DHI contributes 22% to government revenue last year
The major portion of dividends was from Druk Green Power Corporation followed by Bhutan Power Corporation
Druk Holding and Investments (DHI) contributed Nu 6,248.47mn in the form of taxes and dividends to the government, which constituted 22% of the total domestic revenue last year, according to the annual national budget report.
DHI earned Nu 7,383.74mn as income of which 97% was from dividend income from its subsidiaries. The total income of the company increased by 17.4% from Nu 6,291.27mn in 2015 to Nu 7,383.74mn.
The major portion of dividends was from Druk Green Power Corporation (DGPC) amounting to Nu 5,104.36mn followed by Bhutan Power Corporation (BPC) with Nu 1,281.65mn.
According to the budget report, dividend remittances from DHI to government increased by 5.32% with Nu 4,067.54mn in 2016. This is due to increase in profitability of DGPC, BPC and Bhutan Telecom which constitutes 95% of DHI’s dividend income.
Taxes paid by DHI increased by 18% from Nu 1,855.8mn in 2015 to Nu 2,180.93mn in 2016.
The report also states that DHI’s expenditure increased by 6.6% from Nu 112.75mn in 2015 to Nu 120.25mn in 2016. The increase was largely attributed to rise in employee cost which grew by 20% over the previous year. Overall, DHI earned a profit after tax of Nu 5,082.8mn, recording an increase of 17.6% as compared to 2015.
The government’s equity holdings in DHI amount to Nu 45,087.59mn, which constitutes 91% of the total equity investments in SOEs. DHI recorded total assets of Nu 52,793.590mn and net worth of Nu 51,086mn, which grew by 1% and 2.7% in 2016 respectively. The increase was due to additional capital injection of Nu 90.41mn in State Mining Corporation Limited and Nu.404.26mn in Construction Development Corporation Limited (CDCL).
DHI is the only government holding company with Ministry of Finance as its sole shareholder. DHI’s portfolio consists of 19 companies which operate in energy, manufacturing, trading, services and financial sectors. As per the Royal Charter, DHI is mandated to hold, manage, and enhance national wealth through prudent investments.
Additionally, in 2016, State Owned Enterprises (SOEs) and linked companies including DHL companies posted an average growth of 12.85% (from Nu 53,758.8mn in 2015 to Nu 60,667.38mn). The aggregate profit earning of SOEs grew by 12.89% from Nu 13,424.55mn in 2015 to Nu 15,155.66mn in 2016. Overall, the report states that the improvement in the performance of SOEs has contributed toward higher tax revenue and dividend remittances to the government. Last year, SOEs and linked companies contributed Nu 11,089.55mn: tax (Nu 7,022.01mn) and dividend (Nu.4,068.57mn) to the government, which was 39.56% of the total domestic revenue.
In terms of revenue earnings, SOEs achieved combined turnover of Nu 60,667.38mn against the previous year’s revenue of Nu 53,758.8mn (growth of 12.85%).
Hydropower sector continues to be the single largest revenue earner with Nu 14,624.05mn, that is 24% of the total turnover followed by financial sector which posted revenue turnover of Nu 12,868.33mn in 2016.