The Bank of Portugal has published updated Central Balance Sheet Database statistics for Portuguese non-financial corporations for the third quarter of 2024. The release shows a year-on-year increase in equity financing and a rise in the cost of obtained financing, alongside lower profitability. Companies’ return on assets (EBITDA-to-total-assets) was 9.4%, down 0.4 percentage points year on year, with private companies at 9.5% and public companies at 7.1%. Financial autonomy, measured as equity as a share of assets, increased to 45.1% for the total and 45.4% for private companies, while the share of obtained financing in total assets fell to 27.2%; the note links these developments to the conversion of intra-group loans into equity observed in the fourth quarter of 2023 and a continued reduction in borrowing from the financial sector. The cost of obtained financing rose to 5.0% (from 4.0% a year earlier) but increased only 0.1 percentage points versus the previous quarter, and interest expense coverage fell from 8.6 to 6.9, with the largest declines in industry, trade and head offices. The next update is scheduled for 4 April 2025.
Bank of Portugal 2025-01-03
Bank of Portugal publishes Q3 2024 Central Balance Sheet statistics showing equity funding rising to 45% of assets and financing costs at 5%
The Bank of Portugal's updated Q3 2024 Central Balance Sheet Database shows increased equity financing and higher financing costs for Portuguese non-financial corporations, alongside reduced profitability. Return on assets decreased to 9.4%, with financial autonomy rising to 45.1% due to intra-group loan conversions. The cost of financing rose to 5.0%, with interest expense coverage declining, notably in industry, trade, and head offices.