Rapid deterioration of results. What is happening to State Treasury companies?

Luc Williams

The list of state-owned enterprises that recorded a sharp deterioration in results in the just-ending reporting season for last year is completed by the energy company Enea. In 2023, the capital group headed by the Poznań-based company lost PLN 700 million.

This is primarily the result of large adjustments in the value of the assets of the mentioned companies. The losses recorded in the reports are only of an accounting nature and do not reflect the deterioration of the condition of these enterprises. This is best illustrated by the example of PGE – in the same financial statement, the company reported the highest loss in history, exceeding PLN 5 billion, at the level of net profit and a record high operating profit plus depreciation and amortization (EBITDA), which in 2023 exceeded PLN 10 billion.

Orlen, the largest non-financial company in Poland in terms of scale of operations, after checking the value of its assets, reduced their valuation by a record PLN 17.5 billion. However, even after this write-off, the fuel market leader earned PLN 20.7 billion net in 2023.

The total net profit of 24 listed companies controlled by the state amounted to PLN 28.3 billion last year. Compared to the previous year, it was more than 50 percent. lower. Why? The contractual capital group of the State Treasury is dominated by companies whose financial results are linked to the prices of raw materials. Russia's attack on Ukraine in February 2022 drove up prices in this part of the global economy – hence Orlen's net result of PLN 40 billion, but also the record PLN 7.6 billion profit of JSW, which produces coke and coking coal, and PLN 4.7 billion earned by KGHM. Just a few months after the outbreak of the war, commodity prices began to decline, and last year saw a continuation of this trend, as the industrial sector found itself in a global crisis.

The profits of state-owned companies have declined, and the new supervisory boards and management boards elected by Donald Tusk's government had a good reason to adjust down the value of assets on their balance sheets in the 2023 reports, which are a record of the achievements of their predecessors, while reducing the companies' net result. .

The situation is different in the Azoty Group – the sudden collapse on the fertilizer market resulted in revenues in 2023 being almost 50% lower. The net loss of PLN 3.3 billion is the worst result in the company's history.



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