Oltchim tops SEE money makers, HSE paces losers
Romanian chemicals producer Oltchim, which was declared insolvent in January 2013, emerged as a surprising winner of this year's edition of the SEE Most Profitable companies ranking after swinging into profit for the first time in seven years thanks to debt write-offs. The plant, which has been undergoing a reorganisation process, posted a net profit of 507 million euro for 2015, reversing a loss of 102.5 million euro a year earlier, while its revenue jumped nearly fivefold to 697 million euro. Hence, its main profitability indicator, return on revenue, switched to 73% in 2015 from a negative 70% in 2014. Majority state-owned Oltchim, the only producer in Central Europe of liquid caustic soda and the only producer in Romania of chlorine and polyether polyols, launched in August an asset sale auction process, hoping to choose investors by the end of 2016. At the same time, the European Commission has been investigating whether the financial aid the company got from the state in the form of debt write-offs and continued supplies by state-owned enterprises was in line with EU regulations.
Romania accounted for half of the top 10 profit makers in SEE, including the first four. State-owned hydropower producer Hidroelectrica and Continental Automotive Products, part of the German tyre manufacturer, retained their second and fourth positions, respectively, while last year's top earner, gas producer Romgaz, slipped to third place.
Croatia had two entrants in the ranking power utility Hrvatska Elektroprivreda (HEP), a newcomer at no. 5 thanks to an improvement in return on revenue by 6.5 pps, and Hrvatski Telekom at no. 7. The telco booked a drop in return on revenue by 3.3 pps, which allowed its Serbian peer Telekom Srbija to overtake it with a smaller, 1.31 pps, decline.
Slovenia also had two representatives, both of them drug makers as well as newcomers – Lek at no. 8 and Krka at no. 9 with improvement in return on revenue by 4 pps and 0.8 pps, respectively.
Looking at the ownership structure, half of the top 10 money makers are state-controlled, whereas three are units of major inter-
Among the 10 biggest money losers, we have four electricity companies, all of them stateowned, and three privately-owned oil and gas firms, underlining the devastating effect of the global drop in resource prices on SEE and the urgent need of restructuring in those sectors.
The most prominent money loser was Slovenia's top power producer Holding Slovenske Elektrarne (HSE), which turned to a 323 million euro loss in 2015 due to impairments, unfavourable hydrologic factors and lower electricity
prices. It was followed by Romanian peer Complexul Energetic Oltenia, which saw its loss widen 37% last year, and the region's major oil and gas groups - Croatia's INA and Romania's OMV Petrom, which were badly hurt by the oil price slump.
Romania had three other entrants in the losers' ranking, bringing its total number to five, followed by Bulgaria, which was represented by its heavily-indebted power utility NEK and Lukoil's local refinery. Serbia also made it to the disreputable ranking with power supplier EPS Snabdevanje.