Hungary’s state energy group has acquired a leading infrastructure platform, giving it access to Serbia’s investment cycle without challenging the country’s entrenched suppliers.
BELGRADE — When Hungary’s MVM increased its holdings in two Serbian engineering companies last September, the transaction was presented as another step in the regional expansion of the state-owned energy group.
Yet the significance of the deal lies less in the energy MVM might sell than in the infrastructure it will be able to build.
MVM raised its ownership of Energotehnika–Južna Bačka and Elektromontaža Kraljevo from 33.4 per cent to 60 per cent, taking control of both businesses while Serbia’s Maneks group retained the remaining 40 per cent. The companies have since been renamed MVM Južna Bačka and MVM Elektromontaža.
The transaction gives MVM control of what appears, by revenue, to be Serbia’s largest locally registered specialist energy-construction platform. But it does not alter the balance of power in electricity or gas supply, where state incumbents remain overwhelmingly dominant.
That distinction is central to understanding the Hungarian group’s strategy. MVM has not bought a Serbian utility. It has bought the machinery required to participate in the country’s next generation of transmission lines, substations, renewable projects, power-plant reconstruction, smart-meter programmes and cross-border connections.
Diverging fortunes
The two contractors generated combined revenue of RSD38.4bn, or about €328mn, in 2025. Revenue rose 3.4 per cent from the previous year, but net profit fell by almost one-third to RSD2.5bn. Combined earnings before interest, tax, depreciation and amortisation were RSD3.3bn.
The aggregate figures conceal sharply different performances.
MVM Južna Bačka produced revenue of RSD26.4bn, down 2.2 per cent, while net profit more than halved to RSD1.1bn. Its net margin fell from 9 per cent to 4.2 per cent as costs continued to rise despite slightly lower sales.
MVM Elektromontaža, by contrast, increased revenue by 18.3 per cent to RSD12bn and net profit by 9.3 per cent to RSD1.39bn. It earned more than its larger sister company while operating with less than half the revenue.
The divergence illustrates both the appeal and risk of construction-led expansion. Large infrastructure contracts can produce rapid growth, but profitability depends on project mix, procurement terms, equipment costs and the timing of revenue recognition.
It is also too early to treat the 2025 figures as evidence of MVM’s performance as controlling shareholder. The transaction closed only on September 30, meaning the Hungarian group exercised majority control for the final quarter. It had, however, owned minority stakes in the businesses since 2022.
Over that longer period, expansion has been pronounced. Južna Bačka’s revenue has roughly doubled from its 2021 level, although profit has returned to approximately where it started. Elektromontaža’s revenue has risen from RSD4.3bn in 2022 to RSD12bn, while profit has increased about tenfold.
Public procurement has been an important part of that growth. Forbes Serbia found that Južna Bačka had secured about 70 tenders, individually or through consortiums, since MVM’s initial investment — roughly twice the previous number.
Its first large contract following the name change is particularly symbolic: participation in the planned oil pipeline between Serbia and Hungary.
Big contractor, uncertain market share
No authoritative figure exists for the companies’ share of Serbia’s energy-infrastructure works market. Construction contracts cross several statistical categories, are frequently awarded to consortiums and can include imported equipment, engineering services and subcontracted work.
Nevertheless, the scale is notable. The two MVM-controlled companies’ combined 2025 revenue was almost four times that of Kodar Energomontaža, which reported RSD10.2bn, and more than seven times that of the Serbian entity of Elnos, with RSD5.1bn.
Serbia’s statistical office recorded RSD114.96bn of work in the broad category covering pipelines, communication and electricity lines in 2025. The MVM companies’ total revenue equals about one-third of that amount.
It would be incorrect to describe this as a one-third market share. The numerator includes all company revenue and potentially equipment, foreign projects and work outside the statistical category. The denominator also includes water and telecommunications infrastructure. But the comparison demonstrates the companies’ weight within Serbia’s engineering sector.
The reasonable conclusion is that MVM now controls a leading contractor platform, rather than a dominant market in the competition-law sense.
Supply remains firmly in Serbian hands
The position is very different in energy supply.
EPS, Serbia’s state electricity company, accounted for 98.89 per cent of electricity sold to final customers on the open market in 2025 and 96.7 per cent of total final consumption, including regulated supply. It also generated roughly 89 per cent of Serbia’s electricity.
MVM Partner Serbia does not appear among the 11 active final-customer electricity suppliers listed by the regulator. The acquisition of the two contractors therefore gives MVM no meaningful additional retail electricity share.
Natural gas provides MVM with a more tangible foothold. Srbijagas nevertheless remains dominant, supplying 76 per cent of all gas sold to final customers and 84 per cent of the open market in 2025.
Serbhungas, owned 51 per cent by MVM and 49 per cent by Srbijagas, supplied 3.93 per cent of the market. That made it effectively the second-largest supplier, narrowly ahead of Novi Sad Gas in volume, but still a distant challenger to its own Serbian shareholder.
Serbhungas generated revenue of RSD4.9bn in 2025 but recorded a loss of about RSD73mn. Its position is therefore strategically interesting but not yet financially compelling. Electricity and gas market figures are contained in the regulator’s 2025 annual report.
Oil products remain dominated by NIS, which operates Serbia’s only refinery and its largest filling-station network. NIS estimated that it controlled 66 per cent of the total motor-fuel market and 43 per cent of retail sales during the first half of 2026.
A picks-and-shovels strategy
MVM’s Serbian investment is best understood as a picks-and-shovels wager on regional energy modernisation.
Serbia needs to rehabilitate ageing generation assets, strengthen its transmission and distribution grids, install modern meters, connect renewable projects and build new links with neighbouring markets. MVM now owns the Serbian contractors capable of bidding for much of that work.
The model also fits the political economy of the region. A Hungarian state-owned group controls the contractor; Serbian state-controlled utilities commission many of the projects; and an established domestic shareholder remains invested alongside MVM.
That configuration offers access, local knowledge and financial backing. It also creates exposure to public-procurement cycles, political relationships and the investment decisions of a small group of state utilities. Južna Bačka’s profit decline in 2025 demonstrates that high revenue and a substantial order book do not automatically translate into stable margins.
MVM has therefore not broken Serbia’s energy monopolies. It has positioned itself immediately downstream from them.
EPS will continue to dominate electricity, Srbijagas will remain the central gas supplier and NIS will retain its pivotal role in fuels. But when these companies and the Serbian state spend money on grids, pipelines and power facilities, an MVM-controlled business will increasingly be among those competing to build them.
That may ultimately prove a more practical route into the Serbian energy system than attempting to challenge its incumbents head-on.
