Ljubljana – The government confirmed on Wednesday the 2021 plan for the managing of capital investments put forward by Slovenian Sovereign Holding (SSH). The custodian of state assets expects 4.2% return on equity, which is up 0.8 percentage points from what is expected this year. Dividends should remain level.
The adoption of the annual plan is crucial for SSH’s activities and meeting of its targets in 2021.
Despite the Covid-19 epidemic, SSH expects the entire portfolio to be profitable in 2020. Preliminary estimates put net return on equity at 3.4%, which is 2.5 percentage points lower than planned. This is partly due to some regulatory changes.
The most affected by the epidemic in the past year were tourism companies, manufacturing and transport companies. Pharmaceutical and telecommunications companies were the least affected.
The state and SSH will receive EUR 85.9 million in dividends in 2020, while the planned figure was EUR 142.4 million.
Dividends will be lower partly because of poorer results of some companies and partly because of restrictions in the paying out of dividends for banks and insurers.
SSH expects a 4.2% return on equity next year, as economic activity is expected to pick up in most sectors.
A key activity in managing capital investment will be dividend policy.
If the restrictions for banks and insurers remain in place, dividends are expected to stand at EUR 83.9 million. Without restrictions they should total EUR 131.5 million.
SSH plans no major sales in 2021. Only the smaller shares in companies that were expected to be sold this year will be sold or those that the state has acquired or will acquire based on the inheritance act.
SSH will continue to pursue its goals from the tourism strategy as envisaged in the 2020 plans. All key activities will be directed in the management of the company Sava.
In line with the strategy for the development of Slovenian tourism, the holding is meant to help bring about a consolidation and restructuring of tourism companies with state ownership with the end goal of privatisation and development.
While several steps towards a new tourism holding were already taken last year, one key outstanding move is the consolidation of state ownership in Sava, which includes tourism company Sava Turizem.
The required step is the acquisition a 43% stake in Sava held by the Luxembourg-based York fund. SHH and the state’s pension fund management KAD fund hold a combined 46%, while all three are Sava’s creditors, being owed roughly EUR 60 million, which Sava needs to repay by the end of June next year.
According to commercial broadcaster POP TV, SSH’s annual plan for 2021 includes the acquisition of York’s shares, but not the price at which this is to happen.
Economy Minister Zdravko Počivalšek said at the end of November that the consolidation process had already started in 2017 and that the purchase of York’s stake in Sava was only one step on the path that had been set during the previous government, and then confirmed in 2019 and again at the start of this year.