ECFIN Country Focus Issue 3 | June 2013
Several SOEs are accumulating losses and losing equity value, partially due to the current downturn…
The Financial Performance of SOEs
Table 1: SOEs consolidated with GGA (FY 2011, in EUR m) Table 2: SOEs outside GGA (FY 2011, in EUR m)
Notes: (i) Flagging scores are used to allow for a simple overview of the financial performance of SOEs and to identify potential risks. Scores range from 1 (worst performers) to 5 (no issues identified) according to net debt leverage and profitability. Companies with a score of 1 report net losses and high levels of debt when compared against cash flows. Some of these not only have a negative net profit but also a negative operating profit (EBITDA), indicating potential difficulties in covering debt obligations. (ii) Note that only EUR 50 m of KAD's financial obligations are classified as bank debt, while most of the remaining debt is classified as other long-term financial obligations related to pension transfers. Net profits reported are from continuing operations. Employment numbers include employees in Slovenia only, where data are available. (iii) Eight of the SOEs in the above table are on the list of 15 companies adopted by the government for privatisation in April 2013: Adria Airways,
Adria Tehnika, Aerodrom Ljubljana, Elan, Helios, Paloma, Telekom Slovenije, Unior. Source: AUKN Report 2011, Annual company reports for 2011, AJPES, Finance Top 101, own calculations.
CompanySector State ownership Total Assets Total EquityTurnoverEBITDAEBITDA margin Net profit after taxROEGross DebtNet Debt (less cash) Net Debt Leverage (x EBITDA)Equity/ (Equity +Debt)EmployeesScoreKADPension fund100%1320523127-124-98%-129-23%528498na51%581DSUState fund100%141596354%01%656420.8x48%232Railway HoldingTRAN100%6501713964311%-15-6%3943859.0x31%87971SODRestitution fund100%1265128218nananana962955na12%542CompanySector State ownership Total Assets Total EquityTurnoverEBITDAEBITDA margin Net profit after taxROEGross DebtNet Debt (less cash) Net Debt Leverage (x EBITDA)Equity/ (Equity +Debt)EmployeesScoreElektro Ljubljana GroupENER82%515269449399%72%1231142.9x70%9645Elektro Gorenjska GroupENER85%202136831416%21%37342.5x80%3334HSE GroupENER100%22761409132019014%705%4934262.2x77%38155Elektro Primorska GroupENER82%2141351251512%11%32312.0x82%4894Elektro Maribor GroupENER83%3442341752615%52%43351.4x87%8175ELES GroupENER100%6994573924010%-3-1%110782.0x85%5333Elektro Celje GroupENER81%2681811392618%74%37361.4x83%6835Geoplin GroupENER54%4322884014411%197%50441.0x87%1875GEN-I GroupENER69%219491012202%1443%15-60.0x113%1095NEKENER50%5134401987337%00%32320.4x93%6234GEN Energija GroupENER100%7205295597513%214%23130.2x98%2825SODO ENER100%88434131%232%000.0x103%264 Adria AirwaysTRAN96%9622150-7-4%-12-54%4544na34%4501 Adria Airways TehnikaTRAN100%17523-1-3%-4-86%55na52%2291DARSTRAN100%5529242731126184%251%2954295211.3x45%12492Luka Koper GroupTRAN72%4782411445035%00%2062054.1x54%10202 Aerodrom Ljubljana TRAN72%129123331443%54%000.0x100%4105DRITRAN100%241919212%29%0-10.0x103%2895PDPCF100%37270-1na-17-62%1010na74%71Javni Holding Ljubljana CF100%5323782383013%82%34270.9x93%25165Telekom Slovenije GroupCOMM75%157581581526332%344%4884271.6x66%35975Posta SlovenijeCOMM100%3012502383816%94%0-20.0x101%65345Nafta Lendava GroupPI100%461049-1-2%-5-45%3331na25%3961Sava GroupPI31%6111661942010%-157-49%37136118.2x31%21351Pivovarna Lasko GroupPI40%570125323299%-28-5%38936712.5x25%18201Unior GroupPI58%3761472262310%00%1611577.0x48%30182Mercator GroupPI31%264878929281776%243%118511576.5x41%120342Petrol GroupPI38%153744232701164%5212%6125514.8x44%37612Talum Group PI87%20610826110%-7-7%444037.2x73%9971Paloma GroupPI71%5288756%-1-6%20203.8x30%8203Elan GroupPI100%124499099%-1-3%40354.2x58%5861Cimos GroupPI34%7491394566715%33%4094016.0x26%35152Hit GroupPI60%3051051903217%-6-5%1601394.4x43%20151Helios GroupPI34%367200338226%11%119974.5x67%13192Intereuropa GroupPI51%4071412122311%-5-5%2031858.2x43%9081Krka GroupPI28%15341140107630128%16315%70490.2x96%46035Iskra Avtoelektrika GroupPI43%17543245208%615%68663.3x39%15555Istrabenz GroupPI32%377131451511%-25na33532321.2x4%11081Loterija SlovenijePI40%492910466%516%2-80.0x137%625Flagging score (from worst to less worrying) Sectors: 1. Negative territory (high leverage over 4x + negative EBITDA and/ or Net profit)
(i) ENER - Energy (iv) COMM - Post and Telecommunications
2. High leverage (over 4x)
(ii) TRAN - Traffic, Transport and Infrastructure(v) FIG - Financial and Insurance Groups
3. Negative Net profit and ROE
(iii) CF - Capital Funds, Business Special Significance (vi) PI - Portfolio Investments
4. Low earnings and ROE below 1%5. No major issues identified.
Graph 1: Book value and net sales revenue of the total RS portfolio, 2011 (EUR m)
Source: AUKN Report 2011 Note:The RS portfolio includes only direct ownership and approximately 76 companies.
-2000020004000600080001000012000091011Book ValueNet Sales RevenueNet Profit
Graph 2: Book value and number of SOEs by sector, 2011 (% of total)
Source: AUKN Report 2011 Note: The RS portfolio includes only direct ownership and approximately 76 companies.
37.118.83210.1220.127.116.11.514.51.434.80.5130%20%40%60%80%100%Book ValueN. of Companies
OtherPortfolio InvestmentFinancial InstitutionsPost and TelecommunicationsCompanies of Particular SignificanceTraffic, Tranport and InfrastructureEnergy