For the second year running, BHP Billiton, the world's largest diversified resources company, strode home as the profit and turnover giant among SA's listed companies. Against a backdrop of soaring commodity prices, this was hardly surprising, but the extent to which BHP Billiton has moved ahead of its nearest rival, Anglo American, is impressive.
Both groups have surged up the rankings since the mining sector hit bottom in 1998, a year when the FM ranked BHP Billiton 16th, based on net profits. The company went on to grow net profit at an average 59,4%/year over five years, while Anglo delivered an average of 17,3%/year. BHP Billiton's 38,2%/year turnover growth has also outpaced Anglo's 26,5%/year.
Strong Chinese demand for raw materials has worked in BHP Billiton's favour. Among China's biggest imports are oil, gas, iron ore, aluminium, base metals and coal, sectors in which BHP Billiton has expanded aggressively in recent years. This strategy paid off handsomely as these sectors generated 90% of group profits in 2003.
Anglo paid the price for having no oil or gas exposure, and for a strategy in which base metals and coal delivered only a third of net profit.
Many will argue that BHP Billiton is not exactly an SA giant, as less than a quarter of its assets are here and SA's contribution to its turnover is only 6%. With 40% of assets in SA and a third of its profits derived from SA operations, Anglo may have better claim to SA giant status.
UK-domiciled, but still looking very South African in terms of total profits (74% in 2003), Old Mutual was again way out front in the asset race. It is also by far SA's biggest financial-sector company, with total assets of R661bn, 67% above those of SA's largest banking group, FirstRand. But on net profits the disparity between the two was far smaller, with Old Mutual a mere 14% ahead of FirstRand.
As for status, Old Mutual's image has suffered from the Nedcor debacle and the purchase of US and UK asset management operations at the peak of the global bull market.
Undaunted, however, Old Mutual continues to look for another "significant" purchase in the UK. That would add to the group's total assets and, hopefully, to profits, which took an undignified tumble in 2003 (thanks to Nedcor) and prompted a credit rating downgrade from global rating agency Moody's.
In terms of profits, Sasol has clear claim to the title of the largest SA-domiciled company. Though it is only a quarter of the size of Anglo in total asset terms, Sasol's R10bn net profit brought it within striking distance of ousting Anglo from second position. In 2003, 92% of Sasol's operating profit was generated in SA, though this was more by default than by plan, as poor performances by foreign operations lowered their contribution to group operating profit by R1,7bn.
Another SA-domiciled group, Remgro, lags way behind in 43rd position on total asset measurement, but with net profits of R9,8bn races up from 11th to fourth among the super-giants. Sappi slipped because of a 26% profit slide in US dollars and the added blow of a strong rand. From ninth position in terms of turnover, Sappi has faded into 17th, while in profit terms it has sunk from 12th to 32nd.
Richemont also faded through rand strength and weak demand for luxury goods. There has been no growth in turnover in the local currencies of its global operations for the past three financial years. The rand also hit precious-metal counters, despite soaring metal prices. In profit terms the world's largest platinum miner, Anglo Platinum, moved from fifth to 16th position while its counterpart in the gold sector, AngloGold, went from ninth to 21st.
Telecom companies made some of the biggest upward moves. Telkom surged into 10th position in turnover and seventh in net profit. MTN was up from 19th to 14th in net profit.
Old-fashioned products and services such as beer, food, transport and cement dominated SA's industrial groups. SABMiller came out tops on all measures: turnover, assets and net profit - reflecting CEO Graham Mackay's uncompromising insistence on excellence.
Again, purists may wonder whether SABMiller is an SA giant. SA operations now account for only 17% of its turnover and less than a third of profit before tax, interest and amortisation.
The race for second position as SA's industrial giant was a close one between Imperial, Bidvest and Barloworld. A 33% net profit increase put Barloworld ahead.
