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State-Owned Companies

State-Owned Enterprises

At the end of 2021, the Portuguese public business sector was composed of 348 entities, of which 148 were State-Owned Enterprises (SOE), 42 were regional enterprises and 158 were local enterprises. In terms of economic activity, most entities belonged to the water management (19% of these entities), health (14%), transport and storage (11%), and artistic, entertainment, sports and recreational activities (10%) sectors.


The present report focuses on the SOE entities for which information is available: 87 non-financial and 7 financial. The analysis covered 94 companies and business groups representing 141 of the 148 SOE entities. Seven entities were not considered due to unavailability of information and to methodological issues. In the considered entities, the shareholder function exercised by the State directly or indirectly through companies in which it has a stake, covered a total share capital of 33.5 billion euros (15.6% of national GDP), 2.8 bn€ more than in 2020. At the end of 2021, the SOE under analysis employed 156,293 workers (+0.1% than in 2020) representing 3.2% of national employment and 19.9% of public employment, as reported by DGAEP. The economic performance of the SOE companies analysed reflected the recovery of economic activity, especially from the 2nd half of the year, expressed in the growth of the GVA of SOE (measured from EBITDA) by 6.8%, an indicator that represented approximately 2.6% of Portuguese GDP in 2021.

Governance Model

Of the 148 annual reports of companies with information reporting obligations for the SOE universe identified for 2021, only 79 had been approved by the supervising authority. We highlight the lack of publication of accounts of six entities, such as EFACEC and the Administration of the Port of Aveiro. Within the scope of supervision and financial control, it is noted that the SOE entities use a multiplicity of information systems, some outdated, which impairs the quality of the reporting provided, as well as the integrated analysis of the sector. Changing this context is fundamental to ensure the reliability, completeness and timeliness of public information about the SOE. Although the provision of information about the SOE and the State's relationship with this sector in the General State Account (CGE) has improved, as mentioned in the Court of Auditors' opinion on the 2021 CGE, there are still limitations, also noted, in terms of the comprehensiveness, consistency and availability of data, which are also noted in this report.


Economic and financial performance

After the CFP report on the SOE 2019-2020 had noted the deterioration in the results of this sector as a consequence of the outbreak of the pandemic crisis, the present report analyses performance in 2021, marked by a recovery in most economic and financial indicators, reflected in the individual accounts (or consolidated accounts) of the 87 non-financial companies (or group of companies) of the SOE. Although with limitations as to direct comparison with the report for 2019/2020, given the changes to the universe of analysis and the financial statements of the companies, the aggregate turnover of non-financial companies in the SOE rose to 10.1 bn€ in 2021, up from 9.2 bn€ in 2020, but still below the 12.2 bn€ achieved in pre-pandemic year of 2019.


The economic results of non-financial companies in the SOE continue to show a significant economic imbalance, with a negative EBITDA of one bn€ and a negative net profit of 3.1 bn€ in 2021. Compared to 2020, this performance reflected an improvement in these indicators by 290 million € and 708 million €, respectively, insufficient, however, to correct the economic imbalance of the sector.

In 2021, the operations of these companies had more 780 employees (+0.6%) than in 2020, a variation strongly influenced by the increase in health professionals (+1951), which more than offset the reduction in personnel at TAP SA (-1480), as part of the ongoing restructuring plan.


The negative economic results necessarily translate into the need for capital reinforcements by the public shareholder to avoid deterioration of its financial situation and assets. In 2021, the improvement in the financial situation and assets of non-financial companies in the SOE in comparison to 2020 reflects the efforts of the shareholder. In effect, the equity of these companies rose to 5.8 bn€ in 2021 (+4.0 bn€ than in 2020), with major contributions from capital reinforcements made by the public shareholder, through the increase in subscribed capital (2.8 bn€) and from conversion of loans into share capital, the latter in TAP SA. The total liabilities of these entities were reduced by 3.4 bn€ to 54.9 bn€ in 2021, and assets increased by 0.5 bn€ to 60.7 bn€. Compared to 2020, there was thus a positive evolution in the indicators of financial autonomy to 9.6% (+6.5 p.p.) and solvency to 10.6% (+7.4 p.p.), which strengthened their borrowing capacity (+13.6 p.p.) and their ability to meet their commitments. Despite this recovery, more than a third of these companies (32) continued to have negative equity in 2021, a situation of technical bankruptcy.


The health and transport and storage sectors continued to be the most representative of the non-financial companies in the SOE: the health sector accounted for the largest number of employees, turnover and relevant operating expenses, while the transport sector concentrated the majority of assets and share capital.


In the health sector, in 2021 the economic results of the corporate public entities (EPE) integrated in the NHS were particularly affected by the persistence of the negative effects of the COVID-19 pandemic. Practically all the public companies of the NHS recorded negative net results, with a negative aggregate total of 1117.5 million €, which translates as a worsening of 342 million € in relation to 2020. Although turnover increased by 6.8%, relevant operating expenses grew by 8.3%, which caused the economic performance ratio to deteriorate compared to 2020. More than half of the 41 EPE of the NHS had negative equity at the end of 2021. There was also a degradation of the negative values of profitability ratios (sales, assets and equity) of the NHS EPEs, while the financial structure ratios showed a slight improvement of financial autonomy and indebtedness and a slight deterioration of the solvency ratio.


The transport sector recorded a recovery in its activity, with the turnover of SOE companies growing 16.6% in 2021. Despite this higher growth than that observed for relevant operating expenses (3.9%), the aggregate net income for the year of the companies in this sector deteriorated compared to 2020 due to the implementation of TAP's restructuring plan, whose costs with non-recurring items amounted to 1025 million €.


In the companies of the other sectors there was also an improvement in the operating indicators in 2021. These entities covered a wide range of activities, from water abstraction to real estate activities, including TAP SGPS, the former parent company from which TAP SA separated following the State's direct entry into the capital of the latter company. The combined GVA of these entities was positive by 649 million €, 1.1 bn€ more than in 2020, favouring the formation of a positive EBITDA of 269 million € (- 828 million € in 2020), which contributed to reducing losses from 1.5 bn€ in 2020 to 0.3 bn€ in 2021.

Finally, the state-owned financial companies sector, not considering Parpública's stake in EFACEC, had a positive performance with a net profit of 637 million € in 2021 (+50.3 million € than in 2020). Caixa Geral de Depósitos Group, the largest in the SOE, both in terms of the number of employees and turnover, contributed a great deal to this performance.


Financial relationship between the State and its business sector

The State's net financial effort amounted to 4.6 bn€ in 2021 (+27.8% than in 2020), representing 2.2% of GDP. Revenue from dividends increased by 164 million €, due to the fact that Caixa Geral de Depósitos delivered 303 million € in 2021 (net of corporate income tax) and did not distribute dividends in 2020. State expenditure on the SOE increased by 1.2 bn€, mainly due to the increase in "capital endowments and other financial assets" (2 bn€), not entirely offset by the 939 million € reduction in loans granted.


The capital expenditure of non-financial companies in the SOE increased by 367 million € (13.5%), totalling 3 bn€ (1.4% of GDP), in 2021. Excluding Grupo TAP SA, the total investment expenses of the non-financial companies of the SOE would have increased by 333 million € (20.1%), reaching 2 bn€ (0.9% of GDP). This increase would be justified, in more than 90%, by the investment expenditures made by only five companies (Infraestruturas de Portugal, Metropolitano de Lisboa, Águas de Portugal, Administração dos Portos do Douro, Leixões e Viana do Castelo and Metro do Porto), as well as by the group of EPEs integrated in the NHS.


The contingent liabilities of the SOE were mainly concentrated in guarantees granted by the State. At the end of 2021, guarantees amounting to 5.6 bn€ (2.6% of GDP) were outstanding, a fifth of which (1.1 bn€) were associated with companies classified outside the general government sector. The indebtedness of public companies, in particular entities that are not part of the general government sector, reached liabilities amounting to 1.9 bn€ (0.9% of GDP).

Date of last update: 16/02/2023

General Government Sectors . Report nº 02-2023 . 16 February 2023