Down in the dumps
SA’s state-owned enterprises hit new lows with 20 0f the 28 posting ‘utterly shocking’ plummeting financials.
Eskom the biggest culprit with a loss of more than R20 billion. PetroSA, Post Office, Prasa also bad.
An analysis of the results of state-owned enterprises (SOEs) published during the past few weeks shows that only eight of the 28 larger companies posted results that were not utterly shocking.
The other 20 all have serious problems and most suffered larger losses than in previous years.
Only two, the Development Bank (DBSA) and South African National Parks (SANParks), posted results shareholders would have been happy with, if the entities were private companies with private investor shareholders.
Six have not published their results yet, with the worst offenders being South African Airways (SAA) and SA Express. Financial management at the two stateowned airlines is in such a bad state that they have not published annual reports with audited results since 2017.
Last year, parliament’s oversight committees, bankers and taxpayers had to be satisfied with an oral presentation from SAA management disclosing a loss of R5.6 billion in the year to March last year. There is no way to tell if the figure is reliable without full financial statements and the notes that usually accompany the income statement and balance sheet.
Nine SOEs announced losses during the last 12 months, and it is general knowledge that SAA and SA Express also made huge losses.
Estimating the airlines lost at least R6 billion in their last financial year would increase the total loss of loss-making SOEs to nearly R34 billion. This figure might be even higher, depending on SAA’s real loss.
The losses exceeded the good work and profit from other state companies and the SOEs chalked up a total loss of nearly R14 billion compared with a profit of some R8 billion last year.
This is the third time that Moneyweb has compiled a summary of SOE results and this year’s figures show a marked decline.
Nearly all the companies performed worse, with Eskom the biggest culprit with a loss of more than R20 billion. PetroSA, the Post Office and Prasa also posted significantly bigger losses. The disappointing results are even worse than what the figures show, given that a lot of the companies receive grants and subsidies from the government as well.
For instance, the Passenger Rail Agency of SA posted a loss of nearly R1.7 billion after receiving a total of more than R10 billion in operating subsidies and grants for capital expenditure.
The struggling Alexkor diamond mine, Nuclear Energy Corporation of SA, Rand Water, and the Trans Caledon Tunnel Authority also failed to publish their results on time and the figures are still outstanding. Delays in publishing financial results often indicate financial management and governance problems.
SAA, SA Express figures show huge decline