News 21. 12. 2023

Government of the Republic of Slovenia Grants its Consent to Annual Assets Management Plan 2024

Ljubljana, 21 December 2023 - At its meeting held on 21 December 2023, the Government of the Republic of Slovenia gave its consent to the Annual Asset Management Plan for 2023 (AAMP), which is considered a key document for SSH in its role of the central asset manager of the State capital assets. The Annual Asset Management Plan is the basis for SSH to implement its activities. Additionally, the document reflects the expectations of the owner and enables SSH to monitor the achievement of objectives set by the portfolio companies in 2024. 

Main Objectives of Asset Management in 2024

The Annual Asset Management Plan for 2024 defines key objectives for the management of capital assets, claims, and tangible assets included in the portfolio managed by SSH. The objectives of asset management are focused on pursuing effective, profitable and economical operation of portfolio companies, creating value for the owner, and performing effectively services of general economic interest.

In 2024, SSH will carry out various asset management activities which will contribute to achieving the goals set. Key projects planned include the following endeavours: (i) the merger of the real estate portfolios of SSH and DSU; (ii) preparatory activities for the potential separation of coal mining activity and thermal energy activity; (iii) the optimization of electricity distribution activities; and (iv) a comprehensive analysis of approaches for forming a unified pillar to include companies engaged in electricity generation business. SSH will also carry out all other asset management activities which are necessary to realize any strategic objectives of the Republic of Slovenia to be pursued in relation to asset management if these objectives are specified in the new State Assets Management Strategy (such as the development and construction of accessible rental housing).

In addition to carrying out regular asset management activities, SSH will also pay special attention to raising the culture of corporate governance at the company level, strengthening all functions of internal controls, enhancing sustainable operations, supporting new technologies, promoting corporate culture, diversity, human rights, and ensuring efficient design and implementation of investment projects. By means of its recommendations, education events, consulting activities, and oversight, SSH will encourage companies to uphold high standards in these areas.

Solid Performance in 2023 and Stable Returns on State Capital Assets Projected for 2024

The Return on Equity (ROE) which is estimated to be achieved by the SSH’s portfolio in 2023 stands at 8.6 percent and as such it surpasses the target ROE of 7.3 percent as set forth in the Annual Asset Management Plan for 2023. The outperformance in the profitability indicator planned for 2023 has been primarily driven by the successful operations of SOEs in the energy sector. For 2024, the projected portfolio ROE is 6.7 percent, signalling a stable performance throughout all areas of asset management. In 2025, based on current forecasts, the ROE of the portfolio is expected to remain at a similar level. 

The projected ROE of the portfolio is contingent upon numerous factors within the external economic environment, which, in conditions of increasing uncertainty, cannot always be fully and reliably predicted.

Cash Flows Planned to be Generated from State Capital Assets

Implementing a relevant dividend policy is one of core activities in the management of state assets. It enables 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 included in its management portfolio and their development needs.

In accordance with the Annual Asset Management Plan, it is projected that in 2024, the dividend income is to amount as follows: for the Republic of Slovenia, EUR 327.5 million, for SSH, EUR 52.5 million, and for ZPIZ, EUR 3.9 million, which totals EUR 383.9 million in dividends. This represents a significant increase from 2023, when total dividend inflows amounted to EUR 175.5 million.

The increase in expected dividends for 2024 is largely due to the planned dividend payout by energy companies GEN and HSE, totalling EUR 200.0 million. Neither company distributed dividends in 2023. In addition to dividends, the Annual Asset Management Plan also envisages the repayment of the final portion of the subsequently paid-in capital received by HSE in the amount of EUR 150.0 million.


Annual Asset Management Plan for 2024 (General Section) 

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