Wednesday, January 18, 2012

Study shows state companies are not profitable

Lauren Snyders
18 January 2012

A new study has revealed that only half of South Africa’s enterprises made a decent profit over the past three years.

Only five of the nine state owned enterprises reporting to the Department of Public Enterprises produced a profit between 2009 and 2010.

The institute’s analysis was based on the annual reports of all nine state owned enterprises.

Eskom is one of the nine who showed the least profit.

Researcher Jonathan Snyman said that the government would end up supporting these companies at the taxpayer’s expense.

He also added that for these companies to stay afloat, the government would have to pump in a lot of money which would obviously come from the public.

Snyman said that the money could have been used for new development projects but it is now going into keeping these institutions afloat.

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