18 December 2013

Treasury releases its annual report on the Crown’s commercial performance

The Treasury’s Crown Ownership Monitoring Unit (COMU) today published the fourth edition of its Annual Portfolio Report (APR).

This report reviews the performance of 49 government-owned enterprises that have full or partial commercial objectives. Collectively these enterprises employ over 40,000 people and, as at 30 June 2013, held assets of around $125 billion: $52 billion in investment funds; $45 billion in commercially-focused entities, some listed on the NZX; and $29 billion in policy-focused assets.

Investment funds held in the Crown financial institutions are increasingly important to the Crown’s balance sheet. Given strong equity markets, these institutions generated solid returns, the New Zealand Superannuation Fund in particular having a return of over 25% in 2012/13. All funds outperformed their respective benchmarks for the year.

While some State-owned enterprises have performed well, overall performance of the Crown’s commercial portfolio has been mediocre, with poor performance by Solid Energy, KiwiRail and Learning Media. Total shareholder return across the wholly-owned commercial priority companies was 3% (excluding KiwiRail as figures are not comparable due to the change in its corporate structure at the start of 2013).

COMU Deputy Secretary Andrew Turner said: “Getting better value from the Crown’s assets is a priority - there is scope for most entities to improve their performance. In 2014, we’ll be looking to improve how we support Ministers in seeking better results across the portfolio.”

Publishing the APR is consistent with COMU’s role in promoting transparency through public
disclosure initiatives. Its purpose is to provide further disclosure, in combination with stronger information flows from the enterprises themselves.

The report is on the COMU website: http://www.comu.govt.nz/publications/annual-portfolio-report/2013

ENDS

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