Mid – year fiscal position report for 2022 indicates
⦁ significant operational and financial challenges in the first four months of 2022.
⦁ supply chain management has been hampered by a lack of foreign exchange liquidity
⦁ negative effects of this have been felt throughout the economy.
The key 52 state-owned enterprises reported a significant loss of Rs. 859 billion in the first four months of 2022.
Same period 2021 the loss was Rs. 13 billion .
This was revealed in the 2022 Mid-Year Fiscal Position Report.
State-owned enterprises (SOEs) faced significant operational and financial challenges in the first four months of 2022. Many key SOEs’ supply chain management has been hampered by a lack of foreign exchange liquidity. Particularly in the energy and transportation sectors.
The negative effects of this have been felt throughout the economy.
The recent adoption of cost-reflective pricing in the fuel sector is a positive step toward the Ceylon Petroleum Corporation’s (CPC). However, operational sustainability, still have a number of issues that must be addressed.
The primary source of concern is the CPC’s legacy debt. This is predominantly in foreign currency. The resulting frequent foreign exchange losses for the entity, added fiscal stress for the government and financial stress for the state-owned banks.
As a result, the CPC has Rs. 986 billion in negative equity as of the end of April 2022.
Sri Lankan Airlines (SLA) is another SOE with significant fiscal consequences. SLA’s losses for 2021/22 totaled Rs. 171 billion, putting the company in jeopardy of going out of business. The SLA also has external liabilities.
This must be met in difficult operating conditions where revenue is being impacted by a decline in tourism and fuel and finance costs have risen.
Recorded first four month’s loss
The key 52 SOEs reported a significant loss of Rs. 859 billion in the first four months of 2022. The loss was 13 billion in the same period of 2021.
The primary cause of the loss is CPC’s foreign exchange loss as a result of the currency’s depreciation. CPC’s exchange loss in the first four months of 2022 was Rs. 549 billion.
The General Treasury collected levies and dividends of Rs. 11.4 billion in the first four months of 2022, which was a 67 percent increase compared to the corresponding period in 2021.