Numbers are, like fire, a good servant, but they can be a bad master, especially if misinterpreted. This is well illustrated by the business results of companies that achieved revenues exceeding one billion kuna, or 133 million euros, last year. We considered the consolidated data of all groups consisting of multiple companies, both in Croatia and abroad, and the list also includes those companies that do not consolidate results because they operate independently. Those 138 groups and companies recorded a revenue growth of only 3.5 percent last year, which initially suggests an exceptionally poor year for the largest players as they lost the battle even against 4.5 percent inflation. Additionally, the 1000 largest companies increased their revenues by 8.7 percent last year, while the rest of the economy achieved double-digit growth – of 11 percent.
However, this discrepancy has a simple explanation: it is due to the accounting significant drop of the ENNA group, which we obtained by summing the consolidated results of Energija naturalis and Blue Horizon (companies grouped around PPD). The revenues of these two groups, which each separately consolidate their business results, were more than halved compared to 2022, before the separation of PPD’s companies into a separate entity. This shortfall amounts to an astonishing 4.36 billion euros. When observing the ranking list without this group, the other companies achieved a revenue growth of 10.9 percent, which is logical and fits into last year’s trends.
Higher Profit with Lower Revenues
Numbers as masters suggest a significant decline in the business of Pavle Vujnovac’s companies, which is why his group fell from first to fourth place on the ranking list, but the data here can also be misleading. In August of last year, the former flagship and primary revenue bearer PPD separated from the ENNA group as the Blue Horizon group and began preparing the company for its initial public offering (IPO) on the capital market. This is also the reason for the large discrepancies. Namely, the ENNA group for 2023 included the financial data of PPD Global for the first three months of 2023 and the other members of the PPD Group (PPD, PPD BIH, PPD IT, PPD HU, PPD SLO) for the first seven months, while the year before it included data for the entire year of all those companies. At the same time, the Blue Horizon Group for 2023 included the financial data of the PPD Group (PPD, PPD BIH, PPD IT, PPD HU, PPD SLO) from August to December, according to the company’s response, which presented excellent business results in all three divisions: energy, food, and logistics in May. Nevertheless, the ENNA group attributes part of the revenue decline to energy prices. In August, a record gas price of 350 euros per megawatt-hour was recorded, while last year it fell from 75 to 30 euros. Additionally, the ENNA group warns of reduced gas consumption in foreign markets due to a warmer winter, as well as a significant drop in industrial consumption in Europe.
Despite the decrease in revenue, the ENNA group achieved a profit growth of as much as 78 percent. For this seemingly mathematical inconsistency, the company has an explanation: when energy prices are high, less goods are sold, and huge working capital is required; when energy prices are lower, more goods are sold, but less working capital is needed. Therefore, in periods of lower prices, profit in relative terms (percentage) is higher, while in absolute terms it is lower. This logic is confirmed by the examples of most companies in the energy sector: all have reduced revenues and significantly increased profits, especially gas traders MVM Energy Croatia and MET Croatia Energy Trade. The exception is Ina, but it is not just a trader.
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