Specifying the state of the market (goods, capital, currency, some fourth, fifth…), and, God forbid, forecasting, has never been more meaningless. A statement, belief, or analysis written now (these lines are being written in the evening), in the morning is like Czech luftiks in the Adriatic bora: once blown away, no one has ever seen them again. Moreover, what the reciprocal tariffs will be, for whom, and for what exactly, the American administration will announce only on April 2. Until then, the markets are bizarrely going crazy. Namely, the German parliament (as expected) voted for a historic constitutional amendment that allows the state to invest in (defense) infrastructure of 500 billion euros. The capital market immediately jumped, so the Frankfurt DAX index is up 16 percent this year. In comparison, the S&P 500, which tracks the largest American companies, is down five percent. But the night is young; in a month, three, or nine, Trump’s moves could at least turn the indices around the sun three times.
Therefore, it is not surprising that domestic companies cannot precisely target the consequences of tariffs for their business. Namely, regardless of the fact that they are mostly not directly export or import linked to the American market, they are linked to the European one, which will undoubtedly suffer. However, this is not a topic they are eager to discuss. We sent inquiries to quite a few addresses, and only one response was received, from Končar.
– Končar does not see significant reasons for concern, especially since we primarily achieve market placement in the EU market. According to unaudited financial reports for 2024, Končar achieved exports of 551.7 million euros in EU countries, which is an increase of 133 million compared to the previous year, and constitutes 74 percent of total exports. The newly contracted jobs of the Group reached almost 1.7 billion euros. The EU’s share in contracted export jobs is 76.3 percent. Additionally, a key indicator for the continuation of a successful trend is the state of open obligations, backlog, which at the end of 2024 amounts to a record 2.034 billion euros and is 43 percent higher than the state at the beginning of the year – they state from Končar, adding that alongside the German market, the Swedish, Austrian, Norwegian, and Dutch markets are particularly important to them, thus the orientation towards European markets remains a priority in the coming years.
China is a competitor, not the USA
Part of the business is still linked to the USA, so what are the estimates for events there and their consequences?
– The US market is currently important to us due to one segment of the production program within the broader business area of transmission and distribution of electricity. In 2024, goods and services worth 12.4 million euros were exported to the USA, which is only 1.7 percent of Končar’s total revenue. Existing contracts for the USA are related to several energy companies. This involves the delivery of high-voltage transformers that will play an important role in the ‘Greenlink Nevada’ project, which aims to connect the existing 525-kilovolt network with new transmission networks in the northern and western parts of Nevada. It should also be mentioned that Končar – Energy Transformers (KPT), a joint-venture company co-owned with Siemens Energy, in which the company holds a 49 percent ownership stake. Končar – Energy Transformers achieved sales revenues of nearly 250 million euros last year, which is 30 percent more than the results in 2023, with part of the revenue generated precisely in the US market. KPT is now one of the best factories for large energy transformers in the world. The introduction of tariffs brings unfavorable consequences for both sides and is certainly an unpopular measure for trade relations and further economic growth. We will see how the situation develops, but we do not expect that Končar, as a European manufacturer and exporter oriented towards the EU markets, will be significantly threatened in its business. Thanks to the historical investment and transformational momentum, the company will certainly remain an indispensable partner in the green and digital transition at the European level – they say at Končar, adding that despite the current circumstances, they still consider the US market to be potent and promising, and are actively considering strategic partnerships there, as well as the potential for local presence.
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