by Joyce Hooi

SINGAPORE firms topped two of the Boston Consulting Group's lists for value creation in its latest report.

Dairy Farm beat McDonald's to be ranked first in the retail industry, based on an average annual total shareholder return (TSR) of 26.2 per cent from 2004 to 2008. McDonald's and Woolworths were in second and third places with 23 per cent and 21.4 per cent, respectively.

In the travel and tourism industry, SMRT Corporation emerged first, with a 29.1 per cent average annual TSR for the same five-year period. It beat Chilean LAN Airlines and Greek firm OPAP, which posted returns of 27.7 per cent and 20.1 per cent, respectively.

Dairy Farm's TSR for 2009 (as of June 30) remained impressive at 54.7 per cent even as McDonald's recorded a return of -5.9 per cent.

SMRT's 2009 TSR as of June 30, however, stood at 2.4 per cent, as six out of 10 of its peers recorded negative TSRs.

Three other local firms made it to the list of top 10 companies in the multibusiness industry category. Jardine Matheson, SembCorp and Noble Group were ranked sixth, seventh and eighth in a list led by LG Group.

Fourteen industries in total were ranked in BCG's report, 'Searching for Sustainability: Value Creation in an Era of Diminished Expectations'.

Even though double-digit returns were recorded by companies in pole positions for the 14 industries, the weighted average annual TSR for this year's Value Creators database from 2004 to 2008 was an 'anaemic 2.9 per cent,' according to the report.

On an industry basis, the utilities sector fared the best in this year's report, posting a 10.9 per cent five-year average annual TSR.

Among the industries hardest hit with negative TSRs were the pulp and paper and automotive and supply sectors, with -6.7 per cent and -4.5 per cent, respectively.

Despite this, the top 10 companies in every industry had substantially outperformed the industry and beaten the overall sample average by more than four percentage points in terms of TSR.

'The lesson for executives is clear. No matter how bad an industry's average performance relative to other sectors, it is still possible for companies in that industry to deliver superior shareholder returns,' said Dinesh Khanna, a partner in BCG's Singapore office.

Globally, South Korean chemicals firm OCI topped the list of companies for value creation, with a five-year average annual TSR of 73.7 per cent.

This article was first published in The Business Times.