Cyprus CSE-listed profits fell EUR 1 bln in 2008

The combined profits of the listed companies on the Cyprus Stock Exchange fell by a massive EUR 966 mln, or 59% year-on-year to EUR 667.7 mln in 2008, compared to EUR 1.6 bln in 2007, in one of the worst performances ever witnessed in Cyprus.
This may well explain why share prices fell by 80% last year and are off a further 30% from the beginning of 2009 as profits plunge, confidence is shaken and companies are faced with rising costs, leading many to lay off staff and withdraw from markets.
The Financial Mirror survey shows that the Main market sector saw a EUR 341 mln deterioration as the combined profits of the sector fell to EUR 958 mln in 2008 from EUR 1.3 bln in 2007.
The worst overall performance however, was reported in the Investment category which reported a EUR 341 mln loss for 2008 compared to EUR 142 mln profit reported in 2007, with the deterioration at a massive EUR 464 mln.
The profit plunge, which is also being witnessed in all other markets, is forcing investors out of stocks as there is little trust in the figures presented by company CEOs.
The distrust has reached such proportions that the US government has obliged its major banks to pass a “stress test” in order to verify if they can withstand potentially bigger write-offs as asset prices continue to lose in value.
Bank of Cyprus was the most profitable, reporting EUR 502 mln in profits in its P&L account during 2008, followed by Marfin Popular Bank with profits of EUR 395 mln and Hellenic Bank with profits of EUR 33.9 mln. Shareholders’ interests were, however, negatively affected by massive valuation losses reported in the Reserve account, which is why the down pressure on prices continues.
As was expected, the investment companies including Demetra, Interfund, Cytrustees and Elma reported the biggest losses as they lost millions following the decline in equity prices.