Corporate profits melt despite increasing sales
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Hurriyet Daily News
Oluşturulma Tarihi: Haziran 29, 2009 00:00
ISTANBUL - The global financial meltdown has reduced net profits of Turkish companies, says to an annual report by Fortune magazine. Turkish firms’ sales in the domestic market and their export figures have increased. However, the increase has not been enough to stop the stagnation in the industry.
Turkish businesses, which saw a 16.3 percent increase in sales, experienced 35.5 percent decrease in profits last year compared to 2007, according to an annual list of the top 500 Turkish companies by Fortune magazine.
The Fortune first 500 report, prepared by Finar and D&B, has revealed that net sales revenues of the companies, which stood at 337.2 billion Turkish Liras in 2007, reached 392.3 billion liras in 2008. Export rates also rose 18.7 percent to 94.681 billion liras fallowing the decline experienced during the last couple of months of 2008. Still, the increase in export rates was not efficient enough. The rate of domestic sales stood at 76.87 percent in 2008, whereas the export rate stood at only 23.31 percent.
Alarming figures
"Although there is a 392.3 billion liras increase in the net sales, the significant fall of profits to 12.9 billion liras is alarming," said Kenan Şanlı, finance editor of Fortune Turkey.
Some 358 firms out of the Fortune 500 list reported profit while 142 of them posted deficit. "Profit rates are low. In 2007, the overall profit of listed companies was 20.07 billion while in 2008 this figure fell to 12.93 billion liras," said Ali Ağaoğlu, editor-in-chief of Fortune Turkey.
Turkish Petroleum Refineries Corporation, or Tüpraş, ranked first, just as it did back in 2007. The company’s sales rose 35 percent to 30.5 billion liras last year. Petroleum Pipeline Corporation, or BOTAŞ, ranked second with 21.9 billion liras of net sales. Turkey Electric Distribution Company, or TEDAŞ, rounded up the third spot with 20.7 billion liras in net sales.
The top 10 companies in the Fortune 500 reaped 144 billion liras in net sales last year. Oil and energy companies met 17.59 percent in the top 10 firms listed. Türk Telekom, Turkey's main fixed-line phone company, ranked sixth with 10.2 billion liras in net sales and Turkcell, the country’s top mobile phone operator, was in the eighth spot with 8.8 billion liras.
Another significant sector that entered the top 10 was construction. ENKA Construction Company ranked seventh with 9.1 billion liras in net sales.
"While export rates are declining, Tüpraş, Ford Automotive and Turkish Airlines are the top companies in terms of export, with the figures of 5.79 billion liras, 4.82 billion liras and 4.47 billion liras respectively," said Şanlı.
The highest profit rate in the list belongs to Turkcell with 2.313 billion liras. Türk Telekom followed Turkcell’s lead with 1.752 billion liras. Turkish Petroleum Corporation ranked third with 1.566 billion liras.
Sales sum
Only the first 62 companies reached more than 1 billion liras in sales, Şanlı said. "Compared to the companies in the United States, Turkey’s 500 companies’ net sales are only a little more than half of the net sales of Exxon Mobile, which is sitting on top of the U.S. 500 list," he said. Exxon Mobile’s net sales were $442.8 billion for 2008. "Turkey’s sales can reach the U.S. 500 list’s third Chevron, which has a net sale of $263.1 billion," Şanlı said.
Regarding the global turmoil, Selim Seval, chairman of Finar D&B said, "We can realize that the crisis has affected Turkey by looking at the indebtedness ratesÉ For a robust financial structure, the main trend is to have the debt to equities ratio not more than one. However, in Turkey this rate was 1.15 in 2007, but increased to 1.46 in 2008." he said.
"When we look at the first 10 companies, we see that the indebtedness and equities ratio increased from 1.51 to 1.96."
In 2008, sectors with the highest indebtedness rates included computer, software and bureau machines, management and support systems, metal products, exclusive education, culture, arts and sport products, Seval said.
The Fortune first 500 report, prepared by Finar and D&B, has revealed that net sales revenues of the companies, which stood at 337.2 billion Turkish Liras in 2007, reached 392.3 billion liras in 2008. Export rates also rose 18.7 percent to 94.681 billion liras fallowing the decline experienced during the last couple of months of 2008. Still, the increase in export rates was not efficient enough. The rate of domestic sales stood at 76.87 percent in 2008, whereas the export rate stood at only 23.31 percent.
Alarming figures
"Although there is a 392.3 billion liras increase in the net sales, the significant fall of profits to 12.9 billion liras is alarming," said Kenan Şanlı, finance editor of Fortune Turkey.
Some 358 firms out of the Fortune 500 list reported profit while 142 of them posted deficit. "Profit rates are low. In 2007, the overall profit of listed companies was 20.07 billion while in 2008 this figure fell to 12.93 billion liras," said Ali Ağaoğlu, editor-in-chief of Fortune Turkey.
Turkish Petroleum Refineries Corporation, or Tüpraş, ranked first, just as it did back in 2007. The company’s sales rose 35 percent to 30.5 billion liras last year. Petroleum Pipeline Corporation, or BOTAŞ, ranked second with 21.9 billion liras of net sales. Turkey Electric Distribution Company, or TEDAŞ, rounded up the third spot with 20.7 billion liras in net sales.
The top 10 companies in the Fortune 500 reaped 144 billion liras in net sales last year. Oil and energy companies met 17.59 percent in the top 10 firms listed. Türk Telekom, Turkey's main fixed-line phone company, ranked sixth with 10.2 billion liras in net sales and Turkcell, the country’s top mobile phone operator, was in the eighth spot with 8.8 billion liras.
Another significant sector that entered the top 10 was construction. ENKA Construction Company ranked seventh with 9.1 billion liras in net sales.
"While export rates are declining, Tüpraş, Ford Automotive and Turkish Airlines are the top companies in terms of export, with the figures of 5.79 billion liras, 4.82 billion liras and 4.47 billion liras respectively," said Şanlı.
The highest profit rate in the list belongs to Turkcell with 2.313 billion liras. Türk Telekom followed Turkcell’s lead with 1.752 billion liras. Turkish Petroleum Corporation ranked third with 1.566 billion liras.
Sales sum
Only the first 62 companies reached more than 1 billion liras in sales, Şanlı said. "Compared to the companies in the United States, Turkey’s 500 companies’ net sales are only a little more than half of the net sales of Exxon Mobile, which is sitting on top of the U.S. 500 list," he said. Exxon Mobile’s net sales were $442.8 billion for 2008. "Turkey’s sales can reach the U.S. 500 list’s third Chevron, which has a net sale of $263.1 billion," Şanlı said.
Regarding the global turmoil, Selim Seval, chairman of Finar D&B said, "We can realize that the crisis has affected Turkey by looking at the indebtedness ratesÉ For a robust financial structure, the main trend is to have the debt to equities ratio not more than one. However, in Turkey this rate was 1.15 in 2007, but increased to 1.46 in 2008." he said.
"When we look at the first 10 companies, we see that the indebtedness and equities ratio increased from 1.51 to 1.96."
In 2008, sectors with the highest indebtedness rates included computer, software and bureau machines, management and support systems, metal products, exclusive education, culture, arts and sport products, Seval said.