By Mario Tanev
Chemicals producers in Southeast Europe (SEE) took back the first place in the most profitable industries ranking, ousting the rubber and rubber products manufacturers, which ended second.
Serbian state-run petrochemicals producer HIP Petrohemija marked its entrance into the Top 100 ranking by posting the highest return on revenue among all SEE TOP 100 members, of 53.83%. The company turned to a net profit of 342.5 million euro in 2017 from a net loss of 42.7 million euro the year before as revenue doubled. On average, chemicals makers included in this year’s SEE TOP 100 ranking posted a return on revenue of 20.72% in 2017, up from 4.78% in 2016, leaving all other industries trailing far behind. Members of the sector boosted their revenue by 29%, calculated in local currency, and ended 2017 with a nearly five-fold rise in net profit.
Rubber and rubber products producers slid to second place, as their combined return on revenue declined to 13.17% in 2017 from 15.90% the year before. All three represented rubber industry companies grew their revenue in 2017, however, two of them, both from Romania, saw their net profit contract.
Continental Automotive Products cut its 2017 net profit by 10%, despite a 7% rise in revenue, calculated in local currency, while Michelin Romania more than halved its net profit regardless of a 19% increase in revenue in local currency. However, another new entrant from Serbia – Tigar Tyres, claimed the ninth place in terms of return on revenue among all 100 members of the ranking, with a ratio of 14.28%.
The pharmaceutical sector also lost one place, ranking third, with a return on revenue of 10.88%, compared to 9.46% in 2016. Slovenian drug maker Krka and Lek accounted for the improved profitability, posting double-digit rises in net profit of 49% and 11%, respectively. Krka posted return on revenue of 12.51% in 2017, while Lek’s revenue return stood at 8.62%.
Telcos grabbed the fourth place with a 7.38% return on revenue in 2017, which compared to 7.91% a year earlier. The sector managed to increase its net profit in 2017 by a slim 2.95%, however, the profit growth rate was outpaced by the rise in revenue.
Oil and gas companies wrapped up the top five, posting a 5.99% return on revenue in 2017, notably higher than the 3.63% achieved in 2016. Romgaz posted the highest revenue return, of 37.06%, making it the third most profitable company in this year’s edition of the SEE TOP 100 ranking.
JP Srbijagas and Croatia’s INA were the major contributors to the sector’s increased profitability in comparison to 2016, as their net profit skyrocketed following rises in revenue of around 20%. JP Srbijagas expanded its net profit to 141.6 million euro, over seven times higher than in 2016, and posted a return on revenue of 18.64% – the second highest among industry members in this edition of the ranking, up from 2.87% in 2016. Ina boosted its net profit nine times, pumping up its return on revenue to 7.78% in 2017, which compares to 1.06% in 2016.
Wholesaleand retail was the only sector to book a loss – of a net 8.3 million euro – following the financial crisis at Croatian concern Agrokor.
Two Agrokor units – Croatia’s Konzum and Slovenia’s Poslovni Sistem Mercator, posted massive net losses of 525.2 million euro and 203.7 million euro, respectively, dragging the whole sector in the red.
The SEE industrial ranking pools together the revenue generated by all companies in SEE TOP 100 and ranks sectors by cumulative revenue. Year-on-year changes in the sectors’ total revenue have been calculated using the figures in euro. The comparative figures for 2016 are revised to allow a fair comparison. The sub-ranking of the industries with the highest return on revenue was calculated by dividing the cumulative net profit/loss within each industry by the cumulative revenue. We have based our rankings on an industry classification which treats filling station operators and gas trading/distribution companies as Petroleum/Natural Gas companies, pharmacies and pharmaceutical distributors as Wholesale/Retail, and automotive and car parts manufacturers, and sellers as Automobiles.