Business analysts at IBISWorld have calculated their 2017 list of Australia’s top 1000 companies by revenue, whether ASX-listed, private or government run entities.
The firms on the top 1000 account for $1.94 trillion in revenue, or about 28% of all trade in Australia.
Jason Aravanis, Senior Industry Analyst at IBISWorld, says one-third of companies on the list reported lower revenue for the year with a 2% overall decline on 2016.
The fall was concentrated among a small number of large firms, including Westpac, Rio Tinto, ANZ, NAB, and Caltex Australia.
However, other major companies including JB Hi-Fi, BHP, CIMIC Group, expanded revenue. And more than half (52%) of companies on the 2017 list improved profitability.
New entrants in the 2017 Top 1000 came from a variety of industries. Scentre Group generated significant revenue through the sale of its Westfield shopping centre in New Zealand. Lion expanded its revenue after acquiring New Zealand craft brewing company, Brew Strong Limited.
The top 10 performers:
And the five with the biggest rise, and those with the biggest fall, in revenue:
Top Performing Industries:
The Superannuation Funds industry was one of the fastest growing in 2016-17. Revenue is made up of the investment income of various funds, which are highly exposed to equity markets, interest rates and property yields. The All Ordinaries index, which comprises the 500 largest companies listed on the Australian Securities Exchange, appreciated strongly in 2016-17. This has contributed to greater revenue among several superannuation funds in the Top 1000, including AustralianSuper, Q Super, and the Commonwealth Bank.
The mining sector posted significant growth, as rising output volumes and higher commodity prices boosted revenue. Curtailment of Chinese commodity production since 2016 has benefited Australian mineral producers, as lower supply has led to higher global prices. As a result, BHP increased revenue and returned to profitability in 2016-17, after posting a massive loss in 2015-16.
“BHP Billiton’s recovery has been driven by strong performances in the Oil and Gas Extraction, Black Coal Mining, and Iron Ore Mining industries. Rio Tinto posted lower revenue over the year through December 2016, but recent results have shown a strong recovery over the year through December 2017,” says Aravanis.
Revenue across the electricity supply chain increased sharply with higher costs passed on to customers.
Rising gas prices, the closure of power stations, and uncertainty regarding investment in replacement power plants led to a significant increase in wholesale electricity prices in eastern and southern Australia.
Electricity retailers such as Origin and AGL increased revenue on the back of this trend.
EnergyAustralia posted lower revenue over the year through December 2016 due to the shutdown of aging power stations, but generated greater revenue over the year through December 2017 due to higher power prices.
The Petroleum Product Wholesaling industry posted a strong recovery as the world price of crude oil surged.
The increased crude oil price fed through to higher local wholesale and pump retail prices for petroleum and diesel.
The industry is dominated by four major players: Caltex, Viva, BP Australia and ExxonMobil. Revenue declined for all of these companies over the year through December 2016. However, these players are expected to post a significant turnaround over the year through December 2017.
Consumer goods retailing
Consumers have become more informed about purchases and the value of the products they buy.
The industry’s revenue declined as lower household discretionary income led to a cutback in household expenditure.
“Despite the overall decline in industry revenue, the industry’s major players, Wesfarmers and Woolworths, were able to grow their revenue as consumers sought out cheap prices at these large establishments,” says Aravanis.
“These large firms have been able to succeed in a difficult operating environment due to their economies of scale, which have enabled them to gain market share from smaller competitors.”
The Telecommunications Services industry posted lower revenue with intensifying price competition among wireless service providers and declining revenue from fixed-line businesses.
Both Singtel Optus and Vodafone posted significant revenue declines due to lower equipment sales and strong price competition from the mobile telecommunications resellers market.
Telstra’s retail segment has also been affected by these trends. However, Telstra’s overall revenue increased in 2016-17 due to rising revenue from leasing infrastructure to NBN .