Role of state-owned enterprises rising in Russia

Seven of the top ten companies listed among the largest Russian firms of 2014 based on sales were state owned, according to Expert, a Russian business weekly. The list shows that the role of state-owned enterprises (SOEs) has increased sharply in recent years. SOEs in 2007 accounted for just over 30 % of the total sales of Russia’s 400 largest firms. By 2014 that figure exceeded 40 %, nearly matching the sales of privately held Russian firms on the list. In ruble terms, SOE sales corresponded to nearly a third of GDP. The largest foreign-owned company, telecom specialist Vimpelcom, ranked 21st. Energy company Fortum, the largest Finnish-owned firm making the list, ranked 176th.

The situation is quite similar in terms of market capitalisation. SOEs accounted for over half of the combined value in Expert’s top-200 market cap list in banking, oil & gas, electricity and machine-building sectors.

Russia’s corporate sector continues to be fairly concentrated. The total sales of Russia’s 400 largest firms last year amounted to 52 trillion rubles ($1.4 trillion), with the ten largest firms generating over 40 % of that. Companies in the oil & gas sector contributed about a third of the largest firms’ sales, while 10 % came from banks.

Firms in the defence sector posted some of the biggest sales gains in 2014 (e.g. the sales of United Shipbuilding Corporation increased significantly). The largest profits in ruble terms were posted by the big oil & gas companies and Sberbank. The five firms with the largest profits accounted for 70 % of the total profit of the 400 largest firms.

The 2015 Forbes 2000 list of the world’s biggest companies ranks Russia’s Gazprom at 27th place. 27 Russian companies made the Forbes list this year.

Russia’s largest firms by sales in 2014

* Private domestic investors
Source: Expert.