SOEs earned a record return for the state last year – 240 million. euros
State-owned enterprises (SOEs) added 190 million to the state budget with dividends and profit contributions this year. EUR and almost another 50 million. euros in other non-typical fees. This is so far the highest return earned by SOEs to the state during the entire period of Lithuania’s independence.
The Governance Coordination Center publishes the summarized results of the 2022 SOE portfolio. Sales revenue in the SOE portfolio increased by 81.6 percent last year. up to 6.4 billion euros and this amounted to 9.5 percent. country’s GDP.
SOE sector companies earned a total net profit of 434.3 million. euros, i.e. i.e. 49.4 percent more than in 2021. The contribution to the state budget, including dividends allocated to SOEs, profit contributions and other atypical taxes, increased by almost 30 percent. and amounts to 240 million euros, or an average of 85 euros per Lithuanian resident.
“In the face of economic challenges, the SOE sector demonstrates resilience. This is proof that the ongoing long-term transformation of SOEs is on the right track and is already yielding tangible results, which we can see in the annually improving financial indicators of SOEs, more efficient services provided to the people of Lithuania, and a solid return to the state. Today, the bar for the governance of SOEs is set high, so I hope that we will continue to make decisive steps towards an even bigger breakthrough”, says Aušrinė Armonaitė, Minister of Economy and Innovation.
The results exceeded expectations
The successful results of the SOE portfolio, according to Vidas Danieliaus, head of the Governance Coordination Center, reflect both the targeted actions of the Government, in accordance with the planned SOE management centralization plan, and the adaptation of the SOEs themselves to operate in uncertain environmental conditions.
“Last year, the SOE sector not only kept its obligations to the state, but also exceeded all expectations. The energy crisis and inflation, the war launched by Russia against Ukraine, and the resulting uncertainty have encouraged SOEs to consolidate their available resources and make quick strategic decisions that best suit the interests of the organization, shareholder and society. Despite the stressful period, we continued with significant management changes and established a new concept of SOE performance measurement. This significantly led to the awareness of the SOEs themselves that it is important to use all possible opportunities to ensure the highest level of management, which leads to the ever-improving results of the SOE portfolio”, he emphasized.
V. Danielius drew attention to the fact that almost 40 million SVEs were allocated to the state budget. EUR more dividends and profit payments than was forecast. The contribution to the state budget, including dividends and profit payments assigned to SOEs, as well as other non-typical taxes paid by SOEs, rose to a record high of 240 million. euros.
More than half of this amount – 141.5 million. EUR – consists of the profit contribution assigned by the State Forestry Authority and non-typical taxes paid. Among the companies that paid the most dividends and profit contributions to the state budget: AB “Ignitis grupė” (EUR 67.7 million), AB Klaipėda State Seaport Directorate (EUR 8.1 million), VĮ “Regitra” (EUR 4.5 million . EUR), VĮ Registru centras (4 million EUR).
Significant changes in the energy and forestry sectors
V. Danielius, head of the Governance Coordination Center, noted that the increased income and net profit of the SOE portfolio was determined by the energy and forestry sectors, which significantly improved financial indicators.
More than 2 times the income increased in the sector of energy companies and amounted to 5 billion. euros. The increase in the income of energy companies was mainly determined by higher electricity market prices. Also significantly – 55.4 percent. – the sales revenue of the State Forestry Authority of VĮ also increased. This was caused by a significant rise in wood prices on the international market and in Lithuanian auctions. The sales revenue of companies in the transportation sector amounted to 0.8 billion. euros – similar to 2021. In total, the general sales revenue of SOEs increased by 81.6 percent last year. up to 6.4 billion euros.
“The activities of companies in the energy sector continue to have the most significant influence on the results of the SOE portfolio. We also see a tendency that the results of the State Forestry Office, which also affect the overall portfolio of SOEs, are strongly dependent on market fluctuations,” V. Danielius emphasized.
The net profit in the SOE portfolio increased by 49.4 percent. compared to 2021 and reached up to 434.3 million euros. The largest increases in net profit are calculated by AB “Ignitis grupė” (+133.3 million EUR), VĮ Valstynnye miško urėdija (+84.2 million EUR), AB “Klaipėdos nafta” (+58.1 million EUR), AB Lithuanian Post (+11.3 million EUR), VĮ Ignalina nuclear power plant (+7.4 million EUR).
EPSO-G group of companies (-82.3 million EUR), AB Lietuvos geležinkeliai group of companies (-22.3 million EUR), JV “Registrų centras” ( -11.4 million EUR), AB Lithuanian Radio and Television Center (-11.3 million EUR), UAB Agricultural Loan Guarantee Fund (-10.3 million EUR).
Corporate boards meet the OECD standard
Also, the head of the Governance Coordination Center, V. Danielius, pointed out that the depoliticization and increasing independence of collegial management and supervisory bodies in SOE management has reached a new level. “For the first time, the chairmen of all SOE boards and supervisory boards are independent. Meanwhile, 63% of independent members are in the elected collegial bodies of SOEs. This is in line with OECD good governance practices,” he emphasized.
In recent years, SOEs boards and supervisory boards have been moving towards a more even distribution of genders. In 2022, the share of women in collegial bodies will increase to 36.7 percent, and the number of women in leadership positions in collegial bodies will increase to 31.4 percent.
“Achieving the highest standards in SOE governance is gaining more and more momentum, but the shareholder’s point of view remains extremely important for the proper implementation of good governance.” We hope that a strong political will to raise the bar of SOE governance will continue to be maintained, and the centralized governance model, towards which we are moving, will ensure even more professional SOE management, greater transparency and a solid return to the state,” V. Danielius, head of the Governance Coordination Center, emphasized.
In total, at the end of 2022, 45 SOEs were operating, employing 26,947 employees. Over the past year, the number of employees in the SOE sector decreased by 8.2 percent.