Phenomenal revenue growth of 38% and tripling profits. These are the results of the 100 largest companies in Bulgaria in 2021. Such figures are unheard of in the last two decades. Part of this growth is due to the recovery from the pandemic, but the big driver has been the rise in electricity, gas, metals and grain prices, which has accelerated and spilled over to all sectors.
This strange year also shuffled the leaders. For the second year in a row, the champion is the Aurubis copper plant in Pirdop. But the surprise runners-up are the state-owned National Electric Company (NEK) and the Ruse biodiesel refinery Astra Bioplant. Notably, for the first time in the 16-year history of the Capital 100 ranking, Russia's Lukoil does not figure in the leading trio.
The other unprecedented achievement is the profit of the state-owned nuclear power plant - Kozloduy NPP, which recorded a BGN 890 million profit margin, an absolute record for a Bulgarian company. This figure has already been exceeded by the first half of 2022, when profit hit BGN 1.7 billion. The forecast is that the "money machine" in Kozloduy will end the year with an incredible BGN 3-4 billion in profit.
The numbers that matter
In this strong year for local giants, their results outperform by a significant margin the average score of the economy. This is the benchmark: 4.2% GDP growth in 2021, average annual inflation of 3.3% and BGN 68 billion worth of exports of Bulgarian goods (24% growth). The Capital 100 companies are performing much better than average, as the comparisons and indicators of the ranking show:
- 15% is the growth of the total revenues of Bulgarian companies according to the data from tax returns, while members of the top 100 list register 38% growth. For companies with more than BGN 100 million in revenues in the ranking (top 300) the average growth drops slightly to 32%, but it is again double the average for all companies.
- One-fifth of the revenues of all 360,000+ active companies in the country are produced by the top 100 companies. In value terms, the figures are BGN 93 billion in turnover for the top 100 and BGN 456 billion for all companies cumulatively. This is an unprecedented concentration and it is growing.
- BGN 7.1 billion is the net profit of the 100 largest companies, which is three times better than the BGN 2.7 billion reported in 2020.
- 7.6% is the profitability of the Capital 100 firms' earnings, compared to 3.9% reported last year. Even in the strong pre-recession year, the net average margin was 4.6%.
- BGN 37 billion is the total reported profit of all companies in the country, which again shows that a fifth of the result is attributable to the hundred companies in the ranking.
- Twelve companies in the top 100 ended the fiscal year with a loss, but it is significant only for one company - the state-owned Maritsa-East 2 thermal power plant (BGN 137 million). Total accumulated loss by all 12 is BGN 280 million, down from 1 billion in 2020.
- BGN 133 billion are the total revenues of the 300 largest companies. The figure is exactly the same as the entire gross domestic product for 2021 - BGN 133 billion.
- 48 of the companies in the top 100 have foreign owners. A year ago, the number was 52, with the reduction coming from the acquisition of CEZ by Eurohold.
- 20 companies have revenues of over BGN 1 billion. This is an absolute record - by comparison, in 2020, only 15 companies had such a turnover.
Some highlights: Energy, grains, metals and more
Of the large companies growing in 2021, one group broke all records - energy producers and traders. A record number (23) of companies from this sector fall in the Capital top 100 ranking, with a whopping BGN 25 billion in revenues, or 27% of the top 100 revenues, up from 17% last year.
In the second echelon, turnover hits new ceilings in agriculture (50% increase), more than 30% in metals and almost 25% in fuels. In this trio as well it is rising global prices that are the main drivers of growth, but there is also an increase in volumes recorded.
In the middle of the top 100 ranking are K100's traditional champions - machinery and equipment plants and software companies, which are reporting growths of around 20%. Here, less of the growth is inflationary; rather, the reason is increased orders from Western partners. At the bottom of the sectoral growth ranking with single-digits, but still good levels of growth, stand pharmaceuticals, construction and the most modestly performing sector of garment factories.
The Ten Giants
Bulgaria's top giant for the second time is copper mining company Aurubis. Its revenues reached an unprecedented level - BGN 6.6 billion, or more than the entire healthcare budget of the state. The vice-champion for the first time is the state-owned NEK, which overtakes the permanent champion Lukoil Neftochim (now down to 16th place) due to skyrocketing electricity prices.
The big surprise this year is Astra Bioplant, which holds the bronze. The Ruse-based biodiesel refinery is not very popular as it mainly works for export. High vegetable oil prices and increased demand after the pandemic literally doubled revenues to BGN 3.3 billion. The top ten also accommodated energy and fuel companies, including state-owned Kozloduy NPP and Bulgargas. The only industrial factory in the group is Portuguese glass bottle manufacturer B.E. Glass. The top ten is rounded out by the two largest food and FMCG retailers, Kaufland and Lidl, both part of the German Schwarz group.
52 of the companies in the top 100 are based in Sofia, and there are eight more in Sofia-region. The regions with the most representatives in the ranking are Plovdiv with 10, Varna with 6 and Stara Zagora with 5.
The first half of this year has been unique - Europe is at war and energy prices are on a sustained high trajectory with no immediate prospect of normalization. In this environment, Bulgaria is coping - exports of electricity, vegetable oils and fuels, and arms are at unprecedented levels. Machinery, auto parts and electronics plants are booming. Unemployment is falling, banks are also lending at record levels. But there are enough reasons to worry, too - inflation for the first half of the year has hit 17%, interest rates on loans will start to rise, the war in Ukraine continues and there is political uncertainty.
Various institutions have been lowering their GDP growth predictions, but they still expect at least 2-3% growth. However, deterioration in the leading economies of the US, China and Western Europe could quickly reverse Bulgaria's direction, too. The responses in the Capital survey of large companies have been optimistic, foreseeing average revenue growth of 18%. Only 3 out of 34 companies expect a contraction in business.