The Ibex 35 companies reported a 9.59% drop in profit in 2023, totaling 51.12 billion euros. Across the year, combined earnings reached 56,024.82 million euros, as business sentiment had weakened due to the relentless rise in inflation, the conflict in Ukraine, and higher interest rates. Uncertainties have eased in recent months, and this has translated into a modest revenue uptick for the blue-chip group, which posted 664.659 billion euros in sales, up 5.62% from 629.261 billion in 2022.
Among Ibex 35 results notable for weak performance is ArcelorMittal, whose profits plunged by 90%, dragging down the overall index valuation. The company earned 850 million euros and reduced net debt by 30%, to 2,655 million euros. Also negative were Telefónica with a loss of 892 million euros and property groups Merlin Properties (-83.5 million) and Colonial (-1,019 million). The latter faced a sharp depreciation of its office portfolio. Telefónica explains that the restructuring of its British subsidiary Virgin Media O2 and the provision to cover the ERE affecting 3,400 workers weighed on its 2023 results. The company’s president highlighted a 1.64% rise in sales and improved profitability during the results presentation.
Banks and tourism shine on their own merits
The banking sector stood out in 2023, as five of the six Ibex 35 institutions increased their profit, five of them by double digits and three posting gains of up to 50%. The outlier was Unicaja Banco, with earnings of 267 million euros, down 4% from the previous year.
The overall six major banks posted combined profits of 26,336 million euros in 2023, up 26.32% from 2022, largely boosted by a strong rise in interest rates driven by central banks. This surge in earnings also fed through to higher special taxes for the banking sector. The major banks paid 12,552 million euros in corporate tax in 2023, plus the extraordinary banking levy that is settled in the first quarter of the year for the prior year, and which already produced 1,120 million euros in payments. The sector faced ongoing special taxation justified by the government as a result of higher profits from the rate increases set by the European Central Bank. The listed banks allocated 11,432 million euros to corporate taxes at the group level in the prior year, up 17.4% from 2022, though it’s important to note that Unicaja was part of the market continuum. Initially, the extraordinary tax was approved for two years, but the government extended it to 2024 as well. Market forecasts suggest these firms will owe as much as 1,493.5 million for the extra profits of the past year, representing a roughly 30% increase.
Among the standout banking names, Banco Santander achieved the best results in history and again led as the Spanish-listed company with the most profit. It earned up to 11,075 million euros, a 15% rise. BBVA also posted record results, with a net profit of 8,019 million euros, up 26%.
Aligned with banking, the tourism sector also shone in 2023. The industry welcomed 83 million visitors in the year, a historical high. This momentum was reflected in the earnings of tourism-linked companies. IAG’s profits surged by up to 500% in the first year fully free of travel restrictions. Amadeus, a technology company tied to travel, lifted profits by 58% to 1,117 million euros and again surpassed the 1 billion euro mark. Aena, the airport operator, saw an 80% jump in profits to 1,630 million euros thanks to recovering air traffic. Meanwhile, the hotel group Meliá earned 117 million euros, rising 6% and reducing debt modestly by 3% to 2,613 million euros.
Balance mixed in the energy sector
The energy sector remains a key area for the Spanish stock market. In 2023, results were less dramatic than in the prior year, when energy price distortions due to the Ukraine conflict helped inflate results. In this challenging year, Naturgy managed to increase its profit by 20%, reaching 19.86 million euros. The company’s president noted that 2023 results rank among the best in the company’s history. Endesa and Repsol performed less well. Endesa’s earnings were cut by 70%, hindered by the absence of extraordinary gains seen in 2022 from the sale of its electric mobility business, the impact of energy taxes, and a dispute resolution with Qatar. Repsol posted a net profit of 3,168 million euros, down 25% from 2022 when oil prices were higher.