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Total dividend contribution increased to Ngultrum 213.16 million
Thupten Sangpo
The financial situation of state-owned enterprises under the Ministry of Finance improved significantly last year, with only three enterprises making losses, compared with nine the year before.
This suggests that state-owned enterprises are still performing well despite years of declining government subsidies.
Dividend contribution from state-owned enterprises increased from Ngultrum 153 million in 2022 to Ngultrum 213.16 million in 2023, mainly due to dividend contribution from Bhutan Development Bank Limited (BDBL).
BDBL alone contributed N151.88 million in dividends to the government last year.During the same period, corporate income tax for state-owned enterprises increased from Nu 95.67 million to Nu 174.03 million.
Overall, state-owned enterprises made a net profit of Nun1.09 billion and contributed Nun387.19 million in the form of taxes and dividends.
State-owned enterprises such as Green Bhutan Limited (GBCL) recorded a profit of Nu 5 million last year, up from a loss of Nu 8 million the year before.
Bhutan Foods Ltd. also saw an improvement in its financial situation, bouncing back last year to post a profit of Nu 29 million after suffering a huge loss of Nu 70 million in 2022.
Bhutan Post Limited has significantly turned around its financial performance, recording a profit of Nu 52 million last year after a loss of Nu 15 million in 2022.
BDBL also achieved a profit of N218 million, compared to a loss of N278 million in the previous year.
Likewise, Kuensel Corporation Limited also saw a slight improvement in its performance, recording a profit after tax of Nu 4 million last year, compared to a loss of Nu 13 million the year before.
Among state-owned enterprises, the National Housing Development Company Limited had the highest profit, with 598 million Nu last year and 7 million Nu in 2022.
The three state-owned enterprises that are in the red are the Farm Machinery Corporation Ltd (FMCL), the Bhutan Livestock Development Corporation Ltd (BLDCL) and the Bhutan Broadcasting Services Ltd (BBSCL).
All three SOEs saw their losses increase significantly last year. FMCL’s after-tax losses increased from Nu2 million in 2022 to Nu43 million last year, while BLDCL’s loss was Nu75 million last year, up sharply from Nu29 million in 2022. BBSCL’s loss was Nu16 million, up from Nu1 million in 2022.
The National Home and Small Industries Development Bank Ltd (NCSIDBL) merged with BDBL last year. The move was aimed at improving efficiency, reducing duplication and enhancing the bank’s funding capabilities.
NCSIDBL posted a profit of N17 million last year after posting a loss of N54 million in 2022.
Government subsidies to state-owned enterprises have been declining over the years, and the numbers speak for themselves.
The government provided subsidies of N2.28 billion to state-owned enterprises in the 2019-20 fiscal year and N2.14 billion in the 2021-22 fiscal year. The amount of subsidies fell to N1.11 billion in the 2022-23 fiscal year, a decrease of 52.8% compared to the previous fiscal year.
This is mainly attributed to reduction in operating subsidies to BPCL, FCBL, BBSCL, NCSIDBL and FMCL.
However, BBSCL, BLDCL and FMCL were given operating subsidy for salary hike as these companies could not bear the additional impact of salary revision.
In the 2023-2024 fiscal year, the Ministry of Finance’s reasonable subsidies to state-owned enterprises are 836.7 million Ngultrum.
In the 2023-24 financial year, BBSCL is expected to receive Nu 212.84 million in subsidies compared to Nu 127.49 million in the previous year.
BLDCL was expected to receive N8.43 million in subsidy in the last financial year.
For the 2023-24 financial year, the subsidy for FMCL is Nu19.81 million.
The government is reducing subsidy support to state-owned enterprises in phases, reiterating the need for these companies to be financially viable and sustainable.
As of December 2023, the total net assets of state-owned enterprises amounted to 9.18 billion Ngultrums, an increase of 5.9% over the previous year.
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