The most dynamic SEE companies in 2022: Energy rush

The energy sector completely took over the ranking of the fastest growing companies in Southeastern Europe (SEE) last year as the global energy crisis triggered by the Russia-Ukraine war propelled electricity and gas prices to record highs. The most dynamic companies in SEE by revenue in 2022 were seven energy traders, a thermal power plant, an oil refiner and a biodiesel producer.In comparison, a year earlier the ranking also included transportation, wholesale companies, and a steel producer.

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Energy companies fuel revenuerev-up in SEE TOP 100 ranking

In a year marked by Russia’s invasion of Ukraine – the biggest attack on a European country since WWII – traditional geopolitical alignments and economic trajectories were thrown off kilter, not least in front-line Southeast European states, whose energy sectors had historically been heavily dependent on Russia. With energy security and diversification taking precedence, it comes as no surprise that 2022 was a blockbuster year for petroleum and natural gas, and electricity companies.

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Energy companies swing between highs and lows

Extreme volatility on the energy markets in 2022 impacted industry players in different ways, pushing some to the top spots of the most profitable companies ranking in SEE and burdening others with substantial losses. For metal producing companies, however, the economic recovery and global shift to green energy is all good news as demand for their output surges

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Top SEE insurers’ premium growth slows down

The gross written premiums (GWP) of the top insurers in Southeast Europe continued to expand, though at a slower pace than a year earlier amid high inflation, a slowdown in economic activity and geopolitical uncertainties. Profit growth too decelerated, following a robust double-digit increase a year earlier. Nevertheless, the sector remained stable and resilient.

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SEE top insurers book double-digit growth in profit, GWP

The top one hundred insurers in Southeastern Europe (SEE) saw both their net profit and gross written premiums (GWP) grow in double digits in 2021, despite persisting challenges related to the coronavirus crisis and low interest rates. Their combined net profit rose by 26% to 599 million euro in 2021, from 475 million euro in 2020 and 497 million euro in 2019, outpacing the increase in GWP. Only eight of the top insurers closed the year in the red, while 38 recorded a decline in profits. In 2021, SEE’s biggest insurers registered 9.675 billion euro in GWP, 11.65% higher on the year and above the 8.8 billion-euro levels registered by the entrants in the ranking in 2019. Just nine insurers reported a decline in their GWPs in 2021.

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Facilitating access to financing remains our objective

The geopolitical tensions do not affect Banca Transilavania’s operations, considering that we are not present on the neighbouring market and that the Romanian banking system is not directly exposed to risks associated with the conflict in Ukraine. Of course, there is an impact when it comes to payables and receivables with the Russian Federation, as we must respect EU regulations pertaining to international sanctions but we try to responsibly manage the situation in such a way so that the effect on our customers is minimal. As for risk costs, they will increase, but not necessarily as a direct result of the situation in Ukraine, as there are cumulative recession signals coming from the U.S. and the Euro zone. In line with the requirements of the European Central Bank, credit risk management is a priority for us, together with the governance and the solidity of our business model.

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Investing in common good, providing support where it is most needed

Adapting to the newly created conditions that influenced the implementation of some of its plans and ideas, Halkbank AD Skopje managed to achieve the goals set at the beginning of 2021 and showed excellent business results from operations.
In 2021, Halkbank AD Skopje reported credit growth of 12% and 10% increase of the deposit base. The credit support that the Bank provides to businesses in the country is reflected in the 18% increase in loans to legal entities, i.e. loans to small businesses. When it comes to loan products for households, the Bank registered an increase in housing loans of 25% compared to 2020. On the basis of the stated results, Halkbank booked 10.6 million euro profit in 2021, an annual increase of 18%. Its assets amounted to 1.182 million euro at the end of the year, which is an increase of 9% compared to 2020.

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2021: SEE TOP 100 companies shake off pandemic gloom

As governments lifted pandemic-related restrictions and domestic demand started to recover, companies in Southeast Europe (SEE) closed 2021 with better-than-expected financial results. The top one hundred companies in the region posted a solid rise in sales and a remarkable growth in profits, exceeding the pre-crisis levels. The economic rebound benefitted most the companies operating in the oil and gas, electricity and metals sectors as demand for raw materials and energy jumped. At the same time, lingering supply chain disruptions continued to curb production in various sectors. In particular, for manufacturers of automobiles and car parts, traditionally among the top performers in the region, shortages of semi-conductors remained a pressing issue.

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SEE biggest lenders bounce back from Covid 19

As social life returned to normalcy and economic activity picked up, banks in Southeast Europe saw their profits rise and their assets expand on the back of sustained growth in both lending and deposits. Like their global peers, the local lenders continued to play a major role in the redistribution of massive resources aimed to cushion the blow of the Covid-19 pandemic on businesses and clients. At the same time, pressure on interest margins and changing consumer habits strengthened the banks’ focus on efficiency and digitalisation. M&A deals picked up, with most of the action taking place in Serbia.

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ADM Romania Trading leads fastest growing companies ranking

Riding the wave of surging food prices, Romanian transportation and wholesale company ADM Romania Trading, a newcomer in SEE TOP 100, was the fastest growing company in the 2021 ranking. Due to global harvest issues, food commodity prices were already at a ten-year high even before the war in Ukraine started, according to the United Nations Food Prices Index. For ADM Romania Trading, this meant an almost 19 times (1,766%) increase in its revenue last year, to 809.7 million euro.

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We will transition to service-oriented business model

Based on strategic starting points and last year’s macroeconomic forecasts for 2022, the Triglav Group plans a profit before tax of 120–130 million euro and an increase in total written premium to more than 1.4 billion euro; however, due to the growth of the insurance portfolio and other factors, we also expect an increased volume of claims paid. The combined ratio is expected to remain favourable below 93%. Due to the low interest rates at which our investments were reinvested in the previous financial year, we anticipated a further decline in rates of return on investment, excluding unit-linked assets. We estimate that the planned annual profit will be achieved; however, it should be stressed that the risks related to the realisation of target profit increased significantly due to negative influences from the business environment.

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Pharma remains SEE’s most profitable sector

Throughout a year marked by sporadic but enduring pandemic breakouts, the pharmaceutical industry in Southeast Europe, represented in the SEE Top 100 ranking by two companies, retained its leading profitability standing with a double-digit return on revenue (RoR). This indicator, however, eased to 14.46% in 2021 from 15.42% in 2020, after Slovenia’s Krka booked a 4.8% drop in revenue to 1.4 billion euro.

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Bottomlines under more pressure as competition intensifies

The slow recovery in the European Union, Southeast Europe’s (SEE) main trading partner, the sluggish prospects facing nearly all economies in the region and shrunken domestic demand all left their mark on corporate bottomlines in 2013. At the same time, long overdue structural reforms, fiscal and regulatory volatility and poor infrastructure continued to be a drag on local businesses. Against this backdrop, the performance of the companies in the SEE TOP 100 ranking was expectedly lackluster – their combined revenues in 2013 were flattish, with nearly half of the entrants seeing a decline in their revenues.

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OMV Petrom: Volatile tax environment, low demand affect business

With activities in exploration and production, gas and power, and refining and marketing, the OMV Petrom Group has proven oil and gas reserves of approximately 775 million barrels of oil equivalent in Romania and Kazakhstan, a maximum annual refining capacity of 4.2 million tonnes, a network of around 800 filling stations in Romania, Moldova, Bulgaria and Serbia, a 860 megawatt (MW) gas fired power plant and a 45 MW wind park. OMV Petrom was acquired by Austria’s OMV in 2004 in the largest privatisation deal Romania had seen up to that point. OMV owns 51% of the company.