While Sofia is often cited as an example for economic development in Bulgaria, firms in the capital have not been enjoying undisturbed existence. Fluctuations in total revenue, a steady decline in taxes paid, but also an increase in shareholders’ equity and total employment – this is the economic pulse in 2012, the business in Bulgaria’s largest city, judging by the rankings Sofia Top 100 of financial audit company and advisory services provider Active. The ranking was made based on information contained in the annual financial statements published in the commercial register of 3,325 Sofia companies from different economic sectors.
As the BANKER has already informed in a previous issue, the turnover of the top 100 companies in the capital for 2012 was more than 35.3 billion levs, or almost half of the gross domestic product of Bulgaria. At the top is Lukoil Bulgaria with revenues of 3.591 billion levs, but a more detailed analysis of the data revealed by Active showed some interesting things. While it ranks first in revenue, the company led by Valentin Zlatev posted a loss of 70.9 million levs. This can be assumed as either a case of mismanagement of assets, or as a reflection of the fierce competition in the marketing of fuel retail fuel and shortened profit margins in the sector.
The same situation was observed in the following two companies in the ranking in terms of turnover: the National Electricity Company and Bulgargaz which operated in the red with 94 million levs and 113.5 million levs respectively , despite their enormous revenues. The explanation in this case is much easier. Both companies are an eloquent illustration of the deplorable state of the Bulgarian energy sector and basically they are used by the Government as a buffer to maintain the low price of electricity and gas.
At the expense of NEC and Bulgargaz, the best profit of all firms in Sofia last year was generated by Bulgarian Energy Holding (BEH ) – nearly 285.6 million levs. This structure was created during the tripartite coalition with promises it could get a good credit rating, and thus better conditions for borrowing money needed for the rehabilitation of our energy capacity, reduction of carbon emissions, and building new plants using renewable sources as well as improving energy efficiency. But the real benefit of BEH today is non-existent. The energy giant is a duplicate parasitic formation of highly paid employees with the sole task of collecting dividends from the holding’s subsidiaries. Therefore, the profit is so huge.
Second, after the energy holding is the State Consolidation Company with a positive financial result of 185.1 million levs. The entity is engaged in the acquisition, management , evaluation and sale of shares in Bulgarian and foreign companies. The bronze medal remains for Contour Global Maritsa East III, which functions at a profit of 121.19 million levs. It owns the eponymous private thermal power station in Maritsa East, which has a long-term contract with the state for the purchase of electricity produced .
Generally, the overall financial performance of 100 leading companies is Sofia has increased by 32.01% , or from 724.7 million levs it reached 956.6 million levs. However, this indicator remains far from the 1.54 billion lev profit recorded during the critical 2010.
The logical consequence of the volatile financial performance of the companies is the reduction of the total amount of taxes that the Treasury receives from them. The decline is quite clear – 184.6 million lev in 2010 and 130.2 million levs in 2011 dropped in 2012 to only 91.4 million levs. Otherwise, the biggest taxpayer is again the organizer of gambling betting Eurofootball. Company paid 30.65 million levs in taxes for 2012 and 31.32 million levs a year earlier. Far behind it, with 13.37 million levs paid to the budget ranks the already mentioned Contour Global Maritsa East III, followed by another bookmaker – Eurobet Ltd., with 13.122 million levs.
Simply put, businesses in Sofia still misses the long-awaited light in the tunnel, but are doing everything possible to adapt and survive in adverse economic conditions
The BANKER
