19 Nov 2015 15:50

Interfax presents Top 150 energy efficiency rating of Russian businesses

Interfax has prepared a rating of the fundamental efficiency of Russian businesses in 2014. The rating of the 150 largest Russian companies was carried out by the environmental and energy rating agency Interfax-ERA.

The list is headed by LLC Lukoil Lukoil-Ukhtaneftepererabotka, CJSC Antipinsky Oil Refinery and LLC GAZ Automobile Works. The top ten also include LLC Gazprom Dobycha Urengoi, LLC Gazprom Dobycha Yamburg, PJSC United Aircraft United Aircraft Corporation (MOEX: UNAC), PJSC IDGC Center & Volga (MOEX: MRKP), OJSC Concern Almaz-Antei, PJSC Irkut Corporation (MOEX: IRKT) and PJSC Kazan Helicopters (MOEX: KHEL).

The rating is calculated on the basis of five criteria: energy efficiency (energy and resources expenditure per unit of output); technological efficiency (consumption of resources, waste per unit of work); eco-systemic efficiency (level of environmental pollution, emanating from enterprises, which can be assimilated by the local natural co-systems); change in efficiency (from 2005 to 2014); and transparency (extent of disclosure of reporting on energy and resource consumption).

Companies are ranked for each of these five criteria and the final ranking is determined according to the sum of a company‘s places in all five separate rankings. The full Top 150 can be found on the Interfax-ERA website (http://interfax-era.ru).

Major holding companies were assessed by collating efficiency data for the enterprises they represent (in total, 4,696 enterprises from all sectors were assessed). The Top 150 includes enterprises with sales revenue of more than 52 billion rubles. As well as major holdings, the list includes their subsidiaries, branches or standalone divisions, if these have generated more than 52 billion rubles in revenue for the parent company and this sum constituted less than half of a holding company‘s business.

For example, the list includes LLC GAZ Automobile Works (ranked third), the output of which comprises just under half the revenue of OJSC GAZ (22nd), but it does not include that parent companies of MMC Norilsk Nickel (MOEX: GMKN), Severstal (MOEX: CHMF) or NLMK (MOEX: NLMK), which account for more than half of sales to their holding companies.

"The energy and environmental efficiency of Russian businesses have been assessed for more than 15 year," said Alexander Martynov, head of the Interfax-ERA project. "Russia has no other sources of data to monitor the real efficiency factors for the economy in natural rather than financial terms apart from the Interfax-ERA information, that has accumulated and been systematized over the years," he said.

"Our fundamental efficiency rating is a universal tool for assessing a business when its financial results and exchange rates are unstable and amid the uncertainty over the implications of sanctions," Martynov said.

He said the composite data for energy and technological efficiency for enterprises of various sectors reflect the fact that after 2006, the most considerable and sustained decline in efficiency has taken place in the coal industry: the annual drop in the efficiency factor here has been 0.6% for strip mines, 0.8% for coal washing and 3.2% for deep mining. As a result, direct energy costs and waste per tonne have increased by the year.

Similarly alarming tendencies are emerging in other primary sectors: for example in logging, the efficiency factor has gone down by 1.5% per year, in gold mining it has fallen 1.1%, in base metals - 0.8% and even in oil production it has fallen, by 0.1%. In gas production, the efficiency factor has risen, by 4.3% a year.

"In the manufacturing sector, despite the concerns of economists who rely only on financial indicators, real energy and technological efficiency has improved. At chemicals and petrochemicals enterprises it has risen 1.6% per year, in machine-building it has risen 1.9%, in instrument-making - 2.8% and in aircraft manufacturing - 2.7%.

Efficiency varies in transport: the efficiency factor has risen rapidly in automobile transport, by 3.6% per year. And 2.2% in air, river and sea transport, but just 0.2% in oil pipeline and 0.01% in gas pipeline transport. It has fallen in rail transport, by 1.6% annually from 2005 to 2014. This, the problems in the Russian Railways (RZD) (MOEX: RZHD) system are long-standing and have an entirely fundamental basis, Martynov said.