Profit-making companies among Turkey’s top 500 firms declined from 381 to 422 in 2018 while loss-making companies increased from 78 to 119, the Istanbul Chamber of Industry’s (ISO) 2018 report shows.
According to the ISO report titled Turkey’s Top 500 Industrial Enterprises-2018, 500 companies’ net sales increased by 34.5 percent in 2018 and reached to 878 billion lira.
The rise in net sales, price increases and the rise in foreign exchange are important factors which help export revenues, the ISO report said.
The Turkish Petroleum Refineries Corporation (Tupras) recorded the highest net sales with 79 billion dollars in 2019. According to the report, the biggest challenge for the large companies is access to finance and has not made any progress towards the problem which has become chronic.
The share of the operating expenses of top 500 companies rose from 49.8 percent to 88.9 percent in 2018 and industrial firms allocated almost all of their 2018 profit to financial expenses, ISO’s data shows.
The increase in interest rates in the second half of the year and the high inflation due to the depreciation of the lira created negative financial conditions for the 500 companies.
In debt-to-equity ratio, the share of debts increased to 67 percent which historically represents the most unfavorable resource structure, the report mentioned. 500 companies’ deferred VAT increased by 35.6 percent and reached 9.7 billion lira, the report said.
The Turkish online news site Diken commented that in such an environment where funding sources are so limited, the industrialist lends such a significant amount to the state with zero interest.