According to the newspaper, company profits are falling, although from a very high level. In the last quarter of 2023, the net financial result of non-financial companies employing at least 50 people amounted to PLN 43 billion and was 26% higher than last year. lower y/y.
The decline in profits is due to the economic downturn and falling inflation
“It should be noted, however, that even after the decline, the level of profits is still exactly 100 percent higher than the average in the corresponding quarters of 2018-19. This may, of course, be partly due to inflation and the fact that there are more large companies in Poland, but these factors cannot explain the entire change. The net result in relation to revenues amounted to 4.2 percent and was 0.7 percentage points higher than the average in the corresponding quarters of 2018-19. Overall profitability is still high,” reports Puls Biznesu .
According to the newspaper, the decline in profits is due to the economic downturn and falling inflation. “I am not going into the discussion here whether changing margins influence inflation or vice versa – inflation affects margins,” writes the journalist.
“The fact is that in a fog of high inflation, it is easier to raise prices even for companies that do not experience cost pressure. In turn, in an environment of low inflation, it is difficult to raise prices even for companies whose costs are rising. That is why profits were very high in 2021-22, and in 2023 they started to decline. Therefore, profits are falling the most where there is the greatest disinflation, i.e. in industrial processing. In this sector in the fourth quarter of 2023, the total net result was as much as half lower y/y,” the daily notes.
