisis derived from the covid-19 is already evident from the top of the income statements, that which, without accounting tricks, aseptically radiography corporate health.

Sales, the oxygen that allows businesses to walk, have plummeted.

In 2020, the aggregate income of the listed companies totaled 539,723 million euros, an amount that represents a fall of 15.81% compared to 2019.

Another good test of cotton to check the progress of the business is the exploitation result.

This item comes to distill the purest juice of the results, by discounting current expenses from sales (not counting taxes, interest or amortization).

In the case of the analyzed period, the operating result sank 55.17%, going from 61,433 million in 2019 to 27,539 million in 2020.

Transverse damage

The economic recession caused by the pandemic has had a cross-cutting impact, regardless of the size of the listed companies.

The largest companies in the market, those that make up the Ibex 35 index, which in 2019 had earned 25,545 million, ended last year with aggregate losses of 8,296 million.

For their part, the medium and small-sized groups, which make up the rest of the continuous market, closed 2020 with red numbers amounting to 564 million compared to earnings of 909 million a year earlier.

The abuse of the term "historical" has ended up perverting its meaning, but this time its use is more than justified.

Some of the flagships of the national business community for the first time entered what ancient maps called

terra incognita

to refer to unexplored territories.

A clear example is Banco Santander, which suffered the first annual red numbers since its founding 164 years ago.

The entity lost 8,771 million euros in 2020, compared to the 6,515 million it gained in 2019, after increasing the endowments to 12,173 million to face the coronavirus crisis and, in addition, assume an accounting impairment of the value of its subsidiaries in the United Kingdom, the United States and Poland worth 12.6 billion.

The rest of the listed banks, although they suffered significant falls in their net results due to provisions for the economic deterioration and the rise in non-performing loans, managed to maintain the black numbers (although in some cases such as Sabadell by a little margin, since only won two million).

The 2020 accounts are also historic because they have shaken the

business

status quo

.

For the first time, Iberdrola led the list of companies with the most benefits.

The electricity company, with a clear commitment to renewable energy, earned 3,610 million euros.

The second place in the

ranking

went to Telefónica, which managed to improve its profits by 38%, placing them at 1,581 million.

The third was for another company that is not usually so high in the ranks: Endesa.

The electric company multiplied its profits by eight and raised profits to 1,304 million.

This significant growth is due to a year-on-year comparison that is distorted, since the company made a significant provision in 2019 for the closure of its coal generation business.

On the negative side, Banco Santander suffered the biggest hole among those listed with those 8,771 million losses.

Repsol's red numbers were also voluminous, 3,289 million, chaining its second year negative, mainly due to the fall in the price of raw materials and the adjustment of exploration and production assets.

The pandemic also shook the aviation business with force: Airbus suffered a negative result of 1,133 million, while IAG lost 6,923 million.

The case of the airline where Iberia is integrated is a clear example of the destruction that the pandemic has caused in tourism.

It is true that this sector does not have a reflection on the stock market equivalent to its weight in the Spanish economy, but the few listed companies linked to this activity give a good account of the

annus horribilis

that was 2020. The airport manager, Aena, suffered the first losses of his history, 126 million, when a year earlier he had earned 1,442 million.

Passengers who passed through an Aena airport fell by 70.9%, from 307.1 million to 89.3 million.

"In the current circumstances, due to the new waves of contagion, it is not possible to anticipate when the recovery will begin," explains the company in the information with the results sent to the National Securities Market Commission (CNMV).

Hotel chains were other major victims of the absence of tourists.

Meliá Hotels ended 2020 with losses of 595 million, when a year earlier it had made a profit of 112 million.

In the case of NH Hotel Group, the red numbers rose to 437 million compared to profits of 90 million in 2019. “The occupancy of the entire portfolio, including closed hotels, was reduced to 25% of the total in 2020, a record low of the company, compared to an occupancy of 71.6% obtained in 2019, ”NH informs the stock market supervisor.

Industrial companies also suffered greatly in the past year.

However, this is one of the sectors where there was a clear improvement as of the summer, offsetting the impact on the production plants of the strict confinements of the second quarter of 2020. Among the industrial values ​​of the Spanish Stock Exchange, the case of the manufacturers of automotive components.

“The annual drop due to the pandemic in production was over 20%.

However, in the fourth quarter the activity already returned to normal levels ”, they point out in Cie Automotive, a company that earned 185 million, 35% less.

A year from less to more was also experienced in Gestamp, although it could not avoid closing the year with losses of 151 million.

"2020 was a year of two halves, with a first semester in which emergency measures were implemented against the covid and a second semester focused on cost control, with a rebound in production volumes," acknowledges the firm.

Some winners

The poor results were widespread, but there were some sectors for which 2020 was a good year.

This is the case of businesses linked to the consumption of basic goods.

Ebro Foods, for example, improved its sales by 15% and placed its profits at 192 million, 36% more.

"The pandemic has led to a significant improvement in sales since the start of lockdown in March and throughout the second quarter.

The fear of shortages produced, in specific weeks, increases in demand greater than 100% in both rice and pasta ”, the company acknowledges in its presentation of accounts.

Another clear winner from the coronavirus was the pharmaceutical sector.

Rovi, which earned 61 million, 55% more, is one of the few companies that dares with the forecasts (and good ones) for 2021: “We expect operating income to increase between 20% and 30%, including production. of Moderna's vaccine against covid ”.

Deep down, not only Rovi, but all of humanity, has placed all their hopes on the vaccine.

Business leaders moderate their salaries

Shortly after the confinement was decreed in March 2020, there were many companies that promised to cut the emoluments of directors and executives due to the economic and social destruction that was already suspected that the covid-19 would cause.

Almost a year later, the compensation reports sent by the companies to the stock market supervisor (CNMV) confirm in many cases that announced wage moderation.

The members of the boards of directors of the Ibex 35 companies earned an aggregate 278 million euros, an amount that represents a decrease of 9.2% compared to the 307 million they earned in 2019. This reduction was mainly due to the lower distribution of bonuses and severance payments.

In the case of the members of the senior management of these same companies, the wage bill contracted by 5.57%, from 352 million to 332 million.




The highest paid council in Spain in 2020 was, by far, that of Acciona.

The construction and services company paid its administrators 56.3 million.

This amount was distributed to a large extent by its president and vice president due to the payment of a year-on-year bonus and the delivery of shares in a winery that was owned by the group.

José Manuel Entrecanales received 35.32 million (not counting the 1.37 million that the company entered his pension) and Juan Ignacio Entrecanales received 19.47 million.


As in previous years, in the

ranking

of the best paid on the Spanish Stock Exchange are José Ignacio Sánchez Galán, with 12,201 million;

the president of Banco Santander, Ana Botín, who between salary and pension received a total compensation of 8,092 million;

the CEO of Santander, José Antonio Álvarez (6,878 million);

the president of BBVA, Carlos Torres, and its CEO, Onur Genç, with 5.4 and 4.28 million (including contribution to their pensions);

the president of Telefónica, José María Álvarez-Pallete (5.19 million);

the president of Ferrovial, Rafael del Pino (4.86 million);

or the CEO of Repsol, Josu Jon Imaz (3.93 million).

Hit for templates

impact on employment.

In the case of the companies included in the Ibex 35, the aggregate number of workers as of December 31 last year amounted to 1,187,091 people, 87,037 fewer employees than a year earlier.

Among the selective values, the average template that was cut the most was AGI.

The airline where Iberia is located reduced its workforce by 38,678 workers.

With most of the aircraft on the ground after the outbreak of the pandemic, he had to file for an ERTE due to force majeure.


A similar case occurs at Meliá Hotels.

The hotel group, affected by the collapse of tourism, was one of the first to benefit from an ERTE in March 2020. At the end of the year, the workforce of the company controlled by the Escarrer family consisted of 8,474 people, 58% less than a year before.


The decrease in the workforce at ACS was also significant (12,337 fewer workers).

In the case of the construction company, this job cut was influenced by the impact of several divestments such as Thiess, the Australian mining services subsidiary.


Digitization, teleworking and office closures have also accelerated the downsizing of banks.

In total, 10,464 fewer people were working at the Ibex 35 financial institutions at the end of last year than in 2019. Bankinter was the only bank that increased its workforce (330 people) and Banco Santander the one that suffered the biggest cut (7,223 employees ).


Despite this decline, the entity chaired by Ana Botín is the listed company that employs the most people (193,891 workers on average in 2020), followed by ACS (181,699) and Inditex (156,240 people at the end of its first semester).

Source: elparis

All business articles on 2021-02-28

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