26 May, 1998
Inquiries: Ms Marjatta Laine + 358 9 1734 3392, Mr
Raimo Pihlajamäki + 358 9 1734 3398
Statistical Director in charge: Ms Kaija Hovi
Profitability of industry improved in 1997
The profitability of large industrial enterprises clearly improved in 1997 in comparison with the previous year. The operating margin went up to 12.6 per cent of the turnover last year, while it had been 10.9 per cent in 1996. The net result amounted to FIM 15.6 billion which was almost FIM 5 billion more than the year before but still FIM 3 billion less than in the record year of 1995. The indebtedness of enterprises lowered and their equity improved for the fifth consecutive year. This appears from Statistics Finland's Financial Statements Statistics of Large Industrial Enterprises.
The turnover of large enterprises amounted FIM 293 billion in 1997. Turnover was up by 11 per cent and export deliveries by 18 per cent on the year before. Increased exports accounted for 90 per cent of the growth in turnover. The proportion of exports of the turnover of large enterprises rose to 59 per cent, on average, and that of the forest and metal industries to over 70 per cent.
The net result of large enterprises improved in all sectors except the chemical industry and the textile and clothing industry, where profitability weakened slightly. The net result of forest industry enterprises grew by FIM 1 billion on the previous year, but was still FIM 5 billion lower than in 1995. The net result of metal industry enterprises increased by FIM 3.5 on the previous year; with the electronic industry accounting for FIM 3 billion of the growth. The electronic industry accounted for 82 per cent of the growth in metal industry exports.
The operating margin of large enterprises amounted to FIM 37 billion after deduction of ordinary operating expenses. The margin increased by good FIM 8 million on the previous year. The financial result improved by almost FIM 6 billion and the net result by close on FIM 5 billion from the 1996 figures. Return on investment was 7.9 per cent which is about one half percentage point higher than the year before.
The total result of large enterprises, that is, the result after extraordinary items rose to FIM 23.5 billion. The total result rose by FIM 8 billion on the year before. Last year's result was also sustained by profits from assignment of fixed assets amounting to FIM 5 billion.
The balance sheets of large enterprises have also become sounder in the past few years. Good performances have enabled companies to reduce their indebtedness. The equity ratio of large industrial enterprises went up to 49 per cent and the debt-equity ratio down to 78 per cent in 1997. Net liabilities, that is, liabilities less current assets, were 20 per cent of the turnover. With the financial result of last year, enterprises would be able to clear their total debts in less than eight years. Electronic enterprises have already had more current assets than debts in the past few years.
In 1997, large industrial enterprises paid almost FIM 7 billion in taxes, which is FIM 2.5 billion less than the year before. FIM 9.6 billion was paid in dividends.
Large enterprises invested FIM 13.8 billion in tangible assets, that is, about FIM 1 billion less than a year earlier. Investments in the forest industry amounted to FIM 5.8 billion and in the metal industry to FIM 4.4 billion in 1997.
The number of people employed by large enterprises did not grow
from the previous year and the proportion of personnel costs of the
turnover again went down slightly. Turnover per employee increased
by 11 per cent on the previous year.
>
| Large industrial enterprises, adjusted profit and loss account and other key items in 1995 - 1997 | |||||
| 1995 |
1996 |
1997 |
Change 1996-1997 |
Change 1996-1997 |
|
| FIM mill. |
FIM mill. |
FIM mill. |
FIM mill. |
% |
|
| Net sales | 260 774.3 | 263 837.0 | 292 506.0 | 28 669.0 | 10.9 |
| Materials and supplies | -139 900.0 | -146 465.4 | -159 072.2 | 12 606.8 | 8.6 |
| Wages, salaries and other social expenses | -40 203.4 | -41 105.0 | -42 504.9 | 1 399.9 | 3.4 |
| Other expenses | -45 366.9 | -47 569.6 | -53 949.6 | 6 380.1 | 13.4 |
| Operating margin | 35 303.9 | 28 697.1 | 36 979.3 | 8 282.2 | 28.9 |
| Dividend income | 3 213.3 | 4 974.0 | 5 308.9 | 334.9 | 6.7 |
| Interest income | 7 093.3 | 6 269.5 | 5 718.0 | -551.5 | -8.8 |
| Interest expenses | -12 393.9 | -10 899.5 | -9 967.6 | -931.9 | -8.5 |
| Exchange rate diffrences | 732.5 | -1 058.6 | -1 754.8 | 696.2 | .. |
| Other financial income and expenses | -73.8 | -165.1 | -247.9 | 82.8 | .. |
| Direct taxes/tax refunds | -3 637.4 | -4 462.0 | -6 977.2 | 2 515.3 | 56.4 |
| Financial result | 30 229.0 | 23 355.4 | 29 058.6 | 5 703.2 | 24.4 |
| Depreciation | -11 532.5 | -12 621.0 | -13 418.6 | 797.6 | .. |
| Net result | 18 696.5 | 10 734.4 | 15 640.0 | 4 905.6 | 45.7 |
| Other operating income | 4 172.3 | 4 567.8 | 7 519.7 | 2 951.9 | 64.6 |
| Depreciation on long-term investments | -1 397.7 | -1 799.6 | -264.4 | -1 535.2 | .. |
| Group contributions received | 15 535.2 | 13 396.4 | 18 828.5 | 5 432.1 | 40.5 |
| Group contributions paid | -16 050.6 | -13 333.2 | -18 273.7 | 4 940.5 | 37.1 |
| Other extraordinary income and expences | -2 582.4 | 1 976.2 | 69.6 | -1 906.6 | -96.5 |
| Total result | 18 427.3 | 15 542.1 | 23 519.8 | 7 977.7 | 51.3 |
| Increase (-) /decrease (+) in depreciation | -5 766.2 | -4 426.3 | -6 181.2 | 1 754.8 | .. |
| Change in voluntary reserves, total | 1 561.4 | 2 570.2 | 5 286.0 | 2 715.8 | .. |
| Adjusted taxes | 0.1 | .. | .. | .. | .. |
| Profit/loss for the accounting period | 14 222.5 | 13 685.9 | 22 625.4 | 8 939.5 | 65.3 |
| Key indicators: | |||||
| Operating margin, per cent of turnover | 13.5 | 10.9 | 12.6 | .. | .. |
| Financial result, per cent of turnover | 11.6 | 8.9 | 9.9 | .. | .. |
| Net result, per cent of turnover | 7.2 | 4.1 | 5.3 | .. | .. |
| Total result, per cent of turnover | 7.1 | 5.9 | 8.0 | .. | .. |
| Return on investment | 11.1 | 7.4 | 7.9 | .. | .. |
| Total liabilities/turnover ratio | 83.7 | 80.9 | 77.8 | .. | .. |
| Net liabilities/turnover ratio | 29.1 | 26.0 | 20.2 | .. | .. |
| Liabilities/financial result ratio | 7.2 | 9.1 | 7.8 | .. | .. |
| Equity ratio | 46.6 | 47.8 | 49.0 | .. | .. |
| Net investments in tangible assets, FIM mill. | 13 137.4 | 14 788.7 | 13 759.7 | -1 029.0 | -7.0 |
| Personnel | 199 850 | 201 000 | 201 352 | 352 | 0.2 |
| Balance Sheet total, FIM mill. | 417 313.0 | 414 536.1 | 451 475.7 | 36 939.6 | 8.9 |
| Proposed dividend distribution, FIM mill. | 5 729.6 | 6 934.7 | 9 639.1 | .. | .. |
| Increase of share capital, FIM mill. | 1 281.7 | 1 957.4 | 2 254.1 | .. | .. |
| Issue profit, FIM mill. | 2 663.1 | 3 224.7 | 3 601.9 | .. | .. |
Turnover of large construction companies up, profitability unchanged
The turnover of large construction companies grew by almost 15 per cent, to FIM 20 billion last year. Despite the growth in turnover, profitability in the construction sector remained at approximately the same level as the year before. The operating margin of large construction companies amounted to FIM 880 million, that is, 4.5 per cent of the turnover. The net result was FIM 200 million, one per cent of the turnover. The net result of one fourth of the companies showed a loss.
The financial structure of the construction sector has clearly become less heavy in the last few years. The equity ratio of companies rose to 39 per cent last year, whereas the proportion of shareholders' equity of the balance sheet was 27 per cent in 1995. The proportion of total liabilities of the turnover amounted to 45 per cent in 1997, whereas it was 51 per cent in 1996 and as high as 61 per cent in 1995.
The turnover of building construction grew by one fifth, but its profitability was weakened by income recognition from unfinished construction projects according to completion level. The operating margin of the FIM 12 billion turnover was 3.7 per cent, while it had been 4.1 per cent the year before. The net result of building construction remained almost at zero in 1997.
The profitability of civil engineering improved as the turnover increased by 9 per cent. The operating margin of the FIM 4.2 billion turnover was 6.5 per cent and the net result 2.4 per cent.
In contrast, the turnover of building engineering and special construction did not grow much from the year before and the profitability of the sector was somewhat poorer than in 1996. The operating margin of the 3.5 billion turnover was 4.7 per cent and the net result 2.4 per cent.
The Financial Statements Statistics of Large Industrial
Enterprises and Construction Companies in 1997 comprises data on
the financial statements of 247 large industrial enterprises and 57
large construction companies. The statistics describe enterprises
and do not provide data on business groups. Major mergers and
spin-offs have been taken into account. The turnover of large
industrial enterprises accounted for two thirds of the turnover in
the whole industry and that of large construction companies for 37
per cent of the turnover in the whole construction
sector.
>
| Large construction companies, adjusted profit and loss account and other key items in 1995 - 1997 | |||||
| 1995 |
1996 |
1997 |
Change 1996-1997 |
Change 1996-1997 |
|
| FIM mill. |
FIM mill. |
FIM mill. |
FIM mill. |
% |
|
| Net sales | 16 169.3 | 17 082.1 | 19 606.3 | 2 524.2 | 14.8 |
| Materials and supplies | -5 158.8 | -4 875.9 | -6 077.4 | 1 201.4 | 24.6 |
| Wages, salaries and other social expenses | -3 577.9 | -3 720.7 | -3 946.7 | 226.0 | 6.1 |
| Other expenses | -6 884.9 | -7 706.9 | -8 700.1 | 993.1 | 12.9 |
| Operating margin | 547.8 | 778.5 | 882.2 | 103.7 | 13.3 |
| Dividend income | 6.8 | 13.8 | 56.5 | 42.8 | 311.2 |
| Interest income | 127.5 | 97.1 | 67.1 | -30.0 | -30.9 |
| Interest expenses | -285.6 | -272.9 | -226.8 | -46.1 | -16.9 |
| Exchange rate diffrences | -10.5 | 7.3 | -5.3 | 12.6 | .. |
| Other financial income and expenses | -16.8 | -2.2 | -1.0 | -1.1 | .. |
| Direct taxes/tax refunds | -72.8 | -86.9 | -294.7 | 207.8 | 239.0 |
| Financial result | 296.4 | 534.6 | 477.9 | -56.7 | -10.6 |
| Depreciation | -236.5 | -249.2 | -275.6 | 26.4 | .. |
| Net result | 59.8 | 285.4 | 202.3 | -83.1 | -29.1 |
| Other operating income | 31.6 | 41.4 | 55.4 | 14.0 | 33.9 |
| Depreciation on long-term investments | -5.1 | -1.0 | 0.0 | -1.0 | .. |
| Group contributions received | 156.7 | 94.1 | 190.7 | 96.6 | 102.6 |
| Group contributions paid | -187.6 | -202.0 | -211.1 | 9.1 | 4.5 |
| Other extraordinary income and expences | -190.7 | -11.4 | -8.9 | -2.5 | -21.9 |
| Total result | -135.3 | 206.5 | 228.4 | 21.9 | 10.6 |
| Increase (-) /decrease (+) in depreciation | -30.6 | -58.3 | -52.3 | -6.0 | .. |
| Change in voluntary reserves, total | 95.7 | 116.9 | 550.8 | 433.9 | .. |
| Adjusted taxes | 0.3 | .. | .. | .. | |
| Profit/loss for the accounting period | -70.2 | 265.4 | 726.9 | 461.5 | 173.9 |
| Key indicators: | |||||
| Operating margin, per cent of turnover | 3.4 | 4.6 | 4.5 | .. | .. |
| Financial result, per cent of turnover | 1.8 | 3.1 | 2.4 | .. | .. |
| Net result, per cent of turnover | 0.4 | 1.7 | 1.0 | .. | .. |
| Total result, per cent of turnover | -0.8 | 1.2 | 1.2 | .. | .. |
| Return on investment | 4.9 | 6.3 | 4.6 | .. | .. |
| Total liabilities/turnover ratio | 61.1 | 51.3 | 44.5 | .. | .. |
| Net liabilities/turnover ratio | 30.4 | 19.9 | 18.1 | .. | .. |
| Liabilities/financial result ratio | 33.4 | 16.4 | 18.3 | .. | .. |
| Equity ratio | 27.1 | 36.7 | 38.6 | .. | .. |
| Net investments in tangible assets, FIM mill. | 311.7 | 227.6 | 206.6 | -21.0 | -9.2 |
| Personnel | 17 761 | 18 508 | 19 733 | 1 225 | 6.6 |
| Balance Sheet total, FIM mill. | 15 886.8 | 15 938.1 | 16 490.8 | 552.7 | 3.5 |
| Proposed dividend distribution, FIM mill. | .. | 82.8 | 178.1 | .. | .. |
| Increase of share capital, FIM mill. | 40.5 | 659.5 | 95.4 | .. | .. |
| Issue profit, FIM mill. | 95.6 | 42.1 | 249.4 | .. | .. |
Source: Financial Statements Statistics, Large Enterprises (Industry and Construction) 1997. Statistics Finland