DESPITE the negative sentiment that dominated the first quarter of 2003 in an environment of war and recession, 45 percent of Greek companies not only managed to ride the storm, but have displayed substantial improvements in results, particularly in the second quarter.
The half-yearly results of 153 quoted companies, equating to 45 percent of those on the Athens Stock Exchange (ATHEX), showed gains of 8.6 percent in revenues on a consolidated basis and a 33.8 percent increase in profits compared to the first half on 2002. Parent companies displayed a 10.4 percent increase in turnover and 25.3 percent in pretax profits.
"Results were more than satisfactory across a range of sectors. Banking excelled, benefiting from lower interest rates leading to expansion in the lending sector," Andreas Nicolaou, director of portfolio management at Eurolink securities, tells the Athens News. "In particular, the lifting of restrictions on loan limits led to credit expansion that underpinned good banking results," he says. The insurance sector also did well at the end of the second quarter, with further gains expected in the second half of 2003, he adds.
Forward-looking companies are following a Europe-wide trend to cut unprofitable subsidiaries and concentrate on core competencies. Many firms have also improved internal systems so as to cut production costs without damaging sales figures. Low interest rates were a boon, facilitating the restructuring of debts and allowing for a shift from short- to long-term facilities.
The negative global climate and heavy debt leverage of many companies engendered pessimistic forecasts in the early part of 2003. In some cases these proved more than justified. Fishery company Xifias never recovered from its excessive debt burden, and Datamedia was another example of an over-leveraged company that fell into bankruptcy. But others have ridden the storm and survived despite excessive loans.
Undervalued opportunities
At the other end of the spectrum, Nicolaou points to companies such as Frigoglass and Rilken, that not only posted impressive results but are cash-rich and significantly undervalued in terms of market capitalisation. Such players have not attracted much investment yet, offering potential, he says.
Telecoms sector results were good, but OTE let down with an 8 percent drop in pretax profits (see page 33). Among other results out this week, Informer Group on August 29 reported a 33.2 percent increase in its pretax profits in the first half of 2003 to 2.28 million euros from 1.71 million euros in the same period last year. Elbisco Holdings said on August 29 that its pretax profits rose to 903,675 euros in the first half of 2003, from 75,062 euros in the same period last year.
The half-yearly results of 153 quoted companies, equating to 45 percent of those on the Athens Stock Exchange (ATHEX), showed gains of 8.6 percent in revenues on a consolidated basis and a 33.8 percent increase in profits compared to the first half on 2002. Parent companies displayed a 10.4 percent increase in turnover and 25.3 percent in pretax profits.
"Results were more than satisfactory across a range of sectors. Banking excelled, benefiting from lower interest rates leading to expansion in the lending sector," Andreas Nicolaou, director of portfolio management at Eurolink securities, tells the Athens News. "In particular, the lifting of restrictions on loan limits led to credit expansion that underpinned good banking results," he says. The insurance sector also did well at the end of the second quarter, with further gains expected in the second half of 2003, he adds.
Forward-looking companies are following a Europe-wide trend to cut unprofitable subsidiaries and concentrate on core competencies. Many firms have also improved internal systems so as to cut production costs without damaging sales figures. Low interest rates were a boon, facilitating the restructuring of debts and allowing for a shift from short- to long-term facilities.
The negative global climate and heavy debt leverage of many companies engendered pessimistic forecasts in the early part of 2003. In some cases these proved more than justified. Fishery company Xifias never recovered from its excessive debt burden, and Datamedia was another example of an over-leveraged company that fell into bankruptcy. But others have ridden the storm and survived despite excessive loans.
Undervalued opportunities
At the other end of the spectrum, Nicolaou points to companies such as Frigoglass and Rilken, that not only posted impressive results but are cash-rich and significantly undervalued in terms of market capitalisation. Such players have not attracted much investment yet, offering potential, he says.
Telecoms sector results were good, but OTE let down with an 8 percent drop in pretax profits (see page 33). Among other results out this week, Informer Group on August 29 reported a 33.2 percent increase in its pretax profits in the first half of 2003 to 2.28 million euros from 1.71 million euros in the same period last year. Elbisco Holdings said on August 29 that its pretax profits rose to 903,675 euros in the first half of 2003, from 75,062 euros in the same period last year.
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