Serbian companies lift transport, metals to top of most profitable industries ranking

By Mario Tanev

The transport sector soared seven places to the top of this year’s edition of the profitability ranking of Southeast Europe’s industries, mainly backed by a new entrant to the SEE TOP 100 list – Serbia’s Aerodrom Nikola Tesla.

The majority state-owned company whose main asset is Belgrade Airport, joined this year’s SEE TOP 100 ranking at 95th place with revenue of 592.7 million euro. Despite ranking low in terms of revenue, Aerodrom Nikola Tesla posted the third biggest profit among the 100 companies –451.1 million euro. This translated into an impressive return on revenue of 76.11% – the best among all members of the SEE TOP 100 ranking.

The company’s financial performance benefited heavily from a large upfront payment by France’s Vinci Airports, which won a 25-year concession contract to run Belgrade Airport in March 2018. As part of the deal, Vinci Airports agreed to pay 501 million euro for the concession.

The metals sector claimed the second place in terms of return on revenue, backed by another Serbian company.

Serbia Zijin Bor Copper booked the second highest return on revenue among all companies in the ranking, of 58.06%. The company also posted the second highest profit among the top companies in the region in 2018, of 764.2 million euro.

The copper mining and smelting company, previously named RTB Bor, was taken over by Chinese giant Zijin Mining Group in 2018, which subsequently
injected $350 million in the company’s capital. The Chinese owner pledged to invest $1.26 billion to improve the production operations of RTB Bor, open new mines and increase efficiency.

The top three group was wrapped up by the pharmaceutical sector, which retained its place from the last year’s edition of the ranking. The sector was represented by two Slovenian members of the SEE TOP 100 – Krka and Lek. The larger of the two – Krka, also posted a better return on revenue – 13.22%, compared to 10.70% recorded by Lek. The telecommunications sector also kept its place, ranking fourth. The average profitability of telecommunications companies in the SEE TOP 100 ranking was positively affected by Croatian heavyweight Hrvatski Telekom and Telekom Srbija, which posted return on revenue of 16.0% and 11.0%, respectively.

At the other end of the ranking were Romanian telecommunications companies, which recorded below-average profitability. Orange Romania posted the lower return-on-revenue among the telecommunications companies in the ranking, of 3.28%. Two more Romanian companies – RCS & RDS and Vodafone Romania, followed with ratios of 3.72% and 4.49%.

The chemicals sector, which led last year’s edition of the ranking, sunk to fifth place, largely hurt by the dropping of Serbian state-run petrochemicals producer HIP Petrohemija. The sector’s return on revenue fell to 5.58% from 20.72% in the previous edition of the ranking.

The chemicals sector has a single representative in this year’s edition of the SEE TOP 100 ranking – North Macedonia’s Johnson Matthey. The sector’s performance in the 2018 edition of the ranking was heavily backed by HIP Petrohemija, which posted the highest return on revenue, 53.83%.