Overall Performance 2017

SOE Financial Snapshot 2017

State-Owned Enterprise Ownership
(%)
Total Assets
(SBD ‘000)
Total Revenue
(SBD ‘000)
Total Liabilities
(SBD ‘000)
Net Profit / (Loss)
(SBD ‘000)
CEMA Commodities Export Marketing Authority 100 34,266 3,248 298 2,819
SAL Solomon Airlines Limited 100 167,310 277,845 164,594 10,797
SIPC Solomon Islands Postal Corporation 100  36,430  17,922  80,606  3,669
SIBC Solomon Islands Broadcasting Authority 100  36,270  9,462  1,975 (347)
SIEA Solomon Islands Electricity Authority 100  1,138,535  440,979  92,320  79,456
SIPA Solomon Islands Port Authority 100  778,750  215,023  184,833  84,741
SIWA Solomon Islands Water Authority 100  384,311  100,555  168,687  7,336
Portfolio (excluding ICSI)  2,575,872 1,065,034 693,363 188,471

SI ROE + ROA

Performance Highlights

The SOE portfolio has undergone a dramatic turnaround since 2009. Average portfolio return on equity (ROE) increased from (11%) in 2002-2009 to 16% for 2010-2016 and drop to 10% in 2017[1]. Return on Assets (ROA) followed a similar trend. The turnaround can be attributed to (i) financial restructuring of three of the largest SOEs, (ii) tariff increases at SIWA[2] and SIPA, (iii) improved collections for SIEA[3] and SIWA, (iv) privatization and liquidation of non-strategic SOEs and (v) improved implementation of the SOE Act, in particular the community service obligation (CSO) regulations. In 2017 a SOE Ownership Policy was developed with the support of the Asian Development Bank’s Pacific Private Sector Development Initiative (PSDI), the policy outlines the rationale for SOE ownership, performance expectations, privatization principles, and dividend requirements. Aligned with the Solomon Islands SOE Act and Solomon Islands’ National Development Strategy 2011-2020, it will guide government investment, oversight, and divestment of SOEs. In 2016, the Solomon Islands government established a new SOE, Solomon Airlines Airport Corporation Ltd (SIACL), which commenced operations in 2017.

More detailed analysis on the Solomon Islands SOE portfolio can be found in:

Government’s Management of SOEs

Government exercises SOE ownership oversight through the application of the State-owned Enterprises Act 2007and State-owned Enterprises Regulations 2010. The Act and Regulations cover such matters as the duties and responsibilities of the Accountable Ministers, the principal objective of every SOE to operate profitably; how CSOs are identified, costed and approved; directors’ duties; director selection, appointment and removal; and preparation of the Statement of Corporate Objectives and Annual Reports. For SAL, the only SOE that is a registered company, the Companies Act also appliesSome SOEs are established through their own legislation.

The Accountable Ministers are the Responsible Minister and the Minister of Finance. They are jointly responsible to Parliament for the performance of the SOEs. They must ensure that the provisions of the SOE Act 2007 and Regulations 2010 are implemented. In most cases decisions must be made jointly.

SOEs are monitored by the Economic Reform Unit (ERU) within the Ministry of Finance. They provide reports to the Accountable Ministers on SOE performance.

Periodically the Government approves policies to provide guidance to the SOEs and assist the Government effectively manage its ownership interest. The following are key policies adopted by Government relevant to SOEs.

[1] These figures only include the commercial trading SOEs. They do not include CEMA and ICSI. CEMA has regulatory functions, while ICSI is a holding company for the Government’s minority shareholding in a number of companies and other investments. ICSI has not prepared annual accounts for 2015, 2016 or 2017.
[2] Now trading as Solomon Water
[3] Now trading as Solomon Power