Expert RA

The Expert 400 rating of the largest Russian companies has been prepared

October 1, 2007

The Expert RA rating agency together with the Expert magazine has prepared the 13-th rating of the largest Russian companies Expert 400.

“Resources of the raw material model of the large business development have been practically exhausted. To hold the ascending trajectory you need to immediately launch mechanisms of industrial policy. The rating proves: even the first unstable steps towards the goal give results”, — says Dmitry Kabalinsky, the Expert RA rating agency general director on research.

The top five leaders remained unchanged comparing with the last year and look as follows: ОАО Gazprom, LUKOIL, RAO UES of Russia, ОАО RZhD, ОАО ТНК-ВР Holding.

According to the rating data, the revenue dynamics of the 400 largest Russian companies in 2006 reduced down to 26.5% and lost almost 7 percentage points comparing with the last year rating. The current situation is rather the first sign of the drastic change of the traditional development model of the large business. So far the Expert 400 rating has been determined by companies in the field of raw materials, almost without competition. Failures in foreign economy were inevitably replaced by periods of growing prices for oil and gas, pulling up indicators of the rating and the economy as a whole. Presently even mechanical contribution of the raw material sector to speedy development of the large business is not to be expected.

The oil and gas sector has the strongest influence over the rating dynamics. Gazprom and oil companies are accountable for at least one third of accumulated revenues of the leading Russian corporations. Fantastic economic set-up of the oil market in 2003-2005 regularly played the role of a prime mover in the domestic large business. In 2006 the growth of oil prices slowed down more than twice — 21% against 47% in 2005. Development of the Russian oil and gas companies slowed down in the same proportion. After dramatic increase of revenues last year (+57.4%), recorded by the Expert RA analysts, currently the industry has to be contented with pretty modest growth of 26.4%.

Reduced share of industrial companies in the general structure of revenues of the 400 largest Russian companies has long become a sustainable tendency, which manifests itself in every issue of the rating. This year the share of the industry lost another 1.6 percentage point down to 66.8%.

Non-industry sector by-passes the large industrial business in dynamics of its development. The banking sector is definitely in the lead for the two years running. Aggregated revenues of the 26 banks in the rating amounted to 34.9 bln dollars (increase 44%). Currently banks hold position three among non-industry sectors of the rating, behind transport and retail trade.

Reduced level of the large business concentration can be observed in each issue of the rating. The share of the first 40 companies of the expert 400 rating — mostly consisting of raw material giants — annually goes down at most by 1-2 percentage points. Their share at the current rating is 64.1% — 1.7 percentage points lower than the year before.

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