Listed companies will start publishing their annual results on Tuesday

The key word will be modest growth, but the results achieved prior to the recession are a long way away

print this

The tentative recovery of industrial production after the bottom of the recession looks to be the order of the day when companies start publishing their results for 2009. The first company to release its figures on Tuesday is the elevator manufacturer Kone.
      Large listed companies have been extra-cautious with their estimates of the development of their business. Despite the emerging growth, no celebrations are to be expected after the publishing of the Q4 results from 2009.
     
According to Statistics Finland, in November the industrial order books turned upwards for the first time since July 2008.
      Compared with the last quarter of the previous year, at least some of the companies will produce a positive result. Having said that, it is only fair to note that the point of comparison is very low indeed.
      In January-November 2009 Finland’s industrial production slumped to the level of ten years ago.
      So the companies still have a long way to go to reach the output level of early 2008.
     
The economic crisis that started from the American financial market came down hardest on the results of the Finnish exchange-listed companies towards the end of 2008 and the in the first six months of 2009.
      The demand for industrial products was hit most severely. This is because the freezing of the loan market forced the clients of Finnish industrial concerns to cancel or postpone their investments.
      During the recession, the net sales of industrial companies have shrunk exceptionally fast. The companies reacted to the stagnating demand by reducing their expenses, for example, by downsizing and reducing their workforce.
      The inventories where capital was tied up were cleared out, which for its part contributed to the reduction of production.
     
But cutting down expenses cannot go on forever. The businesses have to start increasing their sales again. Hence the financial year’s big question is where the companies have received new orders from and how do they believe they can increase their net sales.
      In Europe and North America the economic growth continues on a shaky basis. But the world’s third largest economy, China, has already managed to restore its economic growth to the level before the recession.
      Already during the third quarter of last year, the results of several large companies started exhibiting faint signs of recovery.
     
On the annual level the results will stay clearly below of those from 2008. This is because of the dramatic reduction in turnover across the board.
      The shortage of financing has added to the problem by reducing companies’ risk-taking.
      During a downward trend even well-established companies incur debts, because their income financing dries up.
     
So far it seems that the teleoperators have survived the recession best.
      Their profitability has remained great. However, the growing unemployment this year could weaken their results as well, if people seek to tighten their already strained belts by reducing their use of mobile phones.


Previously in HS International Edition:
  Balance of trade shows largest deficit since 1991 (3.4.2009)
  Finland faces deep recession this year (25.3.2009)
  Sharp decline in output in November (9.2.2009)
  Finland´s foreign trade balance turns positive again (11.12.2009)
  Finland´s foreign trade headed downwards once more in August (3.11.2009)
  Finnish exports weakened most of all EU members in January to May (18.8.2009)
  Warning! Painful Recovery Ahead (22.2.2009)

See also:
  Slump in industrial output steeper than even during recession of 1990s (11.3.2009)
  It´s official: Finland in recession (2.3.2009)

Helsingin Sanomat