News 13. 1. 2022

Consent granted by the Government of the Republic of Slovenia to the Annual Asset Management Plan 2022

Ljubljana, 13 January 2022 - At its session of 13 January 2022, the Government of the Republic of Slovenia granted its consent to the Annual Asset Management Plan 2022 ("AAMP"). The adoption of the document is of key importance for SSH, which acts in the capacity of the central ownership entity of state assets: it provides the basis for SSH to carry out its activities, clearly state the owner's expectations for 2022 and enable SSH to track the goals set for 2022.


It is mainly due to the improved business conditions that the quantity goals planned for 2021 with regard to capital assets management will be exceeded and will be substantially better than those achieved in 2020. 

In 2021, SSH actively monitored conditions which were inflicted on individual sectors as a result of the COVID-19 epidemic and carried out numerous activities in the field of corporate governance of SOEs. All enterprises from the SSH's portfolio, which manage critical infrastructure, ensured continued operation and smooth provision of services at all times. For some companies, the epidemic still has a major influence on their operations, particularly in the case of companies operating in the tourism sector and gaming industry. Likewise, companies involved in transport activities, some manufacturing companies and some companies from the energy sector will still not yet achieve results which had been achieved before the COVID-19 crisis of 2021.

The performance estimates for companies from the portfolio of assets managed by SSH show that 2021 ROE of the portfolio may stand at 5.5 % - this is by 1.3 percentage point higher than planned in AAMP 2021. According to the last IMAD's forecasts, the economic growth as predicted for Slovenia for 2021 is to amount to 6.1%; the figure is higher than estimated when drafting the AAMP 2021, which forecasted the economic growth to amount to 5.1%.  

Dividend income paid to the Republic of Slovenia, SSH and ZPIZ (the Pension and Disability Insurance Institute of Slovenia) in 2021 (for FY 2020) exceeds the sum planned in AAMP 2021 and is to amount to the total of EUR 150.9 million. This is a significantly higher amount than paid out in 2020, when the total dividend income amounted to EUR 85.9 million. The main reason for higher dividend income to be received for FY 2021 is mainly the result of more favourable business conditions and the relaxation of measures imposed upon banks and insurance firms in 2020 by regulators, which had restricted their dividend pay-outs. 

SSH portfolio's performance results forecasted for 2022 

ROE of the portfolio managed by SSH is anticipated to amount to 5.0% in 2022 - a slightly lower figure than estimated for 2021; however, a slight increase in ROE is foreseen for 2023. The ROE calculation for 2022 and 2023 includes the normalised values of ROE for HSE as it is estimated that some key assumptions regarding the future operation of the HSE Group are still rather uncertain.

Implementing a relevant dividend policy is one of core activities in the management of state assets, enabling SSH to pursue goals aiming at the maximisation of cash flows for the owner while simultaneously taking into account the performance results of individual companies, which are included in its management portfolio, and their development needs. The total volume of dividend pay-outs planned to be received by RS, SSH and ZPIZ in 2022 is planned to amount to EUR 182.2 million. 

The main strategic topics of the management of state capital assets in 2022 will be the sustainable business of SOEs with a focus on the management of climate change and the Industry 4.0 and the employees of the future. 

Indirectly, acting within the limits of its entitlements, SSH aims to encourage SOEs to prepare a long-term plan, within which these topics will be addressed: specifically, how business models will be compatible with the climate-neutral economy, and how this plan will be included in their long-term strategy. 

It is crucial for SOEs to have a clearly defined position on, firstly, what is really important for a company (the aspect of the financial materiality for their operations and the impact of their business activities), secondly, to ensure and maintain a clear connection between their sustainability strategy and the company's mission, further on, to have set goals, milestones and set up projects and partnership to achieve their goals, and finally, to have established performance metrics and ensured relevant disclosures regarding the implementation of the ESG factors. For success in sustainability, it is therefore crucial that sustainable operations are integrated into all corporate governance systems at the level of a company. 

As SOEs take advantages of investment opportunities brought about by the Industry 4.0 and the green transformation, and when they satisfy their stakeholder's expectations in accordance with their mandates, it is the qualified employees that will play a crucial role in contributing to the company's success, ensuring satisfaction and the enhancement of human capital. 

SSH plans several corporate governance projects to be carried out in 2022. Among other matters, SSH intends to issue SSH Recommendations on formulating remuneration policy for SOEs' management bodies and on regulating remuneration in employment contracts concluded with members of management bodies. The aim of the said Recommendations is three-fold: (i) to regulate remuneration of members of SOE's management bodies in a systemic and transparent manner, (ii) to address some HR risks, (iii) to implement a trend-following practices and thus, through the remuneration system, contribute to the sustainable business of SOEs in the long term. 

Based on the analysis on the observance by SOEs of the SSH Corporate Governance Code for SOEs and of SSH Recommendations and Expectations, SSH intends to draft modifications and amendments to the said Code, and, if required, also to the SSH Recommendations and Expectations.

Appendix: Annual Asset Management Plan 2022 - General Section 

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