Romania’s Hidroelectrica leads most profitable chart

By Dragana Petrushevska

Romanian state-run hydro power producer Hidroelectrica claimed the top spot in the ranking of the most profitable companies among the SEE TOP 100 entrants for 2019, up three places from a year earlier. Hidroelectrica’s return on revenue stood at 32.27%, down from 44.26% a year earlier. Its performance was largely affected by the reintroduction of a regulated energy market in Romania in early 2019, which made it sell more electricity at a lower price.

Hidroelectrica is 80.06% owned by the Romanian state, as investment fund Fondul Proprietatea owns 19.94%. The planned initial public offering (IPO) of a 10-15% stake in the company is expected to be the biggest in Romania’s history, seen fetching up to 1 billion euro. The company has in its portfolio 209 hydro power plants with a total installed capacity of 6,482 MW. Hidroelectrica has an ambitious 26.04 billion lei investment programme until 2037 featuring plans for new power generation facilities on wind, solar and biomass.

The second place in the ranking was taken by another energy company, Bulgarian nuclear power plant operator AETs Kozloduy, which increased its return on revenue to 24.32% in 2019 from 14.57% in the prior year. In 2019, the plant generated 16,315,212 МWh of electricity, its highest annual production since 2011.

Croatian drug maker Pliva Hrvatska, a new entrant in the SEE TOP 100 ranking, took the third place with a 20% return on profit.

The biggest money-makers ranking was dominated by Romanian companies for yet another year, as they took more than half of the top ten places.

A state-controlled Romanian energy company led the money-losing chart, as well.

The lignite-based electricity producer Complexul Energetic Oltenia (CE Oltenia) held the first position in the ranking for a second year in a row, despite cutting its net loss to 180.6 million euro from 243 million euro booked in 2018. Earlier in 2020, the European Commission approved Romania’s plans to grant a 251 million euro loan to CE Oltenia to meet its liquidity needs and mitigate the risk of insolvency. CE Oltenia has 3.2 gigawatt of capacity and generates close to 25% of electricity in Romania. Romania’s economy ministry holds a 77.17% stake in CE Oltenia, blue-chip investment fund Fondul Proprietatea owns 21.54% and Electrocentrale Grup holds the remainder.

Telekom Romania Communications, another new entrant in the ranking, came in second with a net loss of 166.3 million euro. Impairment losses on technical equipment and machinery, as well as lower customer numbers, affected the company’s balance sheet in 2019.

Rompetrol Rafinare climbed one spot in the ranking to the third place after its net loss widened to 73.8 million euro from 49.4 million euro. The company attributed its negative financial result in 2019 to fluctuations of the refining margin, a depreciation of the Romanian leu against the U.S. dollar and a volatility of quotations on the international market of raw materials and finished petroleum products.

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Most profitable companies is a ranking of the top ten companies with the highest return on revenue in SEE TOP 100. Return on revenue is calculated as net profit divided by total revenue, both in euro terms. To allow comparison, all local currencies have been converted into euro, using the central banks’ official exchange rates on the last working day of 2019 and 2018, respectively. Money losers is a ranking of the ten companies with the most significant losses in SEE TOP 100. To allow comparison, all local currencies have been converted into euro, using the central banks’ official exchange rates on the last working day of 2019 and 2018, respectively.

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