Double-digit growth in first semester of this year for the net profits of Italian banks and non-financial companies listed on the Milan Stock Exchange, a slight decrease in the profits of listed insurance companies and a decidedly more marked decrease in the profits of companies traded on EGM, the unregulated market dedicated to small and medium-sized enterprises. This is what emerges from the last one CONSOB statistical bulletinwhich focused on the performance of Italian issuers listed or traded in Milan during the first half of 2024 compared to the same period of 2023. Overall, the data highlights a “sustained recovery in some sectors of the Italian stock market, while others show critical issues to be monitored in the coming months”, underlines the Authority.
Companies on the regulated market
Companies under Italian law other than banks and insurance companies listed on the main stock market (Euronext Milan, EXM) have reported profits of 15.7 billion euros in the first half of 2024, up 20.3% compared to the same period in 2023. This result is mainly attributable to an improvement in added value determined by the reduction in operating costs (23.3 billion), greater than the decline in turnover (16.3 billion). As of June 30, 2024, net assets reached 258.5 billion euros, recording an increase of 3% compared to the end of 2023.
Looking at the indices, the operating profitability showed signs of improvementas evidenced by the increase in the EBITDA Margin, which went from 14.6% in 2022 to 21.5% in the first half of 2024. The Debt to Equity ratio decreased from 159.2% in 2022 to 141.7% in 2024, indicating more prudent financial management and less reliance on debt. However, the Interest Coverage Ratio suffered a significant decrease, falling from 865.1% in 2022 to 330.7% in 2024, suggesting a growing impact of debt costs, related to the ECB’s rate hike cycle.
The Euronext Growth Milan market
The companies under Italian law traded on the EGM growth stock market have, however, recorded profits of 106 million euros, down 61% compared to the first half of 2023. This deterioration is linked to the worsening of non-operating and financial activities, which produced overall losses of 847 million euros, compared to 773 million the previous year. Despite this, the net worth of these companies rose to 4.9 billion euros, marking an increase of 1% compared to the end of 2023.
Small-cap companies have suffered a decline in profitability, as highlighted by the indices, with ROE decreasing from 10.7% in 2022 to 4.3% in H1 2024 and EBITDA Margin falling to 11.9% . These trends highlight margin pressures and slowing profit generation. Despite this, Debt to Equity remained stable (67%), demonstrating a prudent debt management. The Interest Coverage Ratio, although decreasing compared to 2022 (1218%), remains at reassuring levels (530% in 2024), guaranteeing solidity in the coverage of interest expenses.
The banks
The Italian banks listed on EXM have reported profits of 14.9 billion euros, up 11% compared to the first half of 2023. This positive result is due to the increase in net interest (2.4 billion) higher than the increase in net commissions (1.1 billion). Net worth remained essentially stable, standing at 192.3 billion euros compared to 191.7 billion euros at the end of 2023.
From the indices it is possible to appreciate that the banking sector shows robust growth in profitability: the ROE went from 8.7% in 2022 to 15.5% in 2024, while the ROA grew from 0.6% to 1, 2% in the same period. Operational efficiency improved significantly, with the Cost to Income ratio falling from 68.2% in 2022 to 52.8% in 2024, signaling a better ability to control costs relative to revenues. Net Interest Margin increased to 2.2%, reflecting a higher interest rate environment. There asset quality improvedwith the Cost of Risk decreasing to 0.21%, indicating a lower incidence of credit losses and confirming prudent risk management, which strengthens capital solidity and the ability to face adverse macroeconomic dynamics.
Insurance
Italian insurance companies listed on EXM have registered profits of 2.9 billion euros, down 3% compared to the first half of 2023. The sector was affected by the increase in costs related to claims and expenses (5.1 billion euros), which exceeded the increased revenues from operating activities (+4.8 billion euros). Net assets remained stable at 41 billion euros as of June 30, 2024, in line with the end-2023 figure.
Observing the profitability indices, it emerges that insurance companies have recorded a significant improvement, with the ROE going from 8.6% in 2022 to 13.9% in the first half of 2024 and the ROA rising from 0.6% to 0.9 % in the same period. Particularly relevant is the recovery of investment returnswhich went from a negative value (-1.8% in 2022) to a solid 5.2% in 2024, signaling more effective management of the investment portfolio. The Leverage Ratio decreased compared to 2022 (14.64 versus 15.16), indicating a more balanced capital structure and greater ability to withstand market shocks.
