The results of the “Capital 500” survey identify the 500 largest privately owned companies in Turkey in 2006 in terms of their turnover. When one considers that the services sector accounts from more than 65 percent of the Turkish economy, then the importance of a study like the Capital 500 becomes clear. This survey covers the entire business world from industry to services, telecommunications, information technology, energy and retailing. This year there were two striking developments. The first was that, because of privatization, Tupraş ranked first in the Capital 500 list this year and Türk Telekom came third. The second was the increase in interest… Many companies, such as Yüksel İnşaat, Kiler and YKM, shared their data for the first time this year and took their place amongst the 500 largest companies. In 2005 a company had to have a minimum turnover of $48.5 million in order to be included in the Capital 500. This year the figure rose to $66.2 million.
The services sector accounts for 65 percent of the Turkish economy, followed by industry with 25 percent and agriculture with 9-10 percent. This is the reason why the Capital 500 study covers the services sectors which make up 65 percent of the economy, such as telecommunications, construction, transportation, health and the media. The survey also serves as a benchmark through which privately owned companies can assess the performance both of their own rivals and companies in other sectors.
The changes and the competition that occur in the Turkish economy and the business world are reflected each year in the results of our survey. The privatization of large state-owned companies such as Tupraş and Türk Telekom affected the results of this year’s survey. These two giant companies were included in the Capital 500 for the first time this year. Tupraş, in which Koç Holding bought a 51 percent stake for $4.14 billion, ranked first this year. Turk Telekom, in which Oger Telecom bought a 55 percent stake for $6.5 billion, was the third largest company in Turkey in 2006 in terms of turnover. The economic growth, which began in the first quarter of 2002 within the framework of the stabilization program introduced after the 2001 crisis, has continued without a break from that day to this. The large big companies performed well in an economy which has grown continuously for 21 quarters. They turned in a good performance in terms of productivity and growth. During this process, the major companies continued to strive to keep pace with the speed of growth and to renew themselves and enter the “giants’ league”. The minimum figure for “size of turnover”, which has been basic criterion for inclusion in the Capital 500, has increased every year since 2002. In 2002 the company which ranked 500th in the Capital 500 had turnover of $23.9 million. By 2005 this figure had risen to $48.5 million. In 2006, which is the most recent figure, the company which ranked 500th had turnover of $66.2 million. This means that the minimum turnover required to enter the Capital 500 grew by 36.5 percent in the space of one year.
The Large Companies Are Growing More Quickly As a result both of the largest companies in Turkey making the most of the continuous economic growth and of the major privatizations of recent years and resultant entry of giant state-owned companies into the private sector, there has been a significant growth in the total turnover of the 500 companies in the Capital 500. In 2002 the Capital 500 companies had total turnover of TL 97 quadrillion. In 2005 the figure stood at TL 223.422 quadrillion. In 2006 the 500 largest private sector companies in Turkey had a total turnover of TL 310.548 quadrillion.
This means that in 2006 the total turnover of the 500 largest companies in Turkey grew by 39 percent compared with 2005. When the GDP deflator is applied to the rate of increase in turnover in order to remove the effect of inflation, the total turnover of the 500 companies in the Capital 500 rose by 24.7 percent in real terms.
The Real Increase In Profits Was Nearly 70 Percent In 2006 When one examines the trends in profitability in the companies in the “giants’ league” from 2002 to today then one can see that there was a significant improvement in profitability in 2006. In 2002, as a result of the 2001 crisis, the companies in the Capital 500 recorded a real decrease of 63.1 percent in profits when compared with the previous year. This decline resulted in the 500 companies having total profits of TL 4.306 quadrillion in 2002. This significant fall in profits was, to a certain extent, offset by growth in 2003 and 2004. But in 2005 the 500 largest companies suffered a 11.7 percent decrease in real terms in their profits. In 2006 the profits of the 500 companies rose by 69.9 percent in real terms and not only recovered to but exceeded pre-2001 crisis levels.
The figures show that in 2006 the 500 largest companies had total profits of TL 20.452 quadrillion.
When one analyzes the turnover, growth and profit figures for the Capital 500 in recent years, then it is clear that the large privately owned companies grew faster than the economy as a whole and were able to increase their profits faster than other companies. The figures clearly show that, in terms of profitability, 2006 was an outstanding year for the large companies in Turkey.