The net profit of municipal-owned enterprises increased 25-fold in 2023.

Municipal-owned enterprises (MOEs) recorded a slight increase in revenue last year, from 1.33 billion to 1.37 billion euros. However, the dynamics of net profit were impressive: in 2023, compared to 2022, the net profit of MOEs grew 25 times, from 4.4 million to 112.3 million euros. At the end of 2023, the assets of MOEs amounted to 4.04 billion euros, 7.9% more than in 2022.

According to the director of the Governance Coordination Center (GCC), Vidas Danielius, it is gratifying to see the noticeable improvement in financial indicators in the MOE sector last year. He noted that the stability of revenues was due to increased tariffs for water supply and sewage management, while the growth in profits was influenced by reduced costs due to falling energy prices.

“The Governance Coordination Center has been monitoring MOE governance for several years, and the financial portfolio results of MOEs in 2023 are solid evidence that changes in municipal governance and company management are moving in the right direction. We must continue to raise the bar for implementing good governance practices, as this is the only way to achieve even better results in the future,” said V. Danielius.

It is estimated that the number of MOEs in Lithuania decreased by 10 companies to 225 over the past year, with 173 of them finishing the year profitably.

The companies managed by the Vilnius City Municipality earned 427.4 million euros in revenue last year, 6.9% less than in 2022. However, their profit reached 56.1 million euros, approximately six times higher than in 2022.

The revenues of Kaunas MOEs grew by 11.1% to 208.6 million euros last year, with profits increasing to 20.1 million euros, about four times more than in 2022.

The revenues of Klaipėda City Municipality-owned companies grew by 11% to 110.3 million euros last year, with a profit of 10.8 million euros.

In 2023, AB “Vilniaus šilumos tinklai” recorded the most significant change in net results, with a net profit increase of 18.3 million euros to 30.7 million euros. The net result of UAB “Vilniaus vandenys” increased by 16.2 million euros, and UAB “Kauno vandenys” by 13.5 million euros.

“It is very important for municipalities to continue boldly on the path of good governance and to be willing to implement good governance practices, understanding the benefits for both companies and the people. The GCC team will continue to be ready to work closely and provide governance consultations to both the MOEs and municipal administrations,” said GCC director V. Danielius.

A municipal-owned enterprise is a company established from municipal property or transferred to the municipality by law, owned by the municipality, and managing, using, and disposing of its property on a trust basis. The goal of municipal enterprises is to provide public services, produce goods, and engage in other activities to meet public interests.

In 2023, a total of 225 municipal-owned enterprises operated in Lithuania, distributed across seven sectors: heating networks (42), water management (49), public transport (38), housing management (17), multifunctional service provision (17), waste management and environmental maintenance (30), and others (32).