SOLOMON Islands State Owned Enterprises (SOE) portfolio has undergone a dramatic turnaround since 2008.
This was revealed by an Asian Development Bank (ADB) on Wednesday during the SOE forum.
The reports revealed that Solomon Islands is now the most profitable portfolio in the pacific, and in the benchmark sample.
“Average of amount of net income (ROE) of the portfolio increased from -12% in fiscal year (FY) 2002 –FY2008, to 6% for 2009 -20012 and 15% in FY2012,’’ the reports revealed.
The reports revealed that the turnaround have been be attributed by four factors.
- Financial restructuring of three major SOEs, namely Solomon Airlines (SAL), Solomon Island Electricity Authority (SIEA) Solomon Island Authority (SIWA)
- Tariff increase of SIWA and SIPA and improved collections for SIEA and SIWA
- Improved implementation of the SOE act ,particular the CSO regulations and
- Privatization /Liquidation of non-strategies SOEs
The report added, the portfolio is relatively small with only active SOEs, 3 of which represented 90% of the assets and 100% of the profit in 2012.
“The financial restructuring of three of the four largest SOEs has cost the gov’t an estimatedSBD $21Million since 2011, involving the settlement of arrears,” ADB report revealed.