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11064
High energy prices gave record surplus
statistikk
2007-12-20T10:00:00.000Z
Public sector;Public sector
en
offregn, Public corporations, accounts, central government corporations, local government corporations, central government quasi-corporations, profit and loss account, balance sheet, accounts by industryLocal government finances , Central government finances , Public sector
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Public corporations, accounts, 2001-2006

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High energy prices gave record surplus

Public non-financial corporations achieved a record high profit in the 2006 accounting year. The high profit is mainly attributed to enterprises involved in oil, gas and mining and energy supply. Corporations involved in transport and communication also achieved high profits.

Public ownership

Both central and local government have a significant ownership interest in Norwegian business and industry. The public companies vary with regard to economic activity and employment. The level of ownership varies from holdings in large listed corporations to small fully owned enterprises. The corporations are involved in activities such as oil and gas exploration, energy supply, transport, real estate operations and rehabilitation. Oil and gas is the dominating business area and includes the State’s Direct Finance Investment (SDFI) and Statoil ASA among others. Corporations in the transport and communication industry are the largest employers. These industries include Posten Norge AS, Telenor ASA and Norges Statsbaner AS.

Development

There were about 2 850 public non-financial corporations at the end of 2006. In addition, Statistics Norway has not obtained accounting data for around 100 enterprises. These are mainly small enterprises. Since 2001, the number of publicly owned enterprises has almost doubled. One reason for this development is that some major enterprises have been reorganised either as a result of takeovers or buying and selling. Another explanation is the improved method of data collection in Statistics Norway. The increase is quite significant during the period from 2003 to 2005. As a result, the increase from year to year will not be completely accurate.

Public non-financial corporations achieved NOK 338 billion in profit before tax in 2006. This is equivalent to a 38.1 per cent pre-tax profit. The profit ratio is calculated as profit before tax as a percentage of operating income. The corresponding figures for 2005 were NOK 264 billion and 32.9 per cent. 2006 was the most profitable year in the period 2001-2006.

Operating result before tax. Public non-financial corporations. NOK million. 2001-2006.

The high profit is mainly attributed to exploration of crude oil and natural gas, which contributed about NOK 254 billion to the profit before tax, or 75 per cent. SDFI and Statoil ASA dominated this industry. The average price of North Sea oil (Brent blend) in 2006 was about USD 64.5 per barrel, against USD 53.5 in 20051.

Compared with 2005, the electricity supply industry achieved a good year in 2006, despite a decrease in electricity production due to less rain and lower water levels2. The profit before tax was NOK 55.5 billion and the net profit for the year was NOK 41.4 billion. The surplus came as a result of record electricity prices. The average price registered by Nord Pool3 was 39.1 øre per KWh and 23.5 øre per KWh in 2006 and 2005 respectively. This is the highest average price ever recorded.

The transport and communication industry achieved a profit before tax of NOK 20.2 billion and a net profit of NOK 18.7 billion, resulting in an operating margin of 21.3 per cent. Among the major corporations in this industry were Telenor ASA, Posten Norge AS and Norges Statsbaner AS.

Central government corporations with highest profit

Central government corporations and central government quasi-corporations together accounted for NOK 315 billion or 93 per cent of the total profit before tax. SDFI alone accounted for about NOK 130 billion4. Among the major business units were Statoil ASA, Statkraft SF and Telenor ASA.

For local government, energy supply enterprises were most profitable.

Operating result before tax, by sector. Per cent. 2006

Moderate increase in asset value

Public non-financial corporations’ total asset value amounted to NOK 1 708 billion at the end of 2006. This was an increase of about NOK 90 billion or 6 per cent from the previous year. The value of fixed assets increased by 6 per cent, while the value of current assets relating to sales of goods and services increased by 4 per cent.

The value of the fixed assets has increased by 47 per cent since 2001. The most significant increase was from 2003 to 2004 and was 23.6 per cent. The increase was mainly a result of the establishment of corporations such as Statkraft AS and Statkraft Energi AS and also because the Hafslund Group was included in the statistics in 2004 following a takeover by Oslo municipality.

However, most of the capital is located in a small number of companies. Approximately 50 corporations contributed about 75 per cent of the total assets. Each of these corporations has an asset value of more than NOK 5 billion. 13 of these capital-intensive enterprises are owned by local government and located in the energy supply industry.

The financial situation

The public non-financial corporations had a relatively stable financial structure in the period 2001 to 2006. Since 2003, the equity ratio has been around 41 per cent. Furthermore, the ratio of fixed assets to long-term capital has been relatively stable and was about 1. In other words, fixed assets have been financed by long-term capital. The debt-equity ratio has been relatively stable.

The current ratio had a moderate downward development from 2003. It was about 0.83 in 2006. This means that the current assets are lower than the current liabilities. The figures do not necessary illustrate the enterprises’ liquidity and therefore require careful consideration.

Central government quasi-corporations have 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 and Forsvarsbygg together with the four districts hospital dispensaries. These corporations are wholly owned by the state.

Employees in public non-financial corporations, by sector. Per cent. 2006

Employment

Some 126 600 people were employed by public non-financial corporations at the end of 2006. Although the number of enterprises has almost doubled since 2001, the number of employees has been relatively stable. One reason for this is the fact that the new enterprises have fewer employees.

Central government corporations had the largest number of employees. About 75 000 people were employed by central government corporations at the end of 2006.

Central government quasi-corporations employed some 3 600 at the end of 2006. One of the reasons for the increase in number of employees in 2002 was the restructuring of Forsvarets Bygningstjeneste to Forsvarsbygg The amalgamation of the local central government quasi-corporations in the defence and military resulted in increase responsibilities Luftfartsverket was restructured to Avinor AS and went from being a central government quasi-corporation to a central government corporation. This resulted in a significant reduction in the number of employees in central government corporations in 2003.

There has been a systematic increase in the number of employed in enterprises owned by local government during the period. About 48 000 people were employed by these enterprises at the end of 2006. Generally, no enterprise had more than 1 000 employees in this sector.

About the statistics

The statistics include all market non-financial corporations in which either the central government or municipalities/county municipalities directly or indirectly own more than 50 per cent of the shares. These include all companies incorporated by special legislation as well as central government market entities.

Types of corporations

Central and local governments are mainly engaged in the following types of corporations:

-Private limited companies and public limited companies, including public corporations.

-Central and local government market entities, so-called quasi-corporations.

-Companies incorporated by special legislation.

IFRS (International Accounting Standards)

From 2005 accounting year, Norwegian companies registered in Oslo Stock Exchange can use international accounting standards. Nevertheless, Statistics Norway does not have well defined information about the population of public owned non-financial corporations that have started using the IFRS. Subsequently, the transition to international accounting standards can affect the comparability of the accounting figures, for example the value of assets.

1Source: Statistics Norway. Accounts statistics, oil and gas activity

2Source: Statistics Norway. Economic survey 1/2007

3 www.nordpool.no

4The accounting figures are collected from Petoros website, www.petoro.no

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