Public corporations, accounts, 1999-2004

There were about 2 300 publicly owned companies at the end of 2004. That is almost 300 more than in 2003. This is mainly due to improved data collection methods, but also because of some reorganization in the public sector.

Public corporations vary both with regard to economic activity and importance for the Norwegian economy and employment. They are engaged in activities such as oil and gas exploitation, energy supply, transportation, real estate operations and rehabilitation. Oil and gas is the dominating economic area and includes the SDFI (The State's Direct Financial Interest) and Statoil, among others. Corporations in the industry of transportation and telecommunications are the largest employers with approximately 68 000 employees. In these industries we find large enterprises such as Telenor, Posten and NSB.

Positive financial development

Public corporations achieved more than NOK 199 billion in profits before tax in 2004. This is equivalent to a 29,7 per cent pre-tax profit margin. The corresponding figures for 2003 were NOK 146 billion and 25,9 per cent. The general impression stands; the new companies included because of improved data collection methods are mainly small.

During 2004 state-owned corporations and central government quasi-corporations together counted for 93 per cent of the total profit, or about NOK 186 billion. Exploitation of crude oil and natural gas alone constituted about NOK 151 billion, or 76 per cent, of the total. This industry alone achieved NOK 105 billion in annual profits for 2004, which is an increase of NOK 19,8 billion from 2003. This profit represents more than 73 per cent of the total profits of all public corporations.

This high profit can mainly be attributed to SDFI and Statoil. SDFI alone contributed in 2004 an annual result that was more than 20 per cent better than in 2003. Total sales volume in 2004 was almost the same as in 2003, so the profits can be attributed to higher prices of oil and gas, together with a 5 per cent depreciation of the USD.( 1 )

In 2004 Statoil increased its profits before tax with 60 per cent and its annual result with 51 per cent. The profits were mainly a result of high activity and high energy prices.( 2 )

The electricity supply industry was characterized with stability in 2004. The industry achieved in total NOK 20,5 billion in profits before tax and an annual result of NOK 15,2 billion. This was an increase of respectively NOK 5 billion and NOK 4,7 billion in relation to the profits in 2003. The profit is mainly a result of higher production together with higher domestic consumption. Statkraft SF that is the biggest corporation in this industry obtained in 2004 an annual result that was about 48 per cent better than in 2003.( 3 )

The transportation- and telecommunications industry achieved in 2004 NOK 19,7 billion in profits before tax, and an annual profit of NOK 15,7 billion. This represent an increase of respectively NOK 7,9 billion and NOK 5,9 billion in relation to the profits in 2003. Telenor is a big public corporation in this industry with almost 21300 employees. For 2004 Telenor had a result that showed an increase of 19 per cent before tax and 32 per cent increase in annual result. The reason for the profits in 2004 is mainly due to an increase of the amount of subscribers. Companies where Telenor are holding shares increased their total portfolio of subscribers with around 17,9 million people from 2003 to 2004.( 4 )

Public corporations exclusive of SDFI achieved NOK 117 billion in profit before tax. This gives an operating margin of 20,6 per cent. Equivalent figures for 2003 was respectively NOK 78,2 billion, NOK 37,5 billion and an operating margin of 16,8 per cent.

The return of equities increased from around 0,5 per cent in 2002 up to more than 13 per cent for 2003 and 2004. As expected it is the oil and gas industry that dominates the picture with a return of equities close to 40 per cent both in 2003 and 2004. Public corporations exclusive oil and gas industry achieved in 2004 a return of equities around 8 per cent. This represent an increase of 1,2 with respect to 2003 and an increase of 10,5 per cent with respect to 2002.

Increasing asset value

Public corporations' total asset value was NOK 1 565 billion at the end of 2004. This is NOK 299 billion, or 20 per cent, higher than in 2003. The fixed asset value increased by 24,3 per cent, while the current asset value relating to sales of goods and services increased by 20,6 per cent. The reason for this increase can mainly be found in the increase of the total amount of public corporations. Most of this increase is due to improved data collection methods at Statistics Norway. This industry of electricity supply increased its total asset value with more than NOK 170 billion. This increase is mainly a result of the establishment of the corporations Statkraft AS and Statkraft Energi AS, together with the fact that the Hafslund concern where not included in the statistics before 2004.

There has been a significant increase in financial assets in the period 1999 to 2004, from NOK 367 billion or 30.4 per cent of the total assets in 1999 to NOK 678 billion or 43,3 per cent of the total assets in 2004. This is an increase of 84,6 per cent. The accumulated profit in the SDFI is not included here, but it is transferred to the Government Petroleum Fond. For 2004 the financial assets increased from about NOK 474 billion to NOK 678 billion, which represent an increase of 5,9 percentage points from 37,4 to 43,3 per cent of total assets. This picture also holds when we take into account the fact that the total amount of corporations has increased in the period.

However, the capital is located in a small number of companies. About 44 corporations contributed about NOK 1 000 billion of the assets. On the other hand, about 1 900 companies had each less than a value of NOK 100 million of assets.

The financial situation

Public corporations (excluding central government quasi-corporations) had a relatively stable financial structure in the period 1999 to 2004. If we disregard 2002 the equity ratio has been around 40 per cent. At the same time the fixed assets have mainly been financed by long-term loans.

While the current ratio had a moderate downward development from 1,03 in 1999 to 0,88 in 2004, the ratio of fixed assets to long-term capital have been relatively stable around 1. The debt-to-equity ratio has been reduced at the end of the period from 1,75 in 2002 down to 1,43 in 2004.

The central government quasi-corporations are been left out here because the equity in these corporations cannot be compared with other public corporations. The central government quasi-corporations comprise the SDFI, Statens kartverk, Statsbygg, Forsvarsbygg together with four hospital dispensaries. These corporations are wholly owned by the state.

Employment

Approximately 149 000 people were employed by public non-financial corporations owned at the end of 2004. This is a decrease of about 8 000 people, or 5,2 per cent, from 1999. The decrease is mainly related to fewer employees in central government owned corporations. Furthermore, during the period, some large enterprises such as Norsk Hydro, SAS Norge, Navion and Norsk Medisinaldepot no longer are classified as public corporations as the ownership interests no longer exceeds 50 per cent.

(1) The accounting figures are taken from Petoros website www.petoro.no

(2) The accounting figures are taken from Statoil's website www.statoil.com

(3) The accounting figures are taken from Statkraft SF's website www.statkraft.no

(4) The accounting figures are taken from Telenor's website www.telenor.no

Tables:

• Table 1 Public limited companies owned by the municipalities. Income statement. Selected accounting figures. 1999-2004. NOK million and per cent
• Table 2 Public limited companies owned by the municipalities. Balance sheet. Selected accounting figures. 1999-2004. NOK million and per cent
• Table 3 Public limited companies owned by the municipalities. Selected key figures. 1999-2004
• Table 4 Public limited companies owned by the state. Income statement. Selected accounting figures. 1999-2004. NOK million and per cent
• Table 5 Public limited companies owned by the state. Balance sheet. Selected accounting figures. NOK million and per cent. 1999-2004.
• Table 6 Public limited companies owned by the state. Selected key figures. 1999-2004
• Table 7 Central government quasi- corporations. Income statement. Selected accounting figures. 1999-2004. NOK million and per cent
• Table 8 Central government quasi- corporations. Income statement. Selected accounting figures. 1999-2004. NOK million and per cent
• Table 9 Public corporations. Income statement. Selected accounting figures. NOK million and per cent. 1999-2004.
• Table 10 Public corporations. Balance sheet. Selected accounting figures. 1999-2004. NOK million and per cent
• Table 11 Public corporations. Income statement and balance sheet by section. Selected accounting figures. 2004. NOK million
• Table 12 Public corporations, with out central government enterprises. Selected key figures. 1999-2004.