Financial health of PEs: 25 made profits, 17 logged losses

KATHMANDU: Of the 44 public enterprises in the country, 25 made profits, while 17 reported losses in 2021/22. Two of them logged zero transactions.

According to the Annual Status Review of Public Enterprises, 2023, Nepal Orind Magnasite Pvt Ltd and Butwal Thread Factory Limited did not have any commercial transactions at all in 2021/22, while Janakpur Cigarette Factory Limited remains shut.

Similarly, two enterprises – Vidyut Utpadan Company Limited and National Transmission Grid Company – are still in their infancy. Likewise, Nepal Railway Company Limited has not been able to gain momentum systematically. According to the review report, these three companies are incurring losses due to administrative expenses even though there is no commercial business.

The net profit of 25 companies operating in profit has increased by 33.65%, while the net loss of 17 companies operating in loss has increased by a whopping 610.96%. The administrative expenses of public enterprises decreased by 2.4% in the review year, according to the report.

In 2020/21, the total operating income of public enterprises was Rs 422.44 billion. It increased by 36.22% to Rs 575.43 billion in 2021/22.

Compared to the previous financial year, the net profit of public enterprises declined by 94.15% to Rs 1.54 billion in 2021/22. The government received Rs 6.15 billion as dividends from public enterprises in 2020/21. The dividend income in 2021/22 is 8.43% lower in the current fiscal year.

The accumulated profit of public enterprises declined by 0.74% compared to the previous financial year to Rs 112.72 billion. Likewise, accumulated loss increased by 176.8% compared to Rs 60.31 million.

Compared to the previous financial year, the government’s share investment in these institutions increased by 4.54% to Rs 328.92 billion in 2021/22. Similarly, loan investment has gone up 14.49% to Rs 289.23 billion.