Return on investments in the heat power industry

Information agency Credinform has prepared a ranking of the largest Russian heat power companies. The largest enterprises (TOP-10) in terms of annual revenue were selected according to the data from the Statistical Register for the available periods (2016-2018). Then the companies were ranged by ROI ratio (Table 1). The analysis was based on the data from the Information and Analytical system Globas.

Return on investments (%) is the ratio of net profit (loss) and net assets value. It demonstrates the return level from each ruble, received from the investments. In other words it shows how many monetary units the company used to obtain one monetary unit of net profit. The ratio is used for the assessment of fund raising at interest.

In general, normative values for ROI ratio are not set as they are changing due to the industry in which company operates.

For the most full and fair opinion about the company’s financial position the whole set of financial indicators and ratios should be taken into account.


Table 1. Net profit, revenue, ROI ratio, solvency index Globas of the largest heat power companies (ТОP-10)
Name, INN, region Revenue, million RUB Net profit (loss), million RUB ROI ratio, % Solvency index Globas
2017 2018 2017 2018 2017 2018
1 2 3 4 5 6 7 8
INN 5257087027 Nizhny Novgorod region
up11426,19 up12006,04 up975,09 up1060,66 up43,28 down31,68 211 Strong
PJC Territorial Generation Company No.2
INN 7606053324 Yaroslavl region
up36382,36 down36355,07 up3012,16 up3013,59 up16,21 down16,02 204 Strong
Bashkir Heat Distribution System LLC
INN 0277072661 Republic of Bashkortostan
up15322,09 up16254,08 down230,88 up458,85 down7,01 up12,23 235 Strong
INN 8901025421 Yamalo - Nenets Autonomous Okrug
up12419,97 up13001,33 down738,99 down218,06 down31,13 down9,23 278 Medium
INN 7720518494 Moscow
up134982,07 up152149,97 up6093,14 up11207,99 up5,05 up8,48 160 Superior
INN 6829012680 Tula region
up51390,85 up53364,23 up602,30 up969,16 up1,82 up2,84 235 Strong
INN 7830001028 Saint Petersburg
down29565,93 up30899,01 up273,53 up285,98 down0,53 down0,49 208 Strong
INN 5190907139 Murmansk region
up9441,59 up10749,62 down-220,59 up1,90 down-5,11 up0,04 288 Medium
INN 7203203418 Tyumen region
up12461,15 down10939,64 up418,35 down-132,44 up8,85 down-2,88 278 Medium
INN 6315530348 Samara region
up9923,41 up10376,44 up-1197,47 up-810,41 down45,19 down-31,31 274 Medium
Total for TOP-10 companies up323315,60 up346095,42 up10926,38 up16273,33    
Average value for TOP-10 companies up32331,56 up34609,54 up1092,64 up1627,33 down15,39 down4,68
Average industry value down133,86 up146,50 down-2,77 up-1,98 down-3,84 up-2,59

Up growth of indicator in comparison with prior period, Down decline of indicator in comparison with prior period.

In 2018, the average value of ROI ratio for TOP-10 companies is higher than average industry value. Four companies improved the results.

Picture 1. ROI ratio and revenue of the largest heat power companies (ТОP-10) Picture 1. ROI ratio and revenue of the largest heat power companies (ТОP-10)

Within 10 years, the average industry indicators of ROI ratio are in the zone of negative values with the growing tendency. (Picture 2).

Picture 2. Change in average industry values of ROI ratio of heat power companies in 2009 – 2018 Picture 2. Change in average industry values of ROI ratio of heat power companies in 2009 – 2018
TOP-20 largest economies by the Human Development Index

When identifying the level of social and economic development at international comparison of the countries, the universal indicator of GDP per capita is used. However, it is not always accurate. There are countries with low GDP per capita, and high life expectancy.

For example, life expectancy at birth in Cuba is 79,1 years, when in the USA it is 77,8 years. Cuba has high level of available medicine and education. Therefore, the wealth of the country does not always determine the quality of life of its inhabitants.

In this regard, Human Development Index as more objective indicator was developed.

Human Development Index (HDI) is a statistic composite index annually calculated under the United Nations Development Program. It is based on the following parameters: life expectancy at birth, duration of education and gross national income (GNI) per capita at purchasing power parity (PPP).
The index takes the values from 0 to 1 and ranks countries and their territories by four groups: countries with very high human development level (HDI exceeds 0,8), countries with high human development level (HDI from 0,7 to 0,8), countries with average human development level (HDI from 0,55 to 0,7), and countries with low human development level (HDI below 0,55).

In comparison for 2018, Russia’s HDI is 0,816, which corresponds to the very high human development level. In TOP-20 largest economies, our country is ranked 11th by HDI. Germany is the leader in this regard: at GNI (PPP) almost equal to the Russia’s one, Germany’s HDI is 0,936 (see Table 1).

Table 1. TOP-20 largest economies ranked by decrease of HDI
Rank Country Human Development Index in 2018 GNI (PPP), trillion dollars, 2019 Rank by GNI
1 Germany VERY HIGH 0,936 4 444 5
2 Canada 0,926 1 900 16
3 USA 0,924 21 439 2
4 Great Britain 0,922 3 131 9
5 Japan 0,909 5 747 4
6 Republic of Korea 0,903 2 320 14
7 France 0,901 3 061 10
8 Spain 0,891 1 941 15
9 Italy 0,880 2 443 12
10 Saudi Arabia 0,8533 1 899 17
11 Russia 0,816 4 349 6
12 Iran HIGH 0,798 1 471 18
13 Turkey 0,791 2 347 13
14 Mexico 0,774 2 628 11
15 Brazil 0,759 3 456 8
16 Thailand 0,755 1 383 20
17 China 0,752 27 309 1
18 Egypt AVERAGE 0,696 1 391 19
19 Indonesia 0,694 3 737 7
20 India 0,640 11 326 3

Source: International Monetary Fund, Human development report (UN), calculations by Credinform

Being the largest economy, China is ranked the 17th and is inferior to Russia and most of TOP-20 participants by HDI.

Despite being the third largest economy, India closes the ranking. The country have a long way to increase wellbeing of inhabitants and introduction of mass education.

Picture 1 demonstrates the dependence of GNI (PPP) on HDI.

Picture 1. TOP-20 largest economies by HDI Picture 1. TOP-20 largest economies by HDI

The presented ranking method is being criticized because of formal approach and small number of indicators for calculation. It bears remembering the difference in access to data, while income level, education and life expectancy are one of the most universal indicators describing the societal development.