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Top-10 of the largest Russian companies engaged in electric power transmission by revenue
Information agency Credinform has prepared a ranking of the largest Russian companies engaged in electric power transmission. On the base of the Information and Analytical system Globas, Тоp-10 companies engaged in electric power transmission and technological connection to distribution systems were selected by the experts in terms of the maximum revenue for 2019. Then the experts made the analysis of financial position of each enterprise and assessed the market condition.
The electric-power industry in Russia is the sector of economy, which assumes the existence of a system of economic relations arising in various processes related to electric power - production, transmission, management, sale and consumption. The main aim of the industry is providing of electrification based on rationality in production and use of electric power.
The market of electric power in Russia has the complex structure and organizations in the industry are divided into:
- power generating companies (electric power generation);
- distributors (electric power sale);
- grid companies (electric power transmission).
The ranking includes only grid companies, in other words, according to the Credinform data, the actual activities of the companies are electric power transmission and technological connection to distribution systems.
According to the Information and Analytical system Globas, Тоp-10 companies in terms of 2018 annual revenue take only 58.2% of the market (989,5 billion RUB), this testifies the high concentration in the field of electricity transmission and the difficult situation for new market participants.
| № | Name | 2019 revenue, billion RUB | 2019 net profit, billion RUB | Solvency index | |
| 1 | JSC FEDERAL GRID COMPANY OF UNIFIED ENERGY SYSTEM Moscow |
242,7 | + 1,0 % | 58,1 | 150 Superior |
| 2 | JSC MOSCOW UNITED ELECTRIC GRID COMPANY Moscow |
160,3 | + 2,5 % | 6,6 | 178 High |
| 3 | JSC IDGC of Centre and Volga Region Nizhniy Novgorod |
96,3 | + 2,6 % | 5,1 | 194 High |
| 4 | JSC INTERREGIONAL DISTRIBUTION GRID COMPANY OF CENTRE Moscow |
94,5 | + 0,7 % | 0,214 | 251 Medium |
| 5 | JSC INTERREGIONAL DISTRIBUTION GRID COMPANY OF URALS Yekaterinburg |
94,0 | + 4,9 % | 2,1 | 203 Strong |
| 6 | JSC LENENERGO Saint Petersburg |
82,3 | + 7,8 % | 12,7 | 199 High |
| 7 | JSC Rosseti Tyumen Surgut |
63,4 | + 8,3 % | - 0,533 | 258 Medium |
| 8 | JSC Interregional Distribution Grid Company of Volga Saratov |
62,8 | - 1,1 % | 2,6 | 194 High |
| 9 | JSC Interregional Distribution Grid Company of Siberia Krasnoyarsk |
57,4 | + 3,4 % | - 0,735 | 276 Medium |
| 10 | JSC KUBAN POWER AND ELECTRIFICATION Krasnodar |
51,0 | + 9,9 % | 2,4 | 214 Strong |
It is remarkable that, top-10 of grid companies are the subsidiaries of JSC «ROSSETI». «ROSSETI» holding, excluding the share in JSC FEDERAL GRID COMPANY OF UNIFIED ENERGY SYSTEM, is the operator of energy networks and related equipment. In fact, the holding controls 15 interregional distribution grid companies. In other words, these are the power lines, which we see in urban infrastructure.
The largest grid company in Russia is JSC FEDERAL GRID COMPANY OF UNIFIED ENERGY SYSTEM, the 2019 annual revenue of the company amounted to 242,7 billion RUB. The company is located in Moscow and it accounts for more than 14 % of the revenue of all industry organizations. The net profit of the company amounted to 58,1 billion RUB, in comparison with the revenue this indicates about the company's profitability. Within the year the company's turnover increased by 1% and industry volume by 10.07%.
The increase in revenue of many grid companies in Russia is connected with increase in electricity consumption (Picture 1). From 2010 to 2018 electricity consumption increased by 9% and according to the preliminary results for 2019, the current trend is expected to continue. As for 2020 forecasts, in connection with the coronavirus pandemic, a sharp decrease in overall electricity consumption is expected.
Picture 1. The dynamics of electric power consumption in Russia during 2010-2020, billion kWhSource: Unified interdepartmental statistical information system (UISIS), estimated data by Credinform
Using the tool ‘Analysis of industry’ in the Information and Analytical system Globas, it is possible to find out another reason for the increase in revenue of top-10 grid companies. The industry volume is constantly growing and in 2018 it amounted to more than 1,6 trillion RUB. The growth of top-10 revenue in 2019 indicates about the projected growth of industry volumes.
In 2019 the significant growth of revenue by 8,3% (in comparison with 2018 Top-10 list) demonstrated JSC Rosseti Tyumen, which took the seventh place instead of ninth. However, the net loss for the last two years indicates about financial problems of the business, this is also proved by the solvency index, which is approaching the average value.
The only company in top-10 list, which demonstrated the reduction in revenue in 2019, is JSC Interregional Distribution Grid Company of Volga, the company took the eighth place instead of the seventh (in comparison with 2018). However, the highest solvency index shows that the company is still financially reliable.
The ranking shows that the field of electric power transmission is still strategically important for the country; this is confirmed by the growth of electric power consumption. The industry volumes are constantly growing, which also testifies the profitability of this market. However, considering the fact that top-10 companies take more than 90% of the market, this industry won’t be a priority for new entrepreneurs due to too high concentration of the industry.