Results of non-financial corporations in 2017 and in the first three quarters of 2018

Central Balance Sheet Data Office Annual and Quarterly Survey data point to a continuation of the recovery in non-financial corporations’ activity, both in 2017 and in the first nine months of 2018, giving rise to growth in ordinary profit and employment in the majority of sectors and firms. As a result of the good corporate earnings performance, rates of return rose in both periods and the spread over the cost of borrowing continued to widen. Extraordinary costs and revenue had a negative impact on net profit in 2017; however, in the first nine months of 2018 the impact was positive, resulting in very strong net profit growth in the period. Average debt ratios continued to decline in 2017, while in the first three quarters of 2018 the debt-to-asset ratio rose slightly and the debt-toordinary income ratio was practically unchanged. Lastly, the debt burden ratio fell in both periods, driven in particular by the lower cost of borrowing. The article includes two boxes analysing the recent economic and financial performance of Spanish SMEs and consolidated groups, respectively, on data up to 2017.