Profitability and persistence among Spanish firms edged higher in the first half of 2023, yet the pace slowed compared with the first quarter. Oil companies, including refiners and fuel marketers, posted exceptional gains last year due to sharp rises in crude prices and the resulting uplift in sales prices. The Quarterly Balance Sheet Center released this information on Monday through the Bank of Spain.
The quarterly survey draws on data from 932 firms representing about 12.4 percent of total gross value added in sectors that are heavily weighted toward industry, energy, and large-scale operations. These conditions shape the Bank of Spain’s latest briefing. When data cannot be gathered from the Integrated Balance Sheet Center, the analysis uses a broader pool of around 800,000 companies, covering roughly 55 to 60 percent of gross value added, to project final figures for 2021. This framework underpins the business trend assessment and the interpretation of sectoral dynamics.
From this basis, the net normal result rate for Spanish companies rose 17.7 percent in the first half, driven by a larger contribution to gross value added and stronger financial income, which climbed 21.7 percent. This growth offset a 51.9 percent surge in financial expenses. Efficiency, measured by the number of firms, increased by 4.9 percent, compared with 3.7 percent in both the year-earlier period and the first quarter of the current year.
p>During the period, overall turnover fell by 7.6 percent, contrasting with a 46.8 percent rise in the comparable period of 2022. In the long-running historical series compiled by the Integrated Balance Sheet Center since 1994, only two episodes triggered negative turnover: the 2008 financial crisis and the period from 2019 to 2021 during the coronavirus pandemic. On the wage side, personnel numbers rose on average by 2.4 percent, while wages advanced by 6.46 percent and overall compensation grew by 9.1 percent. The data point to a mixed picture of resilience and strain across different sectors.
Energy impact
The Bank of Spain explains that the downturn in sales is largely due to the energy-related sectors, namely energy production, refining, and fuel marketing, which bear a disproportionate weight in the sample. The energy sector saw a 20.8 percent drop in turnover in the first half of 2023 after a 92.2 percent surge in the same period in 2022. While total turnover decreased in energy-intensive industries such as industry, trade, and hospitality, gains appeared in information and communication services and other activities.
Despite the overall turnover decline, energy sector results doubled, with gross operating income rising 136.9 percent and ordinary profitability climbing to 10.3 percent. By contrast, industry and commerce, along with hospitality and accommodation, faced notable declines of 55.2 percent and 31.5 percent respectively. The Bank notes that the weaker performance of large banks and some major players conditioned these movements. In industry, refiners and in trade and hospitality the energy marketing segment was a significant driver. If the mentioned companies were excluded, the profitability trends would show improvements in both main branches. Total other activities surged by 179 percent.
Higher profitability than before the pandemic
Profitability metrics show that the cost efficiency ratio stood at 4.9 percent in the first half of 2023, up from 3.7 percent in the prior year and the first quarter of this year. This level remains higher than the pre-pandemic benchmark of around 4.1 percent. The energy sector’s profitability rose notably, achieving 3.1 percent in the previous year, while the information and communication sector improved from 7.2 percent to 7.2 percent in 2023. In contrast, the downturn in the refinery and marketing segment dragged down the broader industrial sectors, shaving nearly seven percentage points off the ratio to around 7.2 percent. The trade and hospitality sector saw the ratio rise from 10.6 percent to 7.6 percent in the first half of 2023.