PSI companies expect bonds and loans of €15Bn over the next two years

Large companies like Portugal’s energy supplier EDP and major high-street bank BCP – both of which are listed on the Lisbon Euronext stock market – are expecting bonds and loans of up to €15Bn over the next two years reports online news source ECO.

That said, the 15 companies that make up the main Euronext Lisbon index are expected to close 2024 with another year of record results. The most recent data shows that in the first nine months of the year the profit of the companies that make up the PSI increased by 6%, to almost €4.4Bn.

However, for its shareholders, these results have not resulted in equal record gains, more the contrary. After the PSI offered investors gains of 16% in 2023, the main Euronext Lisbon index is expected to close this year with a much lower performance, reaching a profitability of close to 4% (already considering the dividends distributed).

For 2025, although analysts who follow PSI companies point to a rise of almost 33% in the national stock market index to 8,400 points, no one knows where it will “navigate” the market. Of the few certainties regarding the 15 companies that make up the PSI for next year, its management teams will have to manage the payment of €5.7Bn in bonds and other loans, followed by €9.2Bn in 2026.

According to data collected from Refinitiv, PSI companies will thus face almost €15Bn of bond and securities that will mature between 2025 and 2026, with 85% of this amount consisting of bonds. And among the companies with most bonds and securities are EDP and BCP, which are responsible for more than 75% of the total PSI debt that will mature in the next two years.

Among the 15 companies that make up the PSI, only CTT, Corticeira Amorim and Jerónimo Martins do not have any securities or loans that will mature in 2025 and 2026. However, that doesn’t mean debt management isn’t a priority for their teams.

This is particularly apparent for postal service company CTT, which among the 15 PSI companies has the highest level of indebtedness. At the end of September, Correios had a total debt equivalent to 40.2 times EBITDA. And although analysts anticipate a drop in the company’s debt level next year, CTT’s debt should be set at an amount equal to 30.6 times EBITDA.

According to Refinitiv data, the level of indebtedness of PSI companies measured by the debt/EBITDA ratio was 2.9 times in September this year and is expected to be 2.4 times next year, in average terms.