Last year, compared to previous years, the energy sector drastically reduced its profitability, liquidity, and solvency, the Center for Economic and European Studies (CEES) announced.
From the CEES, they stated that, according to the data for the last year, the results of the operations of companies in the majority ownership of the state took on worrying proportions.
According to the latest CEES research, the two largest sectors in which state-owned enterprises operate – transport and energy – have increased the risks of their operations. And while the transport sector is characterized by a long-term trend of achieving negative business results, the energy sector drastically reduced profitability, liquidity, and solvency of operations last year compared to previous years – it is stated in the announcement.
As they explained, the deterioration of the profitability, liquidity and solvency of Elektroprivreda (EPCG), as the largest state-owned enterprise, contributed in particular to this.
Moreover, the consolidated financial report of EPCG shows that this company, together with the companies of which it is the majority owner, realized a loss of EUR 9 million last year. The huge losses of the Montenegrin Electric Distribution System (CEDIS) and EPCG-Solar-Gardnje, as companies majority-owned by EPCG, contributed to this – CEES claims.
In addition, as they announced, a significant decrease in EPCG’s liquidity ratio indicates that it, and its related companies, have more and more short-term liabilities that are due for payment, and less and less short-term assets that are due for collection.
Samples of such a situation are primarily reflected in the weaknesses of corporate management, primarily insufficient transparency, direct interference of owners in the management decisions of individual companies and the absence of audit committees in all companies – the statement added.
Business costs in the energy sector have increased significantly, and one of the key factors is the increase in wage costs due to the huge increase in employment.
The number of employees in companies in the energy sector, primarily EPCG, CEDIS, The coal mine and EPCG Solar- construction, increased by nearly a thousand last year, which is almost a quarter more than the previous one. On the other hand, the movement of electricity prices on the market, as well as the difficult collection of receivables, had an adverse effect on the income of energy companies – specified from CEES.
In CEES, they believe that the deterioration of financial results in the energy sector, together with the already negative business results in the transport sector, as the second largest sector, will inevitably increase the pressure on the budget and the state as the owner.
If the state does not urgently adopt a strategy with measures for the reform of companies in its majority ownership and does not reform the supervision of their work, it is to be expected that the pressure on the budget to settle the obligations of these companies will increase – CEES warned.
This, as they said, is already confirmed by individual payments from the budget last year, as well as the fact of the increased number of planned state guarantees in the budget for this year for companies owned by it. Citizens as taxpayers will ultimately pay for everything – they concluded from CEES.