Analysis of the operations of about 20 state-owned companies: Energetica u plus, the Crisis Institute, "Plantaže" and railways

Four power companies achieved a net profit of more than one hundred million last year, their accumulated profit is around 250 million euros. The health center from Igalo and the largest state-owned agricultural company are improving operations, but large debts from the past are too much of a burden

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EPCG achieved a net profit of 52,4 million (illustration), Photo: Boris Pejović
EPCG achieved a net profit of 52,4 million (illustration), Photo: Boris Pejović
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

Most state-owned companies performed better last year than in previous years. Net profits have increased significantly, led by the state-owned power companies, chronic losers such as the Igalo Institute and "Plantaža" have reduced losses, although they are still in serious trouble. The state-owned national air carrier "To Montenegro" has finally turned from negative to positive.

This is shown by the financial balance sheets of the companies for the past year, while a clearer picture will emerge when the audit reports are published in the next two to three months.

Energy becomes the carrier of development

The four largest state electricity companies - Elektroprivreda (EPCG), Rudnik Uglja, Montenegrin Elektroprenosni Sistem (CGES) and Montenegrin Elektrodistributivni Sistem (CEDIS) - achieved a joint net profit of 105 million euros last year, while their accumulated profit is around 250 million euros.

EPCG has not yet published its financial statements, but they announced that they had a net profit of 52,4 million euros. Therefore, there is no precise data on the accumulated profit of that company at the end of the year, but from the nine-month report it can be seen that at the end of September last year it amounted to 125 million euros.

The largest state-owned energy company achieved this result last year even though it financed the reconstruction of the Pljevlja Thermal Power Plant, bought the property of the Ironworks, bought solar panels for five thousand new mini solar power plants on the roofs of consumers and covered the losses of CEDIS due to low regulatory prices.

At the end of last year, through the so-called books, EPCG settled the claims from its company CEDIS for the delivered electricity, which reduced its profit, and CEDIS thus went from a minus to a plus. However, in the consolidated report, which includes the entire EPCG group with subsidiaries including CEDIS, it will have a neutral effect.

For the year 2023, CEDIS withdrew the request to increase the regulatory allowed income through the increase of its item on the electricity bill, thereby preventing price increases, but also a positive result for this company. According to the regulatory prices at the time, CEDIS bought electricity to cover technical losses on the stock exchange at prices twice as high as those at which it could compensate them from consumers.

EPCG announced that in 2023 they had a net profit of 52,4 million euros, that they paid a profit tax of 17,1 million euros, and that the net profit would have been significantly higher for that year if they had allowed the price increase electricity and that the book approvals did not cover the loss of CEDIS that occurred due to regulatory prices.

"We would like to remind you that the realized profit before book approval (given so as not to increase the price of electricity) and the posting of the invoice to CEDIS would amount to EUR 92.073.373,32", EPCG stated at the time.

The coal mine posted a net profit of 15,2 million euros last year, six million more than in 2022, while the company's accumulated profit, including the previous year, rose to 41,2 million euros. Last year, the mine significantly increased its income because it also exported coal to Serbia in the amount of around 11 million euros.

CGES is profiting well from the cable

CGES, which manages the transmission power network as well as the Montenegrin part of the power cable for Italy, last year had a net profit of 35,7 million euros, that is, about 15 million more than the year before. The accumulated profit of this mostly state-owned company at the end of 2023 was 90 million euros. These companies also earned part of their income due to the fact that there was a deficit of electricity in the southern part of Italy last year, which they covered by purchasing electricity in the Balkans, while paying CGES a fee for using the submarine cable.

The company "EPCG Solar gradnja", a subsidiary company of EPCG, had a loss of 2,7 million euros last year, due to the fact that the tender for the purchase of solar panels was blocked for almost half a year. This company earns income per installed solar power plant, and since EPCG, whose obligations it is, could not complete the procurement of solar panels for a long period of time, they had expenses for the payment of wages, but no income. Procurement was normalized only at the end of last year, after which the installation of solar power plants continued and the business of the company normalized.

"EPCG Željezara" has not yet published its financial statements for the past year.

The institute is blocked, the debts are too great

The Institute for Medical Rehabilitation "Simo Milošević" from Igalo last year reduced the loss from 2022 from 5,3 to 2,8 million euros. However, the company is in serious trouble, at the end of last year, the multi-decade work on the rehabilitation of the beneficiaries of the Norwegian Health Fund, which annually brought in about a quarter of the total income, was interrupted, due to a final judgment in favor of the bankrupt Jugobanka, from the beginning of December, the account of the Institute was blocked in the amount of almost eight million euros, the workers are already entering the fourth month without having received their salary, the company is threatened with the loss of disputes worth about another six million euros due to the lawsuits of the workers from the previous period, the facilities and equipment of the Institute need multimillion-dollar investments...

The Government announced support of ten million euros, which would be the maximum amount possible without violating the European Union's regulations on state aid control, as well as possible recapitalization and the purchase of shares of small shareholders. However, more than a month has passed since those announcements, and time is slowly running out, especially for the employees who announced a strike on April 25 if they do not receive three back wages.

If the Government would still help with ten million euros, it could unblock the account due to Jugobanka's lawsuit in bankruptcy, but also from the lawsuits of workers for six million. There would also be no money left for salary payments, seniority connections, supplier payments, necessary renovations and modernizations... and the state, according to state aid regulations, would not be able to help this company in any way again for the next ten years.

The recovery of "Plantaža" is progressing slowly

Despite positive developments in increasing sales revenue and reducing losses, "Plantations" are still in serious trouble. With the arrival of the new management three years ago, the financial statements were audited, when it was discovered that they were rigged and that they were hiding losses that they now have to book and write off some disputed claims. Also, in the previous period, the former management booked or reduced salaries for themselves and the workers in a controversial manner, which is why the company is burdened with hundreds of disputes.

"Plantations" also had two bad agricultural years. In 2022, the city caused damage to vineyards and orchards, which experts estimated at eight million euros, while last year's extremely rainy spring brought a decrease in yield and an increase in diseases in the vines and in the orchards. Also, in the past three years, the Municipality of Tuzi, as it was later proven, took more than two and a half million euros from the company's account through illegal real estate tax decisions. These account blockings created additional problems for the company, as they could not pay bills and pay wages on time, which further undermined its credibility.

Last year, the company made an operating loss of 5,9 million euros, which is a significantly better result than the year before, when the loss amounted to 12,9 million euros. The accumulated loss grew to 46 million euros.

The company now regularly settles wages, obligations to suppliers and banks, as well as provides money for the care of vineyards and orchards, but does not regularly pay obligations for taxes and contributions to the state, which have grown to 14 million euros. As a result, the Tax Administration terminated the reprogramming agreement. The company's plan is to convert surplus land, especially in Lješkopolje, into construction land and sell it, in order to get rid of most of its debts and loans, and thereby stabilize its business.

The railways are still in trouble

Railway transport, despite the increase in subsidies from the state for maintaining public services, did not significantly improve its operations. Last year, it made a net profit of 395 thousand euros, which was 911 thousand the year before. Accumulated losses from the previous period were only partially reduced, to 25,6 million euros.

Railway Infrastructure has not yet published its financial statements for the year 2023. She also has a problem with the disputed financial report for 2022 due to the auditor's negative opinion.

Last year, the state company for freight rail transport "Montecargo" had a loss of 602 thousand euros, while the year before it was in the surplus of 362 thousand. The accumulated loss amounts to EUR 8,8 million, deferred tax liabilities amount to EUR 9,2 million, and other debts and liabilities amount to EUR XNUMX million.

"Maintenance of railway rolling stock" had a loss of 909 thousand euros last year, about 20 thousand more than the year before. However, the accumulated loss grew to 8,3 million euros. The company loses the possibility of independent business, which is why the Government announced earlier that they plan to merge it with the Railway Transport.

"Bonus" is waiting for the resolution of the dispute

The state oil company "Montenegro bonus" significantly improved its operations last year, as it went from a loss of three million in 2022 to a positive net profit of 197 thousand euros. The company has increased the number of contracts for supplying most state institutions with oil derivatives. The main job of this company should be the management of state oil warehouses, but despite the final court ruling, they were not taken over by Jugopetrol, which illegally used them for 20 years. Previously, "Montenegro Bonus" announced that they would lose up to a million and a half euros in revenue per year due to "Jugopetrol" illegally using warehouses, which is why they sent a request to the office of the Protector of Property and Legal Interests of the State to initiate a dispute.

The state company "Monteput", which manages the first section of the highway and the Sozina tunnel, made a net profit of 4,5 million euros last year, which is 1,7 million more than in 2022. According to the decision of the Government, this company has the obligation to use its income and profits to finance the development of projects and the preparation of documentation for the next sections of the highway and expressways.

The business result was also worsened by the Port of Bar, which in 2022 had a net profit of 4,5 million euros, and last year it fell to 777 thousand euros. The accumulated loss from previous years was slightly reduced, to 14,1 million euros.

Marina Bar has a slight increase in profit from 337 to 360 thousand euros, while the accumulated profit grew to 3,3 million euros.

Post of Montenegro, which increased service prices twice last year and significantly increased employee wages after the strike, made a net profit of 126 euros last year, while in 2022 the profit was 47 euros. Its accumulated profit was 3,4 million euros.

The growth of "Morski Dobr" and the Airport

"Morsko dobro", which last year had expenses of around 15 million euros for the purchase of ferries, taking over and maintaining the line Kamenari - Lepetani, ended 2023 with a profit of 2,3 million euros. The company's assets increased from two to 13 million euros, and total revenues from 7,6 to 13,1 million. The total accumulated profit was eight million euros.

Last year, with the worldwide recovery of the aviation industry, the airports of Montenegro achieved a profit of 9,5 million euros, which is about eight million euros better than in 2022. Accumulated profit at the end of last year amounted to 6,9 million euros.

The reason why the accumulated profit is lower than the profit achieved last year is that a large loss was inherited from the pandemic period, which has only now been "ironed out".

The Government still has to decide whether to continue the tender for the long-term lease of both airports, or whether they will continue to be managed by state management.

"Barska plovidba" is recovering, "Montenegro" started and then fell

"Barska plovidba" went from being a former loser to which the state paid installments for the purchase of ships, but in the last two years it managed to reach a situation where it regularly pays all its obligations and makes a profit of 2,4 million euros. They managed to reduce the accumulated loss, which in 2021 amounted to over 17 million euros, to 12,8 million euros.

"Crnogorska plovidba" from Kotor is one of the exceptions, which last year had a worse business compared to 2022, because they reduced their net profit from 2,3 million to 165 thousand. Although they paid all their obligations in 2022, the Government, as a guarantor, had to pay part of the war for the purchase of ships from the budget again last year. The accumulated loss of this company amounts to 13,9 million euros.

Recovery of state hotels

The largest state-owned hospitality group - "Budvanska Riviera" - made a profit of 1,9 million euros last year, which is three times more than the year before. After large losses during the pandemic, the accumulated profit in the last two years has reached the positive zone of 3,6 million euros.

"Ulcinjska riviera", which now manages only the tourist resort on Ada Bojana because the "Olympic" and "Bellevue" hotels were leased for 2017 years from 30, made a profit of 248 thousand euros last year, which is by 42 thousand a worse result than the year before. The company is reducing the accumulated loss from the pandemic period, so last year it amounted to 1,3 million euros.

"To Montenegro" is finally in the plus, "Pegasus" spoiled the picture

Last year, the state airline "To Montenegro" achieved a profit of 3,4 million euros, in line with the general global trend of recovery of the aviation industry, while the year before it had a loss of 2,4 million euros. The accumulated loss from the first two years of operation of 7,3 million euros was reduced to 3,9 million at the end of last year.

The company should have achieved an even better result last year, if it had not happened, as was later determined, the illegal allocation of lines from Podgorica to Istanbul to the Turkish low-budget carrier "Pegasus", which was done by the Ministry of Capital Investments when Ervin Ibrahimović was the minister.

Before that, this line was one of the most profitable for the state-owned airline. According to unofficial information from "Vijesti", the direct damage caused to him through the reduction of profits was estimated at at least 2,8 million euros.

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