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Power outlines new expectations for SOEs

Wednesday 2nd June 2010

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State-owned Enterprise Minister Simon Power has outlined the government’s new performance measures for SOEs, which he expects to be included in their statements of corporate intent from next financial year.  

Power said SOEs, including Meridian Energy, Solid Energy and Landcorp Farming, make up some $25 billion worth of taxpayer investment, and the government has a “duty to ensure that this investment delivers an appropriate return.”

The new performance measures cover shareholder returns, profitability and efficiency, and leverage and solvency.  

“This is another step towards providing taxpayers with the tools to assess how their investment in this portfolio is performing,” he said in a statement.  

Earlier today, Power was reported as telling Parliament’s Finance and Expenditure Committee that he has not received any advice about future sales or rationalisation of SOEs, and said the government will have to discuss whether to change its policy regarding asset sales.  

The new SOE measures are:

-         Total shareholder return,

-         Dividend yield,

-         Dividend pay-out,

-         Return on equity,

-         Return on equity adjusted for unrealised fair value movements and asset revaluations,

-         Return on capital employed,

-         Operating margin, 

-         Generator efficiency for Genesis Energy, Meridian and MightyRiverPower,

-         Net gearing ratio,

-         Interest cover, and

-         Solvency.

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