The biggest companies in 2020: New model, new champion

Aurubis

The biggest companies in 2020: New model, new champion

Bulgaria’s biggest companies were only mildly hit by the coronavirus. Total revenue of the top 100 firms decreased by just 7% in 2020.

Aurubis

© Aurubis


  • Bulgaria's biggest companies were only mildly hit by the coronavirus. Total revenue of the top 100 firms decreased by just 7% in 2020.
  • For the first time, Aurubis replaced Lukoil Neftochim Burgas as the biggest firm in the country in terms of turnover.
  • Data shows that the state's role in the economy is increasing, while state-owned enterprises report significant losses.


Last year brought a shock to every company. The coronavirus pandemic affected everyone but the negative effect on big business was relatively mild. The top 100 firms by revenue in Bulgaria reported an average drop in turnover of 6.8% in 2020. For comparison, in the aftermath of the global financial crisis in 2009 the revenues of the biggest firms shrank by close to 17%. The coronavirus's impact on medium-sized enterprises was even milder: the turnover of the top 300 firms with revenues surpassing 100 million levs (each?) decreased by less than 5% on average.

When we look at the performance of of all of the 357,000 firms in Bulgaria in 2020, the situation is even less dire. True, GDP decreased by 42% last year but the combined turnover of those firms increased by 4%, nearing the record-breaking sum of 400 billion levs (204.5 billion euro), according to the National Revenue Agency (NRA).

For the first time last year, the leader in Capital's annual ranking of the biggest companies in the country is not Lukoil Neftochim Burgas refinjery owned by Russia's Lukoil but the local unit of German copper giant Aurubis.

In the second year of the pandemic, there's some good and some bad news for the Bulgarian economy. The good news is that businesses have adapted quickly to the new normal and quickly migrated online to survive. The bad news is that the state's role in the economy is on the rise, whether it be through the Bulgarian Development Bank (BDB), Avtomagistrali motorway construction company, or Gazprom's TurkStream gas pipeline.

Winners and losers

The revenues of large groups of companies took a hit because of the drop in oil demand and international oil prices in 2020. An example of this in Capital's K100 ranking are the results of the Lukoil group where sales decreased both domestically and abroad. Low international prices and weak demand can also be found in the financial statements of large companies in the energy sector among producers and traders of electricity and natural gas, as well as some firms in the metals production. Transport and apparel production companies working as subcontractors for large luxury brands were also among the large-scale losers in 2020.

Companies active in food, accommodation and tourism sectors also took a big hit but they remain somewhat invisible in this year's edition of K100 as they're mostly smaller firms. The only traditional participant from the tourism industry, Albena resort operator, has dropped out of the ranking this year as its revenues decreased by two-thirds in 2020 to just under 30 million levs.

Among the sectors reporting an increase in revenues are courier firms, IT companies, and pharmaceuticals, online retailers, bicycle manufacturers, and producers of Covid-related goods like masks or protective gear. The sharp increase of international commodity prices improved the financial reports of vegetable oil producers and companies active in copper and gold mining.

In Bulgaria, two sectors reported an increase in revenues for reasons completely unrelated to the pandemic - gambling companies, which have gained market grounds after the closure of gambling tycoon Vassil Bozhkov's business in the country. And construction companies that benefited from billions of levs in public and EU funds poured into the sector for infrastructure projects. Which explains why construction companies are in the lead in terms of revenue growth in K100. Their lead is only temporary, though. First, the construction of TurkStream's extension to Serbia on Bulgarian territory is over, and second, the uncontrollable distribution of money for highways seems to have been broken with the fall from power of GERB party earlier this year.

Covid can be found in profits

Profits took a major hit in the pandemic. According to the data provided by the companies, the decrease in 2020 among the top 100 is 16% compared to 2019. Firms ranked 101st to 300th reported a decrease of 9%.

According to the NRA, the combined profit before tax of all firms in the country totalled 30 billion levs in 2020 - pretty much the same as the year before. However, reported losses increased by about 1 billion levs to 7.5 billion compared to 2019.

Among the top 100, only 14 companies reported losses - Lukoil's oil refinery in Burgas (about 500 million levs), and state-owned thermal power plant (TPP) Maritsa-Iztok 2 (close to 330 million). Other companies that reported losses are also owned by the state, like the National Railway Infrastructure Company, Maritsa-Iztok coal mines, and municipal heating utility Toplofikatsia Sofia.

On average, the profit margin in the top 100 group dropped to 3.9% while last year it was 4.6% for every lev in revenue.

The largest profit reported for 2020 comes from state-owned Kozloduy nuclear power plant (NPP) - 276 million levs, followed by Aurubis, the two local gold-mining companies of Canada's Dundee Precious Metals, and telecommunications firms.

The data also showed a pleasant surprise - the 50 most profitable firms reported the highest profit margin on record, of 24%. The achievement was driven by firms in the private sector like hosting company Siteground and Bulgarian luxury shoes and bags manufacturer Solmate, both of which sell their goods abroad. Another stimulus comes from booming gambling operators and construction companies working on the TurkStream extension in Bulgaria.

The top 10

At the top, Aurubis's copper plant in Pirdop took over the leadership position from Lukoil Neftochim Burgas? Lukoil Bulgaria?. The shift will likely be permanent because the oil refinery will be changing its working model as of this year in a way that will probably decrease its turnover.

Two companies make their debut among the top 10 in this year's edition of K100. The first is glass bottle manufacturer BA Glass whose Portugal parent group began reporting their total profit through the Bulgarian subisdiary because of the low corporate tax rate. The second, Saudi Arabia's Arkad (later taken over by Russians), has found its way into the top 10 because it participated in the construction of TurkStream extension in Bulgaria.

The pandemic increased the need for technology. Consequently, telecoms had a strong year - BTC, operating under the Vivacom brand, and A1 Bulgaria (each?) hit the 1 billion levs mark in turnover. On the other hand, decreasing gas prices drove state-owned natural gas supplier Bulgargaz out of the top 10.

Among the top 100 firms 52 have a foreign ownership. For years, this number has been decreasing because of the outflow of foreign investors.

The recovery

Lockdowns have continued in 2021 but economic indicators started to improve in the spring. Unemployment is going down, business activity is increasing judging by the growth in tax revenue. Foreign trade? Exports? decreased by 9 billion levs in 2020 but the first months of this year are encouraging, showing that recovery is already underway. In March and April exports grew to record highs of over 5.7 billion levs in sales per month.

Economic outlook reports are also favorable. Foreign and local institutions expect GDP to grow by over 4% in both this year and next. However, the recovery will be uneven. According to labor market data, the people most in demand are IT experts and engineers. Rising commodity prices in international markets will be profitable for companies active in energy and metals. On the other hand, tourism is still having a hard time, and politics has put a halt on public tenders, leaving the construction industry with few new deals.

According to the results of a survey among the top 100 companies (of which 33 replied), almost all expect revenue growth, with a majority pointing to double-digits, and many expect higher profits and new hirings.

The methodology

The data in K100 comes from information submitted by the companies themselves, public databases, and regulators. For some, information was gathered from the Commercial Register. The financial indicators of public enterprises are from the Bulgarian Stock Exchange, the Financial Supervision Commission, and other platforms.

The ranking covers non-financial firms registered in Bulgaria and excludes banks, insurance companies, leasing firms, investment intermediaries, and enterprises for special investment purposes. It also excludes schools and hospitals.

The criteria

The primary criterion in K100 is the revenue a company generated in 2020. The data tables also include a second indicator - net financial result. This information is used to compile the ranking of the most profitable companies.

Some of the financial reports were still unaudited at the time of writing. For the third year in a row, the ranking includes groups with consolidated data - holding companies that operate in a common industry.

  • Bulgaria's biggest companies were only mildly hit by the coronavirus. Total revenue of the top 100 firms decreased by just 7% in 2020.
  • For the first time, Aurubis replaced Lukoil Neftochim Burgas as the biggest firm in the country in terms of turnover.
  • Data shows that the state's role in the economy is increasing, while state-owned enterprises report significant losses.


Last year brought a shock to every company. The coronavirus pandemic affected everyone but the negative effect on big business was relatively mild. The top 100 firms by revenue in Bulgaria reported an average drop in turnover of 6.8% in 2020. For comparison, in the aftermath of the global financial crisis in 2009 the revenues of the biggest firms shrank by close to 17%. The coronavirus's impact on medium-sized enterprises was even milder: the turnover of the top 300 firms with revenues surpassing 100 million levs (each?) decreased by less than 5% on average.

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