Profitability non-financial companies further down

09/07/2009 15:00

In the first quarter of 2009, net profits of non-financial companies amounted to 22.7 billion euro, i.e. 10.6 billion euro down on the first quarter of 2008. For the fifth quarter running, net profits are below the level of the same quarter one year previously.

Net profits prior to tax deduction and net operating surplus of non-financial companies

Net profits prior to tax deduction and net operating surplus of non-financial companies

Domestic profits also in decline

Declining net profits before tax deduction of non-financial companies in the four quarters of 2008 were predominantly caused by the poor results achieved by foreign subsidiaries. In period January-March 2009, profits realised by resident companies also dropped for the first time since the financial crisis swept across the world. The net operating surplus over the first quarter of this year was 23.3 billion euro, 4.8 billion euro down on the first quarter of 2008.

Investment spending on fixed capital formation fell considerably by 1.3 billion euro to 11.7 billion euro in the first quarter of 2009 relative to one year previously. A downturn in investment spending has not occurred since the first quarter of 2007.

Net profits non-financial companies

Net profits non-financial companies

Non-financial companies took out 10.6 billion euro in first quarter

In the first quarter of 2009, non-financial companies took out loans worth 10.6 billion euro; 5.6 billion euro was financed by Dutch banks.

In the third and fourth quarter of 2008, non-financial companies paid off more than they took out. Since 2001, the year Statistics Netherlands began to survey these data, it had not occurred that in two successive quarters a higher amount had been paid off than taken out. The reason is that, due to the credit crunch, the conditions for obtaining bank loans have tightened. Currently, the economic prospects are so poor that companies are reluctant to borrow money. 

Angelique Klinkers and Rob van der Holst