Profits of public enterprises declining

By A Staff Reporter Kathmandu, May 30: Profits of state-owned enterprises have been declining for the past two years. The government attributes the decline to COVID-19 pandemic. 

The government has said that the overall financial condition is satisfactory despite some contraction in the performance of public enterprises.

According to the Economic Survey made public on Saturday, 22 out of 44 public enterprises operating in the fiscal year 2020/21 were in profit and 19 were in losses. The rest of the enterprises' transactions are nil.

The net profit of public enterprises has decreased by 45.42 per cent to Rs. 26.35 billion in fiscal year 2020/21 as compared to the previous fiscal year.

In the FY 2020/21, net profit of 22 corporations operating at a profit decreased by 40.30 per cent while net loss of 19 corporations operating at a loss increased by 3.61 per cent as compared to previous fiscal year.

The total operating income of the enterprises increased by 1.51 per cent to Rs. 435.17 billion in the fiscal year 2020/21 while it was Rs. 428.71 billion in the fiscal year 2019/20.

In the fiscal year 2020/21, the government received a total of Rs. 6.72 billion dividends from the public enterprises.

This amount is 52.33 per cent less than the previous year. The government had received a dividend of Rs. 14.99 billion in the fiscal year 2019/20.

In FY 2020/21, the accumulated profit increased by 3.35 per cent to Rs. 113.56 billion. Accumulated losses decreased by 36.36 per cent to Rs. 21.78 billion.

The accumulated profit of all corporations (after deducting accumulated losses) increased by 21.54 per cent to Rs. 91.77 billion, the report said.

A total of 24 enterprises had made profit in the previous year. The turnover of two corporations was zero while 18 corporations had incurred losses. This time, a loss-making institution has been added.

The Janakpur Cigarette Factory is closed while the business of Electricity Generation Company and National Transmission Grid Company are in a stage to start business. 

Among the companies operating in losses, Nepal Oriental Magnetite and Butwal Thread Factory have no commercial business. 

As Nepal Railway Company is under construction, it is running at a loss as it is only incurring administrative expenses.

Administrative expenses of PEs have increased by 2.38 per cent in the fiscal year 2020/21.

In the Fiscal Year 2020/21, the share capital/net worth has increased by 7.36 per cent as compared to the previous fiscal year and reached Rs. 755.72 billion.

During the review period, the total investment of the government in the corporation increased by 9.18 per cent to Rs. 567 billion as compared to the last fiscal year.