Villu Zirnask, business journalist

For me, the biggest surprise in the TOP 101 Estonia's most valuable enterprises in 2021 was not finding Synlab Eesti AS, which placed 84th in the ranking last year. This company is a considerable performer of coronavirus PCR tests, which is why I expected it to be one of the biggest risers in the rankings this year. After all, over the past year and a half during the pandemic these tests have been performed in Estonia for a total of about 100 million euros, a large part of them in Synlab.

Unfortunately, Synlab Estonia had not submitted its annual reports to the Business Register by the beginning of November, and thus it was excluded from the TOP 101. In any case, the turnover of Synlab, the Synlab Estonia parent company, listed on the Frankfurt Stock Exchange, grew by 38% in 2020 and EBITDA by as much as 71%. It’s a pity that its Estonian subsidiary is ashamed of its presumably good financial results, because the opportunity to become one of the most valuable companies in Estonia may not open up every year.

The medical sector in Estonia has somehow gone unnoticed economically (or made itself so) during the pandemic. It’s true that the highest turnover growth in this sector has only taken place this year, but TOP 101 is based on the 2020 financial statements. According to the State Agency of Medicines, the sales volume of human medicines exceeded 100 million euros for the first time in the second quarter, increasing by 34% compared to the same period last year.

Green award

However, TOP 101 reflects the plight of the sector that suffered the most during the pandemic - the tourism and leisure business. If in 2019 Estonia's most valuable enterprise was Tallink, then in 2020 it fell to second and in 2021 it’s only in fifth place. At least, the good news for Tallink's owners is that the value decline has stopped and it seems that it can't get any worse, only better.

However, in addition to the difficulties of Tallink's own sector, the loss of Tallink's position is also due to the fact that some other companies are doing well. The estimated value of Eesti Energia, the leader of the ranking, has increased by 28% compared to the previous year and by as much as 66% compared to 2019. Despite the fact that 2020 was actually a bad year in the electricity market - due to the corona shock, the price was low and consumption lower than usual. Consumption recovered and prices didn’t skyrocket until the second half of this year. Thus, it can be said that Eesti Energia's green revolution has been successful, because the company value is growing even in a bad year. The success of the TOP 101 winner is corroborated by the successful launch of its subsidiary Enefit Green this autumn.

Enefit Green, of whose shares Eesti Energia still owns more than 75%, may support the majority shareholder’s value for some time to come. Firstly, through the growth of renewable electricity production and possible price increases. And secondly, because greener companies are valued higher by the market. On the one hand, green is simply in vogue and in demand, but on the other hand, also because of the strong regulatory headwind, which makes it easier to make a profit with "green".

This regulatory headwind will last for decades (although unexpected turns may occur, as is unfortunately the case with national regulations). The case for being environmentally friendly with the green premium is more precarious - somewhere there’s a limit beyond which investors won’t pay more: green companies are valued higher than "browns", but the gap is no longer growing. We haven’t reached this limit yet.