PEs fail to meet net profit target

KATHMANDU:

Public enterprises (PEs) failed to meet the target on net profit set for the last fiscal year as a significant chunk of them incurred losses.

The government had estimated the 37 state-owned companies to generate a net profit of Rs 13.6 billion in fiscal 2012-13, but they were

able to earn a net profit of only Rs 11.4 billion in the year, shows the Annual Review of PEs released today by the government.

Ironically, 99 per cent of the net profit booked by all public enterprises had come from Nepal Telecom, which generated a net profit of Rs 11.3 billion in the year.

However, considering the loss of Rs 3.50 billion incurred by public enterprises in fiscal 2011-12, it could be said that their performance has improved this fiscal.

Last year, 19 companies — five more than that of the previous fiscal — booked profits and 13 others, including Nepal Electricity Authority (NEA) and Nepal Oil Corporation (NOC), reduced their losses. But three companies — Nepal Drugs Ltd, Nepal Food Corporation, and National Productivity and Economic Development Centre — widened their net losses, and two others did not submit their financial reports.

The performance of PEs improved mainly due to higher profits generated by the utility subgroup. The subgroup’s net profit jumped to Rs 6.5 billion last fiscal, up from Rs 1.4 billion in the previous fiscal.

Similarly, companies belonging to services and financial subgroups also accelerated their net profits, while public enterprises falling in trading and social subgroups minimised their net loss in the last fiscal.

Net loss of NOC, sole importer of petroleum products, reduced to Rs 2.05 billion in the last fiscal year, down from Rs 9.52 billion in the

previous year due to the decrease in the price of crude oil in the global market. Likewise, NEA was able to limit its net loss to Rs 4.6 billion last year, down from Rs 9.94 billion in the year before, as it raised the price of electricity by 20 per cent.

Among others, Agricultural Development Bank’s net profit crossed Rs 2.3 billion and Rastriya Banijya Bank booked a net profit of Rs 1.3 billion in the year.

The government’s investment in PEs stood at Rs 107.66 billion last fiscal, up 5.13 per cent from that of the previous fiscal. In return, it earned a dividend of Rs 6.99 billion in the year, which accounts to 6.49 per cent of the government investment.

The government has estimated public enterprises to earn a net profit of Rs 3.4 billion in fiscal 2013-14.

Source: THT