Despite optimistic signals coming from Brussels that the community is gradually emerging from the global recession, the situation in the country remains too unstable to make rosy predictions for the future. Proof of this are the economic indicators of one of the strongest areas in the country – Varna. A detailed view of the situation in the seaside biggest city made in the ranking Varna Top 100, which have been drawn for more than 15 years by the Active, a company for financial audit and advisory services, brings out very interesting facts and outright paradoxes. The BANKER reported in a previous issue that the total revenue of the leading companies in the seaside city for 2012 were 7.449 billion levs, which is 4.31 % higher than revenue recorded in 2011. And this is not due to one or two of the larger companies, but is a general trend – 59 out of 100 companies increased their turnover .
Undoubtedly, the flagship firm among Varna producers Ship Machinery JSC registered a phenomenal for a crisis period earnings growth of over 582% . Or, from 1.73 million levs per year they jumped to 12.22 million levs in 2012. However, this has its reasons. The plant in Varna is specialized in the production of hatch covers, stern and side ramps for boats and other similar large-size marine equipment. The company has extensive experience in the construction of floating platforms .
Definitely last year the company had a good amount of orders . In an interview some time ago the CEO of Ship Machinery Ivan Daskalov says the goal will be the company to enter the Russian market. The manager said that the upcoming Olympic Games in Sochi and the massive Russian federal programme until 2020 for the construction of 1450 ships suggest many orders from Russia. Impetus for the development of the company came from the loans granted by CCB, against which as collateral the company pledged assets of several million levs. At least for now the result is positive – Ship Machinery posted a profit of 448 thousand levs, given that a year ago it generated a loss of 1.5 million levs.
Close behind the shipbuilder ranks Hygeia EAD, which deals with trade in, preparation and production of medications . The company increased its proceeds by 10.280 million levs over a year (from 2.138 million levs to 12.418 million levs) or an increase of 480.8 percent. Formally, the company is led by the mother of pharmacy boss Veselin Mareshki – Veska Mareshka, who is better known in the region as a singer of Russian songs, albeit at amateur level.
The construction company Stimex Ltd. also has increased its turnover by as much as 17.56 million levs (from 11.162 million to 28.728 million levs) or by 157.37 percent. A check in the registry of procurement contracts shows that the company won many procedures last year. These include the construction of infrastructure in Zone B at the airport, a new nursery school in Varna, construction activities in the rehabilitation facilities of the National Assembly in Velingrad and many others. Stimex provides winter maintenance of municipal road and street network in the region.
At the other extreme in the ranking are two other companies. The largest drop in revenue – with 73.77 percent , was generated by El Commerce Ltd., which is engaged in scrap metal recycling. Following it, with a decrease of 59.9 percent is TPP Varna, which has yet to be modernized if it is to continue to work. Now only three of its six turbines are used, and only as cold reserve, which means – only in cases of emergency. This situation naturally has an impact on its financial results.
In general it can be said that the most cost-effective sector of Varna economy is trade. Commercial firms that are among the first 100 in Varna are 36 and formed up 36.5% of the overall revenue in the top group, or a total of about 2.72 billion levs. Manufacturing is represented by 24 companies with revenues of 1.82 billion levs, followed by a group of sevencompanies active in theproduction and distribution of electricity, heat and gas – with a combined revenue of 1.7 billion levs; then come 12 companies from the transportation and storage sector with revenue of 550 million levs. Construction is represented by 10 companies that managed to post a total turnover of 350 million levs.
The BANKER
