Profitability and financial performance of Italian real estate companies: quantitative profiles

Abstract

Purpose: This study illustrates the economic and financial dynamics of the sector, analysing the evolution of the main ratios of profitability and financial structure of 1,559 Italian real estate companies divided into the three macro-regions: North, Centre and South, in the period 2011–2020. In this way, it is also possible to verify the responsiveness to the 2020 pandemic crisis. Design/methodology/approach: The analysis uses descriptive statistics tools and the ANOVA method of analysis of variance, supplemented by the Tukey–Kramer test, to identify significant differences between the three Italian macro-regions. Findings: The study shows the increase in profitability after the 2008 crisis, despite its reverberation in the years 2012–2013. The financial structure of companies improved almost everywhere. The pandemic had modest effects on performance. Research limitations/implications: In the future, other indices should be considered to gain a more comprehensive view. This is a quantitative study based on financial statements data that neglects other important economic and social factors. Practical implications: Public policies could use this study for better interventions to support the sector. In addition, internal management can compare their company's performance with the industry average to identify possible improvements. Social implications: The research analyses an economic field that employs a large number of people, especially when considering the construction and real estate services covered by this analysis. Originality/value: The study contributes to the literature by providing a quantitative analysis of industry dynamics, with comparative information that can be deduced from financial statements over the years.