TODAY’S – Debt of ‘Second Top 500’ surges to TL 44 bln

Debt of ‘Second Top 500′ surges to TL 44 blnThe total debt of Turkey’s second 500 largest firms had grown by 28.5 percent to TL 44 billion as of the end of last year, according to a study released yesterday by the Istanbul Chamber of Industry (ISO).

The ISO Second 500 Largest Industrial Firms study concerns the second half of Turkey’s largest 1,000 firms, those ranked 501 to 1,000. While overall sales among these firms rose 13.

4 percent on a year-to-year basis in 2013, profits plummeted 30.2 percent due to foreign exchange rates aerse to the Turkish liraOverall debt among the 500 companies shot up 28.

5 percent last year and long-term debt, in particular, skyrocketed with a 61.8 percent increase.

The three largest companies in this group are Gamateks Tekstil, a textile company, Karadeniz InIaat ve Beton Sanayi, a construction firm and cement producer, and Teksut Sut Mamulleri, a dairy product manufacturer All three companies posted revenues of around TL 187 million last yearThe second 500 largest firms experienced a year characterized by high operating costs in 2013, amounting to TL 27 billion, fully half of the TL 54 billion in operating profits.The number of companies turning a profit last year fell from 417 to 377, while those reporting losses rose from 83 to 123, a 48 percent increase, the highest number of companies posting losses in a 10-year period.

ISO President Erdal BahIvan noted that these companies hold debt amounting to 60 percent of their total wealth, adding that small and medium-sized companies are in a “spiral of debt.”On a positive note, the ISO pointed out that exports among the second 500 industrial firms rose 37 percent and total employment among the companies rose 64 percent.

The financial outlook for the top 500 industrial firms was similar in terms of rising debt. ISO announced last month that the debt held by these firms had risen to 57 percent of their total assets by the end of last year The total debt accrued by these firms rose from TL 190 billion in 2012 to TL 238 billion last year BahIvan said last month that these companies were not producing enough and that the strong position of Turkey’s industrial sector had significantly diminished in the past 15 years, accounting for only 15 percent of total gross domestic product (GDP) in 2013.

He said the companies needed to develop a production-oriented model in order to achieve sustainable growth.TuPRAI, Turkey’s sole oil refinery, ranked as the number one industrial firm in 2013, followed by Ford Otosan, an automotive manufacturer owned by Ford and Ko Holding.

The Electricity Generation Holding Company (EuAI), a state-owned firm, rounded out the top three. Several other Ko firms also held spots in the top 10.

SOURCE: Today’s Zaman