In this article we are going to list the 15 biggest companies that aren’t profitable. People start businesses because they don’t want to carry on with the 9-5 slog at best, though in today’s world in most developing countries, 8 hours a day doesn’t even come close to cutting it. And all this effort and bearing rush hour traffic throughout your life only to have to live pay check to pay check and the moment, say a pandemic hits, and businesses are closed and the next day you’re out of a job and don’t know where your next meal will come from. This what allures many people to start businesses, where the work is much harder but then you are earning money for yourself and not for anyone else.
This brings us to the main point of starting a business; making profits at a far larger scale than a simple standard working class pay check and working for yourself instead of anyone. This is why it seems counterintuitive that companies, especially major companies, could go on for decades while often making losses. Look, everyone knows that when you start a business, the first few years are not going to be profitable at all. This is why you need investment from people who will buy into your vision, and you slowly work on converting those losses to profits as times goes by and provide a decent return on the investment that other people have made in your business.
The best example of this, and perhaps the most extreme as well, would be Amazon (NASDAQ:AMZN). From its inception in 1994, up till just a few years ago, Amazon remained unprofitable. This seems an insane thing to say about perhaps one of the most popular companies in the world and certainly one of the most influential but it is definitely true. The reason behind this is that Amazon, over the years, kept making sales at extremely low and competitive prices to entice customers to switch over to the company rather than whatever retailer they were initially going with. This has led to Amazon gaining a significant market share in e-commerce especially over the past decade, which in turn has led to economies of scale allowing Amazon to further provide subsidized prices to customers and gain even more share. This has allowed Amazon to also invest in other businesses such as its cloud service platform, which is one of the biggest in the world, and has allowed it to finally become profitable. Another advantage of the losses I mentioned earlier? Amazon now earns profits of billions of dollars and still doesn’t have to pay income tax on it, due to the losses of previous years being carried forward and being set off against the profits of the current year, making it the biggest company in the world to not pay taxes.
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However, Amazon is perhaps the exception to the rule rather than the rule itself. The goal of the vast majority of the companies in the world is to make money and make as much of it as they can to appease their shareholders. However, in a world which is as globalized and competitive as ours, even the biggest of companies are not exempt from making losses, even if their revenues are in the tens of billions of dollars.
Many of the companies in our list are state-owned, which is one reason why they are loss making. State owned companies main objectives surpass profits and include providing a service which is affordable to all residents, with the government absorbing the losses the company makes. However, it should also be noted that many state owned companies are simply victims of inefficiency and corruption, which is why they fail to make profits which I can say with confidence, being from a developing country whose state owned corporations are plagued by this issue.
To come up with the list of the biggest companies that aren’t profitable, we considered the Fortune Global 500 list for 2020, which has the names of the biggest companies in the world. From this list, we took out the companies which made losses during 2019, and then ranked these companies based on their revenues, assets and employees, with preference given to revenues. Using multiple metrics allowed us to come up with an incredibly accurate list. It is important to note of course that this list is based on 2019 revenues, before the pandemic had disrupted the world. When we update this list for 2020, there will a lot more companies to choose from, as the economic downturn in 2020 has twisted the fortunes of the elite. But till then, let’s take a look at the biggest companies unable to become profitable, starting with number 15:
15. Vale (NYSE:VALE)
Total revenue of the company in 2019 (in millions of dollars): 37,570
Total assets of the company in 2019 (in millions of dollars): 91,713
Total employees of the company in 2019: 71,149
Total losses of the company in 2019 (in millions of dollars): 1,683
One of the biggest mining companies in the world, Vale is a Brazilian company which is the biggest nickel and iron ore producer in the entire world.
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14. Marubeni
Total revenue of the company in 2019 (in millions of dollars): 62,799
Total assets of the company in 2019 (in millions of dollars): 58,481
Total employees of the company in 2019: 49,515
Total losses of the company in 2019 (in millions of dollars): 1,816
We surprisingly have several Japanese companies who are loss making starting off with Marubeni which has a huge market share in both paper pulp trading as well as cereal.
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13. ENEOS Holdings
Total revenue of the company in 2019 (in millions of dollars): 75,897
Total assets of the company in 2019 (in millions of dollars): 74,131
Total employees of the company in 2019: 40,983
Total losses of the company in 2019 (in millions of dollars): 1,729
The Japanese petroleum and metals company was founded just a decade ago in 2010 and makes our list of the biggest companies that aren’t profitable.
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12. Korea Electric Power (NYSE:KEP)
Total revenue of the company in 2019 (in millions of dollars): 50,257
Total assets of the company in 2019 (in millions of dollars): 170,888
Total employees of the company in 2019: 47,452
Total losses of the company in 2019 (in millions of dollars): 2,013
The biggest utility company in South Korea is owned by the government of South Korea and has recently made losses, even though you would expect a company run by the South Korean government to be extremely efficient.
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11. Continental
Total revenue of the company in 2019 (in millions of dollars): 49,783
Total assets of the company in 2019 (in millions of dollars): 47,779
Total employees of the company in 2019: 241,458
Total losses of the company in 2019 (in millions of dollars): 1,371
The German car manufacturer and was initially founded as a rubber manufacturer back in 1871. It was the first country in the world to create grooved vehicle tires, and is one of the biggest car parts supplier in the world.
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10. Auchan Holding
Total revenue of the company in 2019 (in millions of dollars): 54,672
Total assets of the company in 2019 (in millions of dollars): 38,708
Total employees of the company in 2019: 308,137
Total losses of the company in 2019 (in millions of dollars): 1,638
The French multinational retail group has a presence in many European and some Middle Eastern countries in addition to China. The company was founded 60 years ago.
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9. Nippon Steel Corporation
Total revenue of the company in 2019 (in millions of dollars): 54,465
Total assets of the company in 2019 (in millions of dollars): 68,890
Total employees of the company in 2019: 116,462
Total losses of the company in 2019 (in millions of dollars): 3,969
The Japanese steel making company was formed by the merger of two companies in 2012 and has major locations across the country.
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8. Deutsche Bank (NYSE:DB)
Total revenue of the company in 2019 (in millions of dollars): 41,780
Total assets of the company in 2019 (in millions of dollars): 1,456,509
Total employees of the company in 2019: 87,597
Total losses of the company in 2019 (in millions of dollars): 6,033
It is one of the biggest banks in the world, and has a presence in 58 countries. The German company was founded 150 years ago in 1870 and has a presence in Asia, Europe and the Americas.
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7. U.S. Postal Service
Total revenue of the company in 2019 (in millions of dollars): 71,154
Total assets of the company in 2019 (in millions of dollars): 25,633
Total employees of the company in 2019: 565,021
Total losses of the company in 2019 (in millions of dollars): 8,813
The U.S. Postal Service is of course responsible for providing mail and post across the United States, and was in headlines recently as it had a major role to deliver the ballots during the US election amidst the coronavirus pandemic, and the loss making company was provided additional funds to ensure the ballots were delivered on time.
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6. ArcelorMittal (NYSE:MT)
Total revenue of the company in 2019 (in millions of dollars): 70,615
Total assets of the company in 2019 (in millions of dollars): 87,908
Total employees of the company in 2019: 191,248
Total losses of the company in 2019 (in millions of dollars): 2,454
The biggest steel company in the world, Arcelor Mittal is a multinational company with headquarters in India and Luxembourg, and is also among the biggest companies in the world
5. Pemex
Total revenue of the company in 2019 (in millions of dollars): 72,820
Total assets of the company in 2019 (in millions of dollars): 101,602
Total employees of the company in 2019: 125,735
Total losses of the company in 2019 (in millions of dollars): 18,039
It has the highest losses of any company in our list at $18 billion, it is a Mexican state-owned petroleum company, which is among the biggest oil companies in the world. It is the second biggest company in Latin America.
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4. Airbus
Total revenue of the company in 2019 (in millions of dollars): 78,883
Total assets of the company in 2019 (in millions of dollars): 128,413
Total employees of the company in 2019: 134,931
Total losses of the company in 2019 (in millions of dollars): 1,524
The fact that Airbus is already in our list of the biggest companies that aren’t profitable spells doom for one of the biggest aviation companies in the world. Airbus even back in 2016 had performed more than 110 million flights which mean ferrying more than 12 billion passengers, and is a European multinational company. However, Airbus has been one of the worst hit companies by the pandemic as travel ceased and announced at least 15,000 job cuts in 2020 to manage its business during the pandemic and ensure its survival.
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3. SoftBank Group
Total revenue of the company in 2019 (in millions of dollars): 87,440
Total assets of the company in 2019 (in millions of dollars): 344,752
Total employees of the company in 2019: 80,909
Total losses of the company in 2019 (in millions of dollars): 8,844
The Japanese conglomerate is headquartered in Tokyo, Japan and is the biggest technology focused venture capital fund, which was established 39 years ago in 1981. The company is famous for being run by its founder Masayoshi Son, and operates in e-commerce, internet, finance, media marketing, semiconductor, broadband and telecommunications.
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2. Nissan Motor
Total revenue of the company in 2019 (in millions of dollars): 90,863
Total assets of the company in 2019 (in millions of dollars): 157,090
Total employees of the company in 2019: 144,933
Total losses of the company in 2019 (in millions of dollars): 6,174
It is one of the most famous automobile companies in the world, even though it is unable to really profit off its fame and revenue of more than $90 billion. The Japanese companies was established in 1933 and is one of the largest electric vehicle manufacturers in the world.
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1. General Electric (NYSE:GE)
Total revenue of the company in 2019 (in millions of dollars): 95,214
Total assets of the company in 2019 (in millions of dollars): 266,048
Total employees of the company in 2019: 205,000
Total losses of the company in 2019 (in millions of dollars): 4,979
Topping the list of the 5 biggest companies that aren’t profitable is one of the biggest conglomerates in the world in General Electric, which is involved in several industries which includes healthcare, aviation, power, digital industry, renewable energy, venture capital and additive manufacturing. It was one of the most profitable companies in the world in 2011, but has been affected by severe underperformance ever since, and made a loss of nearly $5 billion in 2019 alone.
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Disclosure: No position. 15 biggest companies that aren’t profitable is originally published at Insider Monkey.
