In 2022, public enterprises recorded a ten times higher negative net result compared to the previous year, in the amount of 74.77 billion dinars, the Agency for Business Registers announced in the annual report on business operations in Serbia.
The growth of the negative net result is, as pointed out, largely due to the continuation of the negative business of companies from the Electricity, gas, steam and air conditioning sector, which reported a net loss of RSD 67.39 billion, which is 6.7 times higher than the previous year.
The analysis of the realized negative net result indicates that the dominant contributor to such growth was the more than threefold increased net loss, expressed in the amount of 90.88 billion dinars, while at the same time the net profit was reduced by 16.9 percent, to the amount of 16.1 billion dinars.
According to the APR report, 347 public companies operated with a net profit, which is 25 less than in 2021, while 164 public companies recorded a net loss, or 13 more than two years ago. 16 public companies did not report a net result.
“The growth of the negative net result is to the greatest extent a consequence of the continuation of the negative business of companies from the sector ‘Supply of electricity, gas, steam and air conditioning’. At the same time, they reported a net loss of 67.39 billion dinars, which is 6.7 times higher than in the previous year,” APR said.
The la”ges” company from that sector is the formerly public, and now a joint-stock company – Elektroprivreda Srbije (EPS). That company stated in its Business Report for 2022, while it was still a public company, that in the last quarter of 2021 there was a “significant deterioration of business”, pointing to the collapse that occurred in December of that year, when due to “wet, muddy and sticky coal” there was a drop in electricity production, which continued in 2022, partly due to a shortage of coal, partly due to drought.
When it is taken into account that EPS had to import electricity at an unfavorable price, it is not surprising that the financial result at the end of 2022 was negative – the net loss after taxation amounted to 73.7 billion dinars.
Đukić: EPS as an example of multi-decade accumulation of “bad condition”
During this year, EPS was transformed into a joint-stock company, while there was a fierce debate in the public about the consequences of the adoption of the Draft Law on the Management of Companies Owned by the Republic of Serbia, which was withdrawn from the parliamentary procedure at the beginning of June this year.
At that time, we talked about the measures proposed by that regulation, including the change of form to joint-stock or limited liability companies, with the professor of economics at the Faculty of Technology and Metallurgy, Peter Đukić, who pointed out that one should always keep in mind how long public companies have been managed in an absolutely inadequate way.
“EPS is a good example of the decades-long accumulation of a ‘bad state’, mostly due to the relationship between the authorities and politicized administrations. It was taken from the EPS on various grounds, it was used for earnings and employment along party lines, and even during the period of fiscal stabilization, it paid profits into the budget as if it did not need investments, only to be in losses from 2018 onwards. Only the collapse in December 2021 led to the red lights allegedly turning on both in the country and at the International Monetary Fund (IMF), although I believe many people were clear about what was happening,” Đukić said then in an interview with Biznis.rs.
When it comes to the current report of the APR on business operations in 2022, the negative trend in business results was maintained, as they indicate, even with companies from the construction sector, whose loss is 5.08 billion dinars and is 21.5 percent higher on an annual level, while among the losers in 2022 were also companies from the mining and transport and storage sectors, which were in the plus in 2021.
APR data say that only companies from the real estate sector moved from a negative to a positive sphere of business, which achieved a positive net result in the amount of 17 million dinars.
“The biggest positive result was achieved by companies from the agriculture, forestry and fishing sectors, in the amount of 818 million dinars, which is 7.7 percent less compared to the previous year,” the Report on the Business of the Serbian Economy states.
The main bearers of this result of the operations of public companies were large systems. Their loss in the amount of 73.4 million dinars has increased almost 10 times compared to the previous year.
By the way, out of a total of 569 public companies that were obliged to submit a regular annual financial report for the year 2022, 528 submitted their reports.
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