In 2019, state-run companies reported an aggregate net loss of RON1.8 billion, whereas 2020 brought a return to positive territory, with a total net profit of RON900 million.
The apparent favorable evolution of the net result in nominal terms is seen both at five most profitable state-run companies – net profit growth to RON4.2 billion from RON3.7 billion– and at other companies – a reduction in the aggregate loss to RON3.3 billion from RON5.5 billion, although they continue to be unprofitable, similar to the situation seen in most previous years.
The financial discipline of these companies kept worsening in 2020, which is emphasized by a significant increase in arrears versus 2019 (+33.6%, higher by RON5.6 billion), which was seen mostly at state-owned railway freight carrier CFR Marfa and state-run medical supplier Unifarm.
The total turnover of state-run companies dropped by 11% to RON49.1 billion in 2020. In the private sector, the turnover was nearly 0.8% lower than in 2019, while total revenues contracted by 1%.
In 2020, despite the gross value added (GVA) seeing a positive evolution in the entire economy, it was way below the value recorded in 2019 (+0.7% versus +11.3%) and below the evolution registered by the companies in the private sector (+1.7%).
Also, the weight of the GVA generated by state-run companies in the total economy declined from 8.9% in 2019 to 8.1% in 2020, and the weight of revenues dropped from 3.4% in 2019 to 3.1% in the total economy in 2020.
The total amount of support schemes introduced by the Romanian government against the backdrop of the COVID-19 pandemic reached at least RON8 billion. On lack of these measures, companies’ financial performance would have deteriorated.
The analysis was conducted among 793 companies.