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Riding high on expanding economy, Spain’s Ibex firms hike profits 16% in 2017

Santander, BBVA and other companies increased revenues and reduced debt levels as national output reached 3.1%

The Madrid stock exchange.
The Madrid stock exchange. EFE

With an economy that’s been growing for 17 consecutive quarters (see side box), businesses in Spain have made the most of it by reducing their debt levels – or “deleveraging” – and improving their margins.

Accumulated profit for 34 of the 35 companies listed on the Ibex 35 (Inditex, the parent company of Zara, ends its fiscal year two months later) reached €40.1 billion in 2017, a 16.26% rise from the previous year.

Santander, the eurozone’s largest bank by market capitalization, topped the profit chart

And these large companies also earned 7.6% more than in 2016, achieving revenues of nearly €474.2 billion. To put this figure in perspective, it is the same as the entire expenditure of all of Spain’s public agencies put together.

The collective rise in profit reflects a corporate policy of cost adjustment and margin optimization in recent years.

The figures were compiled by the Spanish securities watchdog, the Comisión Nacional del Mercado de Valores (CNMV).

Santander, at the top

Santander, the eurozone’s largest bank by market capitalization, topped the Ibex 35’s net profit chart with €6.6 billion, up 6.68% from 2016. But ArcelorMittal posted the biggest revenue, at just over €56 billion.

Other top performers include the lender BBVA, which made a profit of €3.5 billion, and Telefónica (€3.1 billion). Acerinox posted the largest profit increase of all (191.5%) to reach €234 million. Meanwhile, ArcelorMittal and the real estate group Colonial grew their revenues by 156% and 149%, respectively.

At the bottom of the list are the engineering firm Técnicas Reunidas and the supermarket chain Dia, whose profits fell 69.3% and 37% respectively last year.

GDP grew 3.1% in 2017

EL PAÍS

The Spanish economy ended 2017 with growth of 3.1%, according to figures released on Thursday by the National Statistics Institute (INE). Growth experienced a slight slowdown in the last quarter, coming in at 0.7%, one-tenth of a point lower than in the July-September period. Domestic demand was the main driver of this growth in the last three months of the year, whereas exports lost some of their strength. Spain’s GDP was nearly €1.2 trillion, a historic high after four consecutive years of growth.

English version by Susana Urra.

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