The chemicals industry took the gold in the ranking of the most profitable industries in Southeast Europe (SEE) with an impressive 31.5% return on revenue thanks to a large state debt write-off at Romania's insolvent Oltchim. The move, which turned Oltchim's debts into income, helping it achieve a 72.8% revenue return, is being probed by the European Commission for possible illegal state aid. Moreover, the sector is represented by only two of the Top 100 SEE companies, the second one being the Macedonian unit of UK-based Johnson Matthey, making any conclusions somewhat tentative. In 2015, chemicals was the sixth most profitable industry with a 6% return.
Last year's winner, the rubber industry, represented by two Romanian tyre makers, ranked second with an increase in return on revenue to 15.5% from 14.2%. German-owned Continental Automotive Products boosted its return to 24.6% from 21.5%, while that of French-owned Michelin fell to 3.4% from 5%.
The pharma sector retained its bronze medal despite a decline in return on revenue to 11.1% from 11.7% a year earlier. The slight decrease was caused by Croatia's Pliva plunge in revenue return to 4.3% from 15.4%, which was not offset by the good results of Slovenia's Lek and Krka. Furniture industry with a single entrant – the Romanian unit of Austria's Holzindustrie Schweighofer - came in fourth in this year's edition, as the company's profitability declined for the third straight year. Construction ranked fifth with a 1.34 pps fall in return, reflecting the deteriorating performance of its only representative - Romanian public roads authority, CNADNR. The 2.1 pps drop in the profitability of the telecoms sector, represented by seven operators, was caused by the worse results of Telekom Romania Mobile - a unit of Greece's OTE, the Romanian unit of French-owned Orange, Telekom Srbija and Hrvatski Telekom – a unit of Deutsche Telekom.
At the bottom of the table, the all-Romanian agriculture and transportation sectors recorded negative return on revenue. Agriculture, represented by the units of U.S. conglomerates ADM and Cargill, and of Swissbased Ameropa, booked a combined net loss of 17.8 million euro in 2015, nearly four times bigger than in 2014. The transportation sector, represented by state railway carrier CFR, its passenger transport division CFR Calatori, and Daewoo-Mangalia Heavy Industries, cut its loss by 41% to 82.6 million euro.
Oil and gas companies continue to dominate the Top 100 SEE 2016 ranking but their number fell to 24 from 27 a year earlier. The global oil price slump resulted in an 11.6% drop in their combined revenue and an 8.8% decline in their net profit.
The second biggest industry by revenue in SEE is wholesale and retail, trailed by electricity. The ranking comprised 20 retail chains, 12 of them in Romania. Their combined revenue increased by 14%, whereas net profit more than doubled. Revenue generated by the 16 electricity companies in the 2016 list rose 5.5% last year but their combined net profit more than halved.